Campaign Spending Commission

Campaign Spending Commission
Zoom Video Conference
April 14, 2021
10:00 a.m.

Commissioners Present
Bryan Luke, Stanley Lum, Maryellen Markley, Ph.D., Neal Herbert, Vic Bonfiglio

Staff Present
Kristin Izumi-Nitao, Tony Baldomero, Gary Kam, Yayoi Tumamao, Ellisa Vendiola
Deputy Attorney General Candace Park

Guests
Banner Fanene, Sandy Ma (Common Cause), Jack James

Call to Order
Chair Luke called the meeting to order at 10:03 a.m.

Chair Luke went over the rules for this video conference meeting.

Consideration and Approval of Minutes of Meeting on 3/10/21
Chair Luke asked for comments or changes to the minutes.  There were none.  Chair Luke called for a motion to approve the minutes.

Vice Chair Lum moved to approve the minutes of the 3/10/21 meeting.  Motion seconded by Commissioner Herbert.  Motion carried (5-0).

New Business
Chair Luke asked for a motion to take “Docket No. 21-35 – In Re the Matter of Banner Fanene and Friends for Banner S. Fanene” out of order of business on the agenda.

Vice Chair Lum moved to take Docket No. 21-35 out of order.  Motion seconded by Commissioner Herbert.  Motion carried (5-0).

*Docket No. 21-35 – In Re the Matter of Banner Fanene and Friends for Banner S. Fanene – Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against Banner Fanene and Friends for Banner S. Fanene for the late filing of the Final Election Period Report. She stated that this matter was continued from the 3/10/21 Commission Meeting because Respondent Fanene was unable to attend, and therefore, requested a continuance which was approved at the last meeting.

She reported that in the Organizational Report filed with the Commission, Respondent Banner Fanene
is listed as the candidate and treasurer of the candidate committee called Friends for Banner S. Fanene.

Respondent Fanene filed nomination papers to be a 2020 candidate for the State Senate, District 22 seat.

Pursuant to HRS §11-334(a), Respondents were required to file the Final Election Period Report for the period covering 8/9/20 through 11/3/20 by 11:59 p.m. Hawaii standard time on 12/3/20.  Respondents did not file the report by the deadline.

On 12/4/20, Commission staff notified Respondents via first class mail of their failure to file the report and that a fine would be imposed.

On 2/1/21, Respondents filed the report.

On 2/2/21, Commission staff notified Respondents via first class mail that a fine of $200 would be assessed for the late filing of the Final Election Period Report 60 days late.  Respondents did not pay the late report fine.

On 2/25/21, Respondent Fanene informed Commission staff that he would like to contest the fine.

On 2/25/21, Commission staff sent Respondents a copy of the complaint and set the matter on the 3/10/21 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 failure to timely file 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 fines, or if the Commission so order that the fines, or any portion, be paid from the candidate’s funds, order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-340(g) within two (2) weeks of receipt of this order.

Respondent Fanene was present and stated that he is on a fixed income receiving social security disability insurance, and that his budget is very tight.  He stressed that after paying his necessary expenses, there is nothing left.

Respondent Fanene also stated that he relies on email notifications he receives from the Commission when it comes to filing disclosure reports.  He argued that he did not receive one for this report (Final Election Period Report).  Respondent Fanene stated that he reads every single email notification he receives from the Commission and responds to them.  Therefore, he was surprised when he learned that he had actually failed to file a report.

Respondent Fanene acknowledged that he was informed he could request a lowering of the fine, but he wanted the opportunity to share his position to see if there was an avenue for a first-time offender to be forgiven the $200 fine.

Chair Luke asked if Respondent Fanene was eligible for a conciliation agreement.  Executive Director Izumi-Nitao responded that he is eligible for a 2/3 reduction because it is his first late report which would bring his $200 fine down to $66.67.

With regards to the notices, Executive Director Izumi-Nitao explained that by law, the Commission sends them by first-class mail and since none of the notices about this report mailed to Respondent Fanene came back as undelivered, it appears that he received them.  Respondent Fanene acknowledged that he received the notice about the fine by mail, however, his point is that he did not receive emails about this report. He maintained that he did everything that he was supposed to do based on the emails he received.

Executive Director Izumi-Nitao explained that the email reminders are done as a courtesy to remind committees about the reports.  It is an extra effort done by staff to encourage compliance, but by law, notifications about potential violation of late reports are done by first-class mail.  She noted that by filing nomination papers to run for office, a candidate agrees to comply with the campaign spending laws which involves filing disclosure reports.

Chair Luke asked if the email reminders are automatically generated and sent to all committees.  Associate Director Baldomero responded that all committees registered with the Commission are automatically opted in to receive these emails.  He added that there were at least four email reminders that were sent out for this particular report prior to the deadline.

Respondent Fanene disputed receiving the email reminders. He argued that there is no reason for him to not file a report.  He added that filing a report is very simple, and if he had received an email reminder, he would have responded.  Respondent Fanene explained that based on his understanding, he was depending on the email reminders to file appropriately and on time.  He questioned if candidates cannot rely on them, why have them at all—why use email reminders if they are not reliable.

Vice Chair Lum stated that the emails are extraneous to the process and that they are done as a courtesy.  Whether Respondent Fanene received the emails or not is not the issue.  The issue is whether there was a violation of a late report.  Vice Chair Lum asked Respondent Fanene if he is denying that the report was filed late.  Respondent Fanene responded that he failed to file the report on time.  Vice Chair Lum stated that he appreciates his attempt to serve his community and suggested that he work with staff on a conciliation agreement.  Respondent Fanene agreed to do so and then to go on a payment plan.

Chair Luke moved to continue the matter to the next meeting to allow Respondent Fanene to work with staff on a conciliation agreement.  Motion seconded by Vice Chair Lum.  Motion carried (5-0).

*Chair Luke resumed the order of business on the agenda.

Executive Director Izumi-Nitao stated that the seven (7) Conciliation Agreements on the agenda were a result of investigations 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 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 settlement amounts stated in each of the proposed agreements.

* Proposed Conciliation Agreement No. 21-123 – In Re the Matter of Friends of Micah Pregitzer for Office – 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 $41.67 to $20.84 as it is Respondent’s second violation.  Chair Luke asked if there were any comments or questions.

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

* Proposed Conciliation Agreement No. 21-124 – In Re the Matter of Manaolana Partners – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns an excess contribution of $2,000 to a candidate committee and requests that they assess a reduced fine from $500 to $166.67 as it is Respondents’ first violation.  Chair Luke asked if there were any comments or questions.

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

* Proposed Conciliation Agreement No. 21-125 – In Re the Matter of Benchmark Hospitality of Hawaii, LLC – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns an excess contribution of $1,000 to a candidate committee and requests that they assess a reduced fine from $350 to $116.67 as it is Respondents’ first violation.  Chair Luke asked if there were any comments or questions.

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

* Proposed Conciliation Agreement No. 21-126 – In Re the Matter of Friends for Vicki Higgins 2020 – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the failure to file the Final Election Period Report and the Supplemental Report and requests that they assess a reduced fine from $1,000 to $500 as it is Respondent’s second violation. Respondents filed these reports on 3/8/21.  Chair Luke asked if there were any comments or questions.

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

* Proposed Conciliation Agreement No. 21-127 – In Re the Matter of Friends of Join Patel – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns excess non-resident contributions totaling $5,807.16 and requests that they assess a reduced fine from $1,000 to $333.33 as it is Respondent’s first violation. Notably, per the proposed conciliation agreement, Respondents will be required to return the excess non-resident contributions to contributors by 4/28/21.  Chair Luke asked if there were any comments or questions.

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

* Proposed Conciliation Agreement No. 21-128 – In Re the Matter of Lorraine for Hawaii – 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 Luke asked if there were any comments or questions.

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

* Proposed Conciliation Agreement No. 21-129 – In Re the Matter of Chad Kaukani – 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 Luke asked if there were any comments or questions.

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

* Docket No. 21-40 – In Re the Matter of Ui Kahue-Cabanting and U’i Kahue-Cabanting –  Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against Ui Kahue-Cabanting and U’i Kahue-Cabanting for the late filing of the Final Election Period Report.

She reported that in the Organizational Report filed with the Commission, Respondent Kahue-Cabanting is listed as the candidate and treasurer of the candidate committee called U’i Kahue-Cabanting.

Pursuant to HRS §11-334(a), Respondents were required to file the Final Election Period Report for the period covering 8/9/20 through 11/3/20 by 11:59 p.m. Hawaii standard time on 12/3/20.  Respondents did not file the report by the deadline.

On 12/16/20, Respondents filed the report.

On 12/17/20, Commission staff notified Respondents via first class mail that a fine of $200 would be assessed for the late filing of the Final Election Period Report.  Respondents did not pay the late report fine.

On 1/12/21, Respondent Kahue-Cabanting requested a Conciliation Agreement for the late filing of the Final Election Period Report which would reduce the fine amount of $200 to $100 because this was Respondents’ second violation of filing a late report.  Proposed Conciliation Agreement No. 21-103 was prepared and mailed to Respondents as well as approved by the Commission at a meeting on 2/10/21.

On 2/10/21, Commission staff informed Respondents via first class mail to sign the agreement and remit the reduced fine assessment of $100 by 2/24/21.  Pursuant to the terms of Conciliation Agreement No. 21-103, Respondents were informed that “[i]f this assessment is not paid by the deadline, the

Commission will consider Respondent to be in breach of this Agreement and will then assess Respondent the original amount of the fine pursuant to appropriate proceedings.”

Respondents did not pay the $100 fine under Conciliation Agreement No. 21-103.

On 3/4/21, Commission staff called Respondent Kahue-Cabanting and left a voicemail regarding compliance of Conciliation Agreement No. 21-103.  She was reminded that if she does not submit payment for the reduced assessment of $100 and sign the agreement by 3/12/21, the fine amount will revert back to the original amount of $200 and a complaint would be filed for the nonpayment of the fine.  Respondents did not comply with the terms of Conciliation Agreement No. 21-103.

On 3/15/21, Commission staff sent Respondents a copy of the complaint and set the matter on the 4/14/21 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 failure to timely file the Final Election Period Report, order that the fines be paid from the candidate’s personal funds, if the candidate committee’s funds are insufficient to pay the fines, or if the Commission so order that the fines, or any portion, be paid from the candidate’s funds, and order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-340(g) within two (2) weeks of receipt of this order.

Vice Chair Lum 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 Markley.  Motion carried (5-0).

* Docket No. 21-41 – In Re the Matter of Kevin McDonald and Friends of Kevin McDonald – Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against Kevin McDonald and Friends of Kevin McDonald for the late filing of the Supplemental Report.

She reported that in the Organizational Report filed with the Commission, Respondent McDonald is listed as the candidate and treasurer of the candidate committee called Friends of Kevin McDonald.

Pursuant to HRS §11-334(b), Respondents were required to file the Supplemental Report for the period covering 11/4/20 through 12/31/20 by 11:59 p.m. Hawaii standard time on 2/1/21.  Respondents did not file the report by the deadline.

On 2/2/21, Commission staff sent Respondents a letter via first class mail informing them that the aforementioned report was not filed and that a fine would be imposed.

On 2/19/21, Respondents filed the Supplemental Report.

On 2/22/21, Commission staff sent Respondents a letter via first class mail notifying them that a fine of $200 would be assessed against them for the late filing of the report.  Respondents did not voluntarily pay the late report fine.

On 3/17/21, Commission staff sent Respondents a copy of the complaint and set the matter on the 4/14/21 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 failure to timely file the Supplemental Report, order that the fines be paid from the candidate’s personal funds, if the candidate committee’s funds are insufficient to pay the fines, or if the Commission so order that the fines, or any portion, be paid from the candidate’s funds, and order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-340(g) within two (2) weeks of receipt of this order.

Executive Director Izumi-Nitao noted that Docket No. 21-08 ($264.58 fine assessed at the 12/9/20 meeting for the late filing of the 1B Preliminary Primary Report) and Docket No. 21-33 ($50 fine assessed at the 2/10/21 meeting for the late filing of the Final Election Period Report) are still outstanding and have been referred to the Attorney General’s Office for collection proceedings.

Vice Chair Lum 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 Markley.  Motion carried (5-0).

Old Business
* Docket No. 21-37 – In Re the Matter of Vicki Higgins, Meg Dereign, and Friends for Vicki Higgins 2020  – Executive Director Izumi-Nitao reported that this matter was deferred from the 3/10/21 Commission meeting to permit Respondents to pursue a conciliation agreement which was handled earlier at this meeting.  As such, Executive Director Izumi-Nitao recommended that this complaint be dismissed.

Vice Chair Lum moved to dismiss this complaint.  Motion seconded by Commissioner Markley.  Motion carried (5-0).

*Consideration, Discussion, and/or Update of Commission Legislation and Other Campaign Finance Related Bills/Resolutions for the 2021 Legislative Session
General Counsel Kam reported about the status of the Commission’s eight (8) bills as well as other bills impacting Commission operations/business for the 2021 Legislative Session.  There are no House bills and ten (10) Senate bills related to Commission operation/business remaining.

Executive Director Izumi-Nitao commented that Ms. Sandy Ma of Common Cause has been very vigilant about the Commission’s related bills and hearings. She thanked Ms. Ma for her efforts and expressed her appreciation for the working relationship with her organization.

Ms. Ma thanked Executive Director Izumi-Nitao and noted that it has been a very interesting legislative session this year.

Chair Luke asked if there were any comments or questions.  There were none.

Report from the Executive Director
Executive Director Izumi-Nitao reported the following:

• Supplemental Report was due on 2/1/21:
  • 17 candidate committees still have not filed.

• Final Election Period Report was due on 12/3/20:
  • 4 candidate committees still have not filed.

With respect to prior reports, there are 1-5 candidate committees that have not filed their reports.  They have been referred to the Attorney General – Civil Recoveries Division (“AG-CRD”).   Executive Director Izumi-Nitao reported that 11 candidates have been referred to AG-CRD.  With respect to compliance of prior matters, Kaniela Ing continues to make fine payments.

EXECUTIVE SESSION
Chair Luke asked for a motion to convene in Executive Session to: (1) Consider and approve Executive Session minutes from the Commission meeting on 3/10/21; and (2) Pursuant to HRS §92-5(a)(4), to consult with the Commission’s attorneys on questions and issues pertaining to the Commission’s powers, duties, privileges, immunities, and liabilities regarding McGee v. Campaign Spending Commission and Friends of Calvin Say.

Commissioner Markley moved to convene in Executive Session for the aforementioned reasons.  Motion seconded by Vice Chair Lum.  Motion carried (5-0).

Public Session reconvened at 11:02 a.m.

Commissioner Markley moved to adjourn the meeting.  Motion seconded by Vice Chair Lum.  Motion carried (5-0).  Meeting adjourned at 11:09 a.m.

Next Meeting:
Scheduled for Wednesday, May 12, 2021 at 10 a.m.