Campaign Spending Commission

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
February 11, 2015
10:00 a.m.

Commissioners Present:
William Snipes, Eldon Ching, Gregory Shoda, Adrienne Yoshihara
Excused – Tina Gomes

Staff Present:
Kristin Izumi-Nitao, Tony Baldomero, Gary Kam, Ellen Kojima
Deputy Attorney General Valri Kunimoto

Call to Order:
Chair Snipes arrived at 10:30 a.m.

Meeting convened at 10:30 a.m. with Chair Snipes presiding.

Chair Snipes moved to amend the agenda to add the reconsideration of the Minutes of December 17, 2014 to address a correction to the minutes.  Motion seconded by Chair Yoshihara.

Reconsideration of Minutes of 12/17/14 Meeting:
Deputy Attorney General Kunimoto noted that the minutes be amended as follows:

Page 4, Paragraph 7 – amend sentence to read:  “General Counsel Kam clarified that Ms. Amato was with Chairperson Ritter when the email saying that Respondent Austin could not use campaign funds for a meal was sent, that she did not authorize the expense, that Respondent Austin did not respond back to the email, and that it was the committee’s position that no campaign funds were to be used at restaurants or bars.”

Consideration and Approval of Minutes of 1/14/2015 Meeting:
Commissioner Ching moved to approve the minutes of January 14, 2015 as amended.  Amendments proposed by Deputy Attorney General Kunimoto and Commissioner Shoda

Amendments     -Page 1 – Docket No. 15-53 – amend first sentence to read:  “General Counsel Kam reported that Nancy McGee filed a complaint against Calvin Say and Friends of Calvin Say alleging the improper use of campaign funds to defend a quo warranto proceeding in violation of Hawaii Revised Statutes (“HRS”) §§11-381 and 11-382.”

-Page 2 – 2^nd to last paragraph delete the underscore of the word “held” and delete the strikethrough word “stated”

-Page 8 – Docket No. 15-77 – amend last paragraph to read:  “Motion seconded by Vice Chair Gomes.”

-Page 11 – Docket Nos. 15-83, 15-84 and 15-85 – amend 3^rd paragraph, last sentence to read:  “Further, in Docket No. 15-85, that Respondents amend the Organizational Report within two weeks of receipt of this order and be assessed an additional fine of $50.”

-Page 13 – Proposed Conciliation Agreements – amend 1^st paragraph, first sentence to read:  “Chair Snipes commented that staff needs to find a way to handle matters that result in fines of less than a certain dollar amount.”

-Page 14 – Motion convening executive session – amend to read:  “Chair Snipes moved to convene executive session to consult with attorney pursuant to HRS §92-5(a)(4) and to investigate proceedings regarding criminal misconduct pursuant to HRS §92-5(a)(5).”

Motion seconded by Chair Snipes.  Motion carried unanimously.

New Business – None 

Old Business
Docket No. 15-53 – In Re the Matter of Nancy E. McGee vs. Calvin Say and Friends of Calvin Say
Present – Lance Collins, attorney representing Complainant Nancy McGee
Nancy McGee, Complainant
Maria Wang, attorney representing Calvin Say and Friends of Calvin Say

Chair Snipes stated that the Commission would hear first from Mr. Collins, attorney representing Complainant Nancy McGee, then Ms. Wang, attorney representing Respondents Calvin Say and Friends of Calvin Say, and reminded parties to limit their testimony to five minutes.

Both Mr. Collins and Ms. Wang stated that they would stand on their submissions of 1/20/15 to the Commission.

Chair Snipes stated that the matter was continued from the 1/14/15 meeting due to concerns arising out of Complainant’s hiring of counsel, access to relevant records, and shortness of time for research and briefing.   With the concerns relating to due process having been addressed and Complainant’s counsel having had the additional time to brief the matter, the Commission considered the substance of the matter.

Chair Snipes moved to dismiss the complaint on the basis that the authorities and cases cited in the Complainant’s letter of 1/20/15 were not persuasive.  Motion seconded by Commissioner Yoshihara.  Motion carried unanimously.

Docket No. 15-76 – In Re the Matter of Christy Ann Gusman, Aysia Valdez, and Friends of Christy Ann Gusman
Executive Director Izumi-Nitao reported that a complaint was filed alleging the failure to file the Final Election Period Report.  On 1/9/15, Respondents electronically filed the report.

This matter was continued from the 1/14/15 meeting to see if Respondents would be submitting payment of the $500 fine.  Payment of the fine was received on 1/15/15.  Staff recommended that the complaint be dismissed due to compliance.

Chair Snipes moved to dismiss the complaint.  Motion seconded by Commissioner Ching.  Motion carried unanimously.

Docket No. 15-10 – In Re the Matter of Leslie McKeague-Gomes, Desiree McKeague, and Vote Leslie 43 Committee
Executive Director Izumi-Nitao reported that a preliminary determination of probable cause was issued at the 9/10/14 Commission meeting for the candidate committee’s failure to file the Supplemental Report for the period 1/1/14 – 6/30/14 and a fine of $500 was assessed.

Staff requested the Commission’s reconsideration of the preliminary determination due to Respondent’s filing of the report and payment of the assessed fine as well as dismissal of the complaint due to compliance.

Chair Snipes moved to reconsider the Order.  Motion seconded by Commissioner Shoda.  Motion carried unanimously.

Chair Snipes moved to dismiss the complaint.  Motion seconded by Commission Yoshihara.  Motion carried unanimously.

Consideration and Discussion of Commission Legislation and/or Other Campaign Finance Related Bills/Resolutions for the 2015 Legislative Session
General Counsel Kam reported on the status of the following bills:

HB No. 175 / SB No. 452
The Commission’s bill amends HRS §11-334(a)(4) to require candidate committees to file the January 31 supplemental report regardless of whether it is after an election year.

The House Judiciary Committee passed HB No. 175 unamended.  The bill passed 2^nd reading and has been referred to the House Finance Committee.

The companion bill, SB No. 452, was passed with amendments by the Senate Judiciary and Labor Committee.

HB No. 16
Clarifies independent expenditures to require more active coordination.  Commission staff opposed this measure.

The House Judiciary Committee deferred the measure.

HB No. 630
Adds a new section to HRS chapter 11 to prohibit corporations from making contributions, expenditures, independent expenditures to candidate or noncandidate committees except in accordance with the will of a majority of the corporation’s shareholders.  Commission staff noted problems regarding implementation, practical concerns regarding enforcement, and Attorney General concerns regarding constitutional restrictions on corporate spending.

The House Judiciary Committee heard the bill on 2/10/15 and deferred decision making until 2/17/15.

HB No. 1476
Adds a new section to HRS chapter 11 to require the Commission to process all campaign contributions to shield donors from candidates, repeals the prohibition of anonymous contributions, and creates a publicly funded voter voucher pilot program in the Office of Elections.  Commission staff opposed this bill with respect to anonymous contributions and noted concerns regarding the proposed voter voucher program.

The House Judiciary Committee scheduled a public hearing for 2/12/15.

SB No. 202
Amends HRS §11-335 to require noncandidate committees to include identification of a ballot issue being advocated for or against.  Commission staff supported the intent of this bill but queried whether it was necessary due to present laws which require ballot issue committees to state in their organizational report if they were formed to support or oppose a specific ballot question and to describe the question.

The Senate Judiciary and Labor Committee scheduled a public hearing for 2/13/15.

SB No. 220
Amends HRS chapter 444 to add a new section to require corporations to obtain majority approval of shareholders to make a contribution to candidate and noncandidate committees, prohibits corporations from making a contribution if the majority of its shares are owned by persons who are prohibited from making contributions under state law or taking political positions due to investments with the state or county, requires corporations to provide written notice or post on its website within 48 hours of its contributions, and permits voting shareholders who did not approve the contribution to request a prorated reimbursement of the contribution made by the corporation.  Commission staff opposed this bill and noted problems with enforcement as well as other practical concerns.

The Senate Commerce and Consumer Protection Committee scheduled a public hearing for 2/11/15.

SB No. 363
Amends the partial public funding laws to increase the maximum amount of public funds available in the primary and general elections to a candidate for the office of Governor, Lt. Governor, or Mayor not to exceed 50% of the established expenditure limit, increases the matching funds amount to $2 for each $1 of qualifying contribution above the minimum qualifying amount, and appropriates funds.  Commission staff supported this bill provided that the Legislature appropriates the funds to pay for the increase in public funding.

The Senate Judiciary and Labor Committee heard the bill on 2/10/15 and recommended that the measure pass with amendments.

SB No. 508
Amends HRS §11-336(a) to require noncandidate committees to file preliminary reports on 10/1 of a general election year, rather than 10 days prior to a general election.  Commission staff noted that the impact of this bill is that there is earlier disclosure but less disclosure as the general election approaches.

The Senate Judiciary and Labor Committee heard the bill on 2/6/15 and recommended that the measure pass with amendments.  Specifically, the bill was amended to add another report for better disclosure (i.e., a report due on 10/1 and a report due 10 days prior to a general election).

SB No. 577
Amends HRS chapter 11 to have fines be deposited into the Hawaii Election Campaign Fund, adds a new subsection (b) to HRS §11-314 to have the general fund pay the Commission’s operating expenses including staff salaries and fringe benefits, and amends HRS §11-421(c) to authorize use of Hawaii Election Campaign Fund moneys for investigation expenses.  Commission staff supported the intent of this bill.

The Senate Judiciary and Labor Committee heard the bill on 2/6/15 and recommended that the measure pass with amendments.

SB No. 654
Amends HRS §11-353(d) relating to anonymous contributions to change the threshold at which the provisions shall not apply from $500 to less than $100 received from 10 or more persons at the same political function.  Commission staff supported this bill.

The Senate Judiciary and Labor Committee heard the bill on 2/6/15 and recommended that the measure pass with amendments.

SB No. 1344
Amends HRS §11-323(a) to require noncandidate committees making only independent expenditures to report whether its contributors and recipients are subject to disclosure reporting requirements and provide access to the contributors’ and recipients’ information.  Commission staff supported the intent of this bill.  Executive Director Izumi-Nitao noted that this bill addresses the political spending of dark money groups which include 501(c)(4) and 501(c)(6) non-profit organizations and asked Commissioner Yoshihara to look at these organizations given her expertise.

The Senate Judiciary and Labor Committee heard the bill on 2/6/15 and deferred decision making until 2/25/15.

Report from Executive Director
Report on Common Cause Hawaii’s Initiative to Increase $3 Tax Check-Off to the Hawaii Election Campaign Fund

Present – Carmille Lim, Executive Director Common Cause Hawaii
Christine Trecker, Volunteer
Corie Tanida, Senior Organizer

Carmille Lim stated that Common Cause Hawaii is a non-profit organization that tries to protect the political process, hold government accountable to the public interest, and encourage public participation in government.  She further stated that Ms. Trecker is spearheading the $3 tax check-off campaign which will align with their campaign to encourage public funding of campaigns and to encourage more support for good government.

Christine Trecker stated that they are partnering with Commission staff to develop an awareness campaign to get more people to participate in the $3 tax check-off.  The fund has been declining over the years and they believe that taxpayers are not aware of or do not know what the fund is about.  Their target audience will primarily be taxpayers and tax preparers.  The message will be that choosing the $3 tax check-off does not increase the taxpayer’s liability or decrease their refund. They have started the campaign with the creation of promotional flyers, distribution of the flyers to 50-75 tax professionals, included information on their website, and working on doing a press release and editorial.  Commission’s staff has also highlighted the $3 tax check-off on the Commission’s website and in the Commission’s newsletter.

Corie Tanida stated that she will be working on the social media side to bring more awareness to the issue.

Executive Director Izumi-Nitao acknowledged Common Cause’s ideas and appreciated their work, support, and interest on this initiative.

Report on Compliance of Filing Timely Disclosure Reports
Executive Director Izumi-Nitao reported that no new updates on prior reports.

Supplemental Report (due on 2/2/15)
-376 total candidate committees required to file

• 101 did not file on the deadline (as of 2/10/15, 44 did not file)
• 13 filed late

-238 total noncandidate committees required to file

• 20 did not file on the deadline (as of 2/10/15, 9 did not file)
• 3 filed late

Khristina Caldwell DeJean, a candidate who ran for Governor, stated that she received a “Notice of Late Report” but when she tried to file the report she was not able to because the reporting period was not available to her.  She wanted Commissioners to know that she was a candidate running in the 2014 election and that the reporting period should have been available to her as a candidate in the election.

Associate Director Baldomero explained that because of information received from the Office of Elections, staff determined her to be a candidate not running in the 2014 election, so her reporting period is different from those candidates that ran in the 2014 election.

Update on 2014 Election
Associate Director Baldomero reported that for the 2014 election he put together a summary of the activity reported by Super PACs and Ballot Issue Committees.

There were 29 registered Super PACs in 2014.  Items addressed include:

-Of the 29 Super PACs, 10 were carryovers from 2012 and one was a reformed committee
-Total contributions received was 8 million dollars, an increase of 3.1 million dollars from 2012
-Total amount spent was 7.4 million dollars, an increase of 2.6 million dollars from 2012

Most contributions received by Super PACs were reported in the name of the Super PAC.  SB No. 1344 would require Super PACs to report whether its contributors and recipients are subject to any disclosure requirements and providing a link to that information.

For 2014, there were 13 registered Ballot Issue Committees for 12 ballot issues (5 state and 7 county issues).  Total moneys received was 13.5 million dollars and the total amount spent was 12.5 million dollars. Most of the moneys spent was on the GMO issues on Maui.

Report on January 2015 News Bulletin
Executive Director Izumi-Nitao reported that the following items were included in the newsletter that was posted on 1/28/15:

-Reminders for the $3 tax check-off
-Reminders for filing the Supplemental Report
-Reminders for Ballot Issue Committees to terminate
-Posting of the new reporting schedules
-Proposed legislation for the 2015 legislative session
-Advisory regarding reproduction of candidate material by a noncandidate committee
-Introduction of new data visualization charts
-Summary of the 2014 election
-Public Funds disbursed for the 2014 election
-Annual Report for Fiscal Year 2014
-Annual on-line survey results
-Commission’s 2015 meeting schedule
-Reminder about the Commission’s Facebook, Twitter and automated Email system

Report on 2014 Ballot Issue Committee Termination
Executive Director Izumi-Nitao reported that 13 registered ballot issue committees were required by law to terminate their registration within 90 days after the general election.  As of today, there are 2 committees that still have not terminated.  Staff is working with the 2 committees.

Commissioner Yoshihara moved to convene executive session to consult with attorney pursuant to HRS 92-5(a)(4) and to investigate proceedings regarding criminal misconduct pursuant to HRS 92-5(a)(5).  Motion seconded by Chair Snipes.  Motion carried unanimously.

Public Session reconvened – 12:20 p.m.

Next Meeting:
Scheduled for Wednesday, March 11, 2015 at 10:00 a.m.

Commissioner Yoshihara moved to adjourn meeting.  Motion seconded by Chair Snipes.  Motion carried unanimously.  Meeting adjourned at 12:20 p.m.