Minutes for February 14, 2024 Meeting

Posted in Minutes

Campaign Spending Commission Meeting
Zoom Video Conference
February 14, 2024
10:00 a.m.

Commissioners Present
Stanley Lum, Neal Herbert, Vic Bonfiglio, David Chee

Jon Itomura

Staff Present
Kristin E. Izumi-Nitao, Tony Baldomero, Gary Kam, Terence Lau
Deputy Attorneys General Mike Chambrella and Candace Park (Zoom)

Anthony Diep

Dan Nakaso (Zoom), Robert Armstrong (Zoom), Chad Blair (Zoom), Kaniela Ing (Zoom)

Call to Order
Chair Herbert called the meeting to order at 10 a.m.

Chair Herbert went over the procedures for the hybrid in-person and remote meeting via Zoom and introduced the Commissioners and Commission staff who were present.

Consideration and Approval of Minutes of Meeting on 1/10/24
Commissioner Lum moved to approve the minutes of the meeting held on 1/10/24.  Motion seconded by Commissioner Bonfiglio.  Motion carried (4-0).

New Business – None

Old Business
*Docket No. 23-29 – In Re the Matter of Mark Ing and Friends of Kaniela Ing – General Counsel Kam reported that Respondent Ing was a member of the Hawaii House of Representatives from 2012 to 2018.  Respondent Friends is Respondent Ing’s candidate committee, which was registered with the Commission on November 9, 2011.  Respondent Ing is the chairperson and treasurer of Respondent Friends.

The complaint in this case was filed by the Executive Director Izumi-Nitao on January 30, 2023 against Respondents.  The complaint alleged twenty-four counts against Respondents for the violation of Hawaii campaign finance laws; specifically, that Respondents failed to keep and make available for inspection records in violation of Hawaii Administrative Rule  (“HAR”) §3-160-23 (Count I) and filed false amended reports in violation of Hawaii Revised Statutes (“HRS”) §§11-331(a), 11-333(a), and HAR §3-160-20(a) (Counts II-XXIV).  The complaint was heard by the Commission at its February 9, 2023 agency meeting.    Respondents were present.  Following presentations by Commission staff and Respondents, the Commission voted to refer the complaint for prosecution.  On February 10, 2023, the Commission issued its order of referral of the complaint for prosecution.  The order provided that if the “Prosecuting Attorney declines the referral of the complaint for prosecution, the Commission retains jurisdiction over the complaint to consider the imposition of civil penalties against Respondents.”

By letter dated February 10, 2023, the order, complaint and supporting records were transmitted to the Prosecuting Attorney for the City and County of Honolulu.  In a December 1, 2023, letter to Executive Director Izumi-Nitao, the Prosecuting Attorney’s Office notified the Commission that that office declined prosecution of the complaint.  The matter was referred back to the Commission for possible civil remedies.

As such, General Counsel Kam makes the following amended recommendations to the Commission as to the twenty-four counts in the complaint.  Notably, all fines recommended by Commission staff are taken from the Schedule of Fines that was approved by the Commission on November 8, 2023, and subsequently published on the Commission’s website.

With respect to Count I – Failure to Keep Records and Make Available for Inspection, General Counsel Kam reported that under HAR §3-160-23, each candidate or treasurer of a candidate committee, or any other person who files a report with the Commission, is required to maintain sufficient records so that information contained in filed reports may be verified and checked for accuracy and completeness.  Further, the records must be kept and made available to the Commission for audit, inspection, or examination, for a period of not less than five years after the report is filed.  Respondent Ing did not provide any records to justify the 150 expenditures in the amended reports that appeared to be for personal use.

General Counsel Kam recommended the assessment of a fine in the amount of $1,000 for this violation.

With respect to Counts II through XXIV – False Reports, General Counsel Kam stated that HRS §11-331(a) requires candidates and treasurers to certify their disclosure reports and HRS §11-333(a) requires candidates and treasurers of candidate committees to report all contributions deposited and expenditures made during a preliminary, final, or supplemental reporting period.  Further, under HAR §3-160-20(a), a candidate or treasurer of a committee must certify that disclosure reports are true, complete, and accurate statements of the committee’s activity during the reporting period.

General Counsel Kam reported that all of the amended reports were inconsistent with the bank records, and therefore, the amended reports were not true, complete, and accurate statements of the committee’s activity.  For each of the twenty-three false report violations, General Counsel Kam recommended the assessment of a fine in the amount of $750 (2nd time) or $17,250 in the aggregate.

In summary, General Counsel Kam recommended that the Commission make a preliminary determination, pursuant to HRS §11-405(a), that there is probable cause to believe that the Hawaii campaign finance law has been violated by Respondents, assess an administrative fine in the amount of $18,250 against Respondents, as follows:

Count I (Failure to Keep Records):  $1,000
Count II (False Report):  $750
Count III (False Report):  $750
Count IV (False Report):  $750
Count V (False Report):  $750
Count VI (False Report):  $750
Count VII (False Report):  $750
Count VIII (False Report):  $750
Count IX (False Report):  $750
Count X (False Report):  $750
Count XI (False Report):  $750
Count XII (False Report):  $750
Count XIII (False Report):  $750
Count XIV (False Report):  $750
Count XV (False Report):  $750
Count XVI (False Report):  $750
Count XVII (False Report):  $750
Count XVIII (False Report):  $750
Count XIX (False Report):  $750
Count XX (False Report):  $750
Count XXI (False Report):  $750
Count XXII (False Report):  $750
Count XXIII (False Report):  $750
Count XXIV (False Report):  $750

Further, General Counsel Kam recommended that the Commission order that any and all administrative fines be paid within thirty days of Respondent Ing’s receipt of the order and that the fines be deposited in the general fund, pursuant to HRS § 11-410(e).  Lastly, he recommended that Respondents be placed on inactive status with the Commission (as long as Respondents do not trigger the campaign finance laws to file mandatory disclosure reports) pending payment of the fine.  He stated that staff believes that it would be pointless to again order Respondents to correct or amend their inaccurate disclosure reports, and thus, does not recommend an order requiring them to do so.

Respondent Kaniela Ing appeared via Zoom and addressed the Commission.  He stated that his attorney was traveling and could not be present, but that he was hoping to resolve the matter.  He stated that his accounts have been closed; he does not intend to seek public office; these events took place 13 years ago which is beyond the 5 years statute of limitations; he used $20,000 of personal funds to pay his fines; the matters have caused him mental health and reputational damage; he was in the middle of a congressional campaign when he amended the reports and did not have information for the little things such as gas stations; he did not know until 2021/2022 that his reports were wrong; he does not know how much more accurate he could have been with the amended reports; and that he respects the work of the Commission.

General Counsel Kam stated that no attorney representing Respondent Ing has called him regarding today’s docket and wanted clarification from Respondent Ing on whether he had an attorney.  Respondent Ing replied that he had consulted with his attorney, but did not know what his options were at this point.

Vice-Chair Chee asked whether he wanted to wait for his attorney and continue the matter to the Commission’s next meeting.  Respondent Ing stated that he cannot afford the $18,000 fine and commented about the stress and reputational damage this has caused him.

Commissioner Lum inquired about the status of Respondent Ing’s fine payments in prior proceedings.  Respondent Ing said that he has paid in full.

Commissioner Lum asked whether he intended to run for office.  Respondent Ing replied no.  Commissioner Lum commented that it gives the Commission no pleasure in fining candidates.

Chair Herbert asked about the fine and the Standard Fine Guidelines as well as the possibility of a payment plan.  General Counsel Kam stated that the fine recommendation was in accordance with the Standard Fine Guidelines which has not changed for the violations at issue in the complaint.  Further, that a payment plan is possible by agreement with the parties.

Vice-Chair Chee moved to 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.  Motion seconded by Commissioner Lum.  Motion carried (4-0).

*Commission went into Executive Session at 10:33 a.m.  Executive Director Izumi-Nitao, General Counsel Kam, and Associate Director Baldomero were excused.

 *Commission returned into public session at 10:55 a.m.  Executive Director Izumi-Nitao, General Counsel Kam, and Associate Director Baldomero returned.

Vice-Chair Chee moved to continue the matter until the Commission’s next meeting on 3/13/24 to permit Respondent Ing to consult with his attorney and have his attorney present.  Motion seconded by Commissioner Lum.  Motion carried (4-0).

*Consideration, Discussion, Approval, and/or Update of Commission Legislation and Other Related Bills/Resolutions for the 2024 Legislative Session – General Counsel Kam reported on the status of the Commission’s bills as well as other campaign finance related bills.  Executive Director Izumi-Nitao noted that the bill requesting two additional personnel and funding was not introduced by Senator McKelvey or Senator Rhoads.

Concern about Commission staff resources ensued should the comprehensive public funding bill be passed.  General Counsel Kam noted that the bill could be opposed if there is no appropriation for additional staff.

Vice-Chair Chee asked if there were any limitations on Commissioners in testifying on bills.  General Counsel Kam stated that there were none.

Chair Herbert asked staff to send the Commissioners the hearing notices and testimony on bills receiving hearings.  Executive Director Izumi-Nitao agreed to provide that information to the Commissioners.

Report from Executive Director
*Report on Compliance of Filing Timely Disclosure Reports – Executive Director Izumi-Nitao provided an update on compliance of the recent filing of the Supplemental Report which was due on 1/31/24 which all committees were required to file.  She reported that of the 434 candidate committees required to file this report, 372 (86%) filed it on time and 61 failed to file.  With respect to the 256 noncandidate committees required to file this report, 241 (94%) filed it on time and 15 failed to file.  As of today, 24 candidate committees and 6 noncandidate committees have still not filed this report.  She further noted that many of the non-filers represent the same committees that have failed to file prior reports and have been brought to the attention of the Attorney General’s Office – Civil Recoveries Division.

 *Report on the 2024 Election – Associate Director Baldomero did an overview of the 2024 election and made the following comments:

  • # of races up for election – 103 out of 128 state and county seats (80% of all elective seats)
  • Races (103) – Senate (13), House (51), Honolulu Mayor (1), Honolulu Prosecuting Attorney (1), Honolulu City Council (5), Hawaii Island Mayor (1), Hawaii Prosecuting Attorney (1), Hawaii County Council (9), Maui County Council (9), Kauai Prosecuting Attorney (1), Kauai County Council (7), OHA (4) (115 races in 2022)
  • Big races (2) – Honolulu Mayor and Hawaii Island Mayor
  • # of registered candidates – 433
  • # of new candidates – 16 since the 2022 general election (waiting on 6 to file their ORs) (214 new candidates in 2022)
  • Nomination paper filing period – February 1, 2024-June 4, 2024. As of yesterday, 7 candidates have filed nomination papers (2 incumbents and 5 challengers-all are registered with the CSC) (368 candidates ran in 2022)
  • # of registered noncandidate committees – 255 (233 standard committees, 3 Political Parties, 19 SuperPACs, 0 Ballot Issue)
  • # of new noncandidate committees – 9 since the 2022 general election
  • Qualified Political Parties (6) – Democratic Party of Hawaii (hawaiidemocrats.org), Libertarian Party of Hawaii (libertarianpartyofhawaii.org), No Labels Hawaii (Washington DC-nolabels.org), Party for Socialism and Liberation (Hilo-pslweb.org), Hawaii Republican Party (hawaiirepublicans.org), Solidarity Party of Hawaii (Illinois-solidarity-party.org) (64 out of 103 races up in 2024 are partisan races and 39 are non-partisan)
  • 11 other parties are attempting to qualify by the February 22, 2024 deadline. 862 signatures by registered voters in the State of Hawaii are required.
  • Primary Election Date – Saturday, August 10, 2024
  • General Election Date – Tuesday, November 5, 2024
  • CC Fundraisers – 195 since 2022 general election held by 68 candidates (65 fundraisers held in October 2023-December 2023 and another 31 fundraisers held in a 2 week period prior to the 2024 session from January 4, 2024-January 16, 2024)
  • NCC Fundraisers – 15 since 2022 general election held by 4 noncandidate committees
  • CC Reporting Timeline in 2024 – Candidate running ($1,000 or less by July 1, 2024/1 report, primary ballot only/4 reports+FEP, primary and general ballot/7 reports, general ballot only/3 reports) (does not include 2 Late Contributions Reports, if required to file) not running (2 reports)
  • NCC Reporting Timeline in 2024 – $1,000 or less by July 26, 2024/1 report not $1,000 or less/5 reports (does not include the 2 Late Contributions/Expenditures Reports and the Electioneering Communication Statements, if required to file)
  • Public Funding – $0 disbursed (15 candidates received public funding and $71,878.29 was disbursed in 2022; 6 were winners; lowest disbursed since 1992 and since the laws were changed in 1995 to provide candidates with more funding) (2014-2022 avg-$140,052.51)
    • Affidavit filers – 5 (172 or 47% of 368 candidates who ran in 2022)
    • Statement of Intent filers – 3 (27 or 7% of 368 candidates who ran in 2022)

Next Meeting:
Scheduled for Wednesday, March 13, 2024.

Chair Herbert asked for a motion to adjourn the meeting.  Vice-Chair Chee moved to adjourn the meeting.  Motion seconded by Commissioner Lum.  Motion carried (4-0).

Meeting Adjourned at 11:41 a.m.