Campaign Spending Commission

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
March 12, 2014
10:00 a.m.

Commissioners Present:
G. William Snipes, Eldon Ching, Gregory Shoda, Adrienne Yoshihara
Tina Gomes-Excused

Staff Present:
Kristin Izumi-Nitao, Tony Baldomero, Gary Kam, Ellen Kojima
Deputy Attorney General Valri Kunimoto

Call to Order:
Meeting convened at 10:05 a.m. with Chair Snipes presiding.

Consideration and Approval of Minutes on 2/12/2014:
Commissioner Shoda moved to approve the minutes of February 12, 2014.  Motion seconded by Commissioner Yoshihara.  Motion carried unanimously.

New Business
Executive Director Izumi-Nitao reported that the following conciliation agreements were initiated in February 2014 pursuant to HRS §11-314(7) to determine whether there has been a violation of the campaign spending laws.

Respondents have been informed in a letter from Commission staff of the violation, and they have been notified of today’s meeting and received a copy of the proposed conciliation agreement.  They have waived the opportunity to explain or otherwise respond to the notice of violation.  She recommended that the Commission make a preliminary determination of probable cause that a violation has been committed, waive further proceedings, and approve settlement amounts as stated in each of the conciliation agreements.

Proposed Conciliation Agreement No. 14-03 – In Re the Matter of Ryan for Hawaii
The proposed conciliation agreement is offered to settle a claim regarding the Respondent’s late filing of the Supplemental Report.  Respondent is the candidate committee for Ryan Kapuniai, a candidate for the Senate, District 20.  The Supplemental Report for the period covering 7/1/13 through 12/31/13 was due no later than 11:59 pm Hawaii standard time on 1/31/14.  Respondent’s Supplemental Report was filed on 2/18/14.  Respondent has agreed to a fine of $70.

Chair Snipes moved to make a preliminary determination that probable cause exists that a violation has been committed and accept the settlement terms and amount as stated in the conciliation agreement.  Motion seconded by Commissioner Ching.  Motion carried unanimously.

Proposed Conciliation Agreement No. 14-04 – In Re the Matter of Hanalei
The proposed conciliation agreement is offered to settle a claim regarding the Respondent’s late filing of the Supplemental Report.  Respondent is the candidate committee for Hanalei Aipoalani, a candidate for the House of Representative, District 43.  The Supplemental Report for the period covering 7/1/13 through 12/31/13 was due no later than 11:59 pm Hawaii standard time on 1/31/14.  Respondent’s Supplemental Report was filed on 2/6/14.  Respondent has agreed to a fine of $70.

On 3/11/14, Commission staff received an email from Hanalei Aipoalani requesting that the Commission not assess a fine for the late filing of the Supplemental Report.  Request was not approved by the Commissioners.

Commissioner Yoshihara moved to make a preliminary determination that probable cause exists that a violation has been committed and accept the settlement terms and amount as state in the conciliation agreement.  Motion seconded by Commissioner Ching.  Motion carried unanimously.

Docket No. 14-15 – In Re the Matter of Lori Wingard, Santiago Gorospe, and Friends of Lori Wingard
Executive Director Izumi-Nitao reported that a complaint was filed alleging that Respondents failed to file the Supplemental Report.

The Organizational Report lists Lori Wingard as the candidate and Santiago Gorospe as the treasurer of Friends of Lori Wingard which is Wingard’s candidate committee.

On 2/3/14, Commission staff sent Respondents a “Notice of Late Report” informing them that the Supplemental Report for the period covering 7/1/13 through 12/31/13 was not filed and that if the report is not filed by 2/17/14, a complaint would be filed and the matter would be set on the next Commission meeting agenda.

The Supplemental Report was not filed. On 2/20/14, Commission staff sent Respondents a copy of the complaint and set the matter for the 3/12/14 Commission agenda.

Staff recommends that the Commission make a preliminary determination pursuant to HRS §11-405(a) that probable cause exists to believe a violation of the campaign spending law has been committed, assess a fine of $500, and order that the report be filed within 20 days of receipt of this order.

On 3/12/14, Commission staff received an email from Respondent Lori Wingard requesting a continuance until the next meeting to discuss a conciliation agreement.  Staff noted that she is not eligible for a conciliation agreement because of prior late reports.

General Counsel Kam reported that Respondent Lori Wingard has moved to California and that she is here in Honolulu until 3/18/14.

Chair Snipes moved to continue the matter until the April meeting.  Motion seconded by Commissioner Shoda.  Motion carried unanimously.

Docket No 14-16 – In Re the Matter of Noralyn Pajmola, Rudy Pajimola, and Friends of Noralyn Pajimola
Executive Director Izumi-Nitao reported that a complaint was filed alleging that Respondents failed to file the Supplemental Report.

The Organizational Report lists Noralyn Pajimola as the candidate and Rudy Pajimola as the treasurer of Friends of Noralyn Pajimola which is Pajimola’s candidate committee.

On 2/3/14, Commission staff sent Respondents a “Notice of Late Report” informing them that the Supplemental Report for the period covering 7/1/13 through 12/31/13 was not filed and that if the report is not filed by 2/17/14, a complaint would be filed and the matter would be set on the next Commission meeting agenda.

The Supplemental Report was not filed.  On 2/21/14, Commission staff sent Respondents a copy of the complaint and set the matter for the 3/12/14 Commission agenda.

Executive Director Izumi-Nitao noted that Respondents have failed to file the previous Supplemental Report that was due on 7/31/13.  In that, at a noticed meeting on 9/12/13 in Docket No. 14-04, the Commission issued a preliminary determination of probable cause and assessed a fine of $500.  The report was filed on 9/15/13, but because the fine has not been paid, on 10/28/13, an Application for Entry of Order Compelling Compliance with Final Order was filed at the First Circuit Court.

Staff recommends that the Commission make a preliminary determination pursuant to HRS §11-405(a) that probable cause exists to believe that a violation of campaign finance law has been committed, assess a fine of $750, and order that the report be filed within 20 days of receipt of this order.

Commissioner Yoshihara moved to make a preliminary determination that probable cause exists that a violation has been committed and to accept the fine and terms as stated in Docket 14-16.  Motion seconded by Commissioner Shoda.  Motion carried unanimously.

Docket No. 14-19 – In Re the Matter of Albert Lee, Ross Shimamura and Lots of People for Albert Lee
Executive Director Izumi-Nitao reported that a complaint was filed alleging that Respondents failed to file the Supplemental Report and amend the Organizational Report.

The Organizational Report lists Albert Lee as the candidate and Ross Shimamura as the treasurer of Lots of People for Albert Lee which is Lee’s candidate committee.

On 2/3/14, Commission staff sent Respondents a “Notice of Late Report” informing them that the Supplemental Report for the period covering 7/1/13 through 12/31/13 was not filed and that if the report is not filed by 2/17/14, a complaint would be filed and the matter would be set on the next Commission meeting agenda.

The Supplemental Report was not filed.  On 2/21/14, Commission staff sent Respondents a copy of the complaint and set the matter for the 3/12/14 Commission agenda.  On 3/8/14, Respondent filed the Supplemental Report which reduced the fine to $200.  Respondent Lee informed Commission staff that he would be closing his committee’s bank account and submitting a request to terminate registration.

Staff recommends that the Commission dismiss the complaint due to compliance and not enforce the fine because Respondent will be terminating his registration.

Commissioner Shoda moved to accept staff recommendation to dismiss the complaint due to compliance and not enforce the fine due to termination of registration.  Motion seconded by Chair Snipes.  Motion did not carry. (no – Ching, Yoshihara).

Commissioner Yoshihara stated that if a complaint is filed and it comes before the Commission fines should not be reduced or waived.  Commissioner Ching commented that it did not seem fair to committees who complied and corrected campaign violations without staff having to file a complaint.  He noted that those committees should face higher penalties and should not be looking at nor receiving reduced fines.

General Counsel Kam suggested withdrawal of the complaint, since the report has been filed, and if the fine is not paid file a complaint for the non-payment of the fine be generated.

Chair Snipes stated that staff uses termination and non-enforcement of fines as a method for candidates who do not plan to run in the future.

Commissioners continued the matter until the April 9^th meeting for further consideration and the fines as stated in the complaint to stand.

Docket No. 14-20 – In Re the Matter of Maui Contractors Association PAC and Joseph Williams
Executive Director Izumi-Nitao reported that a complaint was filed alleging that Respondents failed to file the Supplemental Report and amend the Organizational Report.

Respondent Maui Contractors Association Political Action Committee is a registered noncandidate committee, and Respondent Joseph Williams is listed as the chairperson and treasurer of the noncandidate committee.

On 2/3/14, Commission staff sent Respondents a “Notice of Late Report” informing them that the Supplemental Report for the period covering 7/1/13 through 12/31/13 was not filed and that if the report is not filed by 2/17/14, a complaint would be filed and the matter would be set on the next Commission meeting agenda.

On 2/5/14, Commission staff sent Respondents a “Notice to Amend Organizational Report” informing them that they needed to amend their committee’s Organizational Report and that if the report was not amended by 2/19/14, an administrative fine would be assessed.

The Supplemental Report was not filed and the Organizational Report was not amended.  On 2/21/14, Commission staff sent Respondents a copy of the complaint and set the matter for the 3/12/14 Commission agenda.

On 3/10/14, Respondent filed the Supplemental Report.

Staff recommends that the Commission make a preliminary determination pursuant to HRS §11-405(a) that probable cause exists to believe a violation of the campaign spending law has been committed, assess an adjusted fine of $200 for the late filing of the Supplemental Report and $50 for failure to amend the Organizational Report, and order that the Organizational Report be amended within 20 days of receipt of this order.

Chair Snipes moved to make a preliminary determination that probable cause exists that a violation has been committed, assess a total fine of $250, and amend their Organizational Report.  Motion seconded by Commissioner Ching.  Motion carried unanimously.

Discussion and Consideration of Legislators’ Expenditures
Executive Director Izumi-Nitao reported that a recent review of legislators’ annual allowance obtained from the State Ethics Commission prompted a review of legislators’ campaign expenditures. The review found 2 legislators who sought duplicate reimbursements and staff is working with those committees to account for the transactions.  The project scope was expanded upon learning that there were similarities with campaign expenditures and legislative allowances because both permit use for ordinary and reasonable expenses as an officeholder.  The Commission may want to consider the areas of spending the Ethics Commission will deem prohibited to see if the expense will be permitted with campaign funds. The Ethics Commission has not resolved this issue and continued the matter for further discussion at its March meeting.

Executive Director Izumi-Nitao noted that when reviewing legislators’ campaign expenditures, certain expenditures raised concern.  Staff recommended that the Commission consider issuing a reminder as to the permissive and prohibited campaign expenditures which will serve as notice for future violations.

Staff has also talked with ICSD regarding modifying the Candidate Filing System to add another field in Schedule B, where candidates would select which of the 8 permissible campaign expenditures under HRS §11-381 is being invoked.  With the present 24 options, there is not enough consistency in their application.  This change in the system will provide more transparency and assist in enforcement efforts so staff does not have to guess how the campaign funds were used.

Staff recommended that before the Commission issues a memo that they wait to see how the Ethics Commission rules on the matter, follow up with ICSD regarding a timeline on modifying the Candidate Filing System, and continue the matter to the April meeting for further discussion.

Brian Yamane from Speaker Souki’s office offered comments regarding how the legislators use the legislative allowance.

Commissioners agreed to continue matter until the April meeting and requested that Associate Director Baldomero follow up with ICSD regarding a timeline on modifying the candidate filing system.

Old Business
Docket No. 14-10 – In Re the Matter of WZ Waiakamilo Partners, LLC
Brian Kang, representing WZ Waiakamilo Partners, LLC, was present.

Executive Director Izumi-Nitao reported that a complaint was filed alleging that Respondent gave more than $1,000 to a candidate committee that required Respondent to register and file reports as a noncandidate committee.

The Friends of Clayton Hee committee reported receiving a contribution from the Respondent in the aggregate amount of $4,000 on or about 4/25/13.  Staff sent notices (11/8/13 and 11/26/13) to seek Respondent to register and file required reports.

At the 2/12/14 meeting, Brian Kang stated that on 2/11/14, WZ Waiakamilo Partners registered and filed the Supplemental Report.  He further stated that there was a discrepancy as to how much WZ Waiakamilo Partners contributed to the Friends of Clayton Hee committee.  WZ Waiakamilo Partners records show only one contribution of $2,000 being made to the Friends of Clayton Hee campaign committee and that is the amount reported in the 1/1/13-6/30/13 Supplemental Report.

Lynne Waters, treasurer for the Friends of Clayton Hee committee, sent staff copies of contribution checks.  It was confirmed that WZ Waiakamilo Partners made a $2,000 contribution and another entity WZ Wahiawa Partners, LLC made another $2,000 contribution.

A review of financial documents of WZ Wahiawa Partners showed that they shared the same manager with WZ Waiakamilo Partner, so the aggregation violation remains resulting in the $3,000 excess contribution to the Friends of Clayton Hee committee. Consequently, the excess contribution, escheat, and assessed fine stands.

WZ Wahiawa Partners, LLC was informed of the need to register and report with the Commission, which they have done on 3/7/14, and WZ Waiakamilo Partners has paid the $100 fine assessed for failure to file the Organizational Report.  Staff to follow-up with the Friends of Clayton Hee committee regarding filing an amended disclosure report.

Staff recommends that the complaint be dismissed due to compliance.

Chair Snipes moved to dismiss the complaint.  Motion seconded by Commissioner Ching.  Motion carried unanimously.

Discussion of Conducting Random Audits of Committees
At the 2/12/14 meeting, Commissioners requested legal advice from the Attorney General’s Office as to whether rules will be needed to conduct random audits as well as under what circumstances would rules not be necessary.

Deputy Attorney General Kunimoto informed Commissioners that staff can conduct random audits without rules, but suggested that advance notice be given before audits are done.

Chair Snipes noted that this should be pursued in 2015, a non-election year.

Discussion and Update of Commission Related Legislation for 2014 Legislative Session
General Counsel Kam reported on the following:

– HB 1602 / SB 2117 – Requires candidate committees to file the January 31 Supplemental Report regardless of whether it is an election year – Scheduled to be heard in Senate Judiciary on 3/14/14.
– HB 1603 / SB 2118 – If a candidate exceeds the expenditure limit, he/she must notify the Office of Elections, instead of the Chief Election Officer – Heard in House Judiciary and it was recommended that the measure pass with amendments.
– HB 1604 / SB 2119 – Requires the filing of CSC disclosure reports and payment of all outstanding fines to obtain elections certification – Scheduled to be heard in Senate Judiciary on 3/14/14.
– HB 1605 / SB 2120 – Immediate family members not subject to candidate contribution limits –Transmitted to the House and referred to the House Judiciary and Finance committees.
– HB 2533 – Creates a public funding program for House candidates and repeals partial public funding and maximum expenditure limits for Governor, Lt. Governor, Senate, and House candidates – Transmitted to the Senate and referred to the Senate Judiciary and Ways and Means committees.

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

Report on Compliance of Filing Timely Disclosure Reports
Supplemental Report which was due on July 31, 2013

-Nora Pajimola – First Circuit Court Application pending for non-payment of a fine.
-Bart Mulvihill – Mr. Mulvihill informed staff that check for $250 in the mail
-Adam Reeder – First Circuit Court Application pending for non-payment of fines

Supplemental Report which was due on January 31, 2014

-3 candidate committees and 1 noncandidate committee still have not filed the report.

Report on 2014 COGEL Program Committee Meeting
Committee co-chairs Darrin Lim and Nola Western and 15 members met on 2/28/14-3/1/14 for 1-1/2 days and produced a 3-1/2 day conference.  Committee planned 36 sessions in the following categories: campaign finance, ethics, lobbying, FOIA, elections, multi-disciplinary, and professional/office development.

The 2014 COGEL Conference will held in Pittsburgh, PA on 12/7/14- 12/10/14.

Report and Updates on Open Data Visualization
Associate Director Baldomero reported that the candidate committee data visualization application has been modified.  It now features a menu list of the different charts and it is now a single chart per page.  Regarding the noncandiate committee application, until the State comes to an agreement with Socrata, development of the application is on hold.

Next Meeting:
Next meeting scheduled for Wednesday April 9, 2014, at 10:00 a.m.

Chair Snipes moved to convene executive session to consult with attorney.  Motion seconded by Commissioner Ching.  Motion carried unanimously.

Public Session reconvened – 1:00 p.m.

Commissioner Ching moved to adjourn meeting.  Motion seconded by Chair Snipes. Motion carried unanimously.  Meeting adjourned at 1:00 p.m.