Campaign Spending Commission

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
February 12, 2014
10:00 a.m.

Commissioners Present:
G. William Snipes, Tina Gomes, Eldon Ching, Gregory Shoda, Adrienne Yoshihara

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

Call to Order:
Meeting convened at 10:05 a.m. with Chair Snipes presiding.

Consideration and Approval of Minutes on 12/18/13:
Vice Chair Gomes moved to approve the minutes of December 18, 2013.  Motion seconded by Commissioner Yoshihara.  Motion carried unanimously.

New Business
Docket No. 14-09 – In Re the Matter of WZ Chinatown Partners, LLC
Executive Director Izumi-Nitao reported that a complaint was filed alleging that Respondent gave more than $1,000 to a candidate committee that required Respondent to register and file reports as a noncandidate committee.

The Friends of Maile Shimabukuro reported receiving a contribution from Respondent in the amount of $2,500 on or about 4/30/13.  Staff sent a notice (11/8/13) and called (11/27/13 and 12/4/13) to seek Respondent to register and file required reports.

On 2/11/14, Respondents registered and file required reports.  On 2/12/14, Respondent paid the assessed $100 fine for not filing an Organizational Report.  Staff recommends that the complaint be dismissed.

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

Docket No. 14-10 – In Re the Matter of WZ Waiakamilo Partners, LLC
Executive Director Izumi-Nitao reported that a complaint was filed alleging that Respondent gave more than $1,000 to a candidate committee that required Respondent to register and file reports as a noncandidate committee.

The Friends of Clayton Hee committee reported receiving a contribution from the Respondent in the aggregate amount of $4,000 on or about 4/25/13.  Staff sent notices (11/8/13 and 11/26/13) to seek Respondent to register and file required reports.

Mr. Brian Kang, representing WZ Waiakamilo Partners, LLC, stated that on 2/11/14 WZ Waiakamilo Partners registered and filed the Supplemental Report.  He further stated that there was a discrepancy as to how much WZ Waiakamilo Partners contributed to the Friends of Clayton Hee committee.  WZ Waiakamilo Partners records show only one contribution of $2,000 being made to the Friends of Clayton Hee campaign committee and that is the amount reported in the 1/1/13-6/30/13 Supplemental Report.  WZ Waiakamilo Partners will be following up with the Friends of Clayton Hee committee regarding the amount of the contribution and will be forwarding a copy of the cancelled check for the $2,000 contribution to the Commission.

Executive Director Izumi-Nitao stated that in November 2013 an excess contribution investigation found that WZ Waiakamilo Partners, PMG Entertainment, and WZ Waikiki Partners have the same officer maintaining control over the entities so contributions from each entity was aggregated for a total $7,000 contribution made to Friends of Clayton Hee.  The Friends of Clayton Hee escheated the excess contribution of $3,000 to the Hawaii Election Campaign Fund and a $500 administrative fine was paid by excess contributors PMG Entertainment and WZ Waikiki Partners.  Notably, WZ Waiakamilo Partners did not disclose that it had only made a $2,000 contribution to Friends of Clayton Hee at that time.

Chair Snipes moved to defer matter until the next meeting for further follow-up to include a review of whether aggregation and an excess contribution occurred as a result of WZ Waiakamilo Partner’s $2,000 contribution to Friends of Clayton Hee.  Motion seconded by Vice Chair Gomes.  Motion carried unanimously.

Docket No. 14-13 – In Re the Matter of A&W Partnership, LLC
Executive Director Izumi-Nitao reported that a complaint was filed alleging that Respondent gave more than $1,000 to a candidate committee that required Respondent to register and file reports as a noncandidate committee.

The Friends of Clayton Hee committee reported receiving a contribution from Respondent in the amount of $2,500 on or about 5/6/13.  Staff sent a notice on 1/10/14 to seek Respondent to register and file reports.  On 2/11/14, staff received a letter from the accountant for A&W Partnership stating that they are no longer in business and that it was closed in July 2013.  The assessed $100 fine however was paid.  Recommendation is that the complaint be dismissed and the matter put on Inactive status.

Chair Snipes moved to dismiss the complaint without prejudice.  Motion seconded by Vice Chair Gomes.  Motion carried unanimously.

Discussion of Conducting Random Audits of Committees
Executive Director Izumi-Nitao commenced the discussion by reporting what the Commission has done in the past.  She reported that random audits were conducted in October 2005 and 9 audits of candidate committees on Oahu were completed.  The purpose for this audit was to assist candidate committees in their compliance with recordkeeping and reporting requirements, to assist the Commission by providing a sampling in determining overall compliance with campaign finance laws, and to promote the Commission’s educational efforts.  There were no sanctions for those committees that were audited.  Associate Director Baldomero reported that random audits stopped in 2006 because the Commission got busy.

Mary Donahue was contracted and paid $3,088 to audit specific candidate records using a pre-agreed checklist, to meet with candidate to conduct a field audit, and to maintain confidentiality and report findings to Commission staff.

Executive Director Izumi-Nitao reported that if the Commission were going to implement random audits, considerations should be given to the following areas.

–  Determining the category (if any) for “random” selection – by districts, office, after primary and/or general election, public/not publicly funded candidates, thresholds qualifications or level of raising/spending, candidate and/or noncandidate committees, Oahu or all island, percentage of all candidates that ran in the election cycle, etc.
–  Determining how the selection should be done – by lottery, public selection/drawing at a Sunshine meeting, are rules needed, etc.;
–  Determining how the random audit should be implemented – by hiring an independent auditor or contractor, investigation, notification, enforcement, etc.
–  Concerns if done – time, resources, and cost.

Staff recommended that if random audits are conducted, that they not be done in an election year; that more consideration and discussion needs to occur with the Commissioners in developing this process (rather than doing it as it was done in October 2005); and, that if violations are found to have occurred, that they be enforced.

Chair Snipes agreed that if random audits be conducted that it should not be done during an election year and asked whether rules are needed to implement random audits if violations were enforced.  Commissioners agreed that if random audits are done and violations are found, that there should be consequences.  Commissioners requested legal advice from the Attorney General’s Office as to whether rules will be needed to conduct random audits as well as under what circumstances would rules not be necessary. Discussions to continue when received.

Old Business
Docket Nos. 13-15, 13-24, and 14-02 – In Re the Matter of Bart Mulvihill, Janet Grantham, and Friends and Supporters of Bart Mulvihill State Senate District 6
General Counsel Kam recapped for the Commissioners that three complaints have been filed against Respondents and that fines totaling $2,550 have been assessed for the non-filing of the Respondents’ Organizational Report and 5 disclosure reports.  Respondent Mulvilhill has since filed the outstanding Organizational Report and disclosure reports.  In light of his financial situation, Respondent Mulvihill is requesting that the Commission reconsider the assessed fines and requests that the fines not be enforced.

With only 4 members present at the December meeting, the motion to not enforce the $2,550 fine if Respondent terminated the candidate’s registration by 1/2/14 did not carry.  This morning, General Counsel Kam received an email from Respondent again requesting that the Commission reconsider the assessed fines because of financial and medical reasons (not able to print doctor’s note).  Staff recommendation is to accept waiver of fines if Respondent terminates candidate’s registration.

Discussion ensued on whether the fines assessed should be reduced or waived.  Commissioners Ching, Yoshihara, and Shoda felt that there should be some kind of fine assessed for Respondents’ failure to file a number of disclosure reports on time.  Chair Snipes stated that with previous requests for reconsideration in similar cases, the Commission waived the assessed fine when the candidate terminated their registration within a determined deadline.  Commissioner Ching stated that even if the candidate terminates their registration, there should be a fine for having repeatedly violated the law.

Commissioner Ching moved to reduce the fine to $250.  Motion seconded by Commissioner Yoshihara. Motion carried (no – Snipes & Gomes).

Discussion and Update of Proposed Amendments to the Hawaii Administrative Rules Affecting Campaign Spending Commission
General Counsel Kam reported that the Commission received approval from the Governor’s office to proceed with a public hearing.  He stated that he expects to hold a public hearing sometime in April and is currently working on the public hearing notice.

Discussion and Update of Commission Related Legislation for 2014 Legislative Session
General Counsel Kam reported on the following:

–  HB 1602 / SB 2117 – Requires candidate committees to file the January 31 Supplemental Report regardless of whether it is an election year – heard in House Judiciary, passed 2^nd reading and has been referred to the House Finance committee.
–  HB 1603 / SB 2118 – If a candidate exceeds the expenditure limit, he/she must notify the Office of Elections, instead of the Chief Election Officer heard in Senate Judiciary, passed 2^nd reading and referred to Senate Ways and Means Committee.
–  HB 1604 / SB 2119 – Requires the filing of CSC disclosure reports and payment of all outstanding fines to obtain elections certification – heard in House Judiciary, passed 2^nd reading and referred to the Finance Committee.  Will be requesting an Attorney General opinion on whether other requirements other than being elected can be required.
–  HB 1605 / SB 2120 – Immediate family members not subject to candidate contribution limits – heard in House and Senate Judiciary.  HB 1605 is scheduled for a hearing in the House Finance committee this afternoon, and SB 2120 has been transmitted to the House.
–  HB 2533 – Creates a public funding program for House candidates and repeals partial public funding and maximum expenditure limits for Governor, Lt. Governor, Senate, and House candidates – heard in House Judiciary on 2/11/14 and decision making is scheduled for 2/13/14 afternoon.

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

Report on Compliance of Filing Timely Disclosure Reports
With respect to the Supplemental Report which was due on July 31, 2013, First Circuit Court Applications were filed against Adam Reeder, Nora Pajimola, and Bart Mulvihill for noncompliance with a Commission order.  All three candidates have filed their reports but have not paid the assessed fines.

With respect to the Supplemental Report which was due on January 31, 2014, 14 candidate committees and 1 noncandidate committee still have not filed the report.

Common Cause VOQAL Grant
Associate Director Baldomero reported that Common Cause received a $52,000 grant that will be used to hold workshops and create applications using campaign spending data.  The first workshop was held on January 25th. Target launch date is scheduled for April 19th.

Next Meeting:
Next meeting scheduled for Wednesday, March 12, 2014, at 10:00 a.m.

Chair Snipes moved to convene executive session to consult with attorney.  Motion seconded by Commissioner Ching.  Motion carried unanimously.

Public Session reconvened – 12:20 p.m.

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