Campaign Spending Commission

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
April 12, 2017
10:00 a.m.

Commissioners Present
Bryan Luke, Adrienne Yoshihara, Gregory Shoda, Eldon Ching, Kenneth Goodenow

Commissioners Excused
None

Staff Present
Kristin Izumi-Nitao, Tony Baldomero, Gary Kam, Sandrina Lee
Supervising Deputy Attorney General Pat Ohara and Deputy Attorney General Valri Kunimoto

Call to Order
Chair Luke called the meeting to order at 10:00 a.m.

Consideration and Approval of Minutes on 3/8/17
Chair Luke asked for comments or changes.  Vice Chair Yoshihara sought the following amendments:

• Page 1, under “New Business,” 1^st paragraph, 4^th and 5^th sentence, to read: “Further, each committee has been notified of today’s meeting and received a copy of the proposed Conciliation Agreement.  Executive Director Izumi-Nitao recommended that the Commission make a preliminary determination of probable cause that a violation had been committed in each matter, waive further proceedings, and approve the settlement amounts stated in each of the proposed agreements.”

• Page 5, 1^st paragraph, 2^nd sentence, to read: “He noted that staff will continue to update the legislative spreadsheet and inform the Commissioners of the status of the bills at each meeting.”

Chair Luke called for a motion to approve the minutes as amended.

Commissioner Goodenow moved to approve the amended minutes of 3/8/17.  Motion seconded by Commissioner Ching.  Motion carried (5-0).

New Business
Executive Director Izumi-Nitao stated that the next two (2) matters concern the late filing of the Supplemental Report which was due on January 31, 2017.  The proposed Conciliation Agreements resulted from investigations pursuant to HRS §11-314(7) to determine whether there had been a violation of the Hawaii campaign spending laws.  The committees in all matters have been informed of the violation(s) in a letter from Commission staff.  Further, each committee has been notified of today’s meeting and received a copy of the proposed Conciliation Agreement.  Executive Director Izumi-Nitao recommended that the Commission make a preliminary determination of probable cause that a violation had been committed in each matter, waive further proceedings, and approve the settlement amounts stated in each of the proposed agreements.

*Proposed Conciliation Agreement No. 17-67 – In Re the Matter of Friends of Bronston Kossow
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requested that the Commission assess a reduced fine from $200 to $66.67.  Chair Luke asked if there were any comments or questions. There were none.  Chair Luke called for a motion to approve proposed Conciliation Agreement No. 17-67.

Commissioner Goodenow moved to approve proposed Conciliation Agreement No. 17-67.  Motion seconded by Vice Chair Yoshihara.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 17-68 – In Re the Matter of Friends of Larie Manutai
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requested that the Commission assess a reduced fine from $200 to $66.67.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a motion to approve proposed Conciliation Agreement No. 17-68.

Commissioner Ching moved to approve proposed Conciliation Agreement No. 17-68.  Motion seconded by Commissioner Goodenow.  Motion carried (5-0).

*Docket No. 17-34 – In Re the Matter of Toagaifasa Mataafa and Friends of Junior Mataafa
Executive Director Izumi-Nitao reported that a complaint had been filed against candidate Junior Mataafa who is also the treasurer of his candidate committee called Friends of Junior Mataafa for the late filing of the Final Election Period Report.

Respondent ran in the 2016 election for the House of Representatives, District 47.  Pursuant to HRS §§11-333(a) and 11-334(a), Respondents are required to timely file accurate final reports.  The Final Election Period Report for the period covering 8/14/16 to 11/8/16 was due no later than 11:59 p.m. Hawaii standard time on 12/8/16.  Respondents did not file this report by the deadline.

On 12/9/16, Commission staff sent Respondents a “Notice of Late Report” via first class mail informing them that the Final Election Period Report had not been filed and that a fine would be imposed.  The letter was addressed to Respondents at the addresses listed on their Organizational Report.  Respondents filed the report on 1/31/17.  On 2/1/17, Commission staff sent Respondents a “Notice of Fine for Late Report” via first class mail informing them that a fine of $200 had been assessed for the late filing of the report.  Despite attempts from Commission staff to obtain Respondents’ compliance, on 3/17/17, Commission staff sent Respondents a copy of the complaint and informed them that the matter would be set on the 4/12/17 Commission Agenda.

Executive Director Izumi-Nitao recommended that the Commission make a preliminary determination of probable cause that the Hawaii campaign spending law has been violated pursuant to HRS §11-405(a), assess an administrative fine of $200 for the violation, order that the fine be paid from the candidate’s personal funds if there are insufficient funds in the campaign account, and order that any and all fines be deposited in the general fund pursuant to HRS §11-340(g).

Commissioner Goodenow asked if contact was made with Respondents.  Elections Assistant Sandrina Lee responded that a voicemail was left with Respondents to contact the Commission, but Respondents did not respond.

Commissioner Goodenow 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 Vice Chair Yoshihara.  Motion carried (5-0).

Old Business
*Consideration, Discussion, Update, and Approval of Commission Legislation/Testimony and/or Other Campaign Finance Related Bills/Resolutions for the 2017 Legislative Session
General Counsel Kam referenced the “2017 Legis CSC (April)” spreadsheet to inform the Commissioners of the status of the bills.  He reported the following:

H.B. 100, H.D. 1, S.D. 1 – The Executive Budget bill will go to conference.  In its present form, S.D. 1 reinserted general funding for Commission operations and salaries.

H.B. 279, H.D. 1, S.D. 1 – This is a Commission bill that will go to conference.  This bill specifies that certain types of dissemination, distribution, republication, and use of certain types of campaign materials or the financing of such by any person would not be considered a contribution or expenditure by a candidate.  H.D. 1 defected the effective date to 7/1/2050.  S.D. 1 clarified that it would not be a contribution to a candidate if the campaign materials incorporated into an advertisement or electioneering communication by a different candidate, or by a noncandidate committee, advocated the defeat of the candidate that originally prepared the material.

H.B. 280, H.D. 1, S.D. 1 – This is a Commission bill that will go to conference.  This bill clarifies the due dates of preliminary, final, and supplemental reports, provided that the supplemental report due on 1/31 must be filed every year, and provided that the final election period report would have to be filed 3 business days before the candidate is sworn into office for those candidates who take office before the final election period report is due.  H.D. 1 defected the effective date to 7/1/2050.  S.D. 1 added clarifying language but did not impact the substance of the bill.

H.B. 281, H.D. 1, S.D. 1 – This is a Commission bill that will go to conference.  This bill amends HRS §11-340(f) and requires the Commission to publish on its website the names of noncandidate committees that fail to file or correct a report.  H.D. 1 defected the effective date to 7/1/2050.  S.D. 1 clarified that candidate and noncandidate committees that failed to correct a report within 2 weeks of notification would be published on the Commission’s website.  Staff noted a concern about this amendment because this language conflicts with HRS §11-340(e) which provides that a committee has 14 days (rather than 2 weeks) to correct a substantially defective or deficient report.

H.B. 282, H.D. 1, S.D. 1 – This is a Commission bill that will go to conference.  This bill clarifies that a noncandidate committee that failed to file the 2^nd Preliminary General Report would be assessed the higher minimum fine of $300.  H.D. 1 defected the effective date to 7/1/2050.  S.D. 1 added clarifying language.

S.R. 3 – This resolution has not been scheduled for a hearing in the Senate and is still alive.

All other Commission bills and other campaign finance bills are dead for this session, but could be revived in 2018 since it is a biennium session.

General Counsel Kam asked if there were any questions.  He noted that staff will continue to update the legislative spreadsheet and inform the Commissioners of the status of the bills at each meeting.

Report from Executive Director
Update on Gubernatorial Appointment of New Commissioners
Executive Director Izumi-Nitao reported that she called the Governor’s office to request a meeting between the Governor and Chair Luke but has not been successful.  She spoke with Sharon Ibarra, Boards and Commissions, on 4/5/17.  Ibarra said that she would speak with the Governor.  Also, Comptroller Roderick Becker was apprised of our situation.  Chair Luke will be sending a letter to Governor Ige making further inquiries as to the status of his appointment of new Commissioners.

Commissioner Goodenow thanked Commissioner Ching and Commissioner Shoda for holding over for the past 9 months.

Report on Compliance of Filing Timely Disclosure Reports
With respect to the Commission orders that were referred to the Attorney General’s Office – Civil Recoveries Division (“AG-CRD”), AG-CRD reported that out of the 13 referrals, only 5 have not been resolved (i.e., Henry Kahula, Creighton Higa, Eric Ryan, Raymond Banda, and Junior Mataafa)

As for the report on compliance of filing timely disclosure reports in the 2016 election, Executive Director Izumi-Nitao reported that all reports have been filed and fines collected.  She commented that this was a remarkable milestone and one which the Commission should be proud of having achieved.  She further thanked the Attorney General’s Office for their assistance.

Update on the CSC Budget Request
Executive Director Izumi-Nitao reported that House Finance removed CSC funding in H.B. 100, H.D. 1 (Executive Budget bill) on 3/8/17.  On 3/29/17, Senate Ways & Means restored CSC funding in H.B. 100, H.D. 1, S.D. 1.  Executive Director Izumi-Nitao stated that she and Associate Director Baldomero will be meeting with Representative Sylvia Luke (House Finance Chair) on 4/17/17 to discuss CSC funding as this bill will move into conference.

Reminder on Submitting Annual State Ethics Disclosure Form
Executive Director Izumi-Nitao reminded the Commissioners that their State Ethics financial disclosure form is due on 5/31/17.

Chair Luke moved to amend the agenda to request an update on the changes Mr. Michael Palcic requested to the candidate committee disclosure form.  Motion seconded by Commissioner Shoda.  Motion carried (5-0).

Associate Director Baldomero reported that he has been actively working on the project and that the requested changes need to be reviewed by legal counsel before any technical changes can be considered.

Chair Luke asked for a motion to convene Executive Session to:  (1) Consider and approve Executive Session minutes from the Commission meeting on 3/8/17; and (2) Pursuant to HRS §92-5(a)(4), to consult with the Commission’s attorney on questions and issues pertaining to the Commission’s powers, duties, privileges, immunities, and liabilities concerning Docket No. 17-24 – In Re the Matter of Alan Arakawa and Friends of Alan Arakawa for the prohibited use of campaign funds.

Commissioner Goodenow moved to amend the Executive Session agenda to include consulting with the Commission’s attorney on questions and issues pertain to the Commission’s powers, duties, privileges, immunities, and liabilities in other general matters pursuant to HRS §92-5(a)(4).  Motion seconded by Commissioner Ching.  Motion carried (5-0).

Commissioner Goodenow moved to convene Executive Session for the aforementioned reasons.  Motion seconded by Commissioner Ching.  Motion carried (5-0).

Public session reconvened at 11:11 a.m.

Chair Luke moved to adjourn the meeting.  Motion seconded by Vice Chair Yoshihara.  Motion carried (5-0).  Meeting adjourned at 11:12 a.m.

Next Meeting:
Scheduled for Wednesday, May 10, 2017.