Campaign Spending Commission

Campaign Spending Commission
Zoom Video Conference
March 23, 2022
10:00 a.m.

Commissioners Present
Stanley Lum, Maryellen Markley, Ph.D., Bryan Luke, Neal Herbert, Vic Bonfiglio

Staff Present
Kristin Izumi-Nitao, Tony Baldomero, Gary Kam, Yayoi Tumamao, Janelle Tanna
Deputy Attorney General Candace Park

Guests
David Minkin, Esq., Kainoa Kaumeheiwa-Rego (Common Cause), Blaze Lovell (Honolulu Civil Beat), Leila Fujimori, Michael Vachio, Chris

Call to Order
Chair Lum called the meeting to order at ­­­­­10:03 a.m.

Chair Lum went over the procedures for this meeting via Zoom and introduced Commission staff and the Commissioners who were present.  He asked the Commissioners if anyone else was with them.  All the Commissioners present responded that no one else was with them.

Consideration and Approval of Minutes of Meeting on 2/9/22
Chair Lum called for approval of the 2/9/22 meeting minutes.  He asked if there were any corrections or changes to the minutes.  There were none.   Motion carried (5-0).

New Business
Chair Lum moved “Docket No. 22-12 – In Re the Matter of Timothy Lee” out of order of business on the agenda because Respondent’s attorney David Minkin, Esq. was present.

*Docket No. 22-12 – In Re the Matter of Timothy Lee – Executive Director Izumi-Nitao stated that Respondent Timothy Lee’s attorney, Mr. David Minkin, Esq. was present to seek a continuance on the matter due to a scheduling conflict.  She added that Mr. Minkin also submitted a written request for continuance and the staff has no objection to his request.  She also stated that Respondent has been informed of the Commission’s next meeting date on April 20, 2022.

Mr. David Minkin, Esq. addressed the Commission and requested that this matter be continued to the next Commission meeting based upon his scheduling conflict with court matters.

Chair Lum called for votes to approve the request to continue this matter to the next Commission meeting in April.  All the Commissioners present voted to approve the request.  None opposed.  Motion carried (5-0).

Chair Lum resumed the order of business on the agenda.

Executive Director Izumi-Nitao stated that the four (4) Conciliation Agreements on the agenda were a result of investigations initiated by Commission staff pursuant to HRS §11-314(7) to determine whether there had been a violation of the Hawaii campaign spending laws.  She stated that Respondents have been informed in a letter from Commission staff of the violation and have been notified of today’s meeting as well as received a copy of the proposed conciliation agreement.  She recommended that the Commission make a preliminary determination of probable cause that a violation had been committed, waive further proceedings, and approve the settlement amounts stated in each of the proposed agreements.

*Proposed Conciliation Agreement No. 22-15 – In Re the Matter of Tae W. Kim for Lt. Governor –Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $200 to $66.67 as it is Respondent’s first violation. Chair Lum asked if there were any comments or questions.

Vice Chair Markley moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Luke.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 22-16 – In Re the Matter of Friends of Joe Akana – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $150 to $50 as it is Respondent’s first violation. Chair Lum asked if there were any comments or questions.

Commissioner Luke moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Herbert.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 22-17 – In Re the Matter of Friends of Kukana Kama-Toth – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $200 to $66.67 as it is Respondent’s first violation. Chair Lum asked if there were any comments or questions.

Commissioner Luke moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Herbert.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 22-18 – In Re the Matter of Benchmark Hospitality of Hawaii, LLC – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Preliminary General Report and requests that they assess a reduced fine from $300 to $100 as it is Respondent’s first violation. Chair Lum asked if there were any comments or questions.

Commissioner Luke moved to approve the proposed conciliation agreement.  Motion seconded by Vice Chair Markley.  Motion carried (5-0).

*Docket No. 22-13 – In Re the Matter of Tiare Lawrence and Tiare Lawrence for Maui – Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against Tiare Lawrence and Tiare Lawrence for Maui for the late filing of the Supplemental Report.

She reported that in the Organizational Report filed with the Commission, Respondent Tiare Lawrence is the candidate and treasurer of the candidate committee called Tiare Lawrence for Maui.

Pursuant to HRS §11-334(b), Respondents were required to file the Supplemental Report for the period covering 7/1/21 through 12/31/21 by 11:59 p.m. Hawaii standard time on 1/31/22.  Respondents did not file the report by the deadline.

On 2/1/22, Commission staff notified Respondents via first class mail of their failure to file the report and that a fine would be imposed.

On 2/10/22, Respondents electronically filed the Supplemental Report.

On 2/11/22, Commission staff sent Respondents a letter via first class mail notifying them that a fine of $200 will be assessed against them for the late filing of the report pursuant to HRS §11-340. The letter informed Respondents that they could avoid the complaint process by waiving their rights to be heard at a HRS chapter 92 public meeting and a HRS chapter 91 contested case hearing, and voluntarily paying the fine amount by 2/25/22.

Respondents did not voluntarily pay the late report fine.

On 3/4/22, Commission staff phoned Respondent Lawrence about her fine payment. Respondent Lawrence said that she did not think she would get fined and Commission staff explained to Respondent Lawrence why she was being fined.  Respondent Lawrence said she would drop a check in the mail.

On 3/14/22, Commission staff phoned Respondent Lawrence and left a voicemail informing her that if she does not pay the fine, a complaint would be filed.  Respondents did not pay the fine.

On 3/17/22, Commission staff sent Respondents a copy of the complaint and set the matter on the 3/23/22 Commission agenda.

Executive Director Izumi-Nitao recommended that the Commission make a preliminary determination, pursuant to HRS §11-405(a), that probable cause exists to believe that a violation of the campaign spending law has been committed, assess an administrative fine of $200 for the late filing of the Supplemental Report, order that the fine be paid from the candidate’s personal funds, if the candidate committee’s funds are insufficient to pay the fine, or if the Commission so orders that the fine, or any portion, be paid from the candidate’s personal funds pursuant to HRS §11-410(c), and order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-340(g) within two (2) weeks of receipt of the order.

Commissioner Bonfiglio moved to make a preliminary determination that probable cause exists that a violation had been committed and to accept the fine and terms stated in the complaint.  Motion seconded by Commissioner Luke.

Commissioner Herbert asked if the check was ever received.  Executive Director Izumi-Nitao responded that while Respondent Lawrence stated that she would drop a check in the mail on 3/4/22, the Commission has not received the check.

Motion carried (5-0).

Old Business
*Reconsideration of Docket No. 22-11 – In Re the Matter of Michael Takano, Fay Morinaga-Pang, and Pono Life Sciences, LLC – Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against chairperson Michael Takano, treasurer Fay Morinaga-Pang, and its noncandidate committee Pono Life Sciences, LLC, for the failure to file the Final Primary Report for the period covering 12/4/21 through 12/18/21 by 11:59 p.m. Hawaii standard time on 1/7/22.  She reported that the matter had resulted in a preliminary determination of probable cause at the 2/9/22 Commission meeting and Respondents were fined $500 and ordered to file the report.

Prior to the 2/9/22 Commission meeting, staff called Respondent Morinaga-Pang about the unfiled report and was informed that she had not been with the company since 2018.  Commission staff then called Respondent Takano who stated that he would assign a new treasurer and get the report filed. Despite two more calls to Respondent Takano to remind him to file the report or a fine would be imposed. No report was filed, and the complaint was issued.

After the Commission issued a preliminary determination on 2/9/22, Respondents filed the Final Primary Report on 2/17/22 which showed no activity.  Further, Respondents filed the Preliminary General Report for the period covering 12/19/21 through 2/11/22 by its deadline on 2/16/22 which showed no activity as well as the Final Election Period Report for the period covering 2/12/22 through 2/26/22 before its deadline of 3/28/22 on 2/23/22 which showed no activity.

Upon review of Respondents’ filed reports with the Commission, Respondents did not spend nor receive an aggregate of $1,000, and thus, pursuant to HRS §11-339, Respondents qualified as a $1,000 or less noncandidate committee and were only required to file the Final Election Period Report. Therefore, she recommended that the Commission reconsider its preliminary determination of probable cause in Docket No. 22-11 issued on 2/9/22 and dismiss the complaint.

Commissioner Luke asked if the Respondents amended their Organizational Report to appoint a new treasurer.  Associate Director Baldomero responded that they did, but because the Organizational Report was not timely amended, they were fined $75 which they paid.

Chair Lum called for votes to reconsider the preliminary determination that probable cause existed that a violation had been committed and to accept the fine and terms stated in the complaint issued on 2/9/22.   All the Commissioners present voted to reconsider the preliminary determination.  None opposed.  Motion carried (5-0).

Commissioner Luke moved to dismiss the complaint.  Motion seconded by Commissioner Bonfiglio.  Motion carried (5-0).

Report from the Executive Director
*Report on Compliance of Filing Timely Disclosure Reports – Executive Director Izumi-Nitao reported the following:

• Final Election Period Report for all noncandidate committees and candidate unsuccessful in the Special Election for Kauai Prosecutor is due on 3/28/22. 251 noncandidate committees are required to file this report.  Associate Director Baldomero reported that as of today, 50% of the 251 noncandidate committees have already filed.
• Preliminary General Report for the period covering 12/19/21 through 2/11/22 was due on 2/16/22:
  • 2 candidate committees were required to file this report
    • Both candidates filed on time.
  • 213 noncandidate committees were required to file this report
    • 206 (97%) filed on time
    • 6 (3%) failed to file on time
    • 1 (1%) filed late
    • As of today, all noncandidate committees filed.

With regard to prior reports, Executive Director Izumi-Nitao reported that the number of committees that have not filed their reports remains the same.  She added that Commission staff continues to work with AG-CRD to obtain full compliance.

*General Counsel Gary Kam joined the meeting at 10:27 a.m.

*Update on Special Election for Kauai Prosecutor – Executive Director Izumi-Nitao reported that Rebecca Like won the Special General Election on 2/26/22.  On 3/9/22, Commission staff reviewed Rebecca Like’s reports and certified to Kauai County Clerks’ office that she is in compliance with filing reports and no outstanding fines.  She was sworn in on 3/21/22.

*Reminder to File the State Ethics Commission Annual Disclosure Report – Executive Director Izumi-Nitao reminded Commissioners that their annual disclosure reports must be submitted to the State Ethics Commission by 5/31/22.

*Report on Commission to Improve Standards of Conduct – Executive Director Izumi-Nitao reported that on 2/15/22, House Speaker Saiki introduced House Resolution 9 which created the Commission to Improve Standards of Conduct (CISC) to recommend ways to improve current ethics, lobbying and campaign finance laws and standard of conduct regulations.

The CISC members include:

• Judge Daniel R. Foley (Ret.), Chairperson
• Robert D. Harris, Executive Director of the State Ethics Commission
• Kristin E. Izumi-Nitao, Executive Director of the Campaign Spending Commission
• Sandy Ma, Executive Director of Common Cause Hawaii
• Barbara C. Marumoto, Former State Representative
• Janet Mason, League of Women Voters
• Florence T. Nakakuni, Former United States Attorney for the District of Hawaiʻi

The CISC is tasked with providing interim recommendations on 3/31/22 and final recommendations by 12/1/22.  The CISC met on 2/22/22, 3/2/22, 3/10/22, 3/16/22, and will be meeting on 3/24/22.  Executive Director Izumi-Nitao stated that the CISC plans to issue a report listing recommended action items for legislators which will include campaign finance and ethics related bills, and other bills as well as other long-term ideas that CISC will research and seek public input for the 12/1/22 final report.  In her capacity as the Executive Director of the Campaign Spending Commission, she proposed the following long-term considerations to the CISC:

1. Enhance criminal statutes, penalties, and investigative tools (more in alignment with federal laws) to permit state/counties to prosecute public corruption cases and be an effective deterrent.
2. Increase partial public funding program to adjust for cost-of-living. Public financing will help prevent corruption or the appearance of corruption if candidates do not need to solicit contributions from private sources. The Commission may need a money appropriation and increased staff to administer public funds.
3. Limit cash contributions – possibly $100 (similar to threshold for calabash bowls). Cash contributions have no money trail.
4. Require committees to file fundraiser notices regardless of amount (so ticket price does not have to be more than $25).
5. Public posting of legislative and county counsel allowance spending on legislative/county websites (also an Ethics consideration).
6. Prohibit candidates from using campaign funds to purchase 2 tickets to another candidate’s fundraiser.
7. Affirmatively treat a candidate/noncandidate committee officer’s refusal to speak with the Commission for purposes of an inquiry or investigation as a presumption in the Commission’s favor.

*Vice Chair Markley left the meeting at 10:34 a.m.

Chair Lum asked about the process after the recommendations are submitted.  Executive Director Izumi-Nitao explained that the interim report will include comments and action items concerning any bills that the CISC as a group will encourage the legislators to pass.

Commissioner Luke asked about trainings for new candidates and what will be available to them.  Executive Director Izumi-Nitao responded that updated guidebooks and manuals have been posted and staff is working on updating the cyber learning videos.  She also stated that staff will put together a training program either via Zoom or in-person.

Discussion ensued about mandatory trainings for candidates.  Commissioner Luke shared his concerns about committees saying they did not know about the requirements that applied to them and use that as an excuse for their violations.  Many have not attended any training.  Executive Director Izumi-Nitao commented that mandatory training for candidates was considered by staff as possible long-term consideration for the CISC, but staff felt that trainings have not been as effective of a deterrent to violations as they had hoped.  The best thing that comes out of these trainings is that the committees get to meet the staff and become much more comfortable reaching out for assistance.  Commissioner Herbert recommended to highlight past offenses during the trainings.  He also asked Executive Director Izumi-Nitao to report on updates to the committee trainings for the upcoming Commission meetings.

Executive Director Izumi-Nitao asked if the Commissioners would like the idea of mandatory trainings for candidates be proposed to the CISC, and if so, how would the trainings be executed.  Chair Lum and Commissioner Herbert stated that it would be a good idea.  Commissioner Luke added that if they are trying to undertake the responsibility of being an elected official, they should take the time to understand what the rules are.  General Counsel Kam stressed that there are a lot of things that should be considered in mandatory trainings such as what would the penalties be if they fail to take the training.  He also mentioned that when things are required by law, saying I did not know is not a valid defense.  Commissioner Bonfiglio suggested mandatory trainings be held every two years like pilot certifications and if the candidates do not take the training, they cannot be a candidate.  Executive Director Izumi-Nitao stated that the Office of Elections would not want to make it conditional upon training for candidates to run for office and further stated that there may be constitutional issues.  Commissioner Bonfiglio said it would be a basic candidate training and that he would email Executive Director Izumi-Nitao his recommendations.

*Consideration, Discussion, and/or Update of Commission Legislation and Other Campaign Finance Related Bills/Resolutions for the 2022 Legislative Session – General Counsel Kam provided an update of the status of the Commission’s 5 bills as well as discussed other campaign finance bills introduced this session.  There are now a total of 5 House bills and 9 Senate bills that staff is currently tracking and will provide testimony if they are scheduled for a hearing.

With regards to HB 2416, Commissioner Herbert asked why the bill limits it to section 501(c)(4) nonprofit organizations and does not include other types of nonprofit organizations.  General Counsel Kam responded that the focus has always been on section 501(c)(4) nonprofit organizations because they have been used to funnel large amounts of money for electioneering expenses nationwide.

Chair Lum asked if there were any other questions or comments.  There were none.

Commissioner Bonfiglio moved to adjourn the meeting.  Motion was seconded by Commissioner Herbert.  Motion carried (4-0).  Meeting adjourned at 11:17 a.m.

Next Meeting:
Scheduled for Wednesday, April 20, 2022, at 9 a.m.