Campaign Spending Commission

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
March 8, 2017
10:00 a.m.

Commissioners Present
Bryan Luke, Adrienne Yoshihara, Gregory Shoda, Eldon Ching, Kenneth Goodenow

Commissioners Absent
None

Staff Present
Kristin Izumi-Nitao, Tony Baldomero, Gary Kam, Sandrina Lee
Supervising Deputy Attorney General Pat Ohara

Call to Order
Chair Luke called the meeting to order at 10:03 a.m.

Consideration and Approval of Minutes on 2/15/17
Chair Luke asked for comments or changes.  Vice Chair Yoshihara sought the following amendments:

• Page 4, 4^th paragraph, to read: “Discussion ensued on the Commission’s discretion to waive fines for late reports for exigent circumstances under HRS §11-340.”

• Page 6, 3^rd indentation, to read: “General Counsel Kam reported on the following bills introduced by others that, if passed, would affect Commission operations/business, that received hearings: . . .”

• Page 7, 6^th indentation, to read: “General Counsel Kam reported on the remaining bills introduced by others that, if passed, would affect Commission operations/business, that did not receive hearings to date: . . .”

Chair Luke called for a vote to approve the minutes as amended.

Commissioner Shoda moved to approve the amended minutes of 2/15/17.  Motion seconded by Commissioner Goodenow.  Motion carried (4-0).  Commissioner Ching abstained due to his absence at the 2/15/17 meeting.

New Business
Executive Director Izumi-Nitao stated that the next ten (10) matters concern the failure to file the Supplemental Report which was due on January 31, 2017.  The proposed Conciliation Agreements resulted from investigations pursuant to HRS §11-314(7) to determine whether there had been a violation of the Hawaii campaign spending laws.  The committees in all matters have been informed of the violation(s) in a letter from Commission staff.  Further, each committee has been notified of today’s meeting and received a copy of the proposed Conciliation Agreement.  Executive Director Izumi-Nitao recommended that the Commission make a preliminary determination of probable cause that a violation had been committed in each matter, waive further proceedings, and approve the settlement amounts stated in each of the proposed agreements.

*Proposed Conciliation Agreement No. 17-57 – In Re the Matter of Friends of Janet Grace
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requested that the Commission assess a reduced fine from $200 to $100.  Chair Luke asked if there were any comments or questions. There were none.  Chair Luke called for a vote.

Vice Chair Yoshihara moved to approve proposed Conciliation Agreement No. 17-57.  Motion seconded by Commissioner Shoda.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 17-58 – In Re the Matter of Richard S. Fukushima
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requested that the Commission assess a reduced fine from $200 to $100.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Shoda moved to approve proposed Conciliation Agreement No. 17-58.  Motion seconded by Commissioner Ching.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 17-59 – In Re the Matter of Cody Rodriguez Committee
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requested that the Commission assess a reduced fine from $200 to $66.67.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Shoda moved to approve proposed Conciliation Agreement No. 17-59.  Motion seconded by Vice Chair Yoshihara.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 17-60 – In Re the Matter of Trilogy Corporation
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requested that the Commission assess a reduced fine from $200 to $66.67.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Shoda moved to approve proposed Conciliation Agreement No. 17-60.  Motion seconded by Commissioner Ching.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 17-61 – In Re the Matter of Friends of Vanessa A. Medeiros
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requested that the Commission assess a reduced fine from $200 to $100.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Shoda moved to approve proposed Conciliation Agreement No. 17-61.  Motion seconded by Vice Chair Yoshihara.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 17-62 – In Re the Matter of Committee to Elect Pat Brock
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requested that the Commission assess a reduced fine from $200 to $66.67.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Goodenow moved to approve proposed Conciliation Agreement No. 17-62.  Motion seconded by Commissioner Shoda.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 17-63 – In Re the Matter of Friends of Cynthia Rezentes
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requested that the Commission assess a reduced fine from $200 to $100.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Shoda moved to approve proposed Conciliation Agreement No. 17-63.  Motion seconded by Vice Chair Yoshihara.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 17-64 – In Re the Matter of Friends of Bronson Kaahui
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requested that the Commission assess a reduced fine from $200 to $66.67.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Goodenow moved to approve proposed Conciliation Agreement No. 17-64.  Motion seconded by Vice Chair Yoshihara.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 17-65 – In Re the Matter of electjerrymetcalfe.org
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requested that the Commission assess a reduced fine from $200 to $66.67.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Vice Chair Yoshihara moved to approve proposed Conciliation Agreement No. 17-65.  Motion seconded by Commissioner Goodenow.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 17-66 – In Re the Matter of Pacific Waste, Inc.
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requested that the Commission assess a reduced fine from $200 to $66.67.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Ching moved to approve proposed Conciliation Agreement No. 17-66.  Motion seconded by Commissioner Goodenow.  Motion carried (5-0).

Old Business
*Consideration, Discussion, and Approval of Amendments to the Commission’s Administrative Fine Guidelines
Commissioner Goodenow moved to convene in executive session 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 concerning the Administrative Fine Guidelines.  He further moved that the matter be placed at the end of the agenda when the Commission goes into Executive Session to permit the meeting to continue in open session.  Motion seconded by Vice Chair Yoshihara.  Motion carried (5-0).

*Consideration, Discussion, Update, and Approval of Commission Legislation and/or Other Campaign Finance Related Bills/Resolutions for the 2017 Legislative Session
General Counsel Kam reported that the Commission’s 11 bills have been heard by either the House or Senate and were moving.  He referenced a new spreadsheet entitled “2017 Legis CSC (Mar)” to inform the Commissioners of the status of the bills.  He reported the following:

H.B. 100 – The Executive Budget bill is scheduled for House FIN hearing today.
H.B. 279, H.D. 1 – This is a Commission bill that passed out of the House and will crossover to the Senate.
H.B. 280, H.D. 1 – This is a Commission bill that passed out of the House and will crossover to the Senate.
H.B. 281, H.D. 1 – This is a Commission bill that passed out of the House and will crossover to the Senate.
H.B. 282, H.D. 1 – This is a Commission bill that passed out of the House and will crossover to the Senate.
H.B. 283, H.D. 1 – This is a Commission bill that had a double referral in the House.  It received a JUD hearing but no FIN hearing so it will not move forward.  However, its companion bill on the Senate side (S.B. 440, S.D. 1) passed out of the Senate and will crossover to the House.
H.B. 289, H.D. 1 – This is a Commission bill that passed out of the House and will crossover to the Senate.
S.B. 251, S.D. 1 – The Commission took no position on this bill that passed out of the Senate and will crossover to the House.
S.B. 336, S.D. 1 – The Commission supported this bill that passed out of the Senate and will crossover to the House.
S.B. 337, S.D. 1 – The Commission opposed this bill that passed out of the Senate and will crossover to the House.
S.B. 412, S.D. 2 – The Commission supported this budget bill that passed out of the Senate and will crossover to the House.
S.B. 438 – This is a Commission bill that passed out of the Senate and will crossover to the House.
S.B. 439, SD 1 – This is a Commission bill that passed out of the Senate and will crossover to the House.
S.B. 440, S.D. 1 – This is a Commission bill that passed out of the Senate and will crossover to the House.
S.B. 441, S.D. 1 – This is a Commission bill that passed out of the Senate and will crossover to the House.
S.B. 442, S.D. 1 – This is a Commission bill that passed out of the Senate and will crossover to the House.
S.B. 443 – This is a Commission bill that passed out of the Senate and will crossover to the House.
S.B. 444 – This is a Commission bill that passed out of the Senate and will crossover to the House.
S.B. 445, SD 1 – This is a Commission bill that passed out of the Senate and will crossover to the House.
S.C.R. 2 – This resolution has not been scheduled for a hearing in the Senate and is still alive.
S.R. 3 – This resolution has not been scheduled for a hearing in the Senate and is still alive.

General Counsel Kam asked if there were any questions.  He noted that staff will continue to update the legislative spreadsheet and inform the Commissioners of the status of the bills at each meeting.

Commissioner Goodenow asked about the Commission’s budget.  Executive Director Izumi-Nitao explained that the Commission’s request to convert Commission salaries and operations to general funds was moving through H.B. 100 (the Executive Budget bill) as well as through S.B. 412, S.D. 1.

Mr. Michael Palcic commented about the Commission’s opposition to S.B. 309 and stated that the Commission should support this bill to eliminate the bureaucracy of the campaign finance process.  He commented that the laws are onerous and thus discouraged people from running for office.  General Counsel Kam reported that S.B. 309 was deferred and its language was inserted into S.B. 336, S.D. 1.

Report from Executive Director
Report on Compliance of Filing Timely Disclosure Reports
With respect to the Commission orders that were referred to the Attorney General’s Office – Civil Recoveries Division (“AG-CRD”), AG-CRD reported that out of the 13 referrals, only 5 have not been addressed (i.e., Henry Kahula, Creighton Higa, Eric Ryan, Raymond Banda, and Junior Mataafa).

As for the report on compliance of filing timely disclosure reports in the 2016 election, Executive Director Izumi-Nitao reported that for the Supplemental Report, except for those committees who have been referred to AG-CRD for not filing prior reports, all candidate committees and noncandidate committees have filed this report.

Update on the CSC Budget
Executive Director Izumi-Nitao reported that House Finance was hearing H.B. 100 (Executive Budget bill) at 9 a.m. today.  She stated that she would continue to update them on the Commission’s efforts to convert Commission salaries and operations to general funds.

Update on Consideration of Comments Submitted by Michael G. Palcic, Chairman, The Committee to Elect Julia Allen, Concerning Changes to Headings and Combining Expenditure Election Period Totals on the Candidate Committee Disclosure Reports Filed on the Candidate Filing System
Associate Director Baldomero reported that he reviewed Mr. Michael Palcic’s comments and stated that there were 9 proposals concerning text and computation changes.  He reported that further consideration of these proposals requires a review of the campaign finance laws/rules by the Attorney General’s office, a discussion with the Office of Enterprise Technology Services (ETS) concerning coding revisions for the computation changes, and meeting with a CPA to ensure that accounting principles were intact.  He stated that these discussions have not been completed and intends to come out with staff’s recommendations when his due diligence has been completed.

Mr. Michael Palcic presented the Commission with a handout entitled “Summary and Examples of Proposed Changes to Campaign Disclosure Report.”  He stated that this presentation was to further clarify one of his proposals presented earlier.

Chair Luke commented that the Commission intends to consider Mr. Palcic’s proposals along with some other changes to the system.

Chair Luke asked for a motion to convene Executive Session to:  (1) Pursuant to HRS §92-5(a)(4) to consult with the Commission’s attorney on questions and issues pertaining to the Commission’s powers, duties, privileges, immunities, and liabilities concerning the Administrative Fine Guidelines; (2) Consider and approve Executive Session minutes from the Commission meeting on 2/15/17; and (3) Pursuant to HRS §92-5(a)(4), to consult with the Commission’s attorney on questions and issues pertaining to the Commission’s powers, duties, privileges, immunities, and liabilities concerning Docket No. 17-24 – In Re the Matter of Alan Arakawa and Friends of Alan Arakawa for the prohibited use of campaign funds.

Vice Chair Yoshihara moved to convene Executive Session for the aforementioned reasons.  Motion seconded by Commissioner Ching.  Motion carried (5-0).

Public session reconvened at 11:25 a.m.

**Resumed Old Business 

*Consideration, Discussion, and Approval of Amendments to the Commission’s Administrative Fine Guidelines
Chair Luke called for a vote as to any changes concerning the Administrative Fine Guidelines.

Chair Luke moved to amend the guidelines as follows:  (1) Under “Expenditures – A) Donation of Campaign Funds in Excess of Permitted Amount or Donation to a Prohibited Charitable Organization or Donation Made During a Prohibited Period (HRS §11-381)” and “Expenditures – B) Prohibited Use of Campaign Funds (HRS §11-382),” adding personal reimbursement for prohibited expenditures; (2) Under “Other – A) Electioneering Communications (HRS §11-341),” increasing the fine to $500 for not filing a Statement of Information for Electioneering Communication and $250 for not amending or filing a late or deficient Statement of Information for Electioneering Communication; and (3) Under Part II – Conciliation Agreements, not permitting Conciliation Agreements if the fine is $25 or less and not counting it towards the two times the committee is permitted to seek a fine reduction via a Conciliation Agreement.  Motion seconded by Commissioner Shoda.  Motion carried (5-0).

As for the “Expenditures – D) Advertisements (HRS §11-391)” fine, staff was asked to come up with a recommendation for their consideration.

Executive Director Izumi-Nitao reported that she would post the revised guidelines which were approved on the Commission’s website.

Chair Luke commented that he would like Executive Director Izumi-Nitao to schedule a meeting with Governor Ige concerning the Commissioners’ appointments.  He commented that it has been 8 months since Commissioner Ching’s and Shoda’s terms ended, that Commissioner Shoda has indicated his interest in serving another 4-year term, and expressed his concern over whether this Commission was a priority to the Governor.  Executive Director Izumi-Nitao stated that she would follow up.

Commissioner Goodenow moved to adjourn the meeting.  Motion seconded by Vice Chair Yoshihara.  Motion carried (5-0).  Meeting adjourned at 11:35 a.m.

Next Meeting:
Scheduled for Wednesday, April 12, 2017.