Campaign Spending Commission

Campaign Spending Commission Meeting
Zoom Video Conference
April 23, 2025
10:00 a.m.

Commissioners Present
David Chee, Neal Herbert, Jon Itomura (Joined at 11:04 a.m.), 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

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

Chair Chee stated that this meeting was scheduled and noticed for Wednesday, April 16, 2025, but due to a Zoom outage experienced nationwide on Wednesday, April 16, 2025, the Commission was unable to hold its meeting at 10 a.m.  The Commission’s April 16th meeting was therefore rescheduled to Wednesday, April 23, 2025 at 10 a.m. and complied with Hawaii’s Sunshine laws.

Chair Chee 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.

Executive Director Izumi-Nitao informed Chair Chee that Commissioner Itomura was not present but would notify him if Commissioner Itomura joins the meeting.

Consideration and Approval of Minutes of Meeting on 3/12/25
Commissioner Wong moved to approve the minutes of the meeting held on 3/12/25.  Motion seconded by Vice-Chair Herbert.  Motion carried (4-0).

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 each of the proposed agreements.

*Proposed Conciliation Agreement No. 25-40 – In Re the Matter of Committee of Reform and Change – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Election Period Report and requested that they assess a reduced fine from $200 to $66.67 as it is Respondent’s first violation.  Chair Chee asked if there were any comments or questions.

Respondent Soares was present and stated that he was unaware of the requirement to still file reports after the election ended, it was not his intention to not comply, and apologized for the mistake.  He asked that if there is a deadline for him to pay the fine, because he is currently unemployed and has no income.  Executive Director Izumi-Nitao advised Respondent Soares to contact Commission staff to setup a payment plan, and told him that his registration with the Commission could not be terminated until his fine is fully paid as well as reminded him that he will have to continue filing reports with the next Supplemental Report being due on July 31, 2025.  Respondent Soares said he will contact Commission staff and try to pay off the fine prior to July 31, 2025.  He also asked if Commission staff will file the Supplemental Report on his behalf.  Executive Director Izumi-Nitao stated that Respondent Soares is welcome to contact Commission staff for assistance, however, it is the candidate’s responsibility to file reports and suggested that Respondent Soares come to the Commission’s office in-person for assistance.

Chair Chee asked Respondent Soares if he has any comment regarding the Conciliation Agreement and if it is acceptable to him.  Respondent Soares responded that he has no issue with it.

Vice-Chair Herbert moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Wong.  Motion carried (4-0).

*Docket No. 25-25 – In Re the Matter of Ranson Soares and Committee of Reform and Change – Executive Director Izumi-Nitao reported that this matter was deferred at the 3/12/25 Commission meeting because Respondent Soares agreed to a Conciliation Agreement.  Because the Commissioners approved Proposed Conciliation Agreement No. 25-40 at this meeting, she recommended that the complaint be dismissed.

Commissioner Polk moved to dismiss the aforementioned complaint.  Motion seconded by Commissioner Wong.  Motion carried (4-0).

Old Business
*Presentation, Discussion, and Approval of Standard Fine Guidelines – Chair Chee stated that this is the third meeting of which the fine guidelines will be discussed and asked Executive Director Izumi-Nitao to summarize the differences between the proposed fine guidelines and the previous fine guidelines.

Executive Director Izumi-Nitao summarized the staff’s recommendations from the last two Commission meetings

Under “Contributions – Section K: Exceed Cash Contribution Limit of $100” (page 5), Vice-Chair Herbert asked if the note regarding “*2025 CSC bills – SB 255 & HB 369” will be removed if the fine guidelines are finalized.  Executive Director Izumi-Nitao confirmed that the note is a placeholder to flag if any of those bills pass in the 2025 Legislative session.

Under “Reporting – Section A: Disclosure Reports – (Candidate & Noncandidate Committees) Reports Due 10 Days Before an Election” (page 2), Commissioner Polk suggested removing the fine amount for a first time and second time offense and assess the max amount of fine.  She also asked about the differences between a late report and a report that was not filed.  Executive Director Izumi-Nitao explained that late reports are those that are filed past the deadline, and there is a statute that can be applied to calculate fines based on how many days the report was filed late, but because there is no statute for fines on reports not filed which is why the HRS §11-410 catch-all was applied with the fine amount increasing after the first offense and at the max amount of $1,000 on the third offense.

Commissioner Polk disagreed with having a tiered scale on the fine amounts and believed that assessing the $1,000 max amount of fine for committees that do not file this report is appropriate as this is an important report.

Vice-Chair Herbert asked Commission staff on the frequency of this report not being filed by committees.  Executive Director Izumi-Nitao stated that there were not that many.

Vice-Chair Herbert suggested applying the max amount as the flat fine, but the Commission can adjust the amount at its discretion based on the reason behind the report not being filed.  Executive Director Izumi-Nitao noted her concern that this will result in many of these complaints being prolonged as the Commission will need to hear and deliberate on the fine amounts for each unfiled report.

Executive Director Izumi-Nitao explained that when a committee does not file by the deadline, Commission staff would send a letter notifying them to file by a certain date, and if the report is still not filed by the date on the letter, then a complaint is issued and sent to the committee.

Commissioner Wong asked if it is part of Commission staff’s procedure to send a letter to committees that do not file the reports to notify them that they need to file within two weeks.  Executive Director Izumi-Nitao responded yes.  He further asked if committees filed the report within the specified date on the letter, is the report then treated as late, and if they failed to file, would they then be assessed the full fine via a complaint.  Executive Director Izumi-Nitao responded yes to the above questions.

For clarification, Associate Director Baldomero stated that there is only one type of disclosure report which committees are required to file by various due dates.  These reports fall under “Reporting – Section A: Disclosure Reports”.  As for “Reports Due 10 Days Before an Election”, these are also disclosure reports except that they are specifically describing reports that are due 10 days prior to an election, and the formula to calculate the fine for these reports is different from the rest of the disclosure reports under “Reporting – Section A: Disclosure Reports”.  With respect to the tiered fine amounts, they are used when a committee does not file at all because staff cannot calculate a fine amount without a filed report.  This usually will result in a complaint if staff is unable to gain compliance, with the first complaint being $500, the second complaint at $750, and the third complaint would result in the max fine of $1,000.  He added that in most cases, these complaints involve first-time candidates and it is uncommon that there is a second or third violation from the same candidates.

Commissioner Polk finds it appalling that candidates are allowed two chances to not file an important report before they are fined the max amount.  Executive Director Izumi-Nitao agreed, however, is concerned that fining every candidate the max amount would result in an increase in the number of complaints being contested which may not be ideal in an election year.

Vice-Chair Herbert asked if there is a means to inform the public of those candidates who are not in compliance with filing reports.  Executive Director Izumi-Nitao responded that we are required to post the names of candidate and noncandidate committees who have not filed reports on the Commission’s website.  Associate Director Baldomero added that the Commission used to publish the names of noncompliant candidates in the newspaper, however, this requirement was removed in the law due to the increased costs and the emergence of the internet.

Commissioner Wong asked for clarification on the “Late Contributions Report” and the “Late Expenditures Report”.  Associate Director Baldomero explained that these are the “special reports”.  They are a subsets of disclosure reports that are due three days prior to an election.  The data in these reports are also in the regular disclosure reports (i.e., the Final Primary Report and the Final Election Period Report) that are filed at a later date, but these “special reports” only consist of aggregate contributions received by candidates and noncandidate committees over $500 or independent expenditures made by noncandidate committees over $500.  Commissioner Wong thought that these reports are important and asked if the fine for not filing can be increased from $750 to $1,000.  Executive Director Izumi-Nitao responded that it can be increased, however, Commission staff does not find too many instances of committees not filing these reports.

Vice-Chair Herbert asked if there are any reports due between the due date of the report that is due 10 days prior to the election and the election date.  Executive Director Izumi-Nitao stated that all committees are required to file disclosure reports that cover the whole calendar year but they are just broken up into different periods that are due on various dates.  The “Late Contributions Report” and “Late Expenditures Report” are due three days prior to the election, but they are situational in the sense that they are only required to be filed for aggregate contributions received by candidates and noncandidate committees or independent expenditures made by noncandidate committees of more than $500 within 14 to 4 calendar days before any election.  The fines are higher for these reports to reflect the importance of them as they are due just days before the election.

Vice-Chair Herbert asked would there be a way to allow the public to know of candidates who received large contributions but did not file the special report.  Executive Director Izumi-Nitao stated that Commission staff sometimes do not know until after the candidate files the next regular report, but once that is identified, the candidates’ name will be posted on the Commission’s website until the report is filed.

Vice-Chair Herbert said that he does not find sufficient evidence that warrant changes at this time.  Executive Director Izumi-Nitao added that Commission staff issues an annual report that compiles violations over the year, and if she finds areas with significant violations then staff will recommend to the Commission to consider increasing the fines to obtain deterrence.  Vice-Chair Herbert suggested that Commission staff monitor the violations in these reports over the next year and asked the Commissioners to not rush into making changes that may not be necessary.

Commissioner Wong asked staff to modify the format of the fine guidelines with the addition of a new column on the left and add either a number or letter to allow for better identification of each section.

Commissioner Polk asked if every committee is required to file the report that is due 10 days prior to an election.  Associate Director Baldomero replied that only those candidates that are on the ballot and have not declared as $1,000 or less are required to file this report.  He added that not all of the reports will be filed on time, but everyone will generally file these reports before the election.

Commissioner Wong agreed with Vice-Chair Herbert’s suggestion to not make any modifications at this time and asked that Commission staff track any instances of an egregious nature that would warrant a review of increasing the fines for these reports.  Executive Director Izumi-Nitao said that she would report to them any areas that are in need of attention for the Commission to review in its annual report at the end of the fiscal year.

Chair Chee also agreed and said that if the Commission is receiving a high level of compliance with the fine guidelines as it currently stands for these reports then it might be better if no modification is made at this time, and that the Commission can revisit it if data from the Commission’s annual report so warrant.  He then asked Executive Director Izumi-Nitao to continue her presentation of the fine guidelines to the next section.

Executive Director Izumi-Nitao stated that the next section would be “Part II. Conciliation Agreements”.  She noted the following proposed changes: (1) Allowing a reset if a committee terminates its registration; (2) Changing the fine reductions to 2/3 of the fine (1^st violation) and 1/3 of the fine (2^nd violation); and (3) Apply Conciliation Agreements to only the 5 stated violations:

• Late reports (except for late contribution/expenditure reports)
• Advertisement disclaimers
• Electioneering communications
• Excess non-resident contributions
• Excess contributors

Commissioner Polk proposed that Conciliation Agreement opportunities should only be offered to first-time candidates or candidates who have not ran or held office in the last five years.  She added that five years seemed like a reasonable timeframe for Conciliation Agreement chances to reset as it is understandable that candidates can forget campaign finance rules and regulations if they had not run for office in five years.

Vice-Chair Herbert commented that he noticed that most violations are from candidates who are also their committee’s officers.  He believed that committees that have staff should not be allowed any leniency.

Executive Director Izumi-Nitao asked Vice-Chair Herbert if what he recommended is a stand-alone criterion to be eligible for a Conciliation Agreement or would this be in addition to Commissioner Polk’s proposal to which he said that it would be an amendment to Commissioner Polk’s proposal by adding the requirement that the committee is managed entirely by the candidate himself/herself.  Executive Director Izumi-Nitao then commented that first-time candidates often have family members as committee officers, and if this criterion applies then these candidates would not be eligible for a Conciliation Agreement.

Chair Chee commented that there is an existing complaint that is pending the Commission’s decision relating to a first-time candidate having a family member as an officer.  Associate Director Baldomero worried that candidates might decide to not hire staff to remain qualified for Conciliation Agreements.

Commissioner Wong asked what if the qualifier would be the $1,000 or less candidates. Executive Director Izumi-Nitao replied that the $1,000 or less committees are only required to file the Final Election Period Report during the election year so there would be only one report that would be eligible for a Conciliation Agreement.

Discussion ensured to clarify Commissioner Polk’s proposal that Conciliation Agreement opportunities should only be offered to first-time candidates or candidates who have not ran or held office in the last five years and Vice-Chair Herbert’s suggested amendment of limiting it to first-time candidates who do not have any staff as well as when a candidate is no longer deemed to be a first-time candidate.

Commissioner Itomura asked if candidates who do not run for office would be considered terminated after a period of time.  Executive Director Izumi-Nitao replied that the Commission can only terminate committees on their request if they meet certain requirements as provided by law.

As to when a first-time candidate would no longer be deemed to be a first-time candidate, and thus, not eligible for a Conciliation Agreement, Associate Director Baldomero recommended setting the due date of the Final Election Period Report as the cut-off date.  Commissioner Polk agreed with this method and added that if these candidates do not run for office for five years from that date, then they revert back to a first-time candidate.  Vice-Chair Herbert did not agree with allowing a candidate who may have had previous violations to be able to start from a clean slate.

Commissioner Polk thought that the Commission’s current policy is a reset of Conciliation Agreement reductions for all committees at the end of each election.  Executive Director Izumi-Nitao explained that this was not the case; rather, all of a committee’s violations remain on file indefinitely.  Vice-Chair Herbert asked if Commission staff reviews a committee’s violation record prior to offering a Conciliation Agreement, to which Associate Director Baldomero responded yes.  Executive Director Izumi-Nitao added that the committee files are archived after termination of registration and are disposed of after 10 years, but violation records can be kept electronically.

Chair Chee suggested that Commissioner Polk puts her proposal in writing and share it with Commission staff so that they can better understand and determine if it can be implemented since there is confusion in the details such as defining what is a first-time candidate and reset eligibility for a Conciliation Agreement.

Commissioner Polk asked about what the proper process is to facilitate a discussion with Commission staff.  Executive Director Izumi-Nitao explained that Commissioners can approach Commission staff for advice.  Deputy Attorney General Park added that two members among the Commissioners may discuss matters but cannot engage in decision making or interactions that circumvent the Sunshine Laws.  Executive Director Izumi-Nitao asked if the members of the Commission are required to declare a permitted interaction group to engage in discussions.  Deputy Attorney General Park stated that it is not necessary as long as it is just between two members of the Commission.

Vice-Chair Herbert asked how a “first-time candidate” would be fined if they made a serious error.  Chair Chee said that the Commission does not have to approve the Conciliation Agreement if they find it to be egregious and can act as they see appropriate.  Executive Director Izumi-Nitao added that the Commission can determine that the candidate pay the fine using personal funds.

Commissioner Wong asked what the current rule is regarding Conciliation Agreement chances being reset.  Executive Director Izumi-Nitao clarified that currently there is no reset and that all committees are only eligible for two Conciliation Agreements.  The reason for Commission staff to propose a reset upon termination of registration is simply a way to help define who is considered a “new candidate”.

Chair Chee suggested that Commissioner Polk and Vice-Chair Herbert discuss with Commission staff to form a better-defined proposal and the Commission can meet again to discuss this matter 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 four (4) House bills (H.B. 369, H.B. 370, H.B. 371, and H.B. 413), three (3) of which were introduced by the Commission (H.B. 369, H.B. 370, and H.B. 371), that have been assigned to conference committees.  House bill 370 regarding partial public funding has gone through a few edits but is now basically the Commission’s original bill, and House bill 371, which deal with the prohibition of state and county contractor contributions has been expanded to include grants-in-aid, and the officers and immediate family members of contractors and grantees.  As for House bill 413, which clarified that registered lobbyists are prohibited from making contributions during Legislative sessions, with “Legislative sessions” defined as when both houses are in session, and if a violation is determined, the State Ethic Commission will fine the lobbyists while the Campaign Spending Commission retains jurisdiction over the committees.  This bill was enrolled to the Governor on 4/21/25.

She further stated that there is also one (1) Senate bill (S.B. 1202) which permits the use of campaign funds to be used for childcare and vital household dependent care costs which was enrolled to the Governor on 4/3/25.  If it becomes law, staff will ask the Commission to consider repealing Advisory Opinion No. 25-01 and No. 25-02 at a subsequent public meeting.

Executive Director Izumi-Nitao reported that while the Governor is constitutionally required to provide his notice of his intent to veto to the Legislature by 6/24/25, notice will be given by 6/6/25 due to his traveling schedule.  Departments and agencies will have the opportunity to meet with the Governor’s Policy Team the week of 6/16/25 to discuss bills on this list.  The Governor has until 7/9/25 to veto bills or the law can into effect without his signature.

As for the Commission’s budget, she stated that the Commission’s request for two new positions and funding for a new electronic filing system remains intact as originally proposed.

Report from Executive Director
*Report on Compliance of Filing Timely Disclosure Reports – Executive Director Izumi-Nitao reported that she has no update but that she is communicating with the Attorney General’s Office Civil Recoveries Division to further refine the process in handling referral cases.

*Update on Appointment of New Commissioners – Executive Director Izumi-Nitao reported that she is in communication with the Judicial Council and that they have acknowledged Chair Chee’s letter of interest to hold over with the Commission for a second term, and they are also aware of Vice-Chair Herbert’s resignation request.  She said that the Judicial Council will meet to determine the qualification of the applicants, and if deemed qualified, they will be added to the list of qualified candidates for future consideration by the Governor when there is a vacancy.

Next Meeting:
Scheduled for Wednesday, May 14, 2025.

Vice-Chair Herbert moved to adjourn the meeting.  Motion seconded by Commissioner Wong.  Motion carried (5-0).

Meeting Adjourned at 12:16 p.m.