Campaign Spending Commission

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
April 11, 2018
10:00 a.m.

Commissioners Present
Bryan Luke, Gregory Shoda, Stanley Lum, Maryellen Markley, Ph.D.

Commissioners Excused
Kenneth Goodenow

Staff Present
Kristin Izumi-Nitao, Tony Baldomero, Gary Kam, Sandrina Lee
Deputy Attorney General Valri Kunimoto

Call to Order
Chair Luke called the meeting to order at 10:15 a.m.

Consideration and Approval of Minutes of Meeting on 3/7/18
Time:  10:15 a.m.
Chair Luke asked for comments or changes to the minutes.  There were none.  Chair Luke called for a motion to approve the minutes.

Time:  10:15 a.m.
Commissioner Lum moved to approve the minutes of the 3/7/18 meeting.  Motion seconded by Commissioner Markley.  Motion carried (4-0).

New Business
*Docket No. 18-07 – In Re the Matter of Jarrett Keohokalole, James Frizzell, and Friends of Jarrett Keohokalole
Time:    10:15 a.m.
Executive Director Izumi-Nitao stated that a complaint against Jarrett Keohokalole, James Frizzell, and Friends of Jarrett Keohokalole was filed for failing to timely deposit contributions.

She reported that HRS §11-351 and HAR §3-160-30 require candidate committees to timely deposit contributions into a depository institution duly authorized to do business in the state within 7 days after a committee receives a campaign contribution.  In this case, there were 19 contributions from 18 contributors received between 8/7/16 and 4/25/17 which were not deposited into Respondents’ campaign account until 11/24/17, which was well beyond the 7 day deposit requirement.  All 19 contributions would have been reported in a previous campaign spending report had they been timely deposited into the committee’s bank account.

In understanding the late deposit of these contributions, Respondents informed Commission staff that they use Nation Builder as its software which is linked to their campaign website to seek contributions; that when a contribution is made, it is deposited into their PayPal account; that Respondent Keohokalole was notified of these contributions via email; that these 19 contributions were sitting in Respondents’ PayPal account and were not deposited into the campaign account until 11/24/17; and, that Respondent Frizzell (treasurer) discovered all 19 contributions at the same time when he was reconciling the campaign’s bank records because he did not receive the email notification that these 19 contributions had been received.

Executive Director Izumi-Nitao stated that PayPal does not qualify as a depository institution to satisfy the prompt deposit of monetary contributions.  As such, pursuant to HRS §11-405(a), she recommended that the Commission make a preliminary determination of probable cause that the Hawaii campaign spending law had been violated and assess a fine in the amount of $475 for the violation.  She stated that for this kind of violation, the Schedule of Fines adopted by the Commission pursuant to HAR §3-160-73(a) provides for a fine of $25 for the first violation, $35 for the second violation, and $50 for the third violation.  Because these contributions were discovered at the same time and were all deposited on 11/24/17, she recommended that this matter be treated as Respondents’ first violation (i.e., $25 fine) and the receipt of the 19 contributions as separate occurrences.

Commissioner Shoda commended Respondents for self-reporting the errors to the Commission.

Time:  10:25 a.m.
Chair Luke moved to make a preliminary determination of probable cause that a campaign spending law had been violated by Respondents and to accept the fine and terms stated in the complaint.  Motion seconded by Commissioner Markley.  Motion carried (4-0).

Old Business
*Consideration, Discussion, Approval, or Update of Commission Legislation/Testimony and/or Other Campaign Finance Related Bills/Resolutions for the 2018 Legislative Session
Time:  10:25 a.m.
General Counsel Kam highlighted the bills that had activity in the 2018 Legislative Session.  He reported the following on Commission bills:

–     S.B. 2153, H.D. 1 – Repeals the requirement that candidate committee organizational reports include the name and address of each contributor who contributed an aggregate amount of more than $100 to the candidate committee since the last election.

• 3/29/18 House JUD – Passed with an amendment which defected the effective date to July 1, 2050. Senate JDC passed the bill without amendments so will not likely agree to H.D. 1.  The bill will go to conference committee.

–     S.B. 2154, H.D. 1 – Repeals the requirement that noncandidate committee organizational reports include contributions.

• 3/14/18 House JUD – Passed with an amendment which defected the effective date to July 1, 2050. Senate JDC passed the bill without amendments so will not likely agree to H.D. 1.  The bill will go to conference committee.

As for other bills, General Counsel Kam reported the following:

–     H.B. 2247, H.D. 1, S.D. 1 – Requires advertisement disclaimers on any advertisement communicated by digital means or online social media.

• 3/15/18 Senate JDC – Passed with amendments that the House is not likely to agree to.  D. 1 changed the effective date to July 1, 2035 (House had July 1, 2050), removed “or through the Internet or online social media” from Section 2 of the House draft, included “digital” to the definition of “electioneering communications,” and added that if an advertisement is published through electronic or digital means, the disclaimer can be in the form of a hyperlink to a webpage that contains the required disclosure information if it is “impracticable” to include the information within the advertisement itself.  The bill will go to conference committee.

–     S.B. 2992, S.D. 1, H.D. 1 – Exempts signs and banners from the advertisement disclaimer requirement.

• 3/14/18 House JUD – Passed with amendments that the Senate disagreed with. D. 1 defected the effective date to July 1, 2050.  The bill will go to conference committee.

Report from the Executive Director
Report on Compliance of Filing Timely Disclosure Reports
Time:  10:31 a.m.
Executive Director Izumi-Nitao reported no new updates from the last meeting regarding the Supplemental Report covering the reporting period of 7/1/17 through 12/31/17 which was due on 1/31/18 for all candidate and noncandidate committees registered with the Commission.

Report on Campaign Spending Training to Committees
Time:  10:32 a.m.
Associate Director Baldomero reported that 4 committee trainings were being offered on 5/11/18 on Kauai, 5/15/18 on Maui, 5/18/18 on Hawaii, and 6/8/18 on Oahu.  Online registration has opened and he will be promoting the trainings via e-blasts, Facebook, and Twitter.

Reminder to Submit State Ethics Financial Disclosure Forms
Time:    10:38 a.m.
Executive Director Izumi-Nitao reminded Commissioners to file their annual Disclosure of Financial Interests with the Hawaii State Ethics Commission by 5/31/18.

EXECUTIVE SESSION
Chair Luke asked for a motion to convene Executive Session to consider and approve Executive Session minutes from the Commission meeting on 3/7/18.

Time:  10:40 a.m.|
Commissioner Shoda moved to convene in Executive Session for the aforementioned reason(s).  Motion seconded by Commissioner Lum.  Motion carried (4-0).

Public Session reconvened at 10:42 a.m.

Time:    10:42 a.m.
Commissioner Shoda moved to adjourn the meeting.  Motion seconded by Commissioner Lum.  Motion carried (4-0).  Meeting adjourned at 10:42 a.m.

Next Meeting:
Scheduled for Wednesday, May 23, 2018.