Campaign Spending Commission

Campaign Spending Commission
Zoom Video Conference & Leiopapa A Kamehameha Building
Conference Room 204
235 South Beretania Street
Honolulu, Hawaii 96813
June 23, 2021
10:00 a.m.

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

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

Guests (via Zoom)
Sandy Ma (Common Cause), Pane Meatoga (Hawaii Operating Engineers Industry Stabilization Fund)

Call to Order
Chair Luke called the meeting to order at 10:05 a.m.

Chair Luke went over the procedures for this video conference and in-person hybrid meeting.

Consideration and Approval of Minutes of Meeting on 5/12/21
Chair Luke asked for comments or changes to the minutes. There were none. Chair Luke called for a motion to approve the minutes.

Vice Chair Lum moved to approve the minutes of the 5/12/21 meeting. Motion was seconded by Commissioner Markley. Motion carried (5-0).

New Business
Executive Director Izumi-Nitao stated that the Conciliation Agreement on the agenda was a 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 the Respondent has been informed in a letter from Commission staff of the violation 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 approve the settlement amount stated in the proposed agreement.

*Proposed Conciliation Agreement No. 21-132 – In Re the Matter of Committee to Elect Howard Greenberg – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Election Period Report and the Supplemental Report and requests that they assess a reduced fine from $400 to $133.33 as it is Respondent’s first violation. Chair Luke asked if there were any comments or questions.

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

*Consideration, Discussion, and Approval of Amendments to the Commission’s Mission and Strategic Plan – Executive Director Izumi-Nitao explained that this item was put on the agenda to see whether or not the Commission’s mission and strategic plan required any modification. The last time this was done was in November 2017. Chair Luke read the Commission’s mission and went over the strategic plan by going over each goal.

With regards to the Commission’s mission statement, Ms. Sandy Ma of Common Cause made a comment about the phrase “maintain the integrity and transparency of the campaign finance process …” and whether or not it should say “maintain and increase the integrity” or “maintain and improve the integrity.” Chair Luke pointed out that the first goal addresses improvement to the integrity of the campaign finance process. The Commissioners agreed not to amend the mission statement.

With regards to the 5th goal, Commissioner Markley asked for a definition of “gross” violation. General Counsel Kam explained that “gross” violations are serious types of violations such as false reports and false name violations which could lead to felony prosecution.

With regards to the 6th goal, Commissioner Bonfiglio asked if the Commission can refer investigations to the police department. General Counsel Kam responded that there are no mechanisms to refer cases to the police departments, but the Commission has referred cases to the Attorney General’s office for investigation and prosecution as well as retained investigative services through them.

Chair Luke asked if the Commissioners would like to add a new goal. They did not.

Vice Chair Lum commented that the goals as stated are timeless and continues to be viable and relevant.

The Commission did not have any amendments to the mission and strategic plan.

*Consideration and Discussion of the Role of the Commission – Executive Director Izumi-Nitao explained that the duties of the Commission are based on the statutes and rules. She cited to HRS §11-301 which provides that the purpose of the campaign finance laws is to provide transparency in the campaign finance process and that any ambiguity in the provisions of this part shall be construed to support transparency. Executive Director Izumi-Nitao stated that the Commission executes its duties through education and prevention to obtain compliance, however, when there are violations, enforcement is necessary. Further, she stated that the Commission has kept in mind that they serve the committees as well as the public.

Commissioner Markley commented that she would like more leeway in making decisions on mitigating circumstances and more time to discuss the Commission’s proposed legislation before they are submitted to the legislature. Discussion ensued about when proposed legislation should be discussed. General Counsel Kam explained that proposed legislation is drafted by staff and presented as proposals to the Commissioners for their discussion and approval in October, but they are not submitted to the legislature until sometime in December. He said staff can present the proposed bills earlier and added that the Commission has always voted on each draft legislative proposal before they have been submitted to the legislature. Commissioner Markley stated that she would like the Commission to discuss proposed legislation before they are drafted by staff. The Commission decided to have a discussion on proposed legislations in September, instead of October, before they are drafted by staff.

Discussion ensued about legislative testimony. Commissioner Herbert commented that the legislative testimony is not presented to the Commissioners before they are submitted. General Counsel Kam stated that the Commission only meets once a month and bill testimony is required to be submitted 24 hours before the scheduled hearings set by the legislature. Commissioner Herbert suggested staff to email them to the Commissioners before they are submitted so they can discuss them. General Counsel Kam shared his concern about implementation of suggested edits to the testimony if they are provided that way. Executive Director Izumi-Nitao stated that the testimony submitted to the legislature is provided to the Commissioners at every meeting during the legislative session at which point they have the opportunity to discuss and share any concerns about the testimony so that they can be amended if necessary.

Chair Luke encouraged the Commissioners to contact the staff if they have any concerns or would like to include an item on the agenda for a meeting. He asked for any further discussion on this matter. There was none.

*Consideration, Discussion, and Approval of Amendments to the Commission’s Schedule of Fines, Educational/Training Materials, Procedures, and Statutes – Commissioner Herbert moved to adopt “Commissioner Herbert’s Comments,” and to implement the recommendations. Motion was seconded by Commissioner Markley. Chair Luke asked for any questions or comments.

Executive Director Izumi-Nitao recommended that Commissioner Herbert go over his comments after she goes over staff’s recommended amendments to the Commission’s schedule of fine guidelines. The Commissioners agreed.

Ms. Sandy Ma asked if Commissioner Herbert’s comments were distributed as part of the board packet for this meeting. General Counsel Kam responded that they were not because they were something that Commissioner Herbert was going to raise during the meeting and not as a meeting material for the public. The staff’s recommendations were also not part of the board packet because staff will be going over them in their presentation. He added that they can be emailed to her if she would like them.

Executive Director went over staff’s recommended amendments to the Commission’s schedule of fine guidelines.

Discussion ensued about staff’s recommendation to eliminate the statement about the Commissioners adjusting the fines due to mitigating circumstances. Executive Director Izumi-Nitao explained that the statement was designed for limited application (e.g., legal defense of impossibility) and it was never meant to be for situations like candidates not having enough money to pay the fine which has been asserted by some candidates. She further explained that removing the statement would provide better clarity. Commissioner Herbert expressed his concerns about removing this statement as he feels that Commissioners should be able to review individual cases as they come up on a case-by-case basis and ask questions. He stated that there is room afforded to Commissioners to adjust the fine if circumstances exist and if the Commission approves. Executive Director Izumi-Nitao clarified that eliminating the statement does not take away Commissioners’ ability to review cases and ask questions.

Commissioner Herbert stated that nowhere in the statutes mandate fines be assessed and asked about staff’s concerns on the legal problems. General Counsel Kam explained that the Commission must be consistent in applying the fine standards and by stating that if they are based on a case-by-case basis, it does not inform potential respondents what the fines would be. The Commission has adopted a fine schedule which is available to the public providing the fine amounts for a particular violation. Commissioner Herbert stated that the Commissioners have the right to make adjustments to the fine amounts and do not have to assess the fine as provided in the fine schedule. General Counsel Kam responded that the Commission has the authority to fine or not fine and by adopting a fine schedule, the Commission has decided to assess fines and the fine amount in the schedule is the fine amounts to be assessed. Otherwise, how is the public supposed to figure out what the fine is going to be. He also pointed out that the Commission can vote to amend the schedule if necessary.

Executive Director Izumi-Nitao explained that staff follows the fine schedule as approved by the Commission to write up the notices of fine. If there is a reason why the respondents disagree with the fine, then the matter would be addressed on the complaint which comes before the Commission. She asked Commissioner Herbert whether he was okay with the fines as stated. Commissioner Herbert said yes; however, he explained that the Commission should be able to discuss mitigation and allow the Commissioners to vote based on the discussion. Commissioner Bonfiglio stated the Commission already has that ability during the monthly meetings.

Commissioner Markley stated that she likes the statement and asked why the statement was placed on the fine schedule in the first place. General Counsel Kam explained that when the schedule was drafted with the statement, the only times the Commission voted not to assess a fine was because it was simply impossible for the respondents to file the report electronically such as a case involving power outages due to a storm. That was the state of the Commission when it was written. He further explained that the reason why staff is now recommending taking it out is because the statement has been misconstrued to imply that how much money a campaign has is being considered as mitigating circumstances. General Counsel Kam emphasized that it would be a problem for the Commission to leave it open-ended without defining what circumstances the Commission considers as mitigating.

Ms. Sandy Ma stated that as a representative of Common Cause Hawaii, she is deeply concerned about the Commission not having a defined guidance for the public and candidate committees to follow when there is late filing of reports. She asserted that this would lead the Commission and the Commissioners open to suggestion that favoritism is being played to lower fines. Ms. Ma warned that there could be partisanship raised allegations levied to lower fines if there is no defined guidance provided to the public and to candidates running for office.

Commissioner Herbert stated that he is not looking for broad changes to what the Commission is doing, and that he is asking the Commission to be able to determine its actions based on individual cases as they come up. Executive Director Izumi-Nitao asked Commissioner Herbert what he considers mitigation. Commissioner Herbert responded that he could not answer that question as it depends on the case and its own circumstances. Commissioner Markley stated that there were at least 5 different times where mitigation was discussed such as a case involving hospitalization. She further stated that she did not think the Commission has unreasonably considered cases to be mitigating or not mitigating enough and has been judicious about it.

Executive Director Izumi-Nitao clarified that eliminating the statement does not prevent respondents from appearing in front of the Commission to present their case. She further clarified that it is to prevent any confusion about what it means and to ensure that the schedule of fine guidelines provide a clear message that there will be penalty when there are violations. General Counsel Kam also stated that the word “mitigating” is a broad word, and as different situations come up, it will make it more difficult for the public to figure out what the Commission considers as mitigating circumstances. Chair Luke added that setting a standard is important and that having the guidelines would provide the Commission with consistency with regards to how the Commission is enforcing them and not based on who can tell the best story to get a lower fine. Vice Chair Lum noted that the schedule allows the Commission and the public to see exactly what the ramifications are when there is a violation. He further noted that the schedule allows the Commission to make adjustments to the fine through a conciliation agreement.

Commissioner Herbert stated that he has no problem removing the statement as it does not change the Commissioners’ ability to look at cases on a case-by-case basis. He said he now feels that it would be better to remove it since it does not provide any information to the people who are dealing with the fine.

With regards to termination of committees, Chair Luke asked about the Commission’s ability to terminate a committee under certain circumstances. Commissioner Markley asked if the Commission has the right to close the committee’s registration while they pay the fine to prevent additional fines being assessed. Chair Luke suggested that this issue be addressed for the next legislative session.

With regards to the fines being proposed for failure to name a candidate supported or opposed, Executive Director Izumi-Nitao explained that it is to address disclosure of who is being supported or opposed on an ad which is found in the reports and electioneering communication forms. She said this is particularly evident in Super PAC activity and during the last election, committees have failed to do this. Therefore, some type of deterrent would be appropriate as it is important for the public to be informed of that information.

Chair Luke asked for a motion to approve staff’s recommendations.

Commissioner Herbert moved to accept staff’s recommended amendments to the Commission’s schedule of fine guidelines. Motion was seconded by Vice Chair Lum. Motion carried (5-0).

Break 12:36 p.m. – 12:47 p.m.

Commissioner Herbert proposed to postpone discussion on his comments to the next meeting. He also stated that he will be amending them. The Commission decided to defer this discussion to the July 14, 2021 meeting.

Old Business
*Docket No. 21-53 – In Re the Matter of Howard Greenberg and Committee to Elect Howard Greenberg – Executive Director Izumi-Nitao reported that this matter was continued from the 5/12/21 Commission meeting to permit Respondents to pursue a conciliation agreement (Conciliation Agreement No. 21-132) which was handled earlier at this meeting. As such, Executive Director Izumi-Nitao recommended that this complaint be dismissed.

Vice Chair Lum moved to dismiss this complaint. Motion was seconded by Commissioner Bonfiglio. Motion carried (5-0).

*Consideration, Discussion, and/or Update of Commission Legislation and Other Campaign Finance Related Bills/Resolutions for the 2021 Legislative Session General Counsel Kam reported about the status of the Commission’s bills (SB 400, 402, 404, and 405) as well as SB 200 which impacts Commission operations/business for the 2021 Legislative Session that are currently with the Governor for his decision. He pointed out that staff has recommended SB 404 be vetoed due to lack of transparency and the Governor has announced that he intends to veto.

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

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

– Supplemental Report was due on 2/1/21:
12 candidate committees still have not filed.

– Next report – Supplemental Report due on 8/2/21 which will cover reporting period of January 1, 2021 through June 30, 2021.

Executive Director Izumi-Nitao reported that there are currently 18 candidates who have been referred to AG-CRD for collection proceedings. For prior matters, Kaniela Ing is making his fine payments and staff is reviewing his amended reports.

EXECUTIVE SESSION
Chair Luke stated that because there is nothing confidential in the Executive Session minutes from the Commission meeting on 5/12/21, he asked for a motion in this session to approve the minutes.

Commissioner Markley moved to approve the Executive Session minutes of the meeting on 5/12/21. Motion was seconded by Commissioner Herbert. Motion carried (5-0).

Commissioner Bonfiglio moved to adjourn the meeting. Motion was seconded by Commissioner Herbert. Motion carried (5-0). Meeting adjourned at 1:01 p.m.

Next Meeting:
Scheduled for Wednesday, July 14, 2021 at 10 a.m.