Campaign Spending Commission

Campaign Spending Commission Meeting
Zoom Video Conference
April 12, 2023
10:00 a.m.

Commissioners Present
Stanley Lum, Neal Herbert, Vic Bonfiglio, David Chee, Bryan Luke

Staff Present:
Kristin E. Izumi-Nitao, Tony Baldomero, Gary Kam, Janelle Tanna
Deputy Attorney General Candace Park

Guests
None

Call to Order
Chair Lum called the meeting to order at 10:00 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 3/15/23
Commissioner Bonfiglio moved to approve the minutes on 3/15/23.  Motion seconded by Vice Chair Herbert.  Motion carried (4-0).  Commissioner Chee abstained since he had not been sworn in as a Commissioner by this meeting.

New Business
*Welcome and Introduction of New Commissioner David Chee – Executive Director Izumi-Nitao stated that David Chee was appointed by Governor Green to serve the remainder of former Commissioner Maryellen Markley’s term to expire on 6/30/2025.  Commissioner Chee took the oath of office as a Campaign Spending Commissioner on 3/28/23 which was followed by a 3 ½ hour orientation provided by staff.

She stated that David Chee was born and raised in Honolulu.  In 1988, he received a B.S. in Civil Engineering from the University of Washington, and in 1992, a J.D. from the William S. Richardson School of Law at the University of Hawaii.  He has a small law firm that concentrates on real estate litigation.  He enjoys traveling and spending time with his family.  His term expires on June 30, 2025.

Commissioners welcomed David Chee.

Executive Director Izumi-Nitao stated that the Conciliation Agreements on the agenda were a result of an investigation initiated by Commission staff pursuant to HRS §11-314(7) to determine whether there had been a violation of the Hawaii campaign spending laws.  She stated that the 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 agreements.  She recommended that the Commission make a preliminary determination of probable cause that a violation had been committed, waive further proceedings, and approve the settlement amounts stated in the proposed agreements.

*Proposed Conciliation Agreement No. 23-55 – In Re the Matter of Friends of Walter Ritte – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Election Period Report and requests that they assess a reduced fine from $1,747.89 to $582.63 as it is Respondent’s first violation.  Chair Lum asked if there were any comments or questions.

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

Vice Chair Herbert asked if the fine was calculated applying the 25% rule.  Associate Director Baldomero confirmed that it was.

*Proposed Conciliation Agreement No. 23-56 – In Re the Matter of Arthur D. Hannemann – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Election Period Report and requests that they assess a reduced fine from $200 to $66.67 as it is Respondent’s first violation.  Chair Lum asked if there were any comments or questions.

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

*Proposed Conciliation Agreement No. 23-57 – In Re the Matter of Aloha Aina Party – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $200 to $100 as it is Respondent’s second violation.  Chair Lum asked if there were any comments or questions.

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

*Proposed Conciliation Agreement No. 23-58 – In Re the Matter of Friends of Kapana – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $200 to $66.67 as it is Respondent’s first violation.  Chair Lum asked if there were any comments or questions.

Vice Chair Herbert asked if this was the deferred matter Docket 23-31 from last month’s meeting.  Executive Director Izumi-Nitao confirmed it was.

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

*Proposed Conciliation Agreement No. 23-59 – In Re the Matter of Team Kaululaau – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $200 to $100 as it is Respondent’s second violation.  Chair Lum asked if there were any comments or questions.

Commissioner Bonfiglio moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Chee.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 23-60 – In Re the Matter of Friends of Mo Radke – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $200 to $66.67 as it is Respondent’s first violation.  Chair Lum asked if there were any comments or questions.

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

*Docket No. 23-31 – In Re the Matter of Michael Takano and Pono Life Sciences – 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 and the failure to file the Supplemental Report.

She reported that in the Organizational Report filed with the Commission, Respondent Takano is the chairperson and treasurer of the noncandidate committee called Pono Life Sciences.

Pursuant to HRS §11-336(c), Respondents were required to file the Final Election Period Report for the period covering 10/25/22 through 11/8/22 by 11:59 p.m. Hawaii standard time on 12/8/22.  Respondents did not file the report by the deadline.

On 12/9/22, Commission staff notified Respondents via first class mail of their failure to file the report and that a fine would be imposed.

On 12/15/22, Respondents electronically filed the Final Election Period Report.

On 12/20/22, 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 7 days late 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 amount by 1/3/23.  The letter was addressed to Respondents at the addresses listed on their current Organizational Report.

Respondents did not voluntarily pay the late report fine.

Pursuant to HRS §11-336(d), Respondents were required to file the Supplemental Report for the period covering 11/9/22 through 12/31/22 by 11:59 p.m. Hawaii standard time on 1/31/23.  Respondents did not file the report by the deadline.

On 2/1/23, Commission staff notified Respondents via first class mail of their failure to file the report and that a fine would be imposed.

Respondents did not file the Supplemental Report.

On 3/29/23, Commission staff spoke to Respondent Takano’s executive administrator regarding the fine for the late filing of the Final Election Period Report and the unfiled Supplemental Report.  In a follow up email to Respondent Takano’s executive administrator, Commission staff stated that if the fine for the late filing of the Final Election Period Report was not paid and the Supplemental Report was not filed by 4:30 p.m. on 3/31/23, Commission staff would file a complaint.

Respondents have not paid the late report fine for the Final Election Period Report or filed the Supplemental Report.

On 4/5/23, Commission staff sent Respondents a copy of the complaint and set the matter on the 4/12/23 Commission agenda.

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, $500 for the failure to file the Supplemental Report, order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-340(g) and §11-410(e), and order that Respondents file the Supplemental Report within two weeks of receipt of the order.

Chair Lum asked if there were any comments or questions.

Vice Chair Herbert 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 Bonfiglio.  Motion carried (5-0).

Old Business
*Docket No. 23-30 – In Re the Matter of Kapana Thronas-Kahoonei and Friends of Kapana – Executive Director Izumi-Nitao reported that this matter was continued by the Commissioners at its 3/15/23 meeting to permit Respondent Thronas-Kahoonei to contact Commission staff to discuss a conciliation agreement.  Because the matter was addressed earlier in this meeting (i.e., Proposed Conciliation Agreement No. 23-58 – In Re the Matter of Friends of Kapana), she recommended that this matter be dismissed.

Vice Chair Herbert moved to dismiss the complaint.  Motion seconded by Commissioner Luke.  Motion carried (5-0).

*Consideration, Discussion, Approval, and/or Update of Commission Legislation and Other Campaign Finance Related Bills/Resolutions for the 2023 Legislative Session – Consideration, discussion, approval, and/or update of Commission legislation, Commission to Improve Standards of Conduct legislation, and other campaign finance related bills/resolutions that impact Commission operations/business for the 2023 Legislative Session.

General Counsel Kam provided an update of the status of the Commission’s 11 bills and the other related bills introduced this session.  Notably, HB 90, HB 93, and HB 99 were signed by Governor Green on 3/31/23 as Acts 4, 5, and 6, respectively.

Questions and comments were raised on the following bills:

HB 99 (Act 6, SLH 2023) – Vice Chair Herbert asked if the word “person” is defined in HB 99.  General Counsel Kam stated that HRS §11-302 defines what a person is.  Vice Chair Herbert asked if the noncandidate committees have the $100 cash contribution limitation to which General Counsel Kam responded in the affirmative.  Executive Director Izumi-Nitao added that this law limits cash contributions up to $100 per person.

HB 463, SD1 – General Counsel Kam noted that he spoke with Deputy Attorney General Candace Park regarding the constitutionality of the bill.  Deputy Attorney General Park said that she sent an email to the author of the bill and has not received a response.  General Counsel Kam will continue to monitor the bill.

HB 724, SD1 – Commissioner Luke asked if grant-in-aids were included.  General Counsel Kam confirmed that they were.

HB 727, HD1, SD1 – General Counsel Kam commented that if SD1 is passed out which permits the use of campaign funds to give up to $2,000 to another candidate, CSC would recommend that the Governor veto the bill.  Executive Director Izumi-Nitao stated that SD1 is contrary to current law which generally prohibits candidates from giving campaign funds to another candidate unless they are on the same ticket (i.e., Governor and Lt. Governor).  Commissioner Chee asked General Counsel Kam if CSC recommends veto if the Commissioners would have the discussion later.  General Counsel Kam responded that it is possible depending on when the bill comes to CSC for comments and recommendation.  Executive Director Izumi-Nitao stated that the timeline of a bill going to the Governor’s office for approval is unknown, but if the Commissioners had any concerns on staff’s recommendations, they should have the discussion now.  Commissioner Chee stated that the current draft would not be a good development of the law and that he would be in favor of vetoing SD1 if it goes to the Governor for approval.  In contrast, if instead HD1 passes out of conference committee which eliminates the use of campaign funds to purchase up to 2 tickets to another candidate’s fundraiser, CSC would recommend that the Governor approve the bill.  Vice Chair Herbert asked where the $2,000 amount came from.  General Counsel Kam stated that it was probably linked to the contribution limit of a House candidate or any two-year candidate.  Executive Director Izumi-Nitao stated that staff was just speculating on how the $2,000 number was generated.

SB 1543, SD2, HD1 – General Counsel Kam stated that there is no funding for the full public funding program or additional CSC positions in the current draft.  If this draft goes to the Governor for consideration of approval, CSC may have to recommend veto.

Vice Chair Herbert asked what other states have this type of legislation in place.  General Counsel Kam responded Arizona, Maine (only state offices), and Connecticut.  General Counsel Kam stated that Maine runs on appropriations and costs $3 million to run the program and Arizona has a dedicated source of funding.  Vice Chair Herbert asked if there will be any discussion of the legislation at this point.  Executive Director Izumi-Nitao stated that if any discussion happens, it would be in conference.  General Counsel Kam shared that in his experience not much discussion occurs in conference.

Executive Director Izumi-Nitao asked Associate Director Baldomero to provide examples of the full public funding program as proposed by the bill.  Associate Director Baldomero stated that the numbers in the bill are from an average on what was spent in the past two elections by the winners of each respective office.  For a gubernatorial candidate who collects 6,250 $5 qualifying contributions, they would be eligible for $2.5 million dollars; for a Senate candidate who collects 400 $5 qualifying contributions, they would be eligible for $100,000; and, for a House candidate who collects 200 $5 qualifying contributions, they would be eligible for $50,000.

Vice Chair Herbert asked who came up with the minimum qualifying contribution numbers.  General Counsel Kam replied that the drafter of the bill came up with the numbers and Senator Rhoads introduced the bill.  Executive Director Izumi-Nitao stated that the legislators are asking CSC to run numbers and General Counsel Kam is running point and working with Associate Director Baldomero.

Executive Director Izumi-Nitao stated that there is enormous public support for the full public funding program, but it comes down to the matter of money and resources.  At worst, she stated that the legislature could put numbers in and make CSC run the program, but without the proper amounts of funding and the additional staff needed to run the program, she does not know how effective the program will be.

Report from Executive Director
*Report on Compliance of Filing Timely Disclosure Reports – Executive Director Izumi-Nitao reported that in regard to the Supplemental Report which was due on 1/31/23, there remains 29 candidate committees that have not filed this report.  In regard to the criminal referral of Kaniela Ing’s failure to timely file the Supplemental Report, Deputy Prosecuting Attorney Scott Bell is handling the misdemeanor and Bill Harrison represents Kaniela Ing.

*Update on the Hiring of an Administrative Assistant – Executive Director Izumi-Nitao reported that staff is continuing its search to fill the position.

*Reminder to File State Ethics Financial Disclosure Form and Complete Ethics Training – Executive Director Izumi-Nitao reminded Commissioners to file their Financial Disclosure Form by 5/31/23.  She also reminded Commissioners that pursuant to Act 165 (SLH 2022), Commissioners and staff will need to complete an Ethics training online by 1/1/24 and will need a refresher every 4 years thereafter.

Chair Lum asked if there were any questions or comments.

Next Meeting:
Scheduled for Wednesday, May 17, 2023 at 10:00 a.m. via Zoom.

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

Meeting Adjourned at 11:18 a.m.