Campaign Spending Commission

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
February 19, 2020
10:00 a.m.

Commissioners Present
Bryan Luke, Gregory Shoda, Maryellen Markley, Ph.D, Neal Herbert

Staff Present
Kristin Izumi-Nitao, Tony Baldomero, Gary Kam, Yayoi Tumamao
Deputy Attorney General Candace Park

Absent/Excused
Commissioner Stanley Lum

Call to Order
Chair Luke called the meeting to order at 10:04 a.m.

Consideration and Approval of Minutes of Meeting on 12/4/19
Chair Luke asked for comments or changes to the minutes.  There were none.  Chair Luke called for a motion to approve the minutes.

Commissioner Markley moved to approve the minutes of the 12/4/19 meeting.  Motion seconded by Vice Chair Shoda.  Motion carried (3-0).  Commissioner Herbert abstained because he was not present at the 12/4/19 meeting.

New Business
*Welcome and Introduction of New Commissioner Neal Herbert
Executive Director Izumi-Nitao reported that Commissioner Herbert was appointed by Governor Ige for a term to expire on 6/30/2023.  She reported on his background and stated that he received an orientation from Commission staff on 1/8/20 and was administered the oath of office.  Chair Luke welcomed Commissioner Herbert.

Deputy Attorney General Park introduced herself as the newly assigned Deputy Attorney General for the Commission.  Commissioners welcomed Deputy Attorney General Park.

*Proposed Conciliation Agreement No. 20-11 – In Re the Matter of MARY FOR MAUI
Executive Director Izumi-Nitao stated that this proposed conciliation agreement was the result of an investigation initiated by Commission staff pursuant to HRS §11-314(7) to determine whether there had been a violation of the Hawaii campaign spending laws.  She stated that Respondent has been informed in a letter from Commission staff of the violation which concerns the late filing of the Supplemental Report in violation of HRS §§11-334 and 11-340, and has been notified of today’s meeting as well as received a copy of the proposed conciliation agreement.  She recommended that the Commission make a preliminary determination of probable cause that a violation had been committed, waive further proceedings, and assess a reduced fine from $200 to $66.67.  Chair Luke asked if there were any comments or questions.

Vice Chair Shoda moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Markley.  Motion carried (4-0).

Old Business
*Consideration, Discussion, and/or Update of Commission Legislation and Other Campaign Finance Related Bills/Resolutions for the 2020 Legislative Session
General Counsel Kam informed the Commission of the status of the Commission’s bills, and other campaign finance related bills for the 2020 legislative session.  General Counsel Kam further informed the Commission that he will provide updates at the monthly meetings.

With regard to H.B. 1704, Commissioner Herbert asked why companion S.B. 2145 provides 20 days to request a contested case hearing while the House bill says an “unspecified number of days.”  General Counsel Kam explained that there is a consideration to change the current 20 days to 30 days in H.B. 1704, H.D. 1.

With regard to H.B. 1708 and its companion bill S.B. 2149, Chair Luke expressed his concerns about the bill broadening advertisements through mail, but not addressing the use of social media.  General Counsel Kam stated that there are attempts to address social media advertisements in this legislative session in other bills, which are being consolidated with the Commission’s proposed bills.  Executive Director Izumi-Nitao stated that the law already describes electioneering communications as advertisements by electronic means which includes social media, and that Commission staff has applied the disclosure requirements for these kinds of advertisements.  Although in the last election, Commission staff learned the difficulties in applying these disclosure requirements for social media ads such as Facebook boosts that only costs about $5.

Discussion ensued about the topic of electioneering communications in committee trainings.  Chair Luke asked if there will be additional trainings for committees on electioneering communications.  Commissioner Herbert also asked if electioneering communication fines and concerns about social media advertisements are communicated to the committees.  Associate Director Baldomero responded that they are covered in the committee trainings, newsletters, and online guidance.  Executive Director Izumi-Nitao added that a candidate training is scheduled for Monday, February 24, 2020.

Report from the Executive Director
Report on Compliance of Filing Timely Disclosure Reports
Executive Director Izumi-Nitao reported on the Supplemental Report due on 1/31/20.

• Candidate Committees
  • 360 candidates were expected to file
  • 326 (91%) filed on time
  • 29 (8%) did not file
  • 5 (1%) filed late
  • To date, 6 have not filed
• Noncandidate Committees
  • 242 were expected to file
  • 228 (94%) filed on time
  • 14 (6%) did not file
  • To date, 6 have not filed

Executive Director Izumi-Nitao reported that with respect to prior reports, there are 1 to 3 candidate committees and 4 noncandidate committees that have not filed their reports.  All have been referred to the Attorney General – Civil Recoveries Division (“AG-CRD”).

With respect to an update on the compliance of prior docket matters: (1) Kaniela Ing – fine payments are current and Commission staff is reviewing his amended reports and new filings; and (2) Trinette Furtado – currently, in a HRS chapter 91 contested case proceeding which started January 15-16, 2020 and has been continued to May 14-15, 2020.

Report on the 2019 COGEL Conference
Executive Director Izumi-Nitao reported that Associate Director Baldomero, Chair Luke, and Vice Chair Shoda attended the December 15-18, 2018 COGEL Conference in Chicago, Illinois.  She offered the following comments:

– There were over 500 attendees which makes it the largest conference to date
–  The attendees represented 40 states, 10 Canadian provinces, Guam, Virgin Islands, Liberia, Mexico, Nepal, and South Africa
– There were 13 people who attended from Hawaii:  4 from the Commission; 5 from Hawaii State Ethics Commission; and 4 from Honolulu Ethics Commission
– At the conference, the Commission’s attendees were involved with breakfast roundtables, breakout sessions, and participated on 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 searchable data and data visualization (Kentucky just made electronic filing mandatory) as well as enforcement actions and strong/cohesive operations
– The Commission needs to monitor and be aware of the following areas:

• Candidate’s use of campaign funds to pay for childcare while campaigning or continuous if “ordinary & necessary” to conduct official duties as elected official (and/or elderly or dependent care)
• Increases in public financing programs
• Regulating online campaign advertising to increase transparency regarding disclaimers of who paid for ad (danger with social sharing as it concerns foreign interference/international terrorism – Russia, China). FEC looking into a multi-state cooperative on developing/building a shared Internet political-ad database.
• FEC continues not to have quorum so they are not ruling on any issues

– In summary, Hawaii is performing well on a national and global level and that we have a strong team built with General Counsel Kam in the area of law, Associate Director Baldomero with regard to technology and data, and Chair Luke and Vice Chair Shoda who took the time to attend the conference to learn more about campaign finance
– The 2020 COGEL Conference will be on 12/13/20 to 12/16/20 in Atlanta, GA

Associate Director Baldomero reported that he particularly focused on new innovations in technology in the area of campaign finance and saw that electronic filing advancements in other states was the norm so there was not much discussion in that area.  However, there was a lot of discussion on digital political advertisements and social media such as Facebook not fact-checking political ads, Twitter no longer allowing political ads on their platform, and the trend of political influencers being hired to promote candidates on Twitter in place of social media ads.  He also stated there were follow-up discussions from past conferences on candidates accepting contributions via text and the use of cryptocurrency such as Bitcoin as monetary contributions, which brought up concerns about security and foreign money.

Commissioner Markley left the meeting at 11:10 a.m.

Chair Luke reported and shared that Massachusetts presented a system which allows committee bank account statements to be uploaded to match up with committee’s campaign finance reports.  If they do not match, it alerts them which allows for corrections.  This way, they will always be up-to-date, and everything will match.  He stated that violations can be revealed earlier with a system like this and wondered if we can do something similar.  He added that the 2020 COGEL Conference should be exciting as we are now in an election year.

Vice Chair Shoda reported and shared that the conference showcased a movie called, “All the Queen’s Horses.”  It was about a city comptroller who stole $53 million of public funds from the city of Dixon, Illinois.  He was surprised to learn that the city of Dixon has a population count of only 15,838, and yet she managed to steal so much from them.  He also shared that there was a presentation by the Speaker of the Legislative Assembly in British Columbia who spoke about corruptions he discovered upon being named the Speaker.  He added that he gained new insights on unethical and greedy behaviors.  He also noticed that several states are implementing campaign spending audits of committees by having them submit their bank statements and noted that audits are possible but will require manpower.

EXECUTIVE SESSION
Chair Luke asked for a motion to convene in Executive Session to: (1) Consider and approve Executive Session minutes from the Commission meeting on 12/4/19; and (2) 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 regarding McGee v. Campaign Spending Commission and Friends of Calvin Say.

Vice Chair Shoda moved to convene in Executive Session for the aforementioned reason(s).  Motion seconded by Commissioner Herbert.  Motion carried (3-0).

Public Session reconvened at 11:24 a.m.

Commissioner Herbert moved to adjourn the meeting.  Motion seconded by Vice Chair Shoda.  Motion carried (3-0).  Meeting adjourned at 11:24 a.m.

Next Meeting:
Scheduled for Wednesday, March 11, 2020, at 10 a.m.