FY 2013-2014 Annual Report
HAWAII CAMPAIGN SPENDING COMMISSION
Fiscal Year July 1, 2013 to June 30, 2014
The Hawaii Campaign Spending Commission’s (“Commission”) mission is to maintain the integrity and transparency of the campaign finance process by enforcing the law, educating the public, administering public financing, and training campaign committees in order to encourage timely compliance. The Commission is guided by a 5-year Strategic Plan to assist the organization in shaping its future, set longer term priorities, and to establish a framework to make decisions and allocate resources. This report discusses activities as applied to the Strategic Plan that occurred in fiscal year 2014 covering the period July 1, 2013 to June 30, 2014 as well as documents other significant events. It also includes a discussion of future considerations for fiscal year 2015.
GOAL – TO SIMPLIFY AND CLARIFY CAMPAIGN FINANCE LAWS IN ORDER TO IMPROVE IMPLEMENTATION AND COMPLIANCE.
- Propose legislation. For the 2014 Legislative Session, the Commission’s bills were: (1) H.B. 1602 and its companion bill S.B. 2117; (2) H.B. 1603 and its companion bill S.B. 2118; (3) H.B. 1604 and its companion bill S.B. 2119; and (4) H.B. 1605 and its companion bill S.B. 2120. Except for one bill, all the Commission’s bills were signed into law.
H.B. 1602 & S.B. 2117 – This bill was again deferred by Senate Judiciary and Labor Committee. It sought to amend HRS §11-334(a)(4) to require supplemental reports to be filed by candidate committees on January 31st regardless of whether it is an election year or not. This comports with present practice as well as conforms this requirement with noncandidate committees. The Commission will continue its efforts to have this amendment approved.
Act 140, SLH 2014 (S.B. 2118) – Act 140 was signed into law on June 24, 2014. Act 140 amends HRS §11-426 by replacing the Chief Elections Officer with the Office of Elections as the entity who must be notified if a candidate who filed an affidavit agreeing to limit expenditures exceeds that expenditure limit. The requirement that a candidate reports to the office rather than the officer is more practical. Further, the candidate must notify his/her contributors that they have exceeded the expenditure limit. Also, deletes the reference to a tax deduction for contributions to candidates who file the affidavit because this is no longer available.
Act 139, SLH 2014 (H.B. 1604) – Act 139 was signed into law on June 24, 2014. Act 139 amends HRS §11-156 to clarify that certificates of election shall not be delivered to candidates who have not filed disclosure reports with the Commission and further adds the requirement that candidates must have paid all outstanding fines owed to the Commission.
Act 48, SLH 2014 (S.B. 2120) – Act 48 was signed into law on April 23, 2014. Act 48 amends subsection (b) of HRS §11-359 (Family Contributions) by replacing the reference to HRS §11-355 (Contributions by state and county contractors prohibited) with HRS §11-357 (Contributions to candidates committee; limits), as the exemption for contributions to candidates from immediate family members. This conforms HRS §11-359 with the law prior to the recodification of HRS Chapter 11 in 2010.
- Other legislation of significance that the Commission provided written and oral testimony and/or tracked included legislation proposed by others to enhance the partial public funding program and Hawaii County Council Comprehensive Public Funding Program, but were unsuccessful.
- Draft and submit administrative rules. This Commission drafted proposed amendments to Chapter 3-160 (Election Campaign Contributions and Expenditures) and Chapter 3-161 (Administrative Practice and Procedures Before the Commission) of the Hawaii Administrative Rules which were approved by the Commissioners at their October 9, 2013 meeting. The proposed amendments for the most part updates obsolete references to the HRS and makes technical and grammatical corrections. It also proposes a new section that implements section 2 of Act 112, SLH 2013, which requires SuperPacs to identify their top contributors in their advertisements. The proposed rules will be posted on the Commission’s website once the Commission receives approval from the Governor to proceed with a public hearing. The amendments were given to the Governor for consideration in March 2013.
- Advisory Opinions. Under HRS §11-315, the Commission may render written advisory opinions upon the request of any candidate, candidate committee, noncandidate committee, or other person or entity subject to campaign finance laws, as to whether the facts and circumstances of a particular case constitutes or will constitute a violation of the laws. If no advisory opinion is rendered within ninety (90) days after all information necessary to issue an opinion has been obtained, it shall be deemed that an advisory opinion was rendered and that the facts and circumstances of that particular case do not constitute a violation of the campaign finance laws. During this period, no Advisory Opinions were issued.
GOAL – TO INCREASE PUBLIC EDUCATION, AWARENESS AND ACCESS.
- Direct the public to the Commission’s website and continue to improve web-based information. The Commission has an ongoing partnership with the State of Hawaii’s Information & Communication Services Division (“ICSD”) to improve the Commission’s website which contains three (3) statutorily required electronic filing systems for candidate committees, noncandidate committees, and corporations. For purposes of transparency, much of the Commission’s operations, business, and finances are posted online including Commissioners’ biographies, meeting agendas and minutes, newsletters, advisory opinions, Hawaii Election Campaign Fund (“HECF”) information, annual reports, campaign finance statistics, and the Strategic Plan. Information of current interest is constantly identified and posted on the Commission’s website including statute and rule changes, new legislation, reporting deadlines, enforcement issues, and new informational and technological tools. There are also links for viewing reports, filing reports, seeking guidance including e-learning (now, referred to as cyber learning) presentations, forms, guidebooks, and qualifying for public funding. Based on the results of our annual online survey, we understand that our website continues to be our strongest resource in providing stakeholders and interested parties with campaign finance information. As such, we continue to fine-tune our website with a focus in building more efficient and user friendly navigation tools which includes a searchable database of all the campaign finance data filed by committees. We have also included a section on our home page for our latest tweets and highlighted the candidate committee data visualization app. These updates are done at zero cost to the Commission. During this fiscal period, we had 107,610 “hits” to our website.
- Disseminate to the public information on contributions, expenditures, and other pertinent topics of interest. During this period, working with ICSD, the Office of Information Management and Technology (“OIMT”), and Socrata, the Commission launched a data visualization application on our website which permits viewers to see candidate committee reports in a more visually attractive, user friendly, and dynamic way for a particular election period. Rather than spreadsheets of data, this app permits you to view a colorful pie chart of a candidate’s contributions to see how much and what percentage of their contributions are funded by individuals, noncandidate committees, political parties, immediate family members, etc. Viewers are also able to see how much and what percentage of a candidate’s contributions are coming from in-state versus out-of-state, from which states and zip codes, as well as by geographical location. There is also a visual chart showing how much and what percentage of a candidate’s contributions are $1,000 or less and more than $1,000. As for campaign expenditures, a pie chart will show how much and what percentage of a candidate’s spending was for advertising, food & beverage, printing, professional services, surveys/polls/voter lists, etc., as well as a chart showing in-state versus out-of-state spending. The data is derived from the candidates’ reports which are filed electronically with the Commission from the last 6 years. This application was conceived to provide greater transparency and accountability in government and to enable the public to follow the money of candidates running for state and county offices in Hawaii. It was done at zero cost to the Commission and was featured at OIMT’s Hawaii Digital Government Summit on November 21, 2013. At this summit, the Chief Information Officer of the State of Hawaii awarded the Commission and its partners a “Transparency and Accountability: Open Government” award for this application.
In June 2014, in partnership with the OIMT, ICSD, and Socrata, we agreed to spend $5,250 to build the noncandidate committee data visualization application. Similar to the candidate committee app, this program is intended to permit viewers to see visually attractive charts of noncandidate committees’ campaign spending data for a particular election period. The data is derived from the noncandidate committees’ reports which are filed electronically with the Commission from the last 6 years. This application was conceived to provide greater transparency and accountability in government and to enable the public to follow the money of noncandidate committees’ participation in the elections in Hawaii. The end product is expected to be completed and launched in mid-July 2014.
Other mechanisms to disseminate to the public information concerning campaign finance include regular posts of anything new/interesting on our website under “What’s New,” biannual newsletters, e-blasts, Facebook posts, and tweets. New candidates, new noncandidate committees (including SuperPacs), new corporations, notice of fundraisers, notice of Commission meetings, new guidebooks or manuals, new legislation, updates to the electronic filing systems, requests to take/submit our annual online survey, registering for training classes, electioneering communication statements of information, etc., are tweeted.
- Plan, organize, participate, and host trainings to inform and educate on campaign finance laws and rules. Community presentations to candidate and noncandidate committees, corporations, legislators, community groups, contractors, certified public accountants, political parties, etc., on various areas of campaign finance laws are regularly delivered when requested. In anticipation of the 2014 election, campaign finance presentations to candidates and committees were planned and delivered in June and July 2014 on Kauai (6/24/14), Honolulu (6/25/14), and Maui (7/2/14). Due to a lack of registrations, we cancelled our presentation on the Big Island. Other informational meetings provided during this period included meeting with the Filipino Chamber of Commerce and open government groups as well as meeting with various elected officials. At the Council on Governmental Ethics Laws’ (“COGEL”) Annual Conference in December 2013, Executive Director Izumi-Nitao participated in hosting a breakfast table topic, introducing a keynote speaker, and was a panelist on a session involving office management. Executive Director Izumi-Nitao also became a member of the 2014 COGEL Program Committee and assisted in planning sessions for the December 2014 conference in Pittsburgh, PA. Additionally, requests to respond to media inquiries are accepted where practicable.
The Commission also participated in a 4 month project sponsored by Common Cause and Hawaii Open Data called Civic*Celerator. This was an event where coders, designers, developers, entrepreneurs, students, civic innovators, and engaged citizens competed to build and create apps using campaign finance open data to show how state and local candidates are being funded as well as how candidates are spending campaign funds. It was funded by a grant obtained by Common Cause to bring together people from all aspects of the community to create applications to equip voters with tools to help them understand who is funding political campaigns. Six applications were developed which are available at https://civic.celerator.org/apps/ for viewing and access.
- Explore and implement social and other media applications to inform and educate on campaign finance laws and rules. The Commission regularly uses e-blasts as well as Facebook and Twitter accounts to inform and educate committees, interested parties, subscribers, and the public on campaign finance. We have found the e-blasts to be especially effective in sending out time sensitive information such as reporting deadline reminders and changes in the law. It also permits us to notify interested parties about registering for training classes, publication of new educational tools, and other campaign finance information. Efforts to not overuse the email system or rather reserve it for distribution of important announcements is always a consideration. During this period, the CSC email system was employed 43 times and we have1,041 subscribers. Notably, these subscribers are separated into four (4) groups – candidates (407 subscribers), noncandidate committees (259 subscribers), corporations (173 subscribers), and the public (202 subscribers), thereby permitting us to target relevant audiences with the e-blast.
Since July 2011, we have been employing social media tools such as Facebook and Twitter to leverage our capabilities to increase, enhance, and supplement our communication efforts to inform the public of important and time sensitive campaign finance information. During this fiscal year, we issued 525 tweets.
Every year, we attend the PCATT IT Summit / Conference to identify and learn new ways to improve and educate committees and the general public in campaign finance. This year, this conference highlighted innovations in IT education.
- Raise public awareness and increase visibility of the Commission’s work, hold at least one Commission meeting in a neighbor island county each year. This action item will be addressed in fiscal year 2015, but raising public awareness and increasing visibility of the Commission’s work are always considerations when the Commission communicates with the public.
GOAL – INCREASE THE TECHNOLOGICAL CAPACITY TO IMPROVE ACCESS, REDUCE PAPERWORK, AND INCREASE COMPLIANCE.
- Increase the Commission’s analytical capability. During this period, there were changes to the Commission’s electronic filing systems as a result of legislative enactments to improve transparency and disclosure.
As a result of Act 111, SLH 2013, a modification to the noncandidate committee filing system was made to require these committees to separate the reporting of contributions into “contributions received” and “contributions made,” and to identify the name of the candidate supported or opposed by the committee’s independent expenditures.
As a result of Act 287, SLH 2013, a modification to the candidate committee filing system was necessary to recognize that candidates for the Board of Trustees of the Office of Hawaiian Affairs (“OHA”) must be nominated at a primary election and elected at the general election in even-numbered years.
On its own initiative, at its March 12, 2014 meeting, the Commission agreed that efforts to obtain better compliance with candidate committee expenditures were needed. With the assistance of ICSD, an update to the candidate committee filing system was launched on July 2, 2014 on Schedules B (Expenditures) and E (Unpaid Expenditures) to offer a new field for candidates to identify and select which one of the eight (8) statutorily permitted uses of their campaign funds was being invoked pursuant to HRS §11-381. This change in the system was implemented to provide better transparency and assist in enforcement efforts.
The Commission continues to rely on its searchable database to run queries on various campaign finance issues.
- Maintain awareness of newer technology, including electronic filing systems and hardware/software or applications, for consideration of integration and/or implementation. The Commission works closely with ICSD and OIMT and as a result has benefitted from their expertise and assistance in consolidating and maximizing our hardware/software applications.
The annual COGEL conference is another source from which we learn about other campaign finance systems and technology. During this period, however, there were no plans nor funding to alter our electronic filing systems.
- Maintain awareness of the implications of technological changes on all aspects of campaign finance including political contributions. The annual COGEL conference has been a great venue for the Commission to learn about technological changes or advances employed by other campaign finance offices. During this fiscal year, there were no technological changes that the Commission deemed viable for employment in Hawaii; however, we remain receptive to all new ideas.
GOAL – UPGRADE THE TRAINING FOR AND ABILITY OF THE COMMITTEES TO COMPLY WITH CAMPAIGN FINANCE LAWS.
- Explore new methods for training and disseminating information. During this period, no new methods for training and disseminating information were identified or examined. The Commission continues to work with the Office of Elections in providing informational packets to be given to candidates who file their nomination papers. During this period, the Commission also met with the County Clerks in preparation for the 2014 election to identify any areas requiring better coordination and collaboration – especially, with respect to certifying compliance with campaign finance reports and payments of fines by candidates who win in the 2014 election so that they are able to be timely sworn into office.
- Offer training to committees to improve compliance with campaign finance laws and rules. In an effort to prepare candidates of the numerous reporting requirements and laws regarding campaign finance, training classes were offered across the State. There were classes offered on Kauai, Maui, Hilo, and Honolulu in June and July 2014 with 95 registrants who attended presentations on candidate committees, noncandidate committees, and public financing. In consideration of new case law and entering into an election year, powerpoint training presentations were revised.
As early as 2007, certified public accountants were attending these trainings because they were often employed or asked to assist with treasurer duties of candidate and noncandidate committees. Accordingly, with the assistance of former Chair/Commissioner Paul Kuramoto, we were approved to provide Continuing Professional Education credits by the Board of Accountancy to certified public accountants. Eight (8) CPAS received credit from our trainings this fiscal year. Our instructor certification must be annually renewed and our current certification will expire in December 2014.
- Publish guidebooks, manuals, and e-learning videos on how to comply with campaign finance laws and rules as well as how to use the electronic filing systems. Guidebooks, manuals, and e-learning videos have always been available on the Commission’s website. In anticipation of the 2014 election, the Commission took a look at these materials and revised them. As such, there are new cyber learning videos, new guidebooks, and new manuals on the Commission website. The cyber learning videos were created as a companion to the Candidate Filing System (“CFS”) Manual and Noncandidate Committee Filing System (“NCFS”) Manual to help viewers learn how to use their respective filing systems. The videos therefore cross-reference the table of contents in the CFS Manual and NCFS Manual (which are available on the Commission’s website) and can be used simultaneously with the manual (or by themselves). We believe that viewing short (i.e., 5-minutes or less in length) videos by specific subject matter will speed up the viewer’s learning by giving them a visual of how certain tasks are completed in the electronic filing systems.
GOAL – ENCOURAGE COMPLIANCE.
- Develop escalating penalties for repeat and gross violations, and disseminate information about the penalties. The Commission continues to find that there are some candidate and noncandidate committees who do not file their reports timely or at all. In consideration of staff resources in getting these committees to file their reports, the Commission decided to consider other approaches to encourage compliance including filing complaints against violators, and if no compliance was obtained, filing a First Circuit Court application seeking judicial enforcement of Commission orders. For those committees that failed to file the report, the Commission would file a complaint and invoke an administrative fine of $500 pursuant to HRS §11-410(a) and (h). This action represents a way of invoking a higher fine and a stronger punitive stance to those committees who completely failed to file the report by the statutory deadline.
During this period, twenty-three (23) complaints were filed of which fifteen (15) were resolved which resulted in fines totaling $17,473, five (5) remain outstanding, and three (3) were dismissed and/or withdrawn.
- Simplify and expedite disposition of campaign finance violations. Representative of this strategy are conciliation agreements which are essentially settlement agreements negotiated by the staff and approved by the Commissioners in a publicly noticed meeting. In this fiscal year, there were four (4) conciliation agreements which were approved resulting in a total of $260 in administrative fines.
- Seek enforcement of the campaign finance laws and rules against violators. Most of the Commission’s enforcement actions have focused on the late or unfiled reports. However, other campaign finance violations occurring during this period include twelve (12) excess contributions to candidate or noncandidate committees resulting in a total of $34,165 escheat to the HECF and $6,300 in administrative fines, five (5) false name contributions resulting in a $2,250 escheat to the HECF and $5,000 in administrative fines, seven (7) committees with a surplus resulting in $1,345.13 escheat to the HECF, three (3) anonymous contributions resulting in $377 escheat to the HECF, five (5) late fundraiser notices resulting in $175 in fines, five (5) failures to timely file the organizational report resulting in $500 in fines, one (1) failure to report a contribution resulting in a $500 fine, one (1) excess non-resident contribution resulting in a $1,000 fine, one (1) foreign contribution resulting in a $2,000 fine, and ten (10) prohibited expenditure violations resulting in $1,846.13 in fines.
As for our federal lawsuit, Yamada v. Snipes, et. al., Civil No. CV10-0497 (formerly, Yamada v. Kuramoto, et. al. and Yamada v. Weaver, et. al.), it is pending a decision from the 9th Circuit Court of Appeals who held oral argument on October 9, 2013. Also, pending appellate review concerns plaintiff attorneys’ fees and costs which were substantially reduced by the district court.
- Evaluate the effectiveness of training modules and revise them as needed.
The Commission revised all of its training modules (i.e., guidebooks, manuals, e-learning videos, powerpoint presentations) in preparation for the 2014 election during this period.
- Evaluate the effectiveness of communication efforts and revise them as needed. Current efforts to communicate have been successful – especially, our website, e-blasts, and tweets. We have noticed that oftentimes our tweets get retweeted. The Commission will continue to identify other mechanisms to communicate with multi-generational audiences and employ such tools as needed.
- Encourage compliance to call the Commission, visit the Commission’s office, and/or go to the Commission’s website for information to comply with campaign finance laws and rules. The Commission handles numerous phone calls, walk-ins, and inquiries daily. There are computers located in our office for committees to file their reports and to seek our assistance.
GOAL – INCREASE AND STABILIZE CSC’S INSTITUTIONAL CAPACITY TO CARRY OUT ITS MISSION.
- Develop proposals to stabilize funding. The Commission’s operating expenses and public financing programs are funded by the HECF which is a trust fund within the state treasury. See, HRS §11-421. Primary revenue sources for the HECF are generated from the $3 state income tax check-off, the interest generated from the principal, and any funds that escheat to the HECF pursuant to campaign finance laws. Although regular requests are made to the Comptroller to approve paystub messages to government employees to remind them of the $3 check-off on State tax returns, the revenue from the $3 tax check-offs is inadequate. This year, it generated $190,192 (which is $27,049 more than last year). The Commission therefore remains concerned about funding. In fiscal year 2014, a total of $224,620.81 in revenue was generated and a total of $620,208.43 in expenditures/encumbrances was incurred, thereby closing fiscal year 2014 with a balance of $2,540,556.18.
As for public funding, the Commission had insufficient funds to run the last year of the pilot Hawaii County Council Comprehensive Public Funding program. The Commission continues to emphasize in legislative testimony and in meetings with legislators that, unlike Hawaii, the Arizona, Maine, and Connecticut clean election programs all have substantial revenue for their programs coming primarily from sources other than the state tax check-off.
In consideration of the HECF’s declining balance, the Commission must develop strategies to address the depletion of its funds.
- Plan for potential staff transitions and ensure position descriptions are current. All Commission staff position descriptions were revised and approved by DAGS in July 2013. The revised position descriptions more accurately described job duties and responsibilities and were instructive in conducting staff evaluations in late 2013. Commission staff continue to build binders to document their duties and responsibilities as well as the steps necessary to carry out their duties and responsibilities. It is expected that as processes and procedures are added, revised, or eliminated, that the binders will be amended accordingly. We continue to receive strong support from the Department of the Attorney General’s Office.
- Continue Commissioner development through trainings and conferences as well as issuing a Commissioner handbook and orientation of new Commissioners. With respect to trainings, a training to explain the legislative process was arranged with DAGS representative Robin Yahiku in November 2013.
Commissioners are also regularly updated on any new or developing issues (e.g., court cases, public financing concerns, tax laws, etc.) and provided information from annual COGEL conferences. This year’s COGEL conference was held in Quebec, Canada, in December 2013 and was attended by Commissioners Adrienne Yoshihara and Greg Shoda.
FUTURE CONSIDERATIONS FOR FISCAL YEAR 2015
Hawaii Election Campaign Fund. It is essential that the Commission monitor its revenue as well as consider future strategies and options to sustain operations and programs.
Amendments to HAR. Revisions and updates to our Hawaii Administrative Rules continue to be pursued.
2014 Elections. The offices for Governor, Lieutenant Governor, Maui Mayor, and Kauai Mayor are among the larger races set to occur in fall 2014.
Public Funding Program – Gubernatorial Funds for the 2014 Election. A gubernatorial candidate qualified and obtained $105,164.73 in public funds in the 2014 election. This has not happened since 1998.
Noncandidate Committee Data Visualization. Launch of the noncandidate committee data visualization with Socrata.
SuperPac Activity. Continue to monitor compliance by SuperPacs including independent expenditures and, if necessary, proposed legislative amendments.
—————————————– Three (3) of the five (5) outstanding dockets concern applications in First Circuit Court to seek judicial enforcement of Commission orders pursuant to HRS Section 11-410(d) as a result of noncompliance.