Campaign Spending Commission

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
March 11, 2020
10:00 a.m.

Commissioners Present
Bryan Luke, Gregory Shoda, Stanley Lum, Neal Herbert

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

Absent/Excused
Commissioner Maryellen Markley

Call to Order
Chair Luke called the meeting to order at 10:02 a.m.

Consideration and Approval of Minutes of Meeting on 2/19/20
Chair Luke asked for comments or changes to the minutes.  There were none.  Chair Luke called for a motion to approve the minutes.

Commissioner Herbert moved to approve the minutes of the 2/19/20 meeting.  Motion seconded by Vice Chair Shoda.  Motion carried (3-0).  Commissioner Lum abstained because he was not present at the 2/19/20 meeting.

New Business
Executive Director Izumi-Nitao stated that the three (3) Conciliation Agreements 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.

*Proposed Conciliation Agreement No. 20-12 – In Re the Matter of General Contractors Association of Hawaii Political Action Committee
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $200 to $100.  Chair Luke asked if there were any comments or questions.

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

*Proposed Conciliation Agreement No. 20-13 – In Re the Matter of Friends of Stephen Bischoff

Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $200 to $100.  Chair Luke asked if there were any comments or questions.

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

*Proposed Conciliation Agreement No. 20-14 – In Re the Matter of Friends of Daniel K. Anthony
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $200 to $100.  Chair Luke asked if there were any comments or questions.

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

Docket No. 20-12 – In Re the Matter of Eric Ryan v. John Carroll for Governor
Complainant Eric Ryan filed a complaint with the Commission against John Carroll for Governor for the failure to timely register, failure to report contributions, failure to report expenditures, improper closing of the committee bank account, and false reporting.

General Counsel Kam stated that complainant Eric Ryan informed Commission staff on 3/10/20 that he would like to continue the matter to the Commission’s next meeting on 4/8/20 because he may have the flu.  Staff had no objection and informed Respondent John Carroll.

*Docket No. 20-13 – In Re the Matter of Eric Ryan v. Friends of Tom Berg
Complainant Eric Ryan filed a complaint with the Commission against Friends of Tom Berg for the failure to report an expenditure.

General Counsel Kam stated that complainant Eric Ryan informed Commission staff on 3/10/20 that he would like to continue the matter to the Commission’s next meeting on 4/8/20 because he may have the flu.  Staff had no objection and informed Respondent Thomas Berg.

Vice Chair Shoda moved to continue the matters set in Docket No. 20-12 and Docket No. 20-13 to the Commission’s next meeting.  Motion seconded by Commissioner Herbert.  Motion carried (4-0).

*Docket No. 20-17 – In Re the Matter of Angela Kaaihue and Angela Kaaihue Campaign
Executive Director Izumi-Nitao noted a housekeeping matter that the docket number is incorrect on the agenda.  It should be “20-17” and not “20-14.”  She recommended that the Commission move to amend the agenda to account for this typo.

Commissioner Lum moved to amend the agenda to reflect “Docket No. 20-17 – In Re the Matter of Angela Kaaihue and Angela Kaaihue Campaign.”  Motion seconded by Commissioner Herbert.  Motion carried (4-0).

Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against Angela Kaaihue and Angela Kaaihue Campaign for failing to file the Supplemental Report.

In the Organizational Report filed with the Commission, Respondent Kaaihue listed as the candidate and treasurer of the candidate committee called Angela Kaaihue Campaign.

Pursuant to HRS §11-334(b), Respondents were required to file the Supplemental Report for the period covering 7/1/19 through 12/31/19 by 11:59 p.m. Hawaii standard time on 1/31/20.  Respondents did not file this report by the deadline.

On 2/3/20, Commission staff notified Respondents via first class mail of their failure to file this report and that a fine would be imposed.

On 2/13/20, 2/19/20, 2/25/20, and 2/27/20, Commission staff contacted Respondent Kaaihue concerning the unfiled report.  Respondent Kaaihue represented on three occasions that she would stop by the Commission office to file the report but failed to show.

Respondents have not filed this report.

On 3/3/20, Commission staff sent Respondents a copy of the complaint and set the matter on the 3/11/20 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, order that the fine be paid from the candidate’s personal funds, if the candidate committee’s funds are insufficient to pay the fine, order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-410(e), and order that Respondents file the Supplemental Report within two (2) weeks of receipt of this order.

Commissioner Herbert asked if the fine imposed is the maximum fine for this violation.  Executive Director Izumi-Nitao responded that this was Respondents’ first time for this violation and according to the Commission’s Standard Fine Guidelines, the first unfiled report violation is a $500 fine.  She continued that a second time violation will be assessed a $750 fine and a third time violation will be assessed a $1,000 fine.

Vice Chair Shoda 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 Lum.  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 updated 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 S.B. 2147, S.D. 1, Commissioner Herbert asked who made recommendations for the amendments.  General Counsel Kam explained that the caucus, or Committee chairs make the recommendations for amendments.

Discussion ensued about the amendments made to S.B. 2147.  General Counsel Kam stated that even though this bill was originally proposed by the Commission, he may need to testify against the bill due to  the changes made in S.D. 1.  Commissioner Herbert asked if all the testimonies submitted to the legislature can be reviewed by the Commission before submission.  General Counsel Kam and Executive Director Izumi-Nitao explained that the timeline would not allow for that because the Commission would require a Sunshine meeting to make decisions and submission of testimonies are time sensitive.  Vice Chair Shoda suggested that if time permits, the Commission could weigh in on the testimonies during their Sunshine meetings, otherwise Commissioners could call the Commission staff to share any concerns about the bills.

With regard to S.B. 2989, Chair Luke expressed his concerns about the possibility of reckless spending of campaign funds without knowing what reasonable costs would be for childcare.  Commissioner Herbert agreed that this bill lacks definition.  General Counsel Kam stated that he could testify to recommend including a cap to how much campaign funds can be used for childcare.  Vice Chair Shoda advised Commission staff to express the Commission’s concerns about the potential abuse in their testimony to the legislature.

In reference to S.B. 3074, Commissioner Herbert asked about the public relations efforts being done to spread the word about the voluntary state income tax check-off contribution to HECF.  He expressed his concerns that not many people realize the contributions are not deducted from their tax returns.  Executive Director Izumi-Nitao and Associate Director Baldomero explained that multiple efforts were made in public relations efforts with very little return.  While a lot of money was spent on public relation efforts in the past, the statistics on tax checkoffs have always remained below 10% of total tax filers.  Currently, it is mentioned in the tax instruction booklet, CPA booklet, CSC Newsletters, surveys, and Commission website. Nonetheless, Executive Director Izumi-Nitao stated staff is always looking for new avenues to get the word out.  General Counsel Kam added that the Commission’s operating funds transferred from HECF to the general funds to allow steady growth in the HECF.

Report from the Executive Director
Report on Compliance of Filing Timely Disclosure Reports
Executive Director Izumi-Nitao reported that there are no new reports since the last meeting.  With respect to prior reports, there are 5 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 cases referred to AG-CRD, Administrative Assistant Tumamao reported the following: (1) Alika Atay – case was dismissed due to full compliance; and (2) Debra Kekaualua – a motion for a bench warrant will be filed.  No new updates for the rest of the cases with AG-CRD (i.e., Thomas Belekanich, Michael Juarez, Eric Link, Melissah Shishido, and Laurent Zahnd).

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 Developments Concerning the Commission’s Electronic Filing Systems
Associate Director Baldomero updated the Commission concerning the rewrite of the electronic filing systems from CodeCharge to Scriptcase.  He reported that ETS turned over the candidate filing and email systems for his testing in January 2020 when testing ensued.  He stated that the testing phase with ETS is on-going and a target launch date of 3/31/2020 was discussed, but that contingencies are in place to continue using our existing systems during the 2020 election in the event that there are complications during the testing process.  Lastly, he stated that ETS is also working on enhancements to the systems which will enhance the usability of the systems.

Presentation of New Noncandidate Committee Dashboard
Associate Director Baldomero reported that Socrata has completed its services in developing the noncandidate committee dashboard to mirror the candidate committee dashboard launched in the 2018 election.  He stated that $20,000 was spent to develop the dashboard (i.e., $7,000 to develop and $13,000 for maintenance).  He demonstrated the dashboard with the various data visualizations.

Presentation of Updated CSC Website
Elections Assistant Vendiola reported that the Commission’s website was updated in February.  She demonstrated the new features to the Commission website and highlighted new pages added for candidate committees such as first-time users page and FAQ page.

Executive Director Izumi-Nitao added that the 2020 election training schedule is now posted on the Commission website.  Training dates are as follows: Kauai – May 22, 2020; Hawaii – May 27, 2020; Maui – May 29, 2020; and Oahu – June 4, 2020.  Committees can now register for the training through the reservation link on the site.  Vice Chair Shoda mentioned that attending these trainings are important for committees so they are aware of the need to file disclosure reports and other requirements.

Vice Chair Shoda thanked Associate Director Baldomero and Elections Assistant Vendiola for their presentations.

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; (2) Consider and approve Executive Session minutes from the Commission meeting on 2/19/20; and (3) 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.

Commissioner Herbert moved to convene in Executive Session for the aforementioned reason(s).  Motion seconded by Vice Chair Shoda.  Motion carried (4-0).

Public Session reconvened at 11:40 a.m.

Commissioner Herbert moved to adjourn the meeting.  Motion seconded by Commissioner Lum.  Motion carried (4-0).  Meeting adjourned at 11:40 a.m.

Next Meeting:
Scheduled for Wednesday, April 8, 2020, at 10 a.m.