Campaign Spending Commission

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
August 10, 2016
9:00 a.m.

Commissioners Present
Bryan Luke, Adrienne Yoshihara,* Gregory Shoda, Eldon Ching, Kenneth Goodenow

Commissioners Absent
None

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

Call to Order
Chair Luke called the meeting to order at 9:05 a.m.

Consideration and Approval of Minutes on 6/30/16
Chair Luke asked for comments or changes.  There were none.  Chair Luke called for a vote to approve the minutes.

Commissioner Goodenow moved to approve the minutes of 6/30/16.  Motion seconded by Commissioner Ching.  Motion carried (3-0).  Chair Luke abstained due to his absence at the 6/30/16 meeting.  Vice Chair Yoshihara was not present.

New Business
Executive Director Izumi-Nitao stated that the next three matters concern the late filing of the 1^st Preliminary Primary Report which was due on 7/14/16 by candidates who are running in the 2016 election.  These proposed Conciliation Agreements were a result of investigations initiated by the Commission in July 2016 pursuant to HRS §11-314(7) to determine whether there had been a violation of the Hawaii campaign spending laws.  The candidates in all three matters have been informed in a letter from Commission staff of the violation.  Further, they have been notified of today’s meeting and received a copy of the proposed Conciliation Agreement.  Executive Director Izumi-Nitao 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 three proposed agreements.

**Proposed Conciliation Agreement No. 17-01 – In Re the Matter of Friends of Tommy Oi
Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Goodenow moved to approve proposed Conciliation Agreement No. 17-01.  Motion seconded by Commissioner Ching.  Motion carried (4-0).  Vice Chair Yoshihara was not present.

**Proposed Conciliation Agreement No. 17-02 – In Re the Matter of Friends of Jo Jordan
Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Goodenow moved to approve proposed Conciliation Agreement No. 17-02.  Motion seconded by Commissioner Ching.  Motion carried (4-0).  Vice Chair Yoshihara was not present.

**Proposed Conciliation Agreement No. 17-03 – In Re the Matter of Friends of Junior Mataafa
Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Goodenow moved to approve proposed Conciliation Agreement No. 17-03.  Motion seconded by Commissioner Ching.  Motion carried (4-0).  Vice Chair Yoshihara was not present.

*Vice Chair Yoshihara arrived at the meeting at 9:15 a.m.

**Docket No. 16-14 – In Re the Matter of Elle Cochran v. Forward Progress/PRP and Ka’ala Buenconsejo
General Counsel Kam reported that Elle Cochran filed a complaint on 9/22/15 against Forward Progress/Pacific Resource Partnership (“PRP”) and Ka’ala Buenconsejo alleging improper coordination of activities behind Forward Progress/PRP’s expenditures in opposition to Cochran in violation of HRS §11-363.

In the 2014 general election, Cochran ran against Buenconsejo for the West Maui County Council seat.  Cochran won that race.  Forward Progress/PRP is a registered noncandidate committee making only independent expenditures.  The complaint alleges that Forward Progress/PRP and Buenconsejo engaged in coordinated activities in the 2014 elections that resulted in expenditures made by Forward Progress/PRP in opposition to Cochran and offered the following evidence of coordination:  (1) A $1,712.51 in-kind contribution on 6/30/14 from the Hawaii Carpenters Market Recovery Program Fund (“HCRP”) for “campaign consulting”; (2) On 8/26/14, Chelton Miyazono, deputy chairperson of the Friends of Ka’ala Buenconsejo (and former executive assistant to Cochran in January 2014), met with Shwetika Baijal, an employee of PRP who was involved with its independent expenditures; and (3) On Buenconsejo’s Google calendar, three entries were made on 10/10/14, 10/22/14, and 10/28/14 of “mailer drops.”  Buenconsejo did not send any mailers in the general election and these dates allegedly coincided with dates that Forward Progress/PRP sent out mailers in opposition to Cochran.

General Counsel Kam reported that he reviewed the materials accompanying the complaint, Forward Progress/PRP’s response to the complaint, including Shwetika Baijal’s statement as provided by Forward Progress/PRP, met with or spoke to Sarah Pajimola (another executive assistant for Cochran), Buenconsejo, and Chelton Miyazono, and believes that Cochran has not shown that Forward Progress/PRP and Buenconsejo have engaged in coordinated activities behind Forward Progress/PRP’s independent expenditures in opposition to Cochran or in support of Buenconsejo.

General Counsel Kam recommended that the Commission summarily dismiss the complaint because there is no evidence of coordination between Buenconsejo and Forward Progress/PRP pursuant to HRS §11-404(1).

Commissioner Goodenow commented that PRP has 2 noncandidate committees – a traditional noncandidate committee called HCRP and a Super PAC called Forward Progress.  Shwetika Baijal worked for HCRP which made in-kind contributions to candidate committees before the firewall.  HCRP then put up the firewall and Shwetika Baijal worked for Forward Progress.  General Counsel Kam stated that this was not discussed in the complaint and that the existence of a firewall does not mean there was no coordination.  He stated that a firewall is evidence of lack of coordination but, in the face of actual coordination, a firewall is not a defense.

Commissioner Goodenow asked about Shwetika Baijal’s email concerning training to candidates that was conducted by PRP prior to the firewall and registration of Forward Progress with the Commission on 7/11/14.  General Counsel Kam responded that the training appeared to be generic training to candidates and that this was not alleged in the complaint.

Commissioner Goodenow asked about the standard of proof applied to campaign finance investigations to which General Counsel Kam responded 51% or a preponderance of the evidence.

Commissioner Goodenow commented that the mail drop looks suspicious but understands that it alone does not prove coordination.

Commissioner Shoda commented that there does not appear to be enough proof to show coordination.  General Counsel Kam stated that Buenconsejo had 2 Super PACs supporting him and that he can see how he might not have wanted or felt the need to have mailers sent out keeping in mind that the period at issue is the 25 days before the general election when many candidates and noncandidate committees plan to send out mailers.

Commissioner Goodenow moved to dismiss the complaint.  Motion seconded by Commissioner Ching.  Motion carried (4-0).  Vice Chair Yoshihara recused herself.

**Docket No. 17-01 – In Re the Matter of Daniel Cunningham
Executive Director Izumi-Nitao reported that a complaint had been filed against Daniel Cunningham for the failure to register with the Commission by filing an Organizational Report.

Respondent filed nomination papers with the Hilo County Clerk’s Office on 6/1/16 to be a 2016 mayoral candidate for Hawaii County.  Pursuant to HRS §11-321, Respondent was required to register with the Commission and file an Organizational Report by 6/11/16 which is 10 days from the date he filed nomination papers.  Respondent did not file an Organizational Report by 6/11/16.

On 6/21/16, Commission staff called Respondent and left a message concerning registration with Respondent’s friend named Deborah Spence as well as emailed Respondent urging him to register with the Commission.  On 6/22/16, Commission staff sent Respondent a “Notice to Register with the Campaign Spending Commission” via first class mail informing him that his Organizational Report was due on 6/11/16, that his failure to register by filing an Organizational Report violates campaign finance laws, and of the imposition of an administrative fine if it was not filed.  Although Respondent subsequently completed and submitted the electronic filing form, Respondent did not file the Organizational Report to complete his registration with the Commission.

On 7/6/16, Commission staff sent Respondent a copy of the complaint and informed him that the matter would be set on the 8/10/16 Commission Agenda.

On 7/11/16, Respondent completed his registration with the Commission by filing the Organizational Report.  On 8/8/16, Respondent paid the $100 fine.

Executive Director Izumi-Nitao recommended that the matter be dismissed due to compliance.

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

**Docket No. 17-04 – In Re the Matter of Robertson Properties Group
Executive Director Izumi-Nitao reported that a complaint had been filed against Robertson Properties Group for the failure to register with the Commission by filing an Organizational Report.

In its Supplemental Report for the reporting period of 7/1/14 to 12/31/14, Caldwell for Mayor reported a contribution from Respondent in the amount of $1,000 on or about 11/26/14.  In its Supplemental Report for the reporting period of 1/1/15 to 6/30/15, Friends of J. Ikaika Anderson reported a contribution from Respondent in the amount of $1,000 on or about 3/17/15.  In its Supplemental Report for the reporting period of 7/1/15 to 12/31/15, Friends for Menor reported a contribution from Respondent in the amount of $1,000 on or about 10/28/15.

Because Respondent gave more than $1,000 to a candidate committee, pursuant to HRS §11-321, it is deemed to be a noncandidate committee that is required to register and file reports with the Commission.

On 6/6/16, Commission staff sent Respondent a letter (Notice to Register with the Campaign Spending Commission and Notice to File Report(s)) via first class mail informing Respondent that its campaign contributions to the multiple candidate committees required that Respondent register and file reports with the Commission pursuant to HRS §11-321.

On 6/27/16, Commission staff emailed Respondent the Commission letter dated 6/6/16 (Notice to Register with the Campaign Spending Commission and Notice to File Report(s)) along with a Noncandidate Committee Electronic Filing Form and a Reporting Schedule.

Respondent has not registered with the Commission by filing the Organizational Report nor has Respondent filed the relevant reports disclosing its contributions to multiple candidate committees.

On 7/29/16, Commission staff sent Respondent a copy of the complaint and informed them that the matter would be set on the 8/10/16 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 $100, order that the fine shall be deposited into the general fund of the state pursuant to HRS §11-340(g), order that Respondent register with the Commission by filing the Organizational Report within 2 weeks of receipt of the order, and order that Respondent file all outstanding reports including but not limited to the reports covering the relevant periods in which they made candidate committee contributions.  Failure to file these reports will result in the filing of another complaint to seek enforcement.

Commissioner Shoda moved to make a preliminary determination that probable cause exists that a violation has been committed and to accept the fine and terms as stated in the complaint.  Motion seconded by Vice Chair Yoshihara.  Motion carried (5-0).

**Docket No. 17-05 – In Re the Matter of Hawaii Life Flight
Executive Director Izumi-Nitao reported that a complaint had been filed against Hawaii Life Flight for the failure to register with the Commission by filing an Organizational Report.

In his Supplemental Report for the reporting period of 1/1/15 through 6/30/15, Friends of Josh Green reported a contribution from Respondent in the amount of $3,000 on or about 4/28/15.

Because Respondent gave more than $1,000 to a candidate committee, pursuant to HRS §11-321, it is deemed to be a noncandidate committee that is required to register and file reports with the Commission.

On 5/26/16, Commission staff sent Respondent a letter (Notice to Register with the Campaign Spending Commission and Notice to File Report(s)) via first class mail informing Respondent that its campaign contributions to Friends of Josh Green required that Respondent register and file reports with the Commission pursuant to HRS §11-321.

On 6/27/16, Commission staff emailed Respondent the Commission letter dated 5/26/16 (Notice to Register with the Campaign Spending Commission and Notice to File Report(s)) along with a Noncandidate Committee Electronic Filing Form and a Reporting Schedule.

Respondent has not registered with the Commission by filing the Organizational Report nor has Respondent filed the relevant reports disclosing its contributions to Friends of Josh Green.

On 7/29/16, Commission staff sent Respondent a copy of the complaint and informed them that the matter would be set on the 8/10/16 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 $100, order that the fine shall be deposited into the general fund of the state pursuant to HRS §11-340(g), order that Respondent register with the Commission by filing the Organizational Report within 2 weeks of receipt of the order, and order that Respondent file all outstanding reports including but not limited to the reports covering the relevant periods in which they made candidate committee contributions.  Failure to file these reports will result in the filing of another complaint to seek enforcement.

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

**Docket No. 17-06 – In Re the Matter of Green Leaf Group, LLC
Executive Director Izumi-Nitao reported that a complaint had been filed against Green Leaf Group, LLC for the failure to register with the Commission by filing an Organizational Report.

In his Supplemental Report for the reporting period of 7/1/15 to 12/31/15, Friends of Ernie Martin reported a contribution from Respondent in the amount of $1,500 on or about 8/31/15 and $1,000 on or about 8/31/15 for total contribution of $2,500.

Because Respondent gave more than $1,000 to a candidate committee, pursuant to HRS §11-321, it is deemed to be a noncandidate committee that is required to register and file reports with the Commission.

On 5/24/16, Commission staff sent Respondent a letter (Notice to Register with the Campaign Spending Commission and Notice to File Report(s)) via first class mail informing Respondent that its campaign contributions to Friends of Ernie Martin required that Respondent register and file reports with the Commission pursuant to HRS §11-321.

On 6/27/16, Commission staff called Respondent and left a message concerning registration with the Commission and that a fine could be assessed for failure to comply.

On 6/28/16, Commission staff faxed Respondent the Commission letter dated 5/24/16 (Notice to Register with the Campaign Spending Commission and Notice to File Report(s)) along with a Noncandidate Committee Electronic Filing Form and a Reporting Schedule.  Respondent was again notified that if no response is given, Respondent may be subject to a fine and a formal complaint being made.

Respondent has not registered with the Commission by filing the Organizational Report nor has Respondent filed the relevant reports disclosing its contributions to Friends of Ernie Martin.

On 7/29/16, Commission staff sent Respondent a copy of the complaint and informed them that the matter would be set on the 8/10/16 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 $100, order that the fine shall be deposited into the general fund of the state pursuant to HRS §11-340(g), order that Respondent register with the Commission by filing the Organizational Report within 2 weeks of receipt of the order, and order that Respondent file all outstanding reports including but not limited to the reports covering the relevant periods in which they made candidate committee contributions.  Failure to file these reports will result in the filing of another complaint to seek enforcement.

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

Chair Luke asked for a motion to amend the agenda to take Draft Advisory Opinion No. 16-02 – Perkins Coie under “Old Business” out of order because the attorney, Mr. William McCorriston, was present.

Commissioner Goodenow moved to amend the agenda to take Draft Advisory Opinion No. 16-02 – Perkins Coie under “Old Business” out of order.  Motion seconded by Vice Chair Yoshihara.  Motion carried (5-0).

Old Business
*Draft Advisory Opinion No. 16-02 – Perkins Coie
This matter was continued from the 5/11/16 Commission meeting to permit Perkins Coie to submit a response to the draft advisory opinion presented at the 5/11/16 meeting.

Mr. William McCorriston, on behalf of Perkins Coie, stated that this request has constitutional importance and sought to address two issues.  First, he argued that in the context of the Colorado Republican case, they should be able to have two affiliated PACs (i.e., a PAC that makes direct contributions to candidates and a PAC that makes independent expenditures).  Second, he stated that the candidate’s publicly available material such as B-roll should be available for republication because it makes pragmatic sense and the federal system seems to have agreement in this area.  He therefore urged the Commission to reconsider its decision in the Sierra Club case.

Discussion ensued concerning whether an organization can register a traditional PAC (i.e., a noncandidate committee subject to the $1,000 contribution limit per election who gives directly to candidates subject to their respective contribution limits) and a Super PAC (i.e., a noncandidate committee that only makes independent expenditures) with the Commission.  Further, whether requestor could implement a written firewall policy as described in Federal Election Commission (“FEC”) regulations to keep the coordinated-side personnel separate from the independent-side personnel.

General Counsel Kam advised that requestor’s question #1 concerns whether an organization can have a traditional PAC and a Super PAC if a firewall separates them.  He responded that the mere existence of a firewall would not allow the Commission to treat requestor’s independent-side expenditures as truly independent expenditures since requestor, through its coordinated-side personnel, also makes in-kind contributions to candidates.  Thus, although requestor may make independent expenditures through its Super PAC, those expenditures will be subject to the candidate’s contribution limits as set forth in HRS §11-358 as well as aggregated with the expenditures of its coordinated-side program from its traditional PAC.  General Counsel Kam further reminded the Commission of the Yamada decision which provides the only exception to the $1,000 per election contribution limit to noncandidate committees under HRS §11-358.  That is, the Yamada injunction only applies to noncandidate committees making only independent expenditures.  Noncandidate committees outside the scope of the injunction are subject to the contribution limits of Hawaii law, including HRS §§11-357 and 11-358.  He stated that to the extent that requestor is asking the Commission to find Hawaii law unconstitutional because it does not permit a hybrid PAC or two affiliated PACs to make unlimited independent expenditures, even where a firewall exists, the Commission lacks the power to do so.  General Counsel Kam also argued that an expenditure will be considered independent only if, factually, the expenditure is truly independent, notwithstanding the presence of a firewall.

Commissioner Goodenow asked a series of hypothetical scenarios to determine whether an organization can have a traditional PAC and a Super PAC.  General Counsel Kam reiterated the above arguments.  Executive Director Izumi-Nitao stated that the draft Advisory Opinion is in response to the set of facts presented by the requestor.  General Counsel Kam reported that the law firm would not disclose the true identity of the requestor nor the funding source of the traditional PAC and the Super PAC, whether there would be separate bank accounts, and whether the same person would manage or control the spending of the traditional PAC and the Super PAC.  Discussion among the Commissioners ensued whereupon all agreed that the draft Advisory Opinion must be limited to the scope of facts presented by requestor.

Mr. William McCorriston stated that requestor is looking for guidance and that they read the case law differently than Commission staff.

Commissioner Ching asked Mr. William McCorriston if they would waive the 90-day rule if the Commissioners needed more time to deliberate to which he responded in the affirmative.  Mr. William McCorriston further stated that this Advisory Opinion was not critical for them for this election.

Commissioner Ching asked if the Commission could go into executive session 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 concerning draft Advisory Opinion No. 16-02.

Vice Chair Yoshihara moved to convene executive session 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 concerning draft Advisory Opinion No. 16-02.  Motion seconded by Commissioner Ching.  Motion carried (5-0).

Chair Luke called the meeting back to order at 10:43 a.m.  Chair Luke announced that the Commissioners wanted to meet with Deputy Attorney General Deirdre Marie-Iha in executive session before deciding the outcome of draft Advisory Opinion No. 16-02.

The Commission resumed New Business.

*Discussion of the Next Steps Concerning the Commission’s Amendments to the Hawaii Administrative Rules Title 3, Chapter 3-160 (Election Campaign Contributions and Expenditures) and Chapter 3-161 (Administrative Practice and Procedure Before the Campaign Spending Commission)
Executive Director Izumi-Nitao discussed the next steps concerning the Commission’s proposed amendments to the Hawaii Administrative Rules Title 3, Chapters 3-160 and 3-161 now that Governor David Ige has approved the Commission’s request to hold a public hearing.

On Monday 8/1/16, Elections Assistant Lee had a notice of public hearing published in the Garden Island, Maui News, West Hawaii Today, Hawaii Tribune-Herald, and Honolulu Star Advertiser newspapers informing the public that the Commission would hold its public hearing on Wednesday 8/31/16 at 9:30 a.m. in this conference room to hear all persons interested in the proposed amendments to the Hawaii Administrative Rules.  The notice further informed the public that at the end of the public hearing, the Commission may make its decision or announce then the date when it intends to make its decision.  The notice stated that the Commission is accepting written testimony and that oral testimony would be received at the hearing.  Lastly, the proposed rules are available on the Commission’s and the Lieutenant Governor’s websites as well as available at the Commission’s office and can also be mailed upon request.

As of today, no written testimony has been submitted.

The 8/31/16 public hearing on the proposed administrative rules will be treated like a HRS Chapter 92 Sunshine Meeting so an agenda will be filed – see handout.  The agenda will consist of Chair Luke calling the meeting to order, introducing the Commissioners, opening the meeting to receive oral or written testimony from the public, and time permitting, asking the Commissioners to discuss and deliberate on the adoption of the proposed amendments.  If decision making is not possible or concluded on this date, the Commission can continue the meeting to 9/14/16 at which time it will conduct or conclude its decision making.

Executive Director Izumi-Nitao explained that if the Commission decides to adopt the rules, it will be sent to the Attorney General’s Office and the Governor’s Office for approval.  If the Governor approves the rules, they will remain at the Lieutenant Governor’s Office for a period of 10 days before becoming final.

Chair Luke asked if the Commissioners had any questions or if they would like to convene in executive session 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 concerning the rule-making process of the Hawaii Administrative Rules.  There were no questions and no request to go into executive session.

*Report on the Implementation of the New Electioneering Communications Form
Executive Director Izumi-Nitao reported that Commission staff executed a new Statement of Information for Electioneering Communications form in July 2016 which was announced in the Commission’s July 2016 Newsletter.

Pursuant to HRS §11-341, an electioneering communication means any advertisement that is broadcast from a cable, satellite, television, or radio broadcast station; published in any periodical or newspaper or by electronic means; or sent by mail at a bulk rate, that:  (1) Refers to a clearly identifiable candidate; (2) Is made, or scheduled to be made, either within 30 days prior to a primary or initial special election or within 60 days prior to a general or special election; and (3) Is not susceptible to any reasonable interpretation other than as an appeal to vote for or against a specific candidate.

Persons, which include an individual, a partnership, a candidate committee or noncandidate committee, a party, an association, a corporation, a business entity, an organization, or a labor union and its auxiliary committees, who make electioneering communications in an aggregate amount of more than $2,000 during any calendar year, are statutorily required to file a Statement of Information within 24 hours of each disclosure date with the Commission.  Persons who fail to submit this form timely will be in violation of the campaign finance laws.

The 3-page form was posted on the Commission’s website and committees were informed that they could file it via a writable/printable PDF version or eSign.  Upon receipt of the electioneering communication form, the Commission posted them on the Commission’s website.  This went into effect 30 days before the primary election (i.e., 7/14/16) and will continue since the statute requires that these filings occur for electioneering communications made within 60 days before the general election (i.e., 9/9/16).

Associate Director Baldomero reported that there have been 181 filings for candidate committees (i.e., 63 out of 269 candidate committees have filed the electioneering communications form) and 18 filings from 9 noncandidate committees (6 of which are from Super PACs) for the primary election.  Caldwell for Mayor had the most filings at 29 followed by Djou for Mayor at 20.

Chair Luke asked if the Commissioners had any questions or if they would like to convene in executive session 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 concerning the application and implementation of HRS §11-341 concerning electioneering communications.  There were no questions and no request to go into executive session. 

Old Business
**Update of Campaign Finance Bills from the 2016 Legislative Session
General Counsel Kam reported that despite the Commission’s recommendation to veto, the Governor signed HB 2156, HD 2, SD 2, CD 1 into law on 7/12/16.  See, Act 247.  Executive Director Izumi-Nitao reported that the new law has been posted to the Commission’s website.

**Docket No. 16-37 – In Re the Matter of Oliver McMillan, Inc.
Vice Chair Yoshihara stated that she would recuse herself from this matter because her firm represents Respondent.

Executive Director Izumi-Nitao reported that this complaint involves Respondent’s failure to register with the Commission as a noncandidate committee.  It was continued from the 6/30/16 Commission Meeting to permit receipt of the $100 administrative fine since Respondent registered with the Commission on 6/29/16.  The $100 administrative fine was received.

Executive Director Izumi-Nitao recommended that the matter be dismissed due to compliance.

Commissioner Goodenow moved to dismiss the complaint.  Motion seconded by Commissioner Shoda.  Motion carried (4-0).  Vice Chair Yoshihara recused herself.

**Docket No. 16-38 – In Re the Matter of Beach Club Maui, Inc.
Executive Director Izumi-Nitao reported that this complaint involves Respondent’s failure to register with the Commission as a noncandidate committee.  It was continued from the 6/30/16 Commission Meeting to permit receipt of the $100 administrative fine since Respondent registered with the Commission on 6/29/16.  The $100 administrative fine was received and Respondent seeks to terminate its registration.

Executive Director Izumi-Nitao recommended that the matter be dismissed due to compliance.

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

Report from Executive Director
Report on Compliance of Filing Timely Disclosure Reports
On 7/14/16, Executive Director Izumi-Nitao reported that Commission staff and Deputy Attorney General Kunimoto met with the Attorney General’s Office – Civil Recoveries Division (“AG-CRD”) regarding the matters that were referred to them.  At this meeting, the following process was agreed upon concerning the handling of the referred (and to be referred) matters:

–CSC to mail the Preliminary Determination of Probable Cause (“PDPC”) via certified mail (CSC will no longer prepare demand letters)

• If no compliance with the PDPC, CSC will refer to AG-CRD
• If the PDPC returns undeliverable or unclaimed to CSC, CSC will refer to AG-CRD who will first attempt service of the PDPC by certified mail, then employ a process server to serve

-AG-CRD will issue tax intercept and send out demand letters

• If committee responds, AG-CRD will try to obtain compliance or work a settlement agreement (if warranted)
• If no response, AG-CRD will file First Circuit Court application (pending results in Hanalei Aipolani and Learning Matters cases)
  • If obtain First Circuit Court order, will seek bench warrant for those committees that do not respond
• If AG-CRD determines Respondent is no longer in Hawaii, they will inform CSC who will then put Respondent on “INACTIVE” status, freeze PDPC, force “terminate” committee, and reactivate PDPC if Respondent files nomination papers again

As for the matters referred, there are 9 matters in various stages with AG-CRD.

As for the report on compliance of filing timely disclosure reports in 2016, Executive Director Izumi-Nitao reported that:

-For the 1^st Preliminary Primary Report (covering the period of 1/1/16 – 6/30/16) which was due on 7/14/16, there were 219 candidate committees that were required to file → 204 filed on time (93%), 5 filed late (2%), and 11 did not file (5%)

• As of today, all candidates have filed

-For the Supplemental Report (covering the period 1/1/16 – 6/30/16) which was due on 8/1/16, there were 151 candidate committees that were required to file → 108 filed on time and 43 did not file (28%)

• As of today, 22 have not filed

-For the 2^nd Preliminary Primary Report (covering the period 7/1/16 – 7/29/16) which was due on 8/3/16, there were 220 candidate committees that were required to file → 210 filed on time and 10 did not file (5%)

• As of today, 1 has not filed

-For the Preliminary Primary Report (covering the period 1/1/16 – 7/29/16) which was due on 8/3/16, there were 251 noncandidate committees that were required to file → 236 filed on time and 15 did not file (6%)

• As of today, 10 have not filed

Mr. Mike Palcic commented that in the past the Commission would send out a reminder to file reports through the U.S. Mail and asked that the Commission return to that practice.

Chair Luke asked for a motion to recess the public meeting to permit the Commission to start an HRS Chapter 91 proceeding which is scheduled to start at 11 a.m.

Vice Chair Yoshihara moved to recess the public meeting.  Motion seconded by Commissioner Shoda.  Motion carried (5-0).  Meeting recessed at 11 a.m.

Chair Luke called the meeting back to order at 11:43 a.m.

Chair Luke asked for a motion to convene Executive Session to:  (1) Resume consultation with the Commission’s attorneys on questions and issues pertaining to the Commission’s powers, duties, privileges, immunities, and liabilities concerning draft Advisory Opinion No. 16-02, pursuant to HRS §92-5(a)(4); (2) Consider and approve Executive Session minutes from the Commission meeting on 6/30/16; (3) Consult with the Commission’s attorneys on questions and issues pertaining to the Commission’s powers, duties, privileges, immunities, and liabilities concerning the Commission’s administrative and/or criminal remedies for campaign finance violations, pursuant to HRS §92-5(a)(4) ; and (4) Consult with the Commission’s attorneys on questions and issues pertaining to the Commission’s powers, duties, privileges, immunities, and liabilities concerning fines assessed under HRS §11-340 against committees that are required to file reports but have been referred to the AG-CRD, pursuant to HRS §92-5(a)(4).

Commissioner Shoda moved to convene Executive Session for the aforementioned reasons.  Motion seconded by Commissioner Goodenow.  Motion carried (5-0).

Public session reconvened at 1:05 p.m.

The Commission returned to Old Business.

**Draft Advisory Opinion No. 16-02 – Perkins Coie
Vice Chair Yoshihara moved to approve draft Advisory Opinion No. 16-02.  Motion seconded by Commissioner Shoda.  Motion carried (5-0).

Commissioner Goodenow stated that he agrees with the Advisory Opinion but would like the minutes to reflect that he believes with the right set of facts, there may be the possibility of an organization having a traditional PAC and a true Super PAC that is not subject to the hard money rules of a traditional PAC.  Commissioner Ching concurred with this statement.

Chair Luke asked for a motion to adjourn the meeting.  Commissioner Goodenow moved to adjourn the meeting.  Motion seconded by Commissioner Ching.  Motion carried (5-0).  Meeting adjourned at 1:06 p.m.

Next Meeting:
Scheduled for Wednesday, August 31, 2016.