Campaign Spending Commission

Campaign Spending Commission Meeting
Leiopapa A Kamehameha Building, Room 204
August 11, 2009
10:00 a.m.

Commissioners Present:
Chair Paul Kuramoto, Vice-Chair Steven Olbrich, Gino Gabrio, Dean Robb, Michael Weaver

Staff Present:
Barbara Wong, Tony Baldomero, Grant Tanimoto, Ellen Kojima, Linda Takushi
Deputy Attorney General Russell Suzuki

Call to Order:
Meeting convened at 10:00 a.m. with Chair Kuramoto presiding.

Consideration of Minutes:
Commissioner Robb moved to approve the minutes of the July 16, 2009, as amended (page 4, second to last paragraph, amend to note that Commissioner Gabrio had questions regarding the Puerto Rico case).  Motion seconded by Commissioner Weaver.  Motion carried unanimously.

Old Business:
Advisory Opinion 09-01
Commissioners continued discussions on the third draft advisory opinion (7/31/09) regarding whether a federal elected official can transfer excess federal campaign funds from a federal campaign committee to a state gubernatorial candidate committee.

Executive Director Wong summarized that the third draft contains material discussed at the previous two meetings.  She highlighted the following points: excess federal campaign funds cannot be transferred as surplus funds, because surplus funds are funds raised for office and the definition of office in the Hawaii Revised Statutes (“HRS”) excludes federal elective office; excess federal campaign funds were not received pursuant to Hawaii laws, also the excess federal campaign funds cannot be transferred as his own funds.  She noted that the federal elected official can return the federal contributions and solicit new contributions to his state gubernatorial candidate committee and his noncandidate committee can contribute up to $6,000 to his Hawaii gubernatorial campaign.  Also, regarding rulemaking, as referred to in Mr. Karl Sandstrom’s Supplemental Memorandum #2, the Commission is not rulemaking, but is issuing an advisory opinion pursuant to section 11-193(a)(16), HRS, which authorizes the Commission to render advisory opinions based on the plain language of the statute, and if an opinion is not rendered within 90 days, the federal excess funds could transfer to the state candidate committee with no violation.  Therefore no decision is a yes decision.

Deputy Attorney General Suzuki, noted that they concur with conclusions in the draft advisory opinion.  The Commission would be acting in a quasi-judicial capacity in issuance of an advisory opinion, as opposed to a quasi-legislative process.

Chair Kuramoto noted the following as presenting comments, Mr. Calvert Chipchase, Esq. representing the Hawaii Republican Party; Mr. Lex Smith, Esq. representing The Hannemann committee; Mr. Karl Sandstrom, Esq. representing the Abercrombie committee; and Commission staff.

Commissioner Gabrio recused himself because Mr. Chipchase is representing the Republican Party in this matter and Mr. Chipchase and he are from the same law firm.

Chair Kuramoto noted that the Commissioners have received a copy of the Hawaii Republican Party letter dated August 3, 2009.

Mr. Calvert Chipchase, commented that the Hawaii Republican Party opposes allowing the transfer of federal funds to a state campaign because the transfer would violate state law.  The funds at issue are campaign funds as a matter of federal law, raised by a federal elected official for a federal office, which is held in a federal registered committee, is reported to the F.E.C., and has a treasurer that is registered with the F.E.C..  The Federal statutes allow a donation to a state or local candidate subject to state law.

This situation is similar to a case in Arkansas, in which a former federal elected official decided to run for governor and requested an opinion on whether he could transfer his federal funds to his state campaign.  The Arkansas commission denied his request based on the fact that Arkansas law did not allow for the transfer of federal campaign funds in an amount in excess of the applicable contribution limit imposed by state law.  Also that the funds were not the candidate’s own personal funds, the funds were not raised under applicable state law, and since the federal committee is a person, the committee is limited in how much it can contribute to the state campaign.  Hawaii law differs from federal law, in that Hawaii law provides that no candidate may raise more than 20% from non-resident contributors.  Mr. Chipchase mentioned as options that Hawaii law allows that that a noncandidate committee could be registered with the commission and it could contribute up to the $6,000 limit, and also, that the federal contributions could be returned to contributors and solicited under Hawaii laws.

Commissioner Robb and Mr. Chipchase engaged in a discussion regarding when the F.E.C.  considered whether to allow transfer of state campaign funds to a federal campaign that the F.E.C. noted it was necessary to examine each underlying contribution to determine whether it complied with federal law, which demonstrated they did not see the funds as the candidate’s own funds and that they saw the necessity for each contribution to comply with federal law.

Mr. Lex Smith, representing the Hannemann committee commented that Hawaii has a comprehensive campaign financing law that governs all funds raised for a state campaign, which should apply to the Commission’s decision regarding the draft advisory opinion.  He contended that Federal and state laws are different and should not be merged.

Mr. Karl Sandstrom, representing the Abercrombie campaign committee, reiterated that there is no statute or legislative history that prohibits Abercrombie from transferring his federal funds to his state campaign.  The only basis upon which contributions can be limited is to prevent corruption or the appearance of corruption.  Individuals can use funds they have dominion over as they cannot be corrupted by their own funds.  Congressman Abercrombie is no different from any other state candidate who wants to transfer his own funds from one election to another.  The State of Hawaii has concluded that there is no corruption associated with the transfer of campaign funds from one state campaign to the candidate’s next state campaign.

Mr. Paul Alston, also representing the Abercrombie campaign committee commented that the proposed advisory opinion contemplates the Commission engaging in rulemaking and the Executive Director has said that the prohibition is necessary to preserve transparency, when every penny of Abercrombie’s contributions can be accounted for.  If these two elements are taken out of the proposed opinion there would be no basis for the restriction.

Executive Director Wong reiterated her recommendation that federal excess campaign funds cannot transfer to a Hawaii state campaign committee, that funds are not his own funds, and that the proposed advisory opinion is not rulemaking.

Commissioner Olbrich moved to accept draft advisory opinion 09-01.  Motion seconded by Commissioner Robb.

Commissioners Robb and Olbrich suggested some edits to the draft.  Commissioner Weaver commented on whether the decision on this matter should be based on the fairness of the law or not.

Chair Kuramoto called for a 30 minute recess for staff to make discussed edits. (Meeting to resume at 11:30 a.m.)

Meeting reconvened at 11:50 a.m.

Executive Director Wong noted for the Commissioners edits made to the 7/31/09 draft advisory opinion as follows: page 3, section III, 2nd sentence edited; page 4, added new paragraph that begins “In 1993”; and page 8, section D, deleted sentences referring to state official.  Further edits suggested for the paragraph added on page 4.

Chair Kuramoto called for a 10 minute recess for staff to make edits to the draft. (Meeting to resume at 12:10 p.m.)

Meeting reconvened at 12:10 p.m.

After review of the final draft, Chair Kuramoto called for a vote on the motion to accept draft (8/11/09) advisory opinion 09-01.  Motion carried (aye-Kuramoto, Olbrich, Robb, Weaver / recuse-Gabrio).

Mr. Sandstrom asked to clarify whether the subchapter of Title 2 subtitle 1 is under which the matter is considered.  Another person with Mr. Sandstrom asked as to what type of rules this proceeding was being conducted.  Mr. Sandstrom was referred by the Chair to see General Counsel Grant Tanimoto after the meeting.

New Business:
Petition for Declaratory and Injunctive Relief
General Counsel Grant Tanimoto noted that in deciding this matter Commissioners have the following options: the petition could be denied, they could hear arguments at a later date, or they could assign the petition to a hearings officer.

Mr. Lex Smith, representing the petitioner, stated that in light of the Commission’s decision regarding agenda item #1, he offered to withdraw the petition and asked that the commission accept their filing as written testimony in regard to agenda item #1.

Commission Annual Report – Fiscal Year 2009
Executive Director highlighted the accomplishments of the Commission and staff for fiscal year 2009 and goals for the 2010 fiscal year.

Next Meeting:
Scheduled for Wednesday, September 9, 2009 at 10:00 a.m.

Commissioner Robb moved to convene an executive session to consult with attorney.  Motion seconded by Commissioner Weaver.  Motion carried.

Meeting reconvened at 12:53 p.m.

Commissioner Olbrich moved to adjourn meeting.  Motion seconded by Commissioner Weaver.  Motion carried.  Meeting adjourned at 12:55 p.m.