Campaign Spending Commission

HAWAII CAMPAIGN SPENDING COMMISSION
ANNUAL REPORT
Fiscal Year July 1, 2007 to June 30, 2008

Introduction

The Hawaii Campaign Spending Commission’s (“Commission”) Annual Report for Fiscal Year July 1, 2006 to June 30, 2007 (“FY 07”) listed four projects that the staff would focus on for Fiscal Year July 1, 2007 to June 30, 2008 (“FY 08”).  We are happy to announce that all 4 projects have been completed.  These projects were to:

• Complete the design and development of the web-based Noncandidate Committee Filing System in conjunction with the State’s Information and Communication Services Division;
• Complete at least half of the recodification of the Hawaii Revised Statutes Campaign Contribution and Expenditure Subpart;
• Integrate powerpoint training modules with film for posting to the Commission website; and
• Draft and promote passage of legislation for escalating fines for late reports in an election period, including more severe fines for reports due within 30 days of an election.

Focus for FY 08

The Commission approved a five-year Strategic Plan in April, 2007.  This plan establishes the staff’s focus and alignment of resources for FY 08.  The plan consists of six goals as follows: 

• To simplify and clarify campaign spending laws in order to improve implementation and compliance.
• To increase public education, awareness and access.
• Increase the technological capacity to improve access, reduce paperwork, and increase compliance.
• Upgrade the training for and ability of the committees to comply with campaign spending laws. 
• Encourage compliance.
• Increase and stabilize CSC’s institutional capacity to carry out its mission. 

Results Achieved in FY 08

(Only action items with progress in FY 08 are listed.)

GOAL 1

  1.  To simplify and clarify campaign spending laws in order to improve implementation and compliance

  ACTION ITEMS:

     a.  Begin process in 2007, with the assistance of a blue-ribbon advisory committee.

     b.  Complete recodification draft in 2008, for submission to the 2009 legislature.

Recodification

It was obvious after years of constant amendments to Hawaii Revised Statutes Chapter 11, Subpart B, Campaign Contributions and Expenditures (“Subpart B”), that the campaign finance law had become very fragmented and was difficult to understand.  It was decided that a recodification of Subpart B needed to take place to simplify and clarify the law.  The changes were to be technical in nature, and substantive only when changes were minor and necessary to effect the technical changes.

In February, 2007, the staff developed a list of names of attorneys with campaign finance experience, and who represented diverse backgrounds, to join the Commission staff on the Blue Ribbon Recodification Committee  (“Committee”).  The Commission was consulted and letters went out to 23 attorneys.  We received confirmation from 18 attorneys, though one later changed employment and was not able to attend.  These attorneys were:

James Case, Esq.
Calvert G. Chipchase IV, Esq.
Leroy Colombe, Esq.
Brian DeLima, Esq.
J. George Hetherington, Esq.
Sandra Hoshida, Esq.
William Kaneko, Esq.
Brian Kang, Esq.
Jared Kawashima, Esq.
Bert Kobayashi, Jr., Esq.
James Koshiba, Esq.
Judge Randall Lee
Matt Matsunaga, Esq.
Owen Matsunaga, Esq.
Marilyn Niwao, Esq.
Terry Thomason, Esq.
Renee Yuen, Esq.

Grant Tanimoto, General Counsel to the Commission, worked diligently in 2007 on the first proposed recodification of Subpart B.  After numerous meetings, reviews, and research with staff members Tony Baldomero and Barbara Wong, and numerous redrafts thereafter, in August, 2007, the first proposed draft of the recodification was sent to Committee members along with an agenda for the first Committee meeting on September 6, 2007.

The deadline for completion of the recodification of Subpart B into 10 new subparts, was December, 2008, after meeting on a monthly basis.  However, with Grant Tanimoto’s perseverance and patience, and the Committee’s dedication to the project, the Committee completed its work in May, 2008.  The draft was provided to the Commissioners on July 9, 2008 for review.

Submittal of Amendment to the Hawaii Administrative Rules

On January 29, 2008, an amendment to Hawaii Administrative Rules 2-14.1-14.1 was submitted to the Governor to add a new rule to exclude administrative expenses paid for by a sponsoring entity for its noncandidate committee from the definitions of contribution and expenditure.

Redraft of Hawaii Administrative Rules

We submitted proposed rules in November, 2005 for approval to hold a public hearing.  In July, 2007, after waiting 20 months, we asked for the rules to be returned to update them with 2007 legislative changes.  The rules were returned August 7, 2007.  The rules were updated to incorporate statutory changes in 2007 and 2008, and were streamlined and will be resubmitted in August, 2008.

Legislation

Legislation was drafted for the 2008 session.  The Commission submitted 4 bills for consideration regarding: (1) reinstating partial public financing for prosecutors; (2) increasing the fines for late reports, excluding certain reimbursements from the definition of loan, and collapsing HRS §§11-200 and 11-206- use of campaign funds; (3) technical changes; and (4) prohibiting a candidate from using surplus funds for nomination or election to office.

In addition we tracked 68 bills and 3 resolutions, as well as submitted 26 written testimonies, and orally testified on 13 bills as follows:

Tracking

Senate Bills (29 bills introduced in 2008; 12 carried over from 2007)
House Bills (18 bills introduced in 2008; nine bills carried over from 2007, including HB 661)
Resolutions (3) – HCR 231; SCR 295, HR 139

Testimony

Testified on 13 Bills; and 26 testimonies submitted (for some bills, testimonies were submitted to numerous committees – sometimes for different bill drafts)
HB 661 (Act 244) Testimony to Senate JDL: Testimony to WAM; Testimony to Conference committee
HB 2602; Testimony to House Jud
HB 2656 (Act 11); Testimony to House Jud, Testimony to JDL
HB 3294, Testimony to House Jud
SB 2202 (CSC 1); Testimony Senate JDL; Testimony to Senate WAM; testimony to JUD; Testimony to FIN; testimony to Conference Committee
SB 2203 (CSC 2); Testimony to Senate JDL
SB 2204 (CSC 3); Testimony to Senate JDL
SB 2579; Testimony to Senate JDL; Testimony to WAM; testimony to JUD; Testimony to FIN;  Testimony to conference committee
SB 2581, Testimony to Senate JDL
SB 2605, Testimony to JDL/EDT; Testimony to WAM; Testimony to JUD
SB 2777, Testimony to Senate JDL
SB 3140, Testimony to Senate JDL
SB 3141, Testimony to Senate JDL
Testified on one resolution – HCR 231

We persuaded the legislature to pass legislation increasing fines for late reports,  excluding certain reimbursements from the definition of loan, and making technical changes.  We lobbied unsuccessfully against House Bill 661 in regards to full public funding of Hawaii County Council elections, however, we were able to amend a major portion of the wording in the bill to eliminate numerous errors and conflicts and to provide clarity.  Our position was that we should incrementally increase the current partial public funding program and be fiscally responsible, rather than creating a new program from scratch that is not adequately funded and for which the public is uninformed as to cost.

ACTION ITEM:

     c.  Use (recodification) process to stimulate the awareness of committees and the general public

The Committee completed its work in approximately half the time contemplated, and thus, we publicly thanked the Committee in the Pacific Business News, Honolulu Advertiser and Honolulu Star-Bulletin.  The ads ran on May 14, 2008, May 16, 2008 and May 19, 2008.  This showed the public that we had a balanced committee and will hopefully facilitate passage in the 2009 legislature.

Additionally, the Committee members learned many nuances of the law.   They will be better able to advise clients, and may expand their practices in this area.  This Committee also created good will, as many of the members, if not all, feel free to call us as questions arise.  In the same light, we also learned from them, how they interpreted the laws, the dilemmas, and what they thought the laws should be.  Most importantly, we have their support for the 2009 legislation to recodify Subpart B, as they were integral in the drafting and in the final product.

GOAL 2

  2.  To increase public education, awareness and access

  ACTION ITEM: 

     a.  Develop a simple, multi-year public education plan for the purposes of creating broad-based public knowledge of the most important campaign contribution and expenditure parameters.

A multi-year public education plan (“Plan”) was developed in June, 2008 and was presented to the Commission at the July, 2008 meeting.  The purpose of the Plan is: 

(1) to increase awareness of the transparency of candidate and noncandidate committee campaign contribution and expenditure disclosure reports;
(2) to increase awareness of campaign contribution laws; and
(3) to show the public how to access the reports and the law.

The plan is to be further developed in FY 09.

     b.  Hold periodic public seminars to highlight important issues

2009 Forum

Planning for the National Trends in Campaign Finance Law Forum on October 9, 2009 continued.  After obtaining a quote from the Sheraton Waikiki for a conference site, it was decided that it would be more fiscally prudent to form a partnership with the William S. Richardson School of Law.  After discussions with Dean Avi Soifer and the Chief Operating Officer, Dale Lee, an agreement was reached for a partnership and for use of Classroom 2 which holds up to 125 attendees.

Speakers to date include Jason Kaune, Esq. and/or Darrin Lim, Esq. of Nielsen, Merksamer, Parrinello, Mueller & Naylor, LLP; Paul Ryan, Esq., F.E.C. Program & Associate Legal Counsel of The Campaign Legal Center; Noriko Hara, Ph.D., Associate Professor of Information Science, Indiana University, and Robert Stern, President, Center for Governmental Studies.

The Council on Governmental Ethics Laws

Robert Stern, President, Center of Governmental Studies, invited us to speak on Electronic Filing for the Council on Governmental Ethics Laws’ national conference in Victoria, Canada in September, 2007.

Community Presentations

The  American Council of Engineering Companies of Hawaii, President John Nishimura invited us to make a presentation at their February 6, 2008 meeting.

On March 18, 2008 we made a presentation on noncandidate committees to the Hawaii Building & Construction Trades Council, AFL-CIO, on invitation of Executive Director, Buz Hong.

Senator Gordon Trimble requested a legislative wrap-up on campaign finance laws for his constituents, which took place on May 14, 2008.

The Hawaii State Commission on the Status of Women, with a grant from the Rutgers University Center for American Women and Politics- Ready to Run program, requested a presentation on campaign finance law at their conference on May 28, 2008.  Executive Director Sharon Ferguson-Quick requested our assistance.

On May 30, 2008, we made a presentation on government contractors and noncandidate committees to the Building Industry Association of Hawaii Build-PAC on invitation of Karen Iwamoto, Government Relations.

     c.  Improve web-based information

In July, 2007, the Commission staff designed 5 icons symbolizing the Commission’s goals, and with the assistance of a graphic artist, brochures were created for mailing to candidate and noncandidate committees regarding the Commission’s Strategic Plan. The Strategic plan is also posted on the Commission’s website.  In summary:

• Goal 1:  The three paddles represent the Commission, committees (candidate and noncandidate), and the public paddling in unison when the law is simplified and clarified;
• The starfish represents the staff’s focus that even though there are many committees to teach, even if we reach one, we are making a difference.  Every customer we provide service to is important;
• The sailing canoe represents bringing the old way of doing things into the technologically advancing future, while still respecting the history of the Commission and the law;
• The pahu drum represents teaching by storytelling,  by providing real examples of application of the campaign finance laws, and the importance of passing knowledge on to new candidates;
• The petroglyph with paddle in hand represents compliance efforts;
• The bamboo represents flexibility and continued growth of the Commission staff for the long-term.

New information is constantly placed on the website with the notation “new” under the “Annoucements” listing.  Information on the website is also consistently updated (e.g. laws and rules changes).  We have added more than one link to information on the website, in case viewers look for the information under different headings.

     d.  Develop capacity for regular public information releases during the electoral season on contributions and expenditures.

Advertisements were placed in the Honolulu Advertiser, Honolulu Star-Bulletin, The Garden Island, Maui News, Hawaii Tribune Herald, and West Hawaii Today in October, 2007 and February, 2008 for training classes in November and February.

Advertisements in the above-referenced newspapers were also placed as follows:

February, 2008 – Follow the  Money Trail/Website
March, 2008 – Contribution Limits, Election periods
April, 2008 – Follow the Money Trail/Website
April, 2008 – Ballot Issue Committees
May, 2008 – Contribution Limits, Election periods

In late 2007, a request was made to the Comptroller and was approved to have a message printed on the February, 2008, paystub of the 50,000 or so state employees making them aware of the $2 check-off to the Hawaii Election Campaign Fund and of our website to view candidate contribution and expenditure reports.

     e.  Establish procedures between campaign spending, elections and ethics offices to formalize coordination efforts.

The Office of Elections, through its Chief Election Officer, Kevin Cronin, was invited to participate in our training classes.  Lori Tomczyk, of the Office of Elections, joined us in training classes in February, 2008 and July, 2008 and presented information on the filing of nomination papers process for candidates.

Formalized procedures will be developed and finalized in FY 09, after the election.

GOAL 3

  3.  Increase the technological capacity to improve access, reduce paperwork, and increase compliance

     a.  Develop front-end system so all committees can file on-line, and access additional information and assistance on-line

On June 2, 2008, the Commission launched the web-based Noncandidate Committee Filing System.  All noncandidate committee reports will be available to the public on-line beginning with the disclosure report due on September 10, 2008, covering the period January 1 to September 5, 2008.  Tony Baldomero developed the business requirements for the system and worked closely with the State of Hawaii’s Information and Communication Services Division (“ICSD”), which built the system.  This new system helps to make Hawaii one of the most transparent states in the nation.

The Commission also provided training, phone assistance, and walk-in support for noncandidate committees 

The web-based systems for candidate committees and noncandidate committees means disclosure reports can be filed from anywhere in the world.  One candidate committee report was filed while the candidate was visiting Belgium.

     b.  Keep the system updated, and current.

After the system is launched, as suggestions from users come in, the appropriate work orders are sent to ICSD to tweak the system.

GOAL 4

  4.  Upgrade the training for and ability of the committees to comply with campaign spending laws

     a.  Develop a comprehensive curriculum, with training modules on most asked, most problematic, and new provisions

For background information, there were 44 attendees at the Commission’s Candidate and Candidate Committee, Public Financing, and Noncandidate Committee February, 2006 classes, and 99 attendees at the July, 2006 classes.  There were also 55 people trained by New Horizons in December, 2006 and January, 2007 on the Candidate Filing System.

Training classes, taught by Barbara Wong, Grant Tanimoto, and Tony Baldomero, for candidate and candidate committees, noncandidate committees, and public financing were held in November, 2007 to test the interest in pre-election year classes.  Many candidates are unaware and unprepared for the numerous reporting requirements and laws regarding campaign finance.  By holding classes prior to the election year, we were hoping that potential candidates could determine early-on if they had the commitment and support to meet all the campaign finance requirements and to give them the opportunity and time to gear up properly for a campaign.

Additionally, training classes were held in February, 2008.  FY 08 classes held were as follows:

Candidate Filing System and Noncandidate Committee Filing System classes were taught by Tony Baldomero as follows:

     b.  Create new methods for training and disseminating information, including virtual training (i.e. web-based, DVD)

In June, 2008, ICSD filmed, produced, and edited one training module of the Candidate and Candidate Committee class.   On June 27, 2008, the first training module was posted on the Commission website.  Viewers could now “attend” class 24 hours a day, seven days a week.

Thereafter we continued to update powerpoint presentations for the Candidate and Candidate Committees, Noncandidate Committees, and Public Financing classes.  Each class was broken down into 4 to 6 modules, so that viewers could listen to the sub-topic of their choice, without having to listen to the entire presentation.  Filming is to continue in July, 2008.

     c.  Hold periodic public discussions to highlight important issues

See Goal 2 (b) for an update on the 2009 National Forum on Campaign Finance Law.

GOAL 5 

  5.  Encourage compliance

Tony Baldomero and Linda Takushi completed review of the January 30, 2007 and July 31, 2007 reports on October 11, 2007.  The review of the January 31, 2008 reports were completed within approximately 3 months after the due date.

The following Conciliation Agreements and fines were drafted, negotiated, and approved by the Commission in FY 08:

CA 07-14  Bryan Baptiste and Friends of Bryan Baptiste  $ 6,000
Fined for excess community contributions.

CA 07-15  A. Leiomalama Solomon, Friends of Malama Solomon  $12,000
Fined for contributions in the name of another, and reporting.

CA 08-01  Iron Workers Stabilization Fund  $375
Fined for making an excess contribution.

In FY 08, the following Dockets and fines were decided:

Docket No. 06-08  Patricia Tummons vs. Hawaii’s Concerned Fisherman and their ohana
The complaint regarding failure to register as a noncandidate committee was dismissed.

Docket No. 07-01  Green Party of Hawaii vs. Society of Professional Journalists, et al.
The complaint regarding failure to invite a Green Party candidate to debate was dismissed.

Docket No. 07-02  Barbara Hale vs. Emily Naeole, Friends of Emily Naeole
The complaint alleged 18 allegations, of which 5 allegations were upheld regarding reporting violations, and a deposit violation. $300

Docket No. 07-03  Brian Funai vs. State of Hawaii Campaign Spending Commission, Barbara Wong, Executive Director
The Petition for Declaratory Ruling as to whether Hawaii’s Concerned Fishermen and their ohana was a noncandidate committee was dismissed because Docket No. 06-08 was dismissed making the petition moot.

Docket No. 08-01  Mark Hyde vs. Association for Improved Health Care on Maui, et al.
The complaint alleging that the Association for Improved Health Care on Maui was a noncandidate committee subject to registration and reporting requirements was dismissed.

Additionally, in Charmaine Tavares Campaign vs. Barbara Wong, in her capacity as Executive Director of the Campaign Spending Commission of the State of Hawaii, Barbara Wong and Grant Tanimoto assisted the Attorney General’s office by researching and preparing first drafts of the Opening Brief and Reply Brief for the appeal.

     a.  Develop escalating penalties for repeat and gross violations

The Commission staff drafted and successfully lobbied for legislation increasing fines for late reports.  Not only is it not fair for some candidates to electronically file their reports while their opponents do not, but the volume of follow-up work it creates for the Commission is significant.  Senate Bill 2203 and House Companion 2726 were introduced into the 2008 legislature and a portion of S.B. 2203 was later integrated into House Bill 661, passed, and enacted into law.

Fines increased from an initial fine of $50, and then $50 a day after the Commission generates a letter to the candidate committee or noncandidate committee, to $50 per day for the first 7 days, and $200 per day thereafter, except the second preliminary primary and preliminary general reports for candidate committees are $300 per day, and the preliminary primary and preliminary general reports for noncandidate committees are $300 per day.  There is a cap on these fines.

GOAL 6

  6.  Increase and stabilize CSC’s institutional capacity to carry out its mission

     a.  Articulate the philosophy of fines as fines, not as a dependable or primary funding source for CSC operations

During the 2008 legislature, Senate Bill 2605 (which was not a Commission bill) was introduced increasing the state income tax check-off from $2 to $3.  Senate Bill 2579 was introduced taking away the Commission’s fines and depositing them into the General Fund.  The two bills were later integrated into House Bill 661 and enacted into law on July 8, 2008.  During oral testimony we were challenged as to our philosophy of fines and we articulated that they should not be relied on for budgetary purposes, however, that we would then need a replacement source of revenue.

     b.  Plan for potential staff transitions (beyond 2012)

All five position descriptions for the Commission staff were extensively updated, and sent to Personnel of the Department of Accounting and General Services for filing.  Seven staff meetings were held to update everyone on our goals, to align our work, to learn what each staff member was working on and whether assistance was needed, and to foster a “team” approach.

Various staff members attended training in Intermediate Word, Introduction to Excel, Intermediate Excel, Memory Enhancement, and Staff Support,  and also attended the International Women’s Leadership Conference and the Council on Governmental Ethics Laws.

     c.  Document procedures

Each staff member (Executive Director, Associate Director, General Counsel,

Administrative Assistant, Elections Assistant) has initiated a binder of their duties and responsibilities and the steps to carry out these duties and responsibilities.  As time allows, processes and procedures are added.

     d.  Evaluate space needs for possible staff expansion due to potential for increased statutory responsibilities

An extensive evaluation of physical space, positions, and equipment was completed in June, 2008, for purposes of a Constitutional Convention in 2010.  Budgetary needs were also addressed not only for staffing, but for potential full public funding of the Constitutional Convention.

Focus for FY 2009

Introduce the Recodification draft to the legislature and lobby for its enactment.

Develop a plan and begin implementation to build the Comprehensive Public Funding program.

Further develop a plan to regulate Constitutional Convention candidates and noncandidate committees.

Complete review of all campaign disclosure reports for election year 2008.