CSC Newsletter – January 2017, Vol. 23, No. 1

Posted in Newsletter

REMINDER TO ALL COMMITTEES TO FILE THE SUPPLEMENTAL REPORT

The next report for all committees is the Supplemental Report covering the period November 9, 2016 to December 31, 2016 (for candidates who ran in the 2016 election and all noncandidate committees) or July 1, 2016 to December 31, 2016 (for candidates who did not run in the 2016 election).  This report must be electronically filed on your respective filing systems (i.e., candidate filing system (CFS) or noncandidate committee filing system (NCFS)) no later than 11:59 p.m. Hawaiian standard time on Tuesday, January 31, 2017.

Failure to file this report by the deadline may result in a fine and, if you are a candidate committee, your committee’s name will be posted on the Commission website under “Committees That Failed to File or Correct a Report.”  Moreover, if a fine is assessed against your committee and you fail to timely pay it, Commission staff will issue a complaint against your committee and set it for consideration at the next public Commission meeting.  Be advised that at this meeting it is very possible that a higher fine may be assessed.  Therefore, we encourage all committees to timely file their reports to avoid having to pay any fines.

As a reminder, the reporting period for the Supplemental Report ended on December 31st so the report can be filed as early as January 1st, but no later than January 31st.  Committees do not have to wait until the January 31st deadline to file this report.

NEW – REPORTING SCHEDULES

The new reporting schedules have been posted on our website and are provided via the link below for your convenience to track upcoming reporting deadlines:

These reports must be electronically filed on your respective filing systems (CFS and NCFS) no later than 11:59 p.m. Hawaiian standard time on the day of the deadline.

SUMMARY OF THE 2016 ELECTION

We have posted on our website a summary of the data that all candidates who ran in the 2016 election filed with the Commission.  Among other items, you can see the total amount of monies raised and spent by office as well as top 10 lists of receipts, contributions received, loans, expenditures, and cost per vote.  Click here to view the 2016 election summary.

With respect to the 269 candidates who ran for 104 (out of 128) seats in the State of Hawaii, a total of $14,456,145.65 was raised and a total of $12,230,876.12 was spent.  Out of the 104 seats up for election in 2016, 19 (18% of the 104 seats) were unopposed meaning the incumbent candidate won outright in the Primary election.  In spite of this, these 19 candidates still raised $1,503,293.68 and spent $627,173.11 during their respective election periods.  Of the unopposed candidates, Honolulu District 3 Councilmember Ikaika Anderson raised the most money at $310,181.23 and House District 25 Representative Sylvia Luke spent the most money at $118,360.85.  Rep. Luke also had the highest cost per vote among the unopposed candidates at $33.04 per vote in the Primary election in which she received 3,582 votes. You can view a chart here which shows the 19 unopposed candidates with their receipts and expenditures.

The 2016 election also saw 21 (20% of the 104 seats) winning candidates outspent by their closest highest spending opponent. The highest disparity in spending was in the Hawaii Mayor’s race where Mayor Harry Kim was outspent by $186,263.03 or at a 14.5:1 ratio by newcomer and first time candidate Wally Lau.  Mayor Kim spent $13,805.26 at a cost per vote of $.67 for his 20,636 votes he received in the Primary election while Wally Lau spent $200,068.29 at a cost per vote of $20.08 for his 9,965 votes he received in the Primary election.  In the hotly contested House District 11 race, winning candidate Representative Kaniela Ing was outspent by $58,230.75 or at a 2:1 ratio by first time candidate Diedre Tegarden.  Rep. Ing spent $45,041.91 or $7.72 per vote for each of his 5,835 votes he received in the General election while his opponent Deidre Tegarden spent $103,272.66 or $84.72 per vote for each of her 1,219 votes in the Primary election.  Deidre Tegarden’s cost per vote was the highest of all 269 candidates that ran in 2016.  Rep. Ing, however, did benefit from an additional $62,203.13 in independent expenditure support from Super PAC S.A.F.E Sustainable Action Fund for the Environment compared to Tegarden who did not receive any Super PAC support in 2016.  District 33 Representative Samuel Kong also continues to spend minimally to win election having spent $753.71 or $.28 per vote for each of his 2,707 votes in the Primary election while his opponent Tracy Arakaki outspent him by $9,004.80 or at a 13:1 ratio having spent $9,758.51 or $3.65 per vote for each of his 2,670 votes in the Primary election.  Arakaki also benefited from an additional $4,524.90 in independent expenditure support from Super PAC Planned Parenthood of Hawaii Action Network.  Notably, in 2014, Rep. Kong spent no money to win his first election as a State Representative and in 2016 he spent the least of all the winning candidates on the ballot (Kauai OHA Trustee Daniel Ahuna actually spent $129.79 less but he was unopposed in 2016 and not on a ballot as prescribed by the OHA election laws).  You can view a chart here which shows spending by the 21 winning candidates compared to their closest highest spending opponent.

Of the remaining 64 (62% of the 104 seats) winning candidates in the 2016 election, all 64 candidates outspent their opponents with the most glaring race being the Honolulu Mayor’s race where incumbent Mayor Kirk Caldwell outspent his opponent Charles Djou in the General election by $2,447,493.53 or at a 3.5:1 ratio.  Mayor Caldwell spent $3,410,704.46 while Charles Djou spent $963,210.93.  To reach these heights, Mayor Caldwell had the benefit of holding 45 fundraisers since his last election in 2012 compared to Charles Djou who held 12 fundraisers all in a span of five months in 2016.  Mayor Caldwell’s 45 fundraisers topped the list of the number of fundraisers held by candidates that ran in 2016 and $100,000 in personal loans he made to his candidate committee about a week before the General election topped the list of candidate’s that received loans in 2016.  Another notable race was the Honolulu Prosecuting Attorney’s race where incumbent Keith Kaneshiro spent $100,684.38 while his opponent Anosh Yaqoob spent $0.  In the Senate races, Senator Donna Kim outspent her opponent Carl Campagna by $230,526.43 (26:1), Senate President Ron Kouchi outspent his opponent Kanoe Ahuna by $229,779.09 (10:1), Senator Kai Kahele outspent his closing highest spending opponent Dennis Onishi by $133,805.52 (5:1), Senator Brian Taniguchi outspent his opponent Kaui Amsterdam by $123,644.24 (4,947:1), Senator Karl Rhoads won the open Senate District 13 seat by outspending his closest highest spending opponent Kim Coco Iwamoto by $115,597.51 (3:1), and Senator Stanley Chang won the Senate District 9 seat by outspending incumbent Sam Slom by $96,357.98 (3:1).  Senator Chang spent $147,356.98 compared to Sam Slom who spent $50,999.  Senator Rhoads also benefited from $43,659.05 in joint independent expenditures in support of his candidacy from Super PAC Hawaii Realtors for Good Government and Senator Chang benefited from $11,168.01 in joint independent expenditures in support of his candidacy from Super PAC Planned Parenthood of Hawaii Action Network.  In the House, Representative Calvin Say topped the list by outspending his opponent Julia Allen by $101,759.20 (9:1) and Speaker Joe Souki outspent his opponent Gilbert Rebolledo by $84,708.36 (9:1).  You can view a breakdown of receipts and expenditures by office by clicking here.

This pie chart shows the total raised by office:

This pie chart shows the total spent by office:

With respect to the 17 Super PACs registered with the Commission in 2016, the Super PACs raised a total of $2,029,255.81 and spent a total of $1,663,481.83.  Of the moneys spent, $1,293,121.66 was specifically for independent expenditures with $857,478.86 of that being spent for positive advertising (i.e., in support of a candidate) and $435,642.80 for negative advertising (i.e., in opposition of a candidate).  Hawaii Realtors for Good Government, Kuleana Coalition for Change, S.A.F.E. Sustainable Action Fund for the Environment, and Save Our City LLC were the four new Super PACs that registered with the Commission in 2016. Click here to view the 2016 Election Summary for Independent Expenditure Committees.

Workers for a Better Hawaii raised the most out of all the 17 Super PACs having raised $983,000 with $500,000 of that coming from the Regional Council of Carpenters, $208,000 coming from the Hawaii Government Employees Association and $150,000 coming from the Hawaii State AFL-CIO with AFSCME chipping in $100,000 and Operating Engineers Local No 3 another $25,000.  Workers for a Better Hawaii also spent $966,014.56 which was the most of the Super PACS.  Honolulu Mayor Kirk Caldwell benefited the most from this spending with $613,616.17 being spent to support him and another $213,102.58 being spent to oppose his General election opponent Charles Djou.  Save Our City, LLC, on the other hand, spent $213,636.99 to oppose Mayor Caldwell’s reelection bid in 2016, but spent nothing to support Charles Djou’s bid to unseat the incumbent. The bulk of Save Our City’s funding came from engineer Dennis Mitsunaga who contributed $170,000 and another $36,900 came from 11 individuals employed by Mitsunaga & Associates, Inc., a company owned by Dennis Mitsunaga. Workers for a Better Hawaii was also active on the Big Island spending $12,791.16 to support Mayor Harry Kim, $4,641.05 to support House District 3 Representative Richard Onishi, and $4,120.55 to support unsuccessful Hawaii County Council District 3 candidate Moana Kelii. One Ohana PAC was also an active Super PAC in 2016 raising $380,380 and spending $169,981.58 with $28,806 going to support unsuccessful Maui County Council candidate Keith Regan, $15,054 to support successful Maui County Council candidate Yuki Sugimura, and another $33,406.55 for joint independent expenditures supporting Regan and Sugimura. On a side note, another Super PAC Forward Progress (aka Pacific Resource Partnership or PRP) who was very active in 2014 having raised $748,723.07 and spent $877,228.82 and, in 2012, as Pacific Resource Partnership PAC having raised and spent $3,208,715.33, only raised and spent $50,000 in 2016 to poll Oahu residents for rail and the 2016 elections.

In 2016, there were no ballot issue committees that registered with the Commission for the two (2) state constitution and thirty-three (33) county charter amendments on the general election ballot. In 2014, ballot issue committees set a state record by raising $13,526,038.73 and spending $12,516,105.90.

Notably, this was the first election that the public was able to view all reports filed by candidates prior to the general election.  Thank you 2016 candidate committees for your compliance with filing campaign finance disclosure reports in a timely manner!

PUBLIC FUNDS DISBURSED IN THE 2016 ELECTION

The Commission distributed public funding in the 2016 election to 28 candidates for a total of $202,190.49.  23 candidates received $121,035.62 in public funds for the primary election and 17 candidates received $81,154.87 for the general election.  12 candidates received public funding in both the primary and general elections.  12 candidates receiving public funds successfully won their election and 16 candidates were unsuccessful.  4 out of the 12 candidates that won were non-incumbents and they were: Arthur Brun (Kauai Council), Eileen Ohara (Hawaii Council/First time candidate), Jennifer Ruggles (Hawaii Council/First time candidate) and Yuki Lei Sugimura (Maui Council/First time candidate).  Yuki Lei Sugimura received the most in public funds in 2016 having received $26,262.87 ($15,820 for the primary election and $10,442.87 for the general election).  The partial program has been distributing public funding to qualified candidates since the 1980 election. Click here to view a list of the 146 candidates in 2016 that voluntarily agreed to the expenditure limit set for the office they were seeking and the 46 candidates in 2016 that informed the Commission of their intent to seek public funds.

 PROPOSED LEGISLATION FOR THE 2017 LEGISLATIVE SESSION

For the 2017 legislative session, the Commission has submitted eleven measures to the President of the Senate and the Speaker of the House for introduction.

  • Proposal CSC-01 (17) – Amends HRS §11-334 by clarifying the due dates of preliminary, final, and supplemental reports for candidates filing with the Commission.  The proposal makes clear that the Supplemental Report due on January 31st must be filed every year and not just “after an election year.”  Also requires candidates who are elected and to be sworn into office before the date the Final Election Period Report is due, to file the Final Election Period Report 3 business days before the candidate is to be sworn into office.
  • Proposal CSC-02 (17) – Amends HRS §11-340 to require the Commission to publish the names of noncandidate committees who fail to file a report on its website. The Commission is already required to publish the names of candidate committees who fail to file a report.
  • Proposal CSC-03 (17) – Amends HRS §11-340(c) to add the new 2nd Preliminary General Report due on October 1st of an election year for noncandidate committees in the schedule of fines ($300 minimum).
  • Proposal CSC-04 (17) – Amends HRS §11-410 by raising the amount of fine that can be assessed against a Super PAC (who receives at least one contribution of more than $10,000 from one person or has made expenditures of more than $10,000 in aggregate, in an election period) from $1,000 to $5,000 and to permit the fine to be up to three times the amount of the unlawful contribution or expenditure. Also, allows the Commission to recover its costs of investigative services and bank fees for subpoenaed records from violators.
  • Proposal CSC-05 (17) – Amends HRS §11-341 (electioneering communications) by changing “disclosure date” to when the electioneering communication is publicly distributed rather than when the contract for the electioneering communication is executed. This is in line with federal law and makes more sense.  Also, deletes “communications that constitute expenditures by the expending organization” from the exceptions to the definition of “electioneering communications” to make it clear that candidate and noncandidate committees are required to file statements of information.
  • Proposal CSC-06 (17) – Amends HRS §11-412(b) to provide that the applicable statute of limitations for criminal prosecution of campaign spending violations shall not commence until the Commission’s discovery of the offense. This amendment was recommended by the Attorney General’s Office – Criminal Justice Division.
  • Proposal CSC-07 (17) – Amends HRS §11-322(a) by deleting the requirement that contributions be reported in the organizational report of candidate committees. There is no space in the organizational report to list contributions.  The Commission has not required candidates to report contributions in the organizational report.
  • Proposal CSC-08 (17) – Amends HRS §11-323(a) by deleting the requirement that contributions be reported in the organizational report of noncandidate committees. There is no space in the organizational report to list contributions.  The Commission has not required noncandidate committees to report contributions in the organizational report.
  • Proposal CSC-09 (17) – Amends HRS §11-324(e) to require treasurers of candidate and noncandidate committees to keep information about the employer and occupation of all contributors.
  • Proposal CSC-10 (17) – Amends HRS §11-339 to require candidates who do not intend to have more than $1,000 in activity to provide notice to the Commission of such intent by June 30 of an election year and to require noncandidate committees who do not intend to have more than $1,000 in activity to provide notice to the Commission of such intent by the 5th calendar day prior to the due date of the Preliminary Primary Report.
  • Proposal CSC-11 (17) – Amends HRS §11-363 by placing the treatment of the payment for the republication of a candidate’s campaign material by a person in a separate subsection for clarity and to add four allowable uses of a candidate’s campaign material which is line with state and federal law.

STATUS OF THE HAWAII ELECTION CAMPAIGN FUND AND REMINDER TO CHECK OFF $3 ON YOUR 2016 TAX RETURN

As many of you know, the Commission operates from a trust fund called the Hawaii Election Campaign Fund.  However, you may not know that in addition to providing public funding to qualified candidates, this fund pays for the Commission’s operations such as staff salaries, investigative services, expenses for subpoenas and process servers, training, and office supplies.

For the past ten fiscal years (FY 2007-FY 2016), the Commission has been operating at a net deficit and the fund has not been generating enough revenue to sustain operations.  The health and sustainability of this Commission depends on greater participation of Hawaii taxpayers in checking off the $3 “yes” box which permits $3 from state funds (or $6 if married and filing a joint return) to be allocated to the Hawaii Election Campaign Fund.  Checking off this box does not increase your tax or reduce your refund.

So, if you are a Hawaii taxpayer, please remember to mark the $3 tax check-off on your 2016 state income tax return so that the Commission can continue to “follow the money” of state and county elected officials, candidates, noncandidate committees, ballot issue committees, and Super PACs.

Choose “Yes” for the Hawaii Election Campaign Fund on your state income tax return

By marking the $3 “Yes” checkbox for the Hawaii Election Campaign Fund, you support the work of the Hawaii Campaign Spending Commission. The Commission serves Hawaii voters by helping to ensure that:

  • political candidates’ donations and how candidates spend these donations are lawful and transparent.
  • more qualified candidates have an opportunity to run for office

 Choose “Yes” on your tax return.

It does NOT reduce the amount of your refund or increase the amount of your tax payment.

UPDATED DOWNLOADABLE CALENDAR AVAILABLE ON THE COMMISSION’S WEBSITE

The Commission’s downloadable calendar of events has been updated and includes (but not limited to) the candidate committee and noncandidate committee reporting schedules, our Commission’s monthly meeting schedule, and the State holidays.  The calendar can be downloaded by individuals into their Apple, Google, Microsoft, Outlook, and Yahoo calendars as well as many other calendar programs that use the standard iCal format, from our Commission’s homepage on our website.  The updated downloadable calendar can be viewed here:

TERMINATION OF COMMITTEE REGISTRATION WITH THE COMMISSION

If you are a candidate who does not anticipate running in a future State or county election, or you are a noncandidate committee that does not intend to participate in future State or county elections, and your committee has no surplus or deficit in campaign funds, you may want to consider terminating your registration with the Commission.  If so, you will need to complete and submit the following documents:  (1) A “Candidate Committee Request for Termination of Registration (eSign)” form or “Noncandidate Committee Request for Termination of Registration (eSign)” form; and (2) A closing bank statement verifying that your committee’s bank account has been closed.  Further, you must not have any outstanding fines or unresolved matters with the Commission.  Assuming everything is in order, the Commission will approve your termination request and you will no longer be required to electronically file reports with the Commission.

OVERWHELMING SUCCESS OF EMPLOYMENT OF eSIGN FORMS

On February 1, 2016, the Commission employed eSign forms for committees to use as an additional and alternative way to submit forms for the 2016 election.  The new tool was made available through the Office of Enterprise Technology Services’ commitment to employ new technology to improve government efficiency, services, and communication.  The success of this employment has been tremendous to the Commission.  To date, we have received over 1,100 eSign documents since we launched this application.

For candidate committees, eSign is available for the following forms:  (1) Electronic Filing Form; (2) Executed Loan Document; (3) Notice of Intent to Hold a Fundraiser; (4) Request for Termination of Registration; and (5) Public Funding – Statement of Intent to Seek Public Funds.  For noncandidate committees, eSign is available for the following forms:  (1) Electronic Filing Form; (2) Notice of Intent to Hold a Fundraiser; and (3) Request for Termination of Registration.

For those committees who are unfamiliar with eSign, these forms are completed, esigned, and emailed directly to the Commission from Adobe Sign which we are using for this purpose.  Forms requiring multiple signatures (i.e., Electronic Filing Form and Executed Loan Document) must be completed, esigned, and emailed separately by each person required to sign the form.  The Commission will not process a multiple signature form until the form is complete with all the required signatures and will leave it to the committee to ensure that a proper and complete form has been submitted.

NEW – AMENDMENTS TO THE COMMISSION’S HAWAII ADMINISTRATIVE RULES

The Commission proposed amendments to Chapter 3-160 (Election Campaign Contributions and Expenditures) and Chapter 3-161 (Administrative Practice and Procedure Before the Campaign Spending Commission) of the Hawaii Administrative Rules.  The amendments for the most part updated obsolete references to the HRS and made technical and grammatical corrections.  It also updated the rules to address recent amendments to the HRS, including the implementation of the hardship waiver in HRS §11-393(c) (Act 112, Haw. Sess. Laws 2013), which requires Super PACs to identify its top contributors in their advertisements, and the defining of “close to depletion” and “near depletion” of the Hawaii Election Campaign Fund which will impact the operation of the partial public financing program.

The amendments went into effect on December 9, 2016 and can be viewed here:

2017 STANDARD MILEAGE RATE ANNOUNCED BY INTERNAL REVENUE SERVICE (IRS)

For candidates that seek reimbursement from campaign funds for the campaign related use of a personal vehicle, the federal standard mileage rate for 2017 is 53.5 cents per mile (which is less than last year).  See IRS Notice 2016-79 (Section 3) which was adopted by Comptroller’s Memorandum No. 2016-23.  The Commission reminds candidates that a daily mileage log noting the campaign use and personal use of the personal vehicle satisfies recordkeeping requirements of Hawaii Administrative Rules §3-160-23.  See, Hawaii Administrative Rules §3-160-45(b)(2).

RESULTS OF THE COMMISSION’S 2016 ONLINE SURVEY

Mahalo to everyone who responded to our 2016 Online Survey.  View the 2016 Survey Results and the Report on 2016 Annual Online Survey in the minutes of the Commission’s monthly meeting held on November 16, 2016.

2017 MEETING SCHEDULE

Commission meetings for 2017 are scheduled for the 2nd Wednesday of each month at 10:00 a.m. in Conference Room 204, Leiopapa A Kamehameha Building, 235 S. Beretania Street, Honolulu, Hawaii 96813.  View the 2017 Meeting Schedule.  Meeting location, dates and times are subject to change so please check the “2017 Meeting Schedule” page prior to attending a meeting.