Campaign Spending Commission

DRAFT

Campaign Spending Commission Meeting
Zoom Video Conference
March 12, 2025
10:00 a.m.

Commissioners Present
David Chee, Neal Herbert, Jon Itomura, Barbara Polk, Danton Wong

Staff Present
Kristin E. Izumi-Nitao, Tony Baldomero, Terence Lau, Anthony Diep

Deputy Attorney General
Candace Park

Guest(s)
Ranson Soares, Blaze Lovell

Call to Order
Vice-Chair Herbert called the meeting to order at 10:00 a.m.

Vice-Chair Herbert went over the procedures for the remote meeting via Zoom and introduced the Commissioners, Commission staff, and the Deputy Attorney General who were present.  The Commissioners present stated that there was no one else with them, except Commissioner Itomura, who had a staff member present with him.

Consideration and Approval of Minutes of Meeting on 2/5/25
Commissioner Polk asked for clarification of the minutes on the Executive Director’s report regarding the number of filers for the Supplemental Report due on 1/31/25.  Executive Director Izumi-Nitao explained that the number of those who filed late were not included in the number of those who failed to file.

Chair Chee moved to approve the minutes of the meeting held on 2/5/25.  Motion seconded by Commissioner Wong.  Motion carried (5-0)

Chair Chee thanked Vice-Chair Herbert for assisting him in calling the meeting to order and indicated that he will preside over the meeting from here forward.

New Business
Executive Director Izumi-Nitao stated that the following Conciliation Agreement on the agenda was a result of an investigation initiated by her as the Executive Director pursuant to HRS §11-314(7) to determine whether there had been a violation of the Hawaii campaign spending laws.  She stated that Respondents have been informed in a letter from Commission staff of the violation and have been notified of today’s meeting as well as received a copy of the proposed conciliation agreement.  She recommended that the Commission make a preliminary determination of probable cause that a violation had been committed, waive further proceedings, and approve the proposed agreement.

*Proposed Conciliation Agreement No. 25-39 – In Re the Matter of James Nahele Forrest for Maui County Council – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requested that they assess a reduced fine from $50 to $16.67 as it is Respondent’s first violation.  Chair Chee asked if there were any comments or questions.

Commissioner Polk moved to approve the proposed conciliation agreement.  Motion seconded by Vice-Chair Herbert.  Motion carried (5-0).

*Docket No. 25-25 – In Re the Matter of Ranson Soares and Committee of Reform and Change – Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against Respondents for the late filing of the Final Election Period Report.

She reported that in the Organizational Report filed with the Commission, Respondent Soares is the candidate, and the treasurer of the candidate committee called Committee of Reform and Change.

Pursuant to HRS §11-334(a), Respondents were required to file the Final Election Period Report for the period covering 1/1/24 through 11/5/24 by 11:59 p.m. Hawaii standard time on 12/5/24.  Respondents did not file the report by the deadline.

On 12/6/24, Commission staff notified Respondents via first class mail of their failure to file the report and that their failure to file this report would result in the Commission filing a complaint and assessing a fine.  The letter was addressed to Respondents at the addresses listed on their Organizational Report.

On 12/26/24, Respondents contacted the Commission for assistance on filing the report.  Respondents were able to file the Final Election Period Report but filed the report twenty-one (21) days late.  Commission staff informed Respondents that there would be a fine for filing the report late.  Respondent Soares informed staff that he would not pay the fine because he had no money and that there is an issue with our system.

On 12/27/24, Commission staff notified Respondents via first class mail that a fine of $200 would be assessed against them for the late filing of the report pursuant to HRS §11-340.  The letter informed Respondents that they could avoid the complaint process by waiving their rights to be heard at a HRS chapter 92 public meeting and a HRS chapter 91 contested case hearing and voluntarily paying the fine by 1/10/25.

Respondents did not pay the late report fine.

On 1/2/25, Commission staff informed Respondents by phone that if they did not pay the fine, a complaint would be filed.  Respondent Soares informed staff again that he does not have money to pay the fine.

On 1/15/25, Commission staff sent Respondents a copy of the complaint and set the matter on the 3/12/25 Commission agenda.

Respondents did not respond to the complaint within 30 days from the mailing of the complaint, and therefore, pursuant to HRS §11-403(c), the Commission may treat the failure to explain or respond as a rebuttable presumption that a violation has occurred. However, Respondent is present at the meeting to respond in-person.

Executive Director Izumi-Nitao recommended that the Commission make a preliminary determination, pursuant to HRS §11-405(a), that probable cause exists to believe that a violation of the campaign spending law has been committed, assess an administrative fine of $200 for the late filing of the Final Election Period Report, order that the fine be paid from the candidate’s personal funds if the candidate committee’s funds are insufficient to pay the fine, or if the Commission so orders, and order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-340.

Respondent Soares was present and stated that he could not file the report because there was an issue with the filing system, that Commission staff needed to file the report for him, that he only filed late because he had moved and Commission staff contacted him at his old address so he did not know that he needed to file another report after the election ended, that Commission staff promised him that by appearing at the meeting his fine would be reduced to less than $30, and that he is unemployed and does not have money to pay the full fine amount.

Commissioner Itomura asked Respondent Soares if he attended the Commission’s training workshop.  Respondent Soares said he was busy with campaigning and work at the time, and he also did not receive any notification of training being held because his email account was deleted so he was not able to attend.  Commissioner Itomura asked Respondent Soares if he was aware of his responsibilities as a candidate.  Respondent Soares replied that he understands his responsibilities but was just not aware that he still needed to file reports after the election ended because he lost the election and Commission staff contacted him using his old email and mailing address.  Commissioner Itomura also asked Respondent Soares about his phone calls with Commission staff. Respondent Soares does not remember the name of the staff member but mentioned again that there was an issue with the filing system and that Commission staff needed to file the report for him.

Vice-Chair Herbert asked Associate Director Baldomero if there is any discrepancy with the claims made by Respondent Soares regarding Commission staff’s communication with him.  Associate Director Baldomero stated that he did not personally have any communication with Respondent Soares; however, the Commission did notify all candidates who were unsuccessful in the Primary Election, which included Respondent Soares, of the upcoming deadlines via a memo that was mailed to the candidates’ address on their organizational report on 8/26/24.  He added that Respondent Soares is required to amend his organizational report within 10 days of any address changes, but Respondent Soares did not update the organizational report with his current  address until 1/10/25.  He further stated that the Commission sent 4 courtesy reminders over emails to all candidates regarding the deadline of the Final Election Period Report, but Respondent Soares also did not update the email address on his organizational report until 1/10/25.

Vice-Chair Herbert asked Commission staff if they recall the communication that Respondent Soares claimed to have had with the staff.  Administrative Assistant Diep replied that upon receiving the Notice of Late Report, Respondent Soares contacted the Commission on 12/12/24 and informed staff that he was not aware of the filing  requirement and that he had moved and changed his phone number, which was why staff was not able to contact him.  Staff offered to email the filing instructions to Respondent Soares and asked that he call the Commission if he did not receive the email.  Respondent Soares did not contact staff or file the report after a week so staff mailed a letter with the filing instructions to him, and upon receiving the letter, Respondent Soares called the Commission on 12/26/24, and staff were able to assist him in filing the report.

Vice-Chair Herbert asked if whether a Conciliation Agreement is allowed for this violation and if it was communicated to Respondent Soares.  Administrative Assistant Diep replied that Commission staff informed Respondent Soares that he is eligible for a Conciliation Agreement as this was his first late report violation, but Respondent Soares’ response was that he did not have the money to pay and wanted to appeal the entire fine.

Respondent Soares agreed with staff’s description of the communication he had with them and stated again that he was promised that by appearing at the meeting, his fine would be reduced to less than $30.

Chair Chee asked Executive Director Izumi-Nitao if there was any discussion with Respondent Soares regarding the possibility of a Conciliation Agreement.  Executive Director Izumi-Nitao said that she is unaware, but staff’s statement mentioned that it was explained to Respondent Soares and his response was that he did not have the money to pay.

Vice-Chair Herbert suggested that Respondent Soares may not have fully understood the purpose of a Conciliation Agreement, and that the matter should be deferred to allow staff to explain and offer Respondent Soares a Conciliation Agreement.

Chair Chee explained the Conciliation Agreement process to Respondent Soares, and he said that staff did have a discussion with him and that he will agree to it if it means a reduced fine.

Chair Chee asked Executive Director Izumi-Nitao on whether deferring the matter to the next Commission meeting to allow Respondent Soares the opportunity to discuss a Conciliation Agreement is appropriate.  Executive Director Izumi-Nitao stated that Respondent Soares is eligible for a Conciliation Agreement, and being that this is his first violation, the $200 fine would be reduced to $66.67.  If Respondent Soares agrees, then the Complaint can be deferred to the next meeting which will also include a Proposed Conciliation Agreement to reduce the fine amount under New Business.  If Respondent Soares does not pay the reduced fine by the deadline specified in the Conciliation Agreement, then the fine would revert to $200.

Respondent Soares asked if there are other options because $66.67 is still too much for him to pay.  Chair Chee responded that $66.67 is the amount the Conciliation  Agreement offers if Respondent Soares agrees to it, otherwise, the Commission will move forward with the Complaint as is.  Respondent Soares accepted the Conciliation Agreement offer.

Vice-Chair Herbert moved to have Docket No. 25-25 be deferred to allow Commission staff to draft a Conciliation Agreement that will be a matter under New Business at the 4/16/25 Commission meeting.  Motion seconded by Commissioner Wong.  Motion carried (5-0).  Commissioner Itomura noted that he did not object to this motion because Respondent Soares agreed to the Conciliation Agreement.

Old Business
*Presentation, Discussion, and Approval of Standard Fine Guidelines – Executive Director Izumi-Nitao stated that this matter was continued from the 2/5/25 meeting to allow the Commission an opportunity to review prior violation reports to assess whether the Standard Fine Guidelines need to be adjusted.  She reported that an updated schedule of fines based on the discussion at the February meeting was distributed to the Commission for its consideration.

Executive Director Izumi-Nitao reviewed the sections of concern discussed at the February meeting and stated that staff recommends that under “Reporting – Section B:  Filing Substantially Defective or Deficient Reports” be kept “as is” on the fine guidelines because she believes rulemaking is required in defining what is a “substantially defective or deficient report” as well as keeping the fines set forth in “Reporting – Section C:  False Reports” “as is” for transparency purposes.

Commissioner Wong asked if a referral to the Attorney General’s Office is required to classify a false report violation as a class C felony.  Executive Director Izumi-Nitao responded that Commission staff can investigate and refer or notify the prosecutor’s office for them to review because dual or parallel proceedings are permitted.  In other words, the Commission is permitted to pursue and issue an administrative civil fine and the Attorney General’s Office can investigate and pursue criminal prosecution; however, there has been no precedent cases.

Commissioner Itomura asked Deputy Attorney General Park whether a criminal investigation initiated by the prosecutor’s office would prevent the Commission from pursuing an administrative fine.  Deputy Attorney General Park responded that it would not.

Commissioner Polk commented that the fine guidelines are too lenient for elected officials and experienced candidates.  She agreed with Vice-Chair Herbert’s comment from the February meeting that Conciliation Agreements should only be applied to first-time candidates, and she was particularly concerned about candidates submitting reports after election day.  She suggested that there should not be a reduction in fine for candidates who are late on the reports due 10 days prior to election day.

Vice-Chair Herbert said that the allowance of a reduced fine would provide a learning opportunity for candidates but suggested that the fine amount can be raised if it is too lenient.  Executive Director Izumi-Nitao commented that any increase in fine would have to stay within the HRS §11-410 administrative catch-all’s maximum fines of $1,000 for candidate committees and $5,000 for Super PACs.

Commissioner Polk clarified that her comment was in regard to the total number of late submissions on various items that candidates are allowed before they are fined the full amount for these violations, such as 2 reduced fines for late reports, 2 reduced fines for late fundraiser notice, and so forth.  She added that there should not be a Conciliation Agreement or smaller fines for first- and second-time violators for important reports such as the report due 10 days prior to election day.

Chair Chee proposed that all suggested changes should be discussed after the fine guidelines have been fully explained to avoid further confusion because it appears that Commissioner Polk is commenting on “Part II.  Conciliation Agreements.”

Executive Director Izumi-Nitao continued the presentation of recommended amendments to the fine guidelines that included a possible update for “Contributions – Section K:  Exceed Cash Contribution Limit of $100” to account for bills moving this legislative session which, if passed, would authorize an escheat and the addition of “Other – Section H:  Unauthorized Collection of Contributions OR Unauthorized Expense of Campaign Funds” to account for the codification of fines in complaints previously heard and decided by the Commissioners for this violation.

Executive Director Izumi-Nitao then moved to “Part II.  Conciliation Agreements” and provided staff’s recommendation that included the number of violations being reset once a committee’s registration is terminated with the Commission.  She added that to limit Conciliation Agreements to first time candidates would require further clarification on who is a first-time candidate.

Vice-Chair Herbert commented that the sentence “Remains within one category of violation and only applies to the following violations” is unclear.  Discussion ensued to better describe how it is applied.

Commissioner Polk was concerned that the Conciliation Agreement eligibility as it currently stands is too lenient and suggested that it should only apply to first-time candidates.  Executive Director Izumi-Nitao stated a concern that not allowing any fine reduction might lead to an increase in the number of complaints and does not lend itself to an expeditious compliance.

Vice-Chair Herbert asked if it would be an option to issue a letter of reprimand for a first violation rather than a reduced fine.  Associate Director Baldomero stated that most of the violations are committed by candidates who are running for the first time.  Elected officials on the other hand have enough funding that it would not make a difference if they were allowed a Conciliation Agreement or given a reprimand letter.

Vice-Chair Herbert asked if a formal process is required to allow the Commission to issue a letter of reprimand to first-time candidates who are unable to pay the fine on their first offense stating that the fine is waived but the maximum fine would be imposed on their next violation.

Chair Chee recommended for the Commission members to revise the current version of the fine guidelines and present it for discussion and approval at the next meeting.

Vice-Chair Herbert suggested that the Commission should vote on the fine guidelines as amended by Commission staff.  He also stated that the Commission should make it mandatory for first-time candidates to complete training.  Executive Director Izumi-Nitao stated that at this time there is no statutory requirement for first-time candidates to complete training so the Commission is unable to mandate training.

Commissioner Polk asked Commission members of their perspective regarding her view on the fine guidelines being too lenient for certain reports.  Commissioner Itomura commented that he understands Commissioner Polk’s concern; however, he is worried that if the fines imposed are too punitive then it would discourage candidates from running.

Chair Chee and Commissioner Wong agreed with Commissioner Polk on eliminating Conciliation Agreement eligibility for the report that is due 10 days before an election.  Commissioner Wong added that the Commission can also consider limiting the chances of a reduced fine to just 1 rather than 2 Conciliation Agreements, or the reduced amount can be set as payment of 1/3 of the fine for the first time, 2/3 of the fine for the second time, and payment of 100% for any subsequent violation.  Commissioner Itomura commented about the balance between compliance and being punitive.

Chair Chee asked Commission staff to revise the fine guidelines by removing the possibility of a reduced fine for the report due 10 days prior to election day (i.e., 2^nd Preliminary Primary, and 2^nd Preliminary General Reports), changing the reduced fine amounts for Conciliation Agreements as suggested by Commissioner Wong (i.e., payment of 1/3 of the fine for the first time and 2/3 of the fine for the second time), and proposed that the discussion be continued to the next meeting.  Executive Director Izumi-Nitao added that they also consider the possibility of a reset of Conciliation Agreements if a committee terminates its registration with the Commission as another consideration for discussion at the next meeting.

*Consideration, Discussion, Approval, and/or Update of Commission Legislation and Other Related Bills/Resolutions for the 2025 Legislative Session – Executive Director Izumi-Nitao reported on the status of the Commission’s bills and other related bills.  She stated that there are five (5) bills alive in the House (4 of which are Commission bills) and four (4) bills alive in the Senate (none of which are Commission bills) that are looking at crossover.  As for the Commission’s budget requests, they are moving forward in the Executive budget.

Report from Executive Director
*Report on Compliance of Filing Timely Disclosure Reports – Executive Director Izumi-Nitao reported that there are 11 candidate committees that have not filed the Supplemental Report due on 1/31/25 and most of them are committees that have not been complying and have been referred to the Attorney General’s Office.

 Executive Session
*Consideration and Approval of Executive Session Minutes of Meeting on 2/5/25 – Chair Chee asked if there were no corrections or amendments to the proposed executive session minutes on 2/5/25, he would ask for a motion in open session.

Vice-Chair Herbert moved to approve the executive session minutes on 2/5/25.  Motion seconded by Commissioner Wong.  Motion carried (5-0).

Next Meeting:
Scheduled for Wednesday, April 16, 2025.

Commissioner Itomura moved to adjourn the meeting.  Motion seconded by Commissioner Polk.  Motion carried (5-0).

Meeting Adjourned at 12:12 p.m.