Campaign Spending Commission

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
December 12, 2012
10:00 a.m.

Commissioners Present:
Michael Weaver, Tina Pedro Gomes, G. William Snipes, Gregory Shoda, Eldon Ching

Staff Present:
Kristin Izumi-Nitao, Tony Baldomero, Gary Kam, Ellen Kojima
Deputy Attorney General Robyn Chun

Call to Order:
Meeting convened at 10:05 a.m. with Chair Weaver presiding.

Consideration of Minutes:
Commissioner Gomes noted a correction to be made on page 4 concerning Docket 13-10 – i.e., motion was seconded by Vice-Chair Snipes.

Commissioner Gomes moved to approve the minutes as amended.  Motion seconded by Vice-Chair Snipes.  Motion carried unanimously.

New Business
Executive Director Izumi-Nitao stated that the following proposed conciliation agreements are a result of investigations that she initiated in September, October, and November 2012 pursuant to HRS §11-314(7) to determine whether there has been a violation of the Hawaii campaign spending laws.

Respondents have been notified in a letter of the fine that Commission staff computed as a result of their late filed report and/or excess contribution.   Further, they have been notified of today’s meeting, received a copy of the proposed conciliation agreement, and waived the opportunity to explain or otherwise respond to the notice of violation.  She recommended that the Commission make a preliminary determination of probable cause that a violation has been committed, waive further proceedings, and approve the settlement amounts as stated in each of the proposed agreements.

Commissioners noted that each of the following proposed conciliation agreements had been reviewed.

CA 13-51  In Re the Matter of Outrigger Hotels Hawaii Political Action Committee
CA 13-52  In Re the Matter of Assurance Financial Partners, LLC
CA 13-53  In Re the Matter of Automated HealthCare Solutions
CA 13-54  In Re the Matter of Billy Kealamaikahiki Swain for OHA
CA 13-55  In Re the Matter of Masons Local 630 – PAC
CA 13-56  In Re the Matter of Masons & Plasterers Fraternal Association-PAC
CA 13-57  In Re the Matter of Local #1 – PAC
CA 13-58  In Re the Matter of Lake Erie Wholesale Medical Supply, Inc.

Commissioner Gomes had questions regarding how fines are assessed.  Executive Director Izumi-Nitao explained that historically this is how agreements have been written and how the fines have been assessed.  Regarding CA 13-58, this agreement is to collect a fine assessed for an excess contribution to a sitting senator.  The excess contribution has been escheated to the Hawaii Election Campaign Fund.

Vice-Chair Snipes moved that the Commission make a preliminary determination that probable cause exists that a violation had been committed and accept the settlement terms and amounts as stated in each conciliation agreement.  Motion seconded by Commissioner Gomes.  Motion carried unanimously.

Docket No. 13-13 – in Re the Matter of Adam Reeder, Melissa Reeder, and Friends of Adam Reeder
Executive Director Izumi-Nitao reported that a complaint was filed for the failure to comply with the Commission’s Order from Conciliation Agreement No. 13-44 and payment of a fine for the untimely filing of the 2nd Preliminary Primary and Final Primary reports.

Respondent Adam Reeder was a candidate in the 2012 election for the office of State House Representative, District 41, and Respondent Melissa Reeder is listed as the Treasurer for the candidate committee Friends of Adam Reeder.  Respondents did not timely file the 2nd Preliminary Primary and Final Primary reports.  Fines associated with these reports were reduced via Conciliation Agreement No. 13-44, which was approved by the Commission at its 10/10/12 meeting.  Respondents were informed that the conciliation agreement was approved.  They did not sign or remit payment as specified in the Commission’s Order by the 11/1/12 deadline.  Staff attempted on several occasions to obtain compliance to no avail.  On 11/13/12, the complaint was sent to Respondents and informed that it was set to be heard at the Commission’s 12/12/12 meeting.

Staff recommended that the Commission make a preliminary determination pursuant to HRS §11-405(a) that probable cause that a violation exists and asses a fine of $300 for Count I and $200 for Count II.

Commissioner Ching moved that the Commission make a preliminary determination that probable cause exists that a violation has been committed and to accept the fine of $500 as stated in Docket 13-13.  Motion seconded by Commissioner Shoda.  Motion carried unanimously.

Docket No. 13-17 – In Re the Matter of Balanced View Point PAC and Michael Kawaharada
Executive Director Izumi-Nitao reported that a complaint was filed for the untimely filing of the Preliminary General Report and failure to pay assessed fine.

Respondent is a registered noncandidate committee and Respondent Kawaharada is listed as the chairperson and treasurer of the noncandidate committee.  The Preliminary General report was due on 10/29/12.  On 10/30/12, Respondent’s report was filed and a notice assessing a fine of $300 to be paid by 11/13/12 was sent.  On 11/14/12, Respondents were contacted and informed that if the fine was not paid a complaint would be filed.  Respondents informed staff that payment would not be forthcoming.  On 11/15/12, the complaint was sent to Respondents and informed that it was set to be heard at the Commission’s 12/12/12 meeting.

Staff recommended that the Commission make a preliminary determination pursuant to HRS 11-405(a) that probable cause that a violation exists and assess a fine of $300.

Vice-Chair Snipes moved that the Commission make a preliminary determination that probable cause exists that a violation has been committed and to accept the fine of $300 as stated in Docket 13-17.  Motion seconded by Commissioner Ching.  Motion carried unanimously.

Docket No. 13-18 – In Re the Matter of Pfizer, Inc. and Marc Scarduffa
Executive Director Izumi-Nitao reported that a complaint was filed for the untimely filing of the Preliminary General Report and failure to pay assessed fine.

Respondent is a registered noncandidate committee and Respondent Scarduffa is listed as the chairperson and treasurer of the noncandidate committee.  The Preliminary General report was due on 10/29/12.  On 10/29/12, Respondent’s custodian of books and accounts contacted the Commission and informed staff that they were in the midst of Hurricane Sandy and that there headquarters had no power and that they would not be able to file the report by the deadline.  The report was filed on 11/6/12, and on 11/7/12, a notice assessing a fine of $300 was sent.  Respondents wrote the Commission requesting consideration of the circumstances for the late filing.  Staff informed Respondents of options that could be offered at the staff level, such as a conciliation agreement to reduce the fine, termination of registration, or the filing of a complaint.  In discussions with Respondents, it was understood that staff would file a compliant for the Commission meeting on 12/12/12 and Respondents would request a waiver of the fine in writing in response to the complaint.  Respondents did not submit a response.

Staff recommended that the Commission make a preliminary determination pursuant to HRS §11-405(a) that probable cause that a violation exists and assess a fine of $300.

Discussion regarding the disposition of the complaint ensued.  Because of the circumstances and because staff was notified on the day that the report was due, Commissioners were inclined to dismiss the complaint.

Commissioner Ching moved to dismiss the complaint in consideration of the circumstances of Hurricane Sandy.  Motion seconded by Commissioner Gomes.  Motion carried unanimously.  Commissioners noted that Respondents be informed that the dismissal was due to the circumstances of the hurricane.

Docket No. 13-19 – In Re the Matter of John White, Stacey Katakura, Friends of John White and Joe Leoni
Executive Director Izumi-Nitao reported that the complaint filed against the Respondents concerned an excess contribution because it originated from a loan without proper documentation.    On 12/7/12, Respondent Leoni produced the $10,000 loan document and copy of the check for the $1,000 reimbursement from Respondent White. Based on the submitted documents, no violation has been committed.  Staff is withdrawing complaint.

Consideration of Modification to Executive Director’s Position Description
Executive Director Izumi-Nitao explained that she is seeking the Commission’s permission to modify the position description of the Executive Director to include a desirable qualification of possessing an attorney’s license.

Discussion ensued on whether a desirable qualification of having an attorney’s license be included in the executive director’s position description.

Commissioner Gomes moved that Executive Director’s position description include a desirable qualification of possessing an attorney’s license.  Motion seconded by Commissioner Ching.  (Ayes – Weaver, Gomes, Snipes, Ching / Abstain – Shoda)

Old Business:
Docket No. 11-08 – In Re the Matter of Dawn K. Wasson and Friends of Dawn K. Wasson
General Counsel Kam reported that on 4/15/11 the Commission issued its Preliminary Determination against Respondents, which assessed a fine of $900 for the late filing of 4 disclosure reports.  Respondents requested to make payments in installments, but fell behind.  To date, balance outstanding is $575.  Staff recommended that pursuant to HRS §11-410(c) the Commission order that the fine be paid from personal funds of Respondent Wasson.

Commissioner Shoda moved that fine assess Respondent Wasson be paid from personal funds.  Motion seconded by Commissioner Gomes.  Motion carried unanimously.

Consideration and Discussion of Strategic Planning
Executive Director Izumi-Nitao noted that the roles and responsibilities of the Commission are set by statute are largely regulatory in nature.  A strategic plan helps shape the Commission’s future identity and function, sets long-term priorities, and establishes the foundation to make choices in the short-term to influence the future.  The current plan has 6 goals: (1) Simplify and clarify laws to improve implementation and compliance; (2) Increase public education, awareness, and access; (3) Increase technological capacity to improve access/compliance and reduce paperwork; (4) Upgrade training to better comply with laws; (5) Encourage compliance; and (6) Increase and stabilize the Commission’s institutional capacity to carry out its mission.

Staff comments on the present Commission’s strategic plan are that the goals remain viable but may overlap.  Also, input from the Commissioners is needed such as whether new goals or strategies are needed, whether a vision statement is needed, whether the audience or constituents (i.e., who the Commissions services) has changed or should it change, whether core values should be identified, whether action items should be reclarified or prioritized, and whether the time horizon should be 5-years or 10-years.  Discussion also needed on how process should be handled, whether to procure a facilitator or strategic planner, and designation of roles and phases between staff and commissioners (i.e., pre-planning, meetings, and public input).  She will be spearheading the project and asked commissioners input on how the process should proceed.

Discussion ensued on whether to appoint a subcommittee, or whether all staff and commissioners be a part of process, OIP sunshine procedure concerns, and commission practices and procedures.  It was decided that a majority of the Commissioners would be involved in the tweeking of the Commission’s present strategic plan and that Executive Director Izumi-Nitao would procure a strategic planner to facilitate these meetings.  With respect to whether strategic planning session would need to comply with sunshine laws (i.e., HRS chapter 92), Deputy Attorney General Chun would follow-up on the matter.

Proposed 2013 Legislation
General Counsel Kam presented the proposed 2013 legislation for Commissioner consideration.  The proposed legislation includes:

– Section 1 – HRS §11-301 Definitions – adds the definition of “matching payment period” back into HRS.
– Section 2 – HRS §11-314 Duties of Commission – housekeeping amendments.
– Section 3 – HRS §11-321(e) Registration of Candidate and Noncandidate Committees – corrects an incorrect statutory citation (correction to reference HRS §11-322 (candidate committee organizational reports) and not HRS §11-323 (noncandidate committee organizational reports))
– Section 4 – HRS §11-331(d) Filing of Reports – corrects an incorrect statutory citation (correction to reference HRS §11-321 (noncandidate committee registration) and not HRS §11-323 (noncandidate committee organizational reports))
– Section 5 – HRS §11-334(a)(4) Time for Candidate Committees to File Preliminary, Final, and Supplemental Reports – requires the supplemental report to be filed by candidate committees on January 31 regardless of whether it is an election year
– Section 6 – HRS §11-335 Noncandidate Committee Reports – requires noncandidate committees to report contributions made by noncandidate committees and identify candidate supported or opposed by independent expenditures
– Section 7 – HRS §11-336(d) Time for Noncandidate Committees to File Preliminary, Final, and Supplemental Reports – requires the supplemental report to be filed by noncandidate committees on January 31 regardless of whether it is an election year
– Section 8 – HRS §11-359(b) Family Contributions – corrects an incorrect statutory citation (correction to exempt HRS §11-357 (candidate contribution limits) and not HRS §11-355 (government contractors’ ban))
– Section 9 – HRS §11-423 Voluntary Expenditure Limits; Filing Affidavit – increases the amount of expenditures a publicly financed candidate for the office of the prosecuting attorney can make and requires the filing of the expenditure limitation affidavit no later than the time of filing nomination papers.

Commissioner Ching moved to accept the proposed 2013 legislation.  Motion seconded by Commissioner Gomes.  Motion carried unanimously.

Executive Director Izumi-Nitao informed Commissioners that staff has met with Senate President Shan Tsutsui and Senate Judiciary Chair Clayton Hee regarding the proposed 2013 legislation.  Common Cause intends to submit a bill similar to the latest version of HB 2174 with some changes.  Staff will also be meeting with Kory Payne regarding legislation that may impact the public funding programs.

Report from Executive Director:
Welcome of New Commissioners and Report on 11/20/12 Orientation
Executive Director Izumi-Nitao welcomed new Commissioners Eldon Ching and Gregory Shoda.  Commissioner Ching is a graduate of Iolani School, Loyola Marymount University, and Santa Clara University School of Law.  He is a store owner and Vice-President/Secretary of Diamond Head Memorial Park.  He is also President and Director of the Kahala Business Association and is involved with other community and corporate boards.

Commissioner Shoda attended Roosevelt High School and matriculated at the University of Hawaii at Manoa.  He served in the US Army and following service he was employed with the federal government with the Department of Veterans Affairs.  Since retiring, he has been a volunteer tutor at Manana Elementary School.

A half-day orientation was held on 11/20/12 at the office and they were briefed on operations, legal, legislation, reporting systems, and communications.

Report on Compliance of Filing Timely Disclosure Reports
1 – 1st Preliminary Primary Report for the period 1/1/12 – 6/30/12 due on 7/12/12 for candidates whose names appear on the 2012 ballot:  Full compliance
2 – Supplemental Report for the period 1/1/12 – 6/30/12 due on 7/31/12 for candidates whose names are not on the 2012 ballot:  One candidate committee has not filed
3 – 2nd Preliminary Primary Report for the period 7/1/12 – 7/27/12 due on 8/1/12 for candidates whose names appear on the 2012 ballot:  Full compliance
4 – Preliminary Primary Report for the period 1/1/12 – 7/27/12 due on 8/1/12 for noncandidate committees and corporations:  Full compliance
5 – Late Contributions Report for the period 7/28/12 – 8/7/12 due on 8/8/12:  Full compliance
6 – Final Primary Report for the period 7/28/12 – 8/11/12 due on 8/31/12:  Full compliance
7 – Preliminary General Report for the period 8/12/12-10/22/12 or 1/1/12-10/22/12 due on 10/29/12:
 -Candidate Committees – 4 non-filers
 -Noncandidate Committees – Full compliance
8 – Final Election Period Report for the period 8/12/12-11/6/12 or 1/1/12-11/6/12 or 10/23/12-11/6/12 due on 12/6/12:
 -Candidate Committees – to date 16 non-filers
 -Noncandidate Committees – to date 8 non-filers
9 – Public Funds Expenditure Report for the period 1/1/12-11/6/12 due 12/6/12: Full compliance

Update on Public Funding Programs – HCCCPF and Partial Public Funding
Associate Director Tony Baldomero reported that for the Hawaii County Council Comprehensive Public Funding Program (HCCCPF), 8 candidates were certified with $215,344.23 distributed and 5 candidates being successful.  With regard to Partial Public Funding, $146,000 distributed to 22 candidates with 9 candidates being successful.  Last day to apply for public funding is 12/6/12.

Report on COGEL Conference
Executive Director Izumi-Nitao reported that the 2012 COGEL Conference was held in Columbus, Ohio with 8 from Hawaii in attendance.  Pleased to find that Hawaii is well placed in the campaign finance world.  Found that significant areas Hawaii is excelling in are mandatory electronic filling, communication through technology and social media, enforcement, and building partnerships and relationships with legislators, PACs, community interest groups, elections, ethics, etc.  Areas that staff needs to be aware of include independent expenditures, electioneering communications, and new trends such as contributions by text messaging and money laundering via non-profit organizations.

Next conference will be 12/8-11/2013 in Quebec, Canada and will recommend that 2 staff and 2 Commissioners attend.

Associate Director Baldomero, Chair Weaver and Vice-Chair Snipes offered similar comments regarding the conference.  Chair Weaver also commented that he hoped that Commissioners will continue to be able to attend.

Report on January 2013 CSC Bulletin
Executive Director Izumi-Nitao commented the newsletter is being worked on and that some items that newsletter will include are: Reminders of the Supplemental Report filing, $3 tax check-off, and to subscribe to CSC facebook, tweeter and email, as well as updates of the public funding programs, 2013 proposed legislation, notice of the CSC 2012 Annual Report, and introduction of new Commission members.

Also, this is the first newsletter that will not be mailed, but e-blasted to candidates, noncandidate committees, corporations, and those who subscribed to receive email.

Report on Memos to Successful and Unsuccessful 2012 Candidates
Executive Director Izumi-Nitao reported that on 11/9/12 a memo was mailed to 112 candidates and 5 Hawaii county council comprehensive public funded candidates who were successful in the 2012 election informing them of next steps concerning campaign funds.

Also, on 11/15/12, a memo was e-blasted to unsuccessful candidates informing them of their options with regard to campaign funds now that the 2012 election is over.  This memo was also posted on the website.

Certification of 2012 Elected Officials
Executive Director Izumi-Nitao reported that before an elected official could be sworn in to office they need to have filed all of their disclosure reports including the Final Election Period Report.  On 11/19/12, staff started sending weekly memos to the Office of Elections and County Clerks regarding the filing of the Final Election Period Report by elected officials.  All elected officials are up to date in filing their reports except for Rida Cabanilla.

Report on 2012 Campaign Statistics
Deferred until the January 2013 meeting.

Commissioner Gomes moved to convene executive session to consult with attorney.  Motion seconded by Vice-Chair Snipes.  Motion carried unanimously.

Public Session reconvened

Next Meeting:
Scheduled for Wednesday, January 9, 2013 at 10:00 a.m.

Commissioner Gomes moved to adjourn meeting.  Motion seconded by Commissioner Ching.  Motion carried unanimously.  Meeting adjourned at 12:25 p.m.