Campaign Spending Commission

Campaign Spending Commission Meeting
Zoom Video Conference
November 8, 2023
10:00 a.m.

Commissioners Present
Stanley Lum, Neal Herbert, Vic Bonfiglio, David Chee, Jon Itomura

Excused
Gary Kam, Terence Lau

Staff Present
Kristin E. Izumi-Nitao, Tony Baldomero
Deputy Attorney General Candace Park

Guests
None

Call to Order
Chair Lum called the meeting to order at 10 a.m.

Chair Lum went over the procedures for this meeting via Zoom and introduced the Commissioners and Commission staff who were present.  He also asked the Commissioners if anyone else was with them.  All Commissioners present stated that no one else was with them.

Consideration and Approval of Minutes of Meeting on 10/11/23
Commissioner Bonfiglio moved to approve the minutes on 10/11/23.  Motion seconded by Vice Chair Herbert.  Motion carried (4-0) (Commissioner Itomura abstained because he was not present).

New Business
*Welcome and Introduction of New Commissioner Jon Itomura – Executive Director Izumi-Nitao stated that Jon Itomura was appointed by Governor Green on 9/13/23.  Commissioner Itomura took the oath of office as a Campaign Spending Commissioner on 10/17/23 which was followed by a 3-hour orientation provided by staff.

She stated that Jon is a graduate of St. Louis High School.  In 1985, he received a B.A. in Environmental, Pollution, and Organismic Biology from the University of Colorado, and in 1992, a J.D. from the Puget Sound School of Law.  After working for the Senate Ways and Means Committee, Circuit Court, and serving as Deputy Attorney General until 1999, he was General Counsel for the Campaign Spending Commission from 1999-2003.  Following sixteen years as Supervising Attorney for the Division of Consumer Advocacy, he retired from State service in 2019 and is currently the Executive Director for the Hawaii United Okinawa Association.  His term expires on June 30, 2027.

*Docket No. 24-03 – In Re the Matter of Wayne Chen and Friends of Wayne Chen – Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against Respondents for the late filing of the Supplemental Report.

She reported that in the Organizational Report filed with the Commission, Respondent Chen is the candidate and treasurer of the candidate committee called Friends of Wayne Chen.

Pursuant to HRS §11-334(b), Respondents were required to file the Supplemental Report for the period covering 1/1/23 through 6/30/23 by 11:59 p.m. Hawaii standard time on 7/31/23.  Respondents did not file the report by the deadline.

On 8/1/23, Commission staff notified Respondents via first class mail of their failure to file the report and that a fine would be imposed.

On 8/19/23, Respondents electronically filed the aforementioned report (19 days late).

On 8/29/23, Commission staff notified Respondents via first class mail that a fine of $200 will be assessed for the late filing of the report.   The letter informed Respondents that they could avoid the complaint process by waiving their right to be heard at a HRS chapter 92 public meeting and a HRS chapter 91 contested case hearing, and voluntarily paying the fine by 9/12/23.  The letter was addressed to Respondents at the addresses listed on their Organizational Report.

Respondents did not voluntarily pay the late report fine.

Respondents have failed to timely file the prior Supplemental Report covering the period 7/1/22 to 12/31/22.  A complaint was issued and Docket No. 23-36 was heard before the Commission on 5/17/23.  Due to noncompliance (i.e., payment of a $500 fine), the matter was referred to the Attorney General’s Office – Civil Recoveries Division and is pending.

On 9/14/23, Commissions staff sent Respondents a copy of the complaint and set the matter on the 11/8/23 Commission agenda.  Respondents have not responded 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.

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 Supplemental Report; and order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-340(g).

Commissioner Bonfiglio moved to make a preliminary determination that probable cause exists that a violation had been committed and to accept the fine and terms stated in the complaint.  Motion seconded by Commissioner Chee.  Motion carried (5-0).

*Presentation, Discussion, and Approval of Standard Fine Guidelines – Executive Director Izumi-Nitao presented staff recommendations on amendments to the Commission’s Standard Fine Guidelines in consideration of the new laws that went into effect.  Based on the presentation at the last meeting on the violations incurred in the last fiscal year, she was not recommending further enhancements.  She further stated that, if approved, the fine guidelines will be posted on the Commission’s website.

Discussion ensued on staff recommendations.

With respect to filing substantially defective or deficient reports, Commissioners discussed what constitutes “substantially defective or deficient,” but no definition was determined.  Executive Director Izumi-Nitao reported that if staff finds information contained in the filed reports is defective or deficient, the matter is brought to the attention of the committees and they are fined if it rises to a violation as set forth in the Schedule of Fines.

With respect to fundraisers by elected officials during a prohibitive period (i.e., legislative session), Commissioner Bonfiglio moved for a 2024 CSC bill to provide that a violation of this provision would result in an escheat of the contributions raised.  Motion seconded by Vice Chair Herbert.  Motion failed (4-1).

Commissioners agreed that there should be a penalty for violations of this section, but because there had been no violations in the last legislative session, Commissioners did not see the urgency of this bill and would like to consider for the next legislative session.

With respect to Part III – Criminal Activity, there was discussion on whether to include this section in the Schedule of Fine because it falls outside of CSC jurisdiction.  Commissioners decided to leave the section in and modify the caveat language because it provides notice and information to the committees and the public.

Commissioner Chee moved to accept the Standard Fine Guidelines as proposed by Commission staff with housekeeping amendments.  Motion seconded by Vice Chair Herbert.  Motion carried (5-0).

*Report on 2023 Annual Online Survey – Associate Director Baldomero reported on the results of the Commission’s 2023 Annual Online Survey results.  He stated that the purpose of the survey is to help evaluate the effectiveness of Commission operations and communications for fiscal year 2023 (i.e., July 1, 2022 through June 30, 2023) as well as provide the Commission with any feedback in areas that we administer and regulate for improvement in fiscal year 2024 and beyond.  He made the following remarks:

• This was the 12th year of the survey.
• The survey was launched on 10/2/23 via the CSC website, E-Blast, Facebook & Twitter, and closed on 10/30/23.
• Total outreach via E-Blast was 1,081 made up of 436 candidate committees, 263 noncandidate committees and 382 public subscribers. CSC’s Facebook and Twitter pages are in the public domain and at the time of the survey launch there were 292 Facebook and 1,090 Twitter followers. There were also 376 visitors to the CSC website during the time the survey was open and available on the website.
• The survey ran for a total of 29 days which is tied with 2013, 2019, 2020, 2021 and 2022 for the lowest number of days that we ran the survey and below the 12-year average of 35 days.
• There were 81 total responses which ranks at #12 for the 12 years that the Commission has been conducting the survey compared to the 12-year average of 118 responses (144 responses were received in 2020 which was the highest ever received with the second highest number of responses occurring in 2016 with 140). 76 or 94% of the 81 responders completed the survey to the end.
• 5 minutes and 37 seconds was the typical time spent completing the survey with the CSC estimating it was going to take 5-10 minutes.
• E-Blasts were sent on 10/2/23, 10/9/23, 10/16/23, 10/23/23 and 10/30/23, and Facebook and Twitter posts were done on the same dates. The CSC website post remained on the website for the entire 29-day duration of the survey.
• The survey comprised of 6 sections and 29 survey questions (28 multiple-choice, 1 open-ended).

Associate Director Baldomero went through each of the 6 sections of the survey:

1 – Background Information Highlights (5 Questions/81 Responses)

• Responders were mostly candidates (22) then treasurers of candidate committees (18) and treasurers of noncandidate committees (13) that reside on the islands of Oahu (52), Hawaii (11), and Maui (11). There were also 9 responses from interested members of a noncandidate committee not listed on the Organizational Report and 11 responses from members of the public. The responders have a wide-range of experience among the 6 ranges with most falling in the 10-20 years of experience (28), then the 5-10 years (15) of experience range.  Overall, 50 responders have a 5 or more year relationship with the Commission making this an experienced group.
• 66 or 81% filed CSC reports electronically, 55 or 68% have been involved in campaign activities, 43 or 53% made a contribution or loan to a candidate committee, and 19 or 23% made a contribution to a noncandidate committee, so this was an engaged group that was quite familiar with the world of campaigning and campaign finance.
• 40 or 49% responded that this was their first time taking the survey with 33 or 41% responding that they took the survey between 2-5 times so it seems that this is a group that will offer us a fresh look at what we do. Only 8 or 10% took the survey between 6-10 times.

2 – Communication/Access Highlights (8 Questions/80 Responses)

• 68 or 85% of responders in this category responded that the Commission’s website was the #1 source for obtaining information from the Commission followed by phone calls or drop-in visits to the Commission’s office (60 or 75%), Email (58 or 73%), and then the Guidebooks and Manuals (54 or 68%).
• Social-media engagement is still lacking with only 8 or 10% following us on X (formerly known as Twitter), 4 or 5% following us on Facebook, and 8 or 10% just viewing our X posts on the CSC website, compared to 64 or 80% who are not.  Despite that, 61 or 75% were email subscribers who received E-Blasts (i.e., so most of the responders came from our E-Blast outreach and the CSC website versus Facebook and X posts).
• Electronically filing disclosure reports (64 or 80%) and forms (41 or 51%), followed by accessing guidebooks and manuals (39 or 49%) as well as viewing committee reporting schedules (39 or 49%), drove people to the CSC website. Overall, it seems that responders are visiting our website to electronically file reports and forms, and to access resources to educate themselves on the campaign spending law.
• Of the 39 or 49% who said that they use the searchable database, 36 or 92% said it was a helpful tool that was mainly used to search contributor names and how much money they gave to candidates (35 or 97%) and how candidates spent/expended their campaign funds (19 or 53%).
• The candidate and noncandidate committee data visualization apps were not as popular as the searchable database with 22 or 28% who said they had used it.

3 – Education/Training Highlights (3 Questions/79 Responses)

• 17 or 22% viewed the candidate committee cyber learning videos and 9 or 11% viewed the noncandidate committee cyber learning videos with 48 or 61% never viewing any videos.
• For those who attended training, most of them said that it had been more than 3 years ago (27 or 34%) or 1-3 years (12 or 15%) since they last attended an in-person training or viewed the cyber learning videos. 27 or 34% have never attended training or viewed the Commission’s learning videos before.
• 35 or 44% have viewed the Candidate Committee Guidebook, 34 or 43% viewed the Treasurer’s Guidebook, and 33 or 42% viewed the Candidate Filing System Manual, and so it seems that this was the preferable way of obtaining information on the requirements.

4 – Compliance and Enforcement Highlights (5 Questions/79 Responses-Percentages recalibrated to reflect a question’s applicability to the 79 responders)

• 35 or 51% of responders in this category said they file their disclosure reports on time with 34 or 49% saying they have not with 33 or 97% saying they only filed late 1-2 times.
• 45 or 63% of responders said they were fined 1-2 times with 2 or 3% saying they were fined 3-5 times. 25 or 32% said they were never fined.
• 50 or 74% never entered into a Conciliation Agreement with the Commission but 18 or 2664/70% have entered into a Conciliation Agreement with the Commission.
• 64 or 91% have never had a complaint filed against them with 6 or 9% saying they had a complaint brought before the Commission against them.

5 – Public Funding Highlights (3 Questions/78 Responses-Percentages recalibrated to reflect a question’s applicability to the 78 responders)

• Only a small number of responders in this category (10 or 19%) have qualified for and received public funding versus 42 or 81% who have not. Of the 10 receiving public funds, 7 or 70% received the maximum amount.
• 55 or 71% support public funding versus 23 or 29% who did not.

6 – Other Highlights (5 Questions/76 Responses)

• 51 or 67% of responders in this category said they would support a general fund appropriation to see public funding continue versus 25 or 33% who said they would not. 34 or 45% have been checking off the $3 tax check-off versus 42 or 55% who have not.
• 67 or 88% knew that the $3 check-off did not affect their tax liability or decrease their refund versus 9 or 12% who did not. It seems that the responders are aware that checking off the box does not affect their tax liability or decrease their refund, but they are still not checking the box.
• 41 or 54% responded that Super PACs were a concern versus 35 or 46% who said they were not a concern. This is a reversal from last year when Super PAC activity was a concern as a result of increased Super PAC during the election in the form of negative ads that opposed candidates.

Comments (17 Responses) – Many random comments.  These are the most constructive: 1) Request that email reminders about deadlines continue to be sent; 2) Make deadlines more visible on website; and 3) Request that software, forms, and submittal process for reports be more user-friendly/intuitive.

Associate Director Baldomero asked if there were any questions.  There were none.

Executive Director Izumi-Nitao stated that the survey results will be posted on the Commission’s website.

*Consideration, Discussion, and/or Approval of Commission Legislation for the 2024 Legislative Session – Executive Director Izumi-Nitao reported that she drafted 3 more bill proposals to address penalties for excess cash contributions, contributions by state and county contractors and grantees during a prohibited period, and contributions by foreign national or foreign corporations for the Commissioner’s consideration.

• CSC-05 (24), RELATING TO CAMPAIGN CONTRIBUTIONS – Amends HRS §11-364 to provide that an excess contribution of more than $100 in cash, in the aggregate, from a single person during an election period to a candidate, candidate committee, or noncandidate committee shall escheat to the Hawaii Election Campaign Fund if not returned to the contributor within 30 days.
• CSC-06 (24), RELATING TO CONTRIBUTIONS BY STATE AND COUNTY CONTRACTORS AND GRANTEES – Amends HRS §11-355 by adding a new subsection to provide that contributions from state and county contractors and grantees during a prohibited period shall escheat to the Hawaii Election Campaign Fund if not returned to the contributor within 30 days of receipt.
• CSC-07 (24), RELATING TO CONTRIBUTIONS BY FOREIGN NATIONAL OR FOREIGN CORPORATIONS – Amends HRS §11-356 by adding a new subsection to provide that a prohibited contribution from foreign national or foreign corporations shall escheat to the Hawaii Election Campaign Fund.

Upon further consideration, Executive Director Izumi-Nitao is withdrawing CSC-07 (24) because in the past, it has been General Counsel Kam’s position that foreign contributions are regulated and banned federally; therefore, there is no necessity in the Commission asserting an interest.

Discussion ensued regarding the additional bill proposals.

Vice Chair Herbert moved to approve CSC-05 (24) and CSC-06 (24) for the 2024 Legislative Session.   Motion seconded by Commissioner Chee.  Motion carried (5-0).

Executive Director Izumi-Nitao reported that 2024 bill packages are due by 12/29/23 to Speaker Saiki.  As such, Commission staff is preparing the bills that the Commission has approved for submission.  Meetings will be set up with legislative leadership including subject matter chairs and finance.

Old Business – None.

Report from Executive Director
*Report on Compliance of Filing Timely Disclosure Reports – Executive Director Izumi-Nitao provided an update on compliance of past disclosure reports. She stated that many of the non-filers represent the same committees that have failed to file prior reports and have been brought to the attention of the Attorney General’s Office – Civil Recoveries Division.

 *Report on the 2022 Election – Associate Director Baldomero reviewed the reports filed in the 2022 election and commented on the data filed by candidate committees and noncandidate committees including ballot issue committees and Super PACs.  He further commented on the 2024 election.

Next Meeting:
Scheduled for Wednesday, January 10, 2024.

Chair Lum asked for a motion to adjourn the meeting.  Commissioner Bonfiglio moved to adjourn the meeting.  Motion seconded by Commissioner Chee.  Motion carried (5-0).

Meeting Adjourned at 12:12 p.m.