Campaign Spending Commission

Campaign Spending Commission
Zoom Video Conference
October 26, 2022
9:00 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
Craig Hirasaki, Fern Holland, Joelle Edwards, Jonathan Kennealy, KITV4 Island News

Call to Order
Chair Lum called the meeting to order at 9:02 a.m.

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

Consideration and Approval of Minutes of Meeting on 9/22/22
Chair Lum called for approval of the 9/22/22 meeting minutes. Commissioner Bonfiglio moved to approve the minutes on 9/22/22.  Motion seconded by Commissioner Luke.  Motion carried (5-0).

New Business
Executive Director Izumi-Nitao stated that the Conciliation Agreements on the agenda were a result of an investigation 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 the 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 agreements.  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 the proposed agreements.

*Proposed Conciliation Agreement No. 23-18 – In Re the Matter of Friends of Fern – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Primary Report and requests that they assess a reduced fine from $75 to $25 as it is Respondent’s first violation.  Chair Lum asked if there were any comments or questions.

Ms. Fern Holland and Ms. Joelle Edwards were present.  Ms. Edwards, accountant for Ms. Holland, stated that she inadvertently filed the wrong report, but was able to file the correct report a day after the report was due.  She further stated that she appreciated the reduction of the fine amount.  Ms. Holland also thanked the Commission for the opportunity for the reduction and thanked Associate Director Baldomero for his help with the filing.

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

*Proposed Conciliation Agreement No. 23-19 – In Re the Matter of Team Gueso – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the 2nd Preliminary Primary Report and requests that they assess a reduced fine from $740.23 to $246.74 as it is Respondent’s first violation.  Chair Lum asked if there were any comments or questions.

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

*Proposed Conciliation Agreement No. 23-20 – In Re the Matter of Kennealy for Office – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Primary 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.

Mr. Jonathan Kennealy was present and thanked the Commission for the opportunity.  He stated that he had no changes to his reports and acknowledged that he missed the deadline.  He also mentioned that he had issues with the filing which was corrected and that he appreciated staff for working with him.

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

*Proposed Conciliation Agreement No. 23-21 – In Re the Matter of Committee to Elect Veamoniti Lautaha – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Primary 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 Vice Chair Markley.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 23-22 – In Re the Matter of Par Pacific Holdings, Inc. PAC – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Primary Report and the 1st Preliminary General Report and requests that they assess a reduced fine from $400 to $133.34 as it is Respondent’s first violation.  Chair Lum asked if there were any comments or questions.

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

*Proposed Conciliation Agreement No. 23-23 – In Re the Matter of Godfrey4Hawaii – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the 2nd Preliminary Primary Report and the Final Primary Report and requests that they assess a reduced fine from $500 to $166.67 as it is Respondent’s first violation.  Chair Lum asked if there were any comments or questions.

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

*Proposed Conciliation Agreement No. 23-24 – In Re the Matter of Friends of Blake Boyd – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the 2nd Preliminary Primary 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 Bonfiglio moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Luke.  Motion carried (5-0).

*Docket No. 23-15 – In Re the Matter of Lono Mack and MACK – Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against Respondents for the late filing of the 1B Preliminary Primary Report and the 2nd Preliminary Primary Report.

She reported that in the Organizational Report filed with the Commission, Respondent Lono Mack is the candidate and treasurer of the candidate committee called MACK.

Respondent Mack filed nomination papers to be a candidate in the 2022 election and did not win in the primary election.

Pursuant to HRS §11-334(a)(1)(B), Respondents were required to file the 1B Preliminary Primary Report for the period covering 1/1/22 through 6/30/22 by 11:59 p.m. Hawaii standard time on 7/14/22.  Respondents did not file the report by the deadline.

On 7/15/22, Commission staff notified Respondents via first class mail of their failure to file the report and that a fine would be imposed.

Pursuant to HRS §11-334(a)(1)(C), Respondents were required to file the 2nd Preliminary Primary Report for the period covering 7/1/22 through 7/29/22 by 11:59 p.m. Hawaii standard time on 8/3/22.  Respondents did not file the report by the deadline.

On 8/4/22, Commission staff notified Respondents via first class mail of their failure to file the report and that a fine would be imposed.

On 8/31/22, Respondent Mack electronically filed the 1B Preliminary Primary Report and the 2nd Preliminary Primary Report.

On 9/2/22, Commission staff notified Respondents via first class mail that a fine of $1,050 would be assessed against them for the late filing of the 1B Preliminary Primary Report and a fine of $310.50 would be assessed against them for the late filing of the 2nd Preliminary Primary Report for a total fine of $1,360.50 pursuant to HRS §11-340.

On 9/13/22, Respondent Mack informed Commission staff that he wanted a conciliation agreement that would reduce the fine to $453.50.  Proposed Conciliation Agreement No. 23-15 was prepared and mailed to Respondent Mack as well as approved by the Commission at its meeting on 9/22/22.

Pursuant to the terms of Conciliation Agreement No. 23-15, Respondent Mack was informed that “[i]f this assessment is not paid by the deadline, the Commission will consider Respondent to be in breach of this Agreement and will then assess Respondent the original amount of the fine pursuant to appropriate proceedings.”

Respondent Mack did not comply with the terms of Conciliation Agreement No. 23-15 by not signing the agreement and paying the reduced fine assessment of $453.50 by 10/6/22.

On 10/6/22, Commission staff phoned Respondent Mack and left a voicemail informing him that if he does not pay the reduced assessment, a complaint would be filed against them at the original amount of the fine which is $1,360.50.  Respondent Mack did not sign the agreement or pay the fine.

On 10/13/22, Commission staff sent Respondents a copy of the complaint and set the matter on the 10/26/22 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 $1,360.60 for the late filing of the 1B Preliminary Primary Report and the 2nd Preliminary Primary Report, and order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-340 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.  Motion carried (5-0).

*Docket No. 23-16 – In Re the Matter of Dennis O’Shea and Dennis O’Shea for South Maui – Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against Respondents for the failure to file the Final Primary Report.

She reported that in the Organizational Report filed with the Commission, Respondent Dennis O’Shea is the candidate and treasurer of the candidate committee called Dennis O’Shea for South Maui.

Respondent O’Shea filed nomination papers to be a candidate in the 2022 election.

Pursuant to HRS §11-334(a)(2), Respondents were required to file the Final Primary Report for the period covering 7/30/22 through 8/13/22 by 11:59 p.m. Hawaii standard time on 9/2/22.  Respondents did not file the report by the deadline.

On 9/6/22, Commission staff notified Respondents via first class mail of their failure to file the report and that a fine would be imposed.

On 10/11/22, Commission staff emailed Respondent O’Shea that if he did not file the report, a complaint would be filed.  Respondents did not file the report.

On 10/18/22, Commission staff sent Respondents a copy of the complaint and set the matter on the 10/26/22 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 and assess an administrative fine of $500 for the failure to file the Final Primary 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, order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-410(e), and order that Respondents file the report within two (2) weeks of receipt of this order.

Commissioner Luke 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 Bonfiglio.  Motion carried (5-0).

*Docket No. 23-17– In Re the Matter of Chad Owens, Rena Owens, and Friends of Chad Owens – Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against Respondents for the late filing of the Final Primary Report.

She reported that in the Organizational Report filed with the Commission, Respondent Chad Owens is the candidate and Respondent Rena Owens is the treasurer of the candidate committee called Friends of Chad Owens.

Respondent Owens filed nomination papers to be a candidate in the 2022 election.  He was successful in the primary election and is moving on to the general election.

Pursuant to HRS §11-334(a)(2), Respondents were required to file the Final Primary Report for the period covering 7/30/22 through 8/13/22 by 11:59 p.m. Hawaii standard time on 9/2/22.  Respondents did not file the report by the deadline.

On 9/6/22, Commission staff notified Respondents via first class mail of their failure to file the report and that a fine would be imposed.

On 9/16/22, Respondents electronically filed the Final Primary Report.

On 9/19/22, Commission staff notified Respondents via first class mail that a fine of $200 would be assessed against them for the late filing of the Final Primary Report pursuant to HRS §11-340.

Respondents did not voluntarily pay the late report fine.

On 10/13/22, Commission staff phoned Respondents and left a voicemail informing them that if they did not pay the fine by 10/17/22, a complaint would be filed against them.

On 10/19/22, Commission staff sent Respondents a copy of the complaint and set the matter on the 10/26/22 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 Final Primary Report, and order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-340 within two (2) weeks of receipt of the order.

Mr. Craig Hirasaki was present on behalf of Respondent Chad Owens who was unable to appear due to conflict.  He explained that Respondent Owens and his family were in the process of moving and were not timely receiving their mail.  Respondents have since updated their mailing address on their Organizational Report.  Mr. Hirasaki stated that he will be helping Respondent Owens with his future filings and that when he became aware of the $200 fine, he immediately sent the Commission a check to pay the fine.  Executive Director Izumi-Nitao stated that the Commission has not received the check yet.  Mr. Hirasaki stated that it was just mailed on 10/24/22.

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.  Motion carried (5-0).

*Presentation, Discussion, and Approval of the Commission’s Annual Report for FY 2022 – Executive Director Izumi-Nitao presented the proposed draft of the Commission’s Annual Report for FY 2022 which discussed Commission activities covering the period 7/1/21 to 6/30/22 as applied to the Commission’s Strategic Plan.  She commented that upon approval, the annual report will be posted on the Commission’s website.

Commissioner Herbert moved to approve the FY 2022 Annual Report. Motion seconded by Commissioner Luke.  Motion carried (5-0).

Old Business
*Docket No. 23-07 – In Re the Matter of Janie Gueso, Ashley Siliado, and Team Gueso – Executive Director Izumi-Nitao reported that this matter was deferred at the 9/22/22 Commission meeting to permit Respondents time to consider a conciliation agreement.  Because it was approved earlier at this meeting, she recommended that this complaint be dismissed.

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

*Docket No. 23-13 – In Re the Matter of Mark Ing and Friends of Kaniela Ing – Executive Director Izumi-Nitao stated that upon further review, staff would like to amend the complaint, and therefore, would like to defer this matter to the 11/18/22 CSC meeting.  She also stated that Respondent Ing emailed a statement this morning which was provided to the Commissioners at the start of this meeting.  Respondent Ing’s statement requested for a continuance to the next meeting.

Commissioner Bonfiglio moved to defer this matter to the 11/18/22 CSC Meeting.  Motion seconded by Commissioner Luke.  Motion carried (5-0).

*Consideration, Discussion, and/or Approval of Commission Legislation for the 2023 Legislative Session
General Counsel Kam reported that CSC-11 (23), Relating to Partial Public Financing of Elections was deferred from the 9/22/22 Commission meeting to permit staff to consider it further.

o      CSC-11 (23), RELATING TO PARTIAL PUBLIC FUNDING

Increases the amount of partial public financing available for all offices.  Amends HRS §11-425 by increasing the maximum amount of public funds available for all offices by 50%.  Increases the maximum amount of public funds available for a candidate for the office of Hawaiian Affairs from $1,500 to 10% of the expenditure limit established in section 11-423(d) for each election.  Amends HRS §11-429(a) by increasing the amount of qualifying contributions for the Office of Hawaiian Affairs from more than $1,500 in the aggregate to more than $5,000 in the aggregate.  Provides a downward adjustment of the amounts of qualifying contributions for the Office of Prosecuting Attorney for the City and County of Honolulu, County of Hawaii, and County of Kauai and for the Office of County Council for the County of Maui.  Provides for a two to one match of qualifying contributions after the minimum required amount is reached and up to the eligible maximum amount for all offices.  Provides for an unspecified amount of appropriations for each of the two fiscal years of the next biennium to pay for the increase in the partial public financing program.  Provides for an appropriation in the amount of $200,000 for each of the two fiscal years of the next biennium for the Commission to hire two additional staff members.

Commissioner Bonfiglio moved to approve this proposed legislation for the 2023 Legislative Session.   Motion seconded by Commissioner Luke.  Motion carried (5-0).

Executive Director Izumi-Nitao informed the Commission that this bill will be shared with the Commission to Improve Standards of Conduct (“CISC”) for their review and consideration at their 11/9/22 meeting.

She further reported that the CISC drafted substantively the same bills and that she and General Counsel Kam are recommending that the Commission adopt the CISC bills to avoid any duplicity.  She noted however that the government contractor ban bill was amended to eliminate employees of the government contractor due to constitutional concerns and that Commission staff had no objections.  Further, she reported that at the 10/19/22 CISC Meeting, Common Cause Hawaii and League of Women Voters proposed a separate bill regarding campaign expenditures.  Rather than just excluding the purchase of not more than two tickets for an event or fundraiser held by another candidate, their bill further banned charitable/community organization donations, public school or library donations, and full-time scholarship awards.

Executive Director Izumi-Nitao reported that she abstained from the vote of this proposal and that it was approved by the CISC.  As such, it will be a recommended bill for adoption along with the CSC proposal.

With regards to the amended government contractor ban bill which eliminated employees of the government contractors, Commissioner Luke asked if it now includes a replacement language.  General Counsel Kam responded that it does not.  Discussion ensued about how the Commission would track, monitor, and determine who the owners and officers of the government contractors are. Commissioner Luke stated that by including employees of the government contractor, it made it clear who the ban applied to.  Commissioner Luke further shared his concerns about the ambiguity of who is considered an “owner” and explained that it would be difficult to ascertain who the owners or officers of the contractors are.  General Counsel Kam stated that he could look at the contributors’ employer and occupation information when contributions are reported and also pointed out that as the bill goes through legislative hearings with various committees, it can be amended to include definitions or make further clarifications.

General Counsel Kam left the meeting at 10:02 a.m.

Commissioner Bonfiglio moved to approve the proposed legislation submitted by the CISC for the 2023 Legislative Session to replace the CSC bill package.   Motion seconded by Commissioner Herbert.  Motion carried (5-0).

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

• 1^st Preliminary General Report for the period of 8/14/22 to 9/26/22 (or 1/1/22 to 9/26/22 for candidates who will only appear on the General Election ballot) was due on 10/3/22.
  • 178 candidate committees were expected to file.
    • 167 (93%) filed on time.
    • 8 (6%) did not file.
    • 4 (1%) filed late.
    • As of today, only one candidate (Candace Linton) has not filed the report.
  • 250 noncandidate committees were expected to file.
    • 232 (93%) filed on time.
    • 16 (6%) did not file.
    • 2 (1%) filed late.
    • As of today, only one noncandidate committee has not filed the report.

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

*Report on Commission to Improve Standards of Conduct (CISC) – Executive Director Izumi-Nitao reported that the CISC held a meeting on Open Government and Elections on 10/5/22 and Campaign Finance Reform on 10/19/22.  Commission staff led the 10/19/22 meeting to present the Commission’s bills which were all approved by the CISC.  Executive Director Izumi-Nitao shared the dates and the subject matter of the upcoming CISC meetings.

*Report on FY 2022 CSC Annual On-Line Survey – Associate Director Baldomero reported that this is the 11th year of doing the survey to help improve and evaluate the effectiveness of Commission operations and communications for FY 2022 (i.e., 7/1/21 through 6/30/22) as well as provide us with any feedback. The survey will launch on 10/26/22 and end on 11/23/22 whereupon the results will then be summarized, reported at the Commission’s public meeting, and posted on the Commission’s website.  Associate Director Baldomero went over the contents of the survey.

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

*Discussion of Certification of the 2022 Election – Associate Director Baldomero reported that Commission staff will certify all elected candidates so they can be sworn into office.  He went over the swearing in dates for elected officials and stated that staff is working with Office of Elections and the County Clerks’ offices. By law, certification means that the candidate filed all campaign finance reports and paid all their fines.  He further stated that Elections Assistant Tanna will be lead on communicating with the Office of Elections and the County Clerks.

*Discussion and Approval of 2023 CSC Meeting Schedule – Executive Director Izumi-Nitao went over the 2023 meeting dates and asked the Commissioners to inform her of any scheduling conflicts.

Commissioner Luke mentioned that his second term with the Commission ends in June and that he hopes the Governor will appoint a new Commissioner in a timely manner.  Executive Director Izumi-Nitao stated that she will follow-up with the Judicial Council and the Governor’s office in February to ensure a seamless transition.

Chair Lum asked for a motion to adjourn this meeting.  Commissioner Bonfiglio moved to adjourn.  Motion seconded by Commissioner Herbert.  Motion carried (5-0).  Meeting adjourned at 10:21 a.m.

Next Meeting:
Scheduled for Friday, November 18, 2022, at 9 a.m.