Campaign Spending Commission

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
December 13, 2017
9:00 a.m.

Commissioners Present
Kenneth Goodenow, Adrienne Yoshihara, Gregory Shoda, Eldon Ching
Bryan Luke arrived at 9:45 a.m.

Commissioners Absent
None

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

Call to Order
Vice Chair Goodenow called the meeting to order at 9:03 a.m.  He informed the Commissioners and the public that Chair Luke would be arriving later to the meeting.

Consideration and Approval of Minutes of Meeting on 11/8/17
Vice Chair Goodenow asked if there was any public testimony on this agenda item.

Mr. Michael Palcic suggested to the Commission that the members of the public who sign-in and attend the meeting be listed in the minutes.  General Counsel Kam stated that the sign-in sheet is retained by the Commission and anyone can request to see it.

Vice Chair Goodenow asked for comments or changes to the minutes.  Commissioner Ching sought the following amendment:

• Under “Consideration and Approval of Minutes of Meeting on 10/11/17,” page 2, last sentence to read: “Motion carried (4-0).  Commissioner Ching abstained for not attending the 10/11/17 meeting.”

Vice Chair Goodenow called for a motion to approve the minutes as amended.

Commissioner Yoshihara moved to approve the minutes of the 10/11/17 meeting as amended.  Motion seconded by Commissioner Ching.  Motion carried (4-0) (Chair Luke not present).

New Business
Vice Chair Goodenow recommended to move Docket No. 18-06 – In Re the Matter of Hawaii Solutions to the end of the agenda so that Chair Luke may participate.  The Commissioners agreed.

*Presentation of Updated CSC Website
Associate Director Baldomero distributed a handout to the Commissioners and staff to show what the new Commission website would look like.  Associate Director Baldomero reported the following to the Commission:

• Purposes of the new website: (1) Give the homepage a fresh look and make it more aesthetically appealing; (2) Increase the effectiveness of the website by reducing the number of clicks to view reports for committees as well as accessing the candidate and noncandidate committee filing systems; and (3) Make the Commission’s downloadable calendar more accessible.
• The top ten (10) interests on the Commission’s website include:
  1. Viewing Candidate Reports
  2. Accessing the Candidate Filing System
  3. Searching Candidate Data
  4. Viewing Candidate Fundraiser Notices
  5. Accessing the Noncandidate Committee Filing System
  6. Viewing Candidate Contribution Limits
  7. Viewing Noncandidate Committee Reports
  8. Viewing Candidate Reporting Schedules
  9. Accessing Candidate Forms
  10. Accessing Candidate Guidebooks and Manuals

Associate Director Baldomero went through the six slides on the homepage: (1) Opening Slide – About the Campaign Spending Commission; (2) Candidate Registration; (3) View Candidate Reports; (4) View Noncandidate Committee Reports; (5) Search Candidate Committee Data; and (6) Search Noncandidate Committee Data.

Associate Director Baldomero reported that the Commission will launch the new website on 1/2/18.

Old Business
Vice Chair Goodenow recommended to move Docket No. 18-02 – In Re the Matter of Alan Arakawa and Friends of Alan Arakawa to the end of the agenda so that Chair Luke may participate.  The Commissioners agreed.

*Consideration, Discussion, Approval, and Update of Commission Legislation for the 2018 Legislative Session
General Counsel Kam recommended to remove CSC-03 (18) from the Commission’s 2018 legislative package because the Attorney General’s Office no longer supports this bill.  Notably, this bill was submitted in the 2017 legislative session (i.e., H.B. No. 285 and S.B. No. 442) and provided that the statute of limitations for criminal prosecution of campaign spending violations shall not commence until the Commission’s discovery of the offense.

Commissioner Ching moved to withdraw CSC-03(18) from the 2018 legislative package.  Commissioner Yoshihara seconded.  Motion carried (4-0) (Chair Luke not present).

Report from the Executive Director
Report on Compliance of Filing Timely Disclosure Reports
Executive Director Izumi-Nitao reported that there were 4 non-compliant noncandidate committees that have Eric Ryan as the chairperson and treasurer.  She stated that those 4 committees have bank accounts which have been closed, and thus, no further action can be taken by the Attorney General – Civil Recoveries Division because the campaign finance laws do not permit the Commission to go after the personal funds of the chairperson and treasurer.  As such, Executive Director Izumi-Nitao reported that all of those committees will be put on inactive status and, if they become active again, the Commission will pursue the outstanding fines.

Report on Wiki-Meetings in January 2018
Executive Director Izumi-Nitao reported that she and Associate Director Baldomero will be launching Wiki-Meetings with committees every Thursday starting on 1/25/18.  The committees will have an opportunity to meet with Commission staff for 20 minutes to ask any questions.  The meetings will be announced in the Commission’s January newsletter and sign-ups for 3 time slots, (i.e., 9:00 a.m., 10:00 a.m., and 11:00 a.m.) will be made available on the Commission’s website.

Report on the 2017 COGEL Conference
Executive Director Izumi-Nitao reported the following from the 2017 COGEL Conference in Toronto, Canada:

• There were 440 attendees (80 of whom were first-time attendees).
• There were 9 people who attended from Hawaii: Executive Director Izumi-Nitao; Associate Director Baldomero; Chair Luke; Jan Yamane, Executive Director and Legal Counsel of the Honolulu Ethics Commission; Daniel Gluck, Executive Director of the Hawaii State Ethics Commission; Susan Yoza, Associate Director of the Hawaii State Ethics Commission; Virginia Chock, Attorney at the Hawaii State Ethics Commission; Kee Campbell, Staff Attorney at the Hawaii State Ethics Commission; and Chair Reynaldo Graulty, Hawaii State Ethics Commission.
• At the conference, the Commission attendees were involved with a panel discussion, breakfast roundtables, and participated on the Steering Committee as well as the Nominating Committee.
• The conference continues to be an invaluable opportunity to learn about other campaign finance offices, litigation, legislation, enforcement, and new developments/trends as well as measure Hawaii’s performance in these areas.
• The Commission continues to be well placed in the campaign finance world and excels in the areas of data visualization as well as enforcement actions.
• The Commission needs to monitor and be aware of evolving electronic filing systems, super PAC activity, and dark money groups.
• The 2018 COGEL Conference will be on 12/9/18 to 12/12/18 in Philadelphia, PA.

Associate Director Baldomero reported that he enjoys attending the conference on the odd numbered years because of the reflection from the previous election.  He added that he was made more mindful of the social media aspects for the Commission’s office.  He commented that every tweet, Facebook post, etc. are considered government records and that the Commission keeps these records in perpetuity.  Regarding social media communication, Associate Director Baldomero reported that the Commission staff does not have the resources to contact everyone that directly messages the Commission so the social media outreach is one-way.  He further stated that he learned about federal PACs becoming more active in state/local elections.

*Vice Chair Goodenow moved back to New Business.

New Business
*Docket No. 18-06 – In Re the Matter of Hawaii Solutions
General Counsel Kam reported that a complaint had been filed against the noncandidate committee Hawaii Solutions for the failure to file the Late Contributions Report.  Under HRS §11-338(a), he stated that a late contribution report must be filed on or before the 3^rd calendar day prior to the election if a contribution over $500 is made or received within the period between 14 calendar days through 4 calendar days before an election.

With respect to this matter, General Counsel Kam reported the following:

• In 2014, the Late Contributions Report for the General Election was due on 11/3/14.
• On 11/1/14, Respondents filed a Late Contribution Report but it did not show that Respondent received or made any late contributions (see Exhibit 2).
• On 12/3/14, Respondent filed its Final Election Period Report which covered the period 10/21/14 through 11/4/14. In Schedule A, Respondent reported receiving 2 contributions over $500 (i.e., $3,500 contribution on 10/27/14 and a $5,000 contribution on 10/30/14).
• The period between 14 calendar days and 4 calendar days before the 2014 General Election was 10/21/14 through 10/31/14. Both of those contributions were received by Respondent within this time period, but not reported in the Late Contributions Report.

General Counsel Kam recommended that the Commission make a preliminary determination of probable cause that the Hawaii campaign spending law had been violated pursuant to HRS §11-405(a), assess an administrative fine of $750 for the violation, order that any and all fines be deposited in the general fund pursuant to HRS §11-410(e), and order that the Late Contributions Report be amended by Respondent to reflect the 2 contributions.

General Counsel Kam added that after the complaint was filed and sent to Respondent’s current chairperson and treasurer, a former treasurer of Respondent’s committee emailed staff a copy of the Late Contributions Report that did contain the 2 late contributions.  Notably, this was not the report which had been electronically filed on 11/1/14.  General Counsel Kam stated that he believes that the former treasurer must have used the “Preview/Print” feature so the printout sent to the Commission was not the actual report filed by Respondent.

Vice Chair Goodenow asked about how you file the Late Contributions Report.  General Counsel Kam replied that when the contributions are entered into Schedule A, the system automatically populates the Late Contributions Report which then would just need to be filed.

Mr. Michael Palcic requested to testify.  Vice Chair Goodenow told Mr. Palcic that testimony shall be limited to 5 minutes at the beginning of the item at question.  Mr. Palcic wanted to express his concern that those in the public should be able to testify on any matter.  Mr. Palcic argued that he would not know what would be presented for the case, and therefore, insisted that he should be able to testify after the matter has been presented by the Commission staff.

*Vice Chair Goodenow called a recess at 9:42 a.m.

Chair Luke arrived at the meeting during recess at 9:45 a.m.

Vice Chair Goodenow called the meeting back to order at 10:12 a.m.

The Commission resumed discussion of Docket No. 18-06 – In Re the Matter of Hawaii Solutions.

Commissioner Yoshihara 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 Ching.  Motion carried (4-0).  Chair Luke abstained since he was not present during the discussion of Docket No. 18-06.

*Chair Luke moved back to Old Business.

*Docket No. 18-02 – In Re the Matter of Alan Arakawa, Ann R. Arakawa, Anthony T. Arakaki and Friends of Alan Arakawa
General Counsel Kam reported that Respondents would be testifying first.

Mr. Michael Palcic stated that he would like to testify before the discussion, per the instructions he was previously given.  He stated that he heard about the complaint on the news regarding advertisements on shirts and that it was resolved.  Mr. Palcic wanted the opportunity to testify after the complaint would be presented since he was not sure what the complaint was going to be about.

Chair Luke informed Mr. Palcic that the agenda states what the complaint is about (i.e., exceeding the limits on the use of campaign funds for charitable donations).

Mr. David Minkin, legal counsel for Mayor Arakawa, requested that the Commission continue the case to the 2/14/18 Commission Meeting for purposes of negotiating the matter with Commission staff.

General Counsel Kam stated that he was informed at this meeting that the Respondents need to retrieve responses from organizations.

Mr. Minkin stated that Respondents and Commission staff will be meeting in early January to discuss a possible settlement.

Vice Chair Goodenow moved to continue this matter to the 2/14/18 Commission Meeting.  Commissioner Yoshihara seconded.  Motion carried (5-0).

*Chair Luke returned to Report from the Executive Director so that he may add his observations and comments.

Report from the Executive Director
Report on the 2017 COGEL Conference
Chair Luke stated that at the conference he got updated on what happened last year with the Presidential election.  He further mentioned that Hawaii is far ahead of other states for our data visualizations.

Executive Director Izumi-Nitao recognized Jennifer Silva from Enterprise Technology Services (“ETS”) who was present at the meeting.  She said that Ms. Silva helps out the Commission’s office with the data visualizations as well as the electronic filing system.

Commissioner Shoda mentioned that the third-party complaints are brought before the Commission from the public using data and the data visualizations.  The public can see and use the raw data from the Commission’s website.

Chair Luke asked for a motion to convene to Executive Session to consider and approve Executive Session minutes from the Commission meeting on 11/8/17.

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

Public Session reconvened at 10:26 a.m.

Commissioner Yoshihara moved to adjourn the meeting.  Motion seconded by Vice Chair Goodenow.  Motion carried (5-0).  Meeting adjourned at 10:26 a.m.

Next Meeting:
Scheduled for Wednesday, January 10, 2018.