Campaign Spending Commission

Campaign Spending Commission
Zoom Video Conference
February 9, 2022
10:00 a.m.

Commissioners Present
Stanley Lum, Maryellen Markley, Ph.D., Bryan Luke, Neal Herbert, Vic Bonfiglio

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

Guests
Kainoa Kaumeheiwa-Rego (Common Cause), Scott Collins, Esq., Richard Wilson, Esq., Arlina Agbayani (Hawaii Public Policy Advocates 2022), Daryl Huff, Hawaii News Now

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

Chair Lum went over the procedures for this meeting via Zoom and introduced all who were present.  He asked the Commissioners if anyone else was with them.  All the Commissioners present responded that no one else was with them.

Consideration and Approval of Minutes of Meeting on 1/12/22
Chair Lum asked for comments or changes to the minutes.  There were none.

Chair Lum called for votes to approve the minutes.  All the Commissioners voted to approve the minutes.  None opposed.  Motion carried (5-0).

Chair Lum asked for a motion to take “Docket No. 20-11 – In Re the Matter of Richard E. Wilson, James

1. Wade, John F. Perkin, Sandra P. Haskell, and Thurston H.B. Wong” out of order of business on the agenda.

Commissioner Herbert moved to take Docket No. 20-11 out of order.  Motion seconded by Commissioner Luke. Motion carried (5-0).

Old Business
*Docket No. 20-11 – In Re the Matter of Richard E. Wilson, James J. Wade, John F. Perkin, Sandra P. Haskell, and Thurston H.B. Wong – Executive Director Izumi-Nitao stated that Respondent Richard Wilson was present with his attorney, Mr. Scott Collins, Esq., who was authorized by the other Respondents and their attorneys to appear on their behalf.

Executive Director Izumi-Nitao explained that this complaint concerns HRS §11-352 which provides that no person shall make a contribution to any candidate, candidate committee, or noncandidate committee in any name other than that of the person who owns the money, property, or service.  Pursuant to HRS §11-412(b), a violation of HRS §11-352 is a class C felony.

In October 2019, an investigation was initiated concerning three $1,000 contributions made to Friends of Mel Rapozo from Respondents James Wade, John Perkin, and Sandra Haskell, as well as a $4,000 contribution to Friends of Mel Rapozo from Respondent Thurston Wong.

The Commission staff subpoenaed bank records which showed that Respondent Wilson’s mother, Mary Wilson, who has since passed away, gave $1,000 to Respondents Wade, Perkin, and Haskell who in turn  made a $1,000 contribution to Friends of Mel Rapozo.  The subpoenaed bank records further showed that a $4,000 check was deposited into Respondent Wong’s bank account whereupon a $4,000 contribution to Friends of Mel Rapozo was made.

On 7/2/20, a complaint was filed alleging 4 counts for false name contributions.  The Commission heard the complaint at a public meeting on 8/12/20.  All parties, with the exception of Respondent Wong who had a conflict, appeared with their lawyers and explained what happened including their understanding that this was permissible.  The Commission moved unanimously to refer the matter for prosecution to the Attorney General’s Office.

On 1/13/22, the Attorney General’s Office informed the Commission that prosecution was declined due to insufficient evidence.  As such, the parties have been informed that the Commission will consider administrative civil penalties in today’s meeting.  In preparation for this hearing, Respondent Wilson and his attorney, Mr. Scott Collins, have submitted a written statement on 2/3/22 which has been provided to the Commissioners.

Executive Director Izumi-Nitao went over staff’s amended recommendations for the complaint:

• Count I – As to Respondent Wilson, staff recommended that the Commission assess a fine of $1,000 against him as provided in the Commission’s Fine Guidelines. As to Respondent Wade, staff recommended that the Commission dismiss the complaint because the basis for the complaint was the communications between him and Ms. Siiri Wilson, who he was married to at the time of the alleged violation.
• Count II – As to Respondent Wilson, staff recommended that the Commission assess a fine of $1,000 against him as provided in the Commission’s Fine Guidelines. As to Respondent Perkin, staff recommended that the Commission dismiss the complaint because he passed away.
• Count III – As to Respondent Wilson, staff recommended that the Commission assess a fine of $1,000 against him as provided in the Commission’s Fine Guidelines. As to Respondent Haskell, staff recommended that the Commission dismiss the complaint.  She was employed by Respondent Perkin at all relevant times in the complaint.  She was not an attorney and was advised by attorneys—Respondents Perkin and Wilson—that the transactions concerning the contribution were proper.
• Count IV – Staff recommended that the Commission dismiss this count based upon the declaration provided by Respondent Wong to the Commission in which he affirmed under penalty of perjury that the moneys he used to make the contribution was owned by him. Staff has no evidence to rebut Respondent Wong’s declaration.

Executive Director Izumi-Nitao recommended that the Commission make a preliminary determination, pursuant to HRS §11-405(a), that probable cause exists to believe that Respondent Wilson violated HRS §11-352(a), assess an administrative fine in the amount of $3,000 against him for the violations contained in Counts I through III, order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-410(e) within two (2) weeks of Respondent Wilson’s receipt of the order, and order the dismissal of the complaint against Respondents Wade, Perkin, Haskell, and Wong, and the dismissal of Count IV against Respondent Wilson. 

Respondent Wilson addressed the Commission.  He reiterated his position that he alone is responsible and that he thought what he did was permissible at the time based on the way he read the statute.  Respondent Wilson acknowledged that it was improper and apologized.  He stated that he did not just willingly break the rules and added that it has been hard on his reputation as well as his mother’s reputation.  Respondent Wilson asked the Commission to adopt the dismissal for the other Respondents.  With respect to the fine amount, he stated that $3,000 is like a mortgage payment and it would be tough for him, and therefore, asked the Commission to consider a reduction of the fine to $1,000.

Mr. Scott Collins, Esq. also addressed the Commission and stated that Respondent Wilson made a mistake.  He asked the Commission to consider Respondent Wilson’s intent and motive for his actions and pointed out that it was not malicious.  Mr. Collins explained that Respondent Wilson was trying to accommodate and appease his mother who was very ill at the time and was trying to do something nice for her.  He continued that Respondent Wilson was just trying to help his mother and her legacy and emphasized that he had no ill intent.

Commissioner Luke moved to accept the staff’s amended recommendations.  Motion seconded by Commissioner Herbert.

Commissioner Herbert asked if the language in the motion should include Respondent Wilson’s lack of intent to violate the law.  Commissioner Luke disagreed and explained that the question of intent was already addressed by the Attorney General’s Office and that the Commission’s determination should be whether there was a violation and if there should be a fine for the violation.  Executive Director Izumi-Nitao stated that she maintains staff’s recommendation.

Chair Lum asked if there were any other questions or comments.  There were none.

Motion carried (4-0).  Commissioner Bonfiglio recused himself from this matter because he was not an appointed member when this matter was heard on 8/12/20.

New Business
Executive Director Izumi-Nitao stated that the two (2) Conciliation Agreements on the agenda were a result of investigations 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 Respondents have been informed in a letter from Commission staff of the violation and have 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 approve the settlement amounts stated in each of the proposed agreements.

*General Counsel Gary Kam joined the meeting at 10:28 a.m.

*Proposed Conciliation Agreement No. 22-13 – In Re the Matter of One Ohana Political Action Committee – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Preliminary Primary Report and requests that they assess a reduced fine from $1,800 to $600 as it is Respondent’s first violation. Chair Lum asked if there were any comments or questions.

Vice Chair Markley moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Herbert.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 22-14 – In Re the Matter of Green Party of Hawaii – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Preliminary Primary Report and requests that they assess a reduced fine from $300 to $150 as it is Respondent’s second violation. Chair Lum asked if there were any comments or questions.

Commissioner Luke moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Bonfiglio.  Motion carried (5-0).

*Docket No. 22-11 – In Re the Matter of Michael Takano, Fay Morinaga-Pang, and Pono Life Sciences, LLC – Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against Michael Takano, Fay Morinaga-Pang, and Pono Life Sciences, LLC for the failure to file the Final Primary Report.

She reported that in the Organizational Report filed with the Commission, Respondent Michael Takano is the chairperson and Respondent Fay Morinaga-Pang is the treasurer of the noncandidate committee called Pono Life Sciences, LLC.

Pursuant to HRS §11-336(b), Respondents were required to file the Final Primary Report for the period covering 12/4/21 through 12/18/21 by 11:59 p.m. Hawaii standard time on 1/7/22.  Respondents did not file the report by the deadline.

On 1/10/22, Commission staff notified Respondents via first class mail of their failure to file the report and that a fine would be imposed.

On 1/14/22, Commission staff called Respondent Morinaga-Pang to file the report and was informed that she had not been with the company since 2018.  Commission staff then called Respondent Takano who stated that he would assign a new treasurer and get the report filed.

On 1/25/22 and 1/27/22, Commission staff phoned Respondent Takano to remind him to file the report or a fine would be imposed.  No report was filed.

On 2/2/22, Commission staff sent Respondents a copy of the complaint and set the matter on the 2/9/22 Commission agenda.

Executive Director Izumi-Nitao recommended that the Commission make a preliminary determination, pursuant to HRS §11-405(a), that probable cause exists to believe that a violation of the campaign spending law has been committed, assess an administrative fine of $500 for failure to file the Final Primary Report, order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-410(e) within two (2) weeks of receipt of the order, and file the Final Primary Report within two (2) weeks of receipt of the order.

Commissioner Bonfiglio 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 Herbert.  Motion carried (5-0).

Old Business
*Docket No. 22-05 – In Re the Matter of William Dickinson, Jeff Turner, and Green Party of Hawaii – Executive Director Izumi-Nitao reported that this matter was deferred at the 1/12/22 Commission Meeting to permit Respondents to consider a conciliation agreement which was approved earlier at this meeting.  As such, she recommended that this complaint be dismissed.

Commissioner Luke moved to dismiss the complaint.  Motion seconded by Vice Chair Markley.  Motion carried (5-0).

*Consideration, Discussion, and/or Update of Commission Legislation and Other Campaign Finance Related Bills/Resolutions for the 2022 Legislative Session – General Counsel Kam provided an update of the status of the Commission’s 5 bills as well as discussed other campaign finance bills introduced this session.  There are a total of 14 House bills and 15 Senate bills that staff is currently tracking and will provide testimony if they are scheduled for a hearing.

With regards to HB 1888, Commissioner Herbert asked for clarification on “timelier” disclosure.  He commented that since the expenditure date is earlier than the advertisement date, how is it timelier to move the disclosure date to the advertisement date.  General Counsel Kam explained that it is timelier because the public will see the statement within 24 hours after they see the advertisement.

With regards to HB 1881, Commissioner Herbert asked who proposed the bill and the reason for this bill.  General Counsel Kam responded that it was introduced by Representatives Nakashima, Ichiyama, and Matayoshi to address dark money situations.  Executive Director Izumi-Nitao stated that Common Cause had submitted this model legislation, but in speaking with them, they were surprised that it was introduced in this form.  She explained that this model legislation is so foreign to the existing campaign finance laws with different terminologies that it would require the Commission to overhaul the entire electronic filing system.

With regards to HB 2474, Commissioner Herbert asked if the issues with the Wilson case could have been addressed with this law.  General Counsel Kam responded that it would have allowed the Commission to assess fines and make a referral for prosecution.

Chair Lum asked if there were any questions or comments.  There were none.

Report from the Executive Director
*Report on Compliance of Filing Timely Disclosure Reports – Executive Director Izumi-Nitao reported the following:

• Supplemental Report for the period covering 7/1/21 through 12/31/21 was due on 1/31/22:
  • 395 candidate committees were required to file this report
  • 340 (86%) filed on time
  • 47 (12%) failed to file on time
  • 8 (2%) filed late
  • As of today, 15 candidate committees still have not filed

With regard to prior reports, Executive Director Izumi-Nitao reported that the number of committees that have not filed their reports remains the same.  She added that Commission staff continues to work with AG-CRD to obtain full compliance.

*Update on Special Election for Kauai Prosecutor – Executive Director Izumi-Nitao reported that the Special General Election will occur on 2/26/22.  The next disclosure report for the Special Election is the Primary General Report due on 2/16/22 and for those that qualify will be required to file the Late Contributions Report due on 2/23/22.

Commissioner Bonfiglio moved to adjourn the meeting.  Motion was seconded by Commissioner Herbert.  Motion carried (5-0).  Meeting adjourned at 11:12 a.m.

Next Meeting:
Scheduled for Wednesday, March 9, 2022, at 10 a.m. via Zoom