Campaign Spending Commission

Campaign Spending Commission Meeting
Leiopapa A Kamehameha Building, Room 204
April 14, 2010
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, Linda Takushi, Ellen Kojima
Deputy Attorney General Robyn Chun

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

Consideration of Minutes:
Commissioner Gabrio moved to approve the minutes of the February 10, 2010 meeting as amended.  Motion seconded by Commissioner Weaver.  Motion carried unanimously. (Olbrich-abstain)

New Business:
Proposed Conciliation Agreement 10-01  In Re the Matter of John Henry Felix, Felix  for City Council
Proposed conciliation agreement is to settle claims regarding alleged acceptance of six excess loans, false reporting for the Preliminary Special Election report and false reporting for the Final Special Election report in violation of HRS sections 11-195, 11-205.6, 11-212 and 11-213.

Executive Director Wong presented the facts of the Conciliation Agreement including:

-Respondent John Henry Felix was a candidate in the 2009 special election for the office of Honolulu City Council District 3;
-Respondent Felix for City Council is the candidate committee for Felix;
-Respondent Felix filed nomination papers on 3/2/09;
-Election period for the District 3 special election was 11/5/08 to 4/23/09;
-Respondents accepted loans from William McCorriston aggregating $65,000 which were deposited into Felix Central Pacific Bank Account (“CPB Account 1”);
-Respondents accepted loans from Lawrence Tseu aggregating $100,000 which were deposited into Felix Central Pacific Bank Account (“CPB Account 1”);
-Seven checks were drawn on Felix Central Pacific Bank Account 1 aggregating $115,000 and were deposited into the Felix for City Council Central Pacific Bank account;
-Respondent Felix’s Preliminary Special Election report disclosed 4 loans from Felix aggregating $70,000 and Final Special Election report disclosed 3 loans from Felix aggregating $45,000;
-Respondent Felix asked McCorristion for a $20,000 loan for the purpose of moving from Aina Haina, which is located in District 4 to Lanikai, located in District 3;
-Respondent Felix became a candidate for the City Council District 3 seat on or before 2/10/09 by accepting a $20,000 loan from McCorriston.
-The $20,000 loan was deposited into Felix’s CPB Account 1 on 2/20/09;

Two letters from Respondent Felix were received by the staff on 5/26/09, as set forth in the draft Conciliation Agreement.  In one of the letters, Felix wrote that there was an agreement that Felix would advance a $100,000 donation to Harris Manchester College on behalf of Tseu and that Tseu would repay Felix within five years.   Tseu repaid $50,000 to Felix with a check dated 3/16/09.

Executive Director Wong recommended making a preliminary determination of probable cause.

The following Commissioners noted for the record, though not requiring recusal:

*Chairperson Kuramoto served on a non-profit board with Mr. Lawrence Tseu.
*Commissioner Robb said a partner in his law firm represented an entity of which Mr. Felix is a board member.
*Commissioner Gabrio said that his law firm is involved in matter with a company adverse to a company for which Mr. Felix signed a guaranty.  Commissioner Gabrio understands that the matter is being settled and sees no reason to recuse himself from this matter.

Mr. Warren Price, Esq., representing Respondents John Henry Felix and Felix for City Council, commented that Mr. Felix has been involved in many campaigns for office and that for this special election tried to run the campaign himself and many mistakes were made.   Felix understands that technical violations were made and takes full responsibility and agrees with the conciliation agreement.  Also, noted for the record that Mr. Felix’s Aina Haina home was on the market before November, 2008.

Commissioner Robb moved that a preliminary determination of probable cause be made.  Motion seconded by Commissioner Gabrio.  Motion carried unanimously.

Executive Director Wong notes that Respondents waive Findings of Facts and Conclusions of Law and asked for and waived a contested case hearing.

Executive Director Wong recommended that the proposed conciliation agreement be accepted with a fine of $50,000, which Respondents have agreed too, subject to Commission approval.

There was discussion regarding the fine and the options available if the Commission does not accept the proposed conciliation agreement.

It was suggested that the last paragraph (page 18) of the conciliation agreement be modified to read that the agreement is only with Respondents Felix and his committee.  Mr. Price stated that he represents Mr. Felix and his committee only and accepts the change on behalf of Mr. Felix.

Commissioner Robb was bothered that several loans were involved and that others may try to do the same thing.

Commissioner Gabrio moved to accept the proposed conciliation agreement with the modification of the last paragraph.  Motion seconded by Vice-Chair Olbrich.  Motion carried unanimously.

Proposed Conciliation Agreement 10-02  In Re the Matter of Peter Robson
Executive Director Wong recommended that the agreement be amended to reflect Seina Properties, L.L.C. as the respondent, as the excess contribution was made by Siena Properties, L.L.C.

Executive Director Wong presented the facts as follows:

– Gary Hooser a candidate for Lt. Governor self-reported receiving an excess contribution from Seina Properties, L.L.C. in violation of HRS sections 11-204(a)(1) and 11-204(f);
– Section 11-204(a)(1), provides that contributions to a candidate seeking a four-year statewide office is $6,000 for the election period;
– Section 11-204(f) provides payments made by a person whose contributions are financed, maintained, or controlled by a person shall be aggregated and considered to be made by a single person;
– Peter Robson made a $5,000 contribution on 4/14/2009;
– Seina Properties, L.L.C. made a $5,000 on 12/31/2009; and
– Peter Robson finances, maintains or controls Seina Properties, L.L.C as Manager.

Executive Director Wong recommended making a preliminary determination of probable cause.

Commissioner Robb moved that a preliminary determination of probable cause be made.  Motion seconded by Commissioner Olbrich.  Motion carried unanimously.

Executive Director Wong further noted that Respondent waived Findings of Facts and Conclusion of Law and requested a contested hearing.  Respondent waived a contested case hearing.  Executive Director Wong recommended that the conciliation agreement be accepted with an assessment of a $560 fine.

Respondent agrees to the Conciliation Agreement and Gary Hooser returned the excess contribution within 30 days.

Commissioner Olbrich moved to accept Conciliation Agreement 10-02.  Motion seconded by Commissioner Robb.  Motion carried unanimously.

Update on Proposed Legislation 2010
Commissioners given a handout detailing the current status of HB 2003 and other bills of interest.

HB 2003 – (Recodification) Scheduled for Conference Committee hearing Thursday, April 15, 2010.
HB 2397 – (Primary election date) Scheduled for Conference Committee hearing, Thursday, April 15, 2010.

Staff has asked the legislature to adjust reporting deadlines accordingly if the primary election date is changed.

Executive Director Wong informed Commissioners that in the passage of the recodification last year, the Commission’s ability to “at pleasure” dismiss employees of the Commission was changed by the Senate who removed “at pleasure.”  Staff submitted written testimony and orally testified to reinstate the “at pleasure” into HRS section 11-193 (11-F in H.B. 2003).  The Senate added “at its discretion” to dismiss.

Corporate Money in Politics Panel
Common Cause invited staff to participate on panel that discussed Citizens United and its impact on Hawaii and we were asked to provide an analysis of the Tavares decision.

Executive Director Wong announced her decision to retire effective October 28, 2010.

Commissioner Robb moved to convene an executive session to discussion personnel matters.  Motion seconded by Commissioner Weaver.  Motion carried unanimously.

Executive session convened at 11:15 am.  Public session reconvened at 11:44 a.m.

Next Meeting:
Scheduled for Wednesday, May 12, 2010 at 10:00 a.m.

Commissioner Gabrio moved to adjourn meeting.  Motion seconded by Commissioner Weaver.  Motion carried unanimously.  Meeting adjourned at 11:45 a.m.