Campaign Spending Commission

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
March 9, 2016
10:00 a.m.

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

Staff Present
Kristin Izumi-Nitao, Tony Baldomero, Gary Kam, Sandrina Lee
Deputy Attorney General Valri Kunimoto

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

Consideration and Approval of Minutes of 2/3/16
Chair Shoda asked for discussion or comments.  There were no comments. Chair Shoda then called for a vote to approve the minutes.

Commissioner Goodenow moved to approve the minutes of 2/3/16.  Motion seconded by Vice Chair Yoshihara.  Motion carried (4-0).

New Business
Proposed Conciliation Agreement No. 16-03 – In Re the Matter of ORMAT Nevada
Executive Director Izumi-Nitao reported that the proposed conciliation agreement is a result of an investigation initiated pursuant to HRS §11-314(7) to determine whether there has been a violation of the campaign spending laws for the late filing of the Supplemental Report which was due on February 1, 2016.

Respondent has been informed in a letter from Commission staff of the violation, they have been notified of today’s meeting, and they have received a copy of the proposed conciliation agreement.  They have waived the opportunity to explain or otherwise respond to the notice of violation.  Executive Director Izumi-Nitao recommended that the Commission make a preliminary determination of probable cause that a violation of the campaign spending laws has been committed, waive further proceedings, and approve the settlement amount of $70 as stated in the conciliation agreement.

Vice Chair Yoshihara moved to make a preliminary determination that probable cause exists that a violation has been committed and to accept the settlement terms and amount as stated in Conciliation Agreement No. 16-03.  Motion seconded by Commissioner Goodenow.  Motion carried (4-0).

Docket No. 16-22 – In Re the Matter of Noralyn Pajimola, 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 which was due on February 1, 2016.

On 2/2/16, Commission staff sent a “Notice of Late Report” informing Respondents that the Supplemental Report had not been filed and the imposition of a fine.

Respondents have not filed the Supplemental Report.

On 2/19/16, Commission staff sent Respondents a copy of the complaint and informed them that the matter would be set on the 3/9/16 Commission Agenda.

Executive Director Izumi-Nitao reported that there have been 5 prior complaints issued against Respondents and that all 5 complaints have been referred to the Attorney General’s Office to obtain compliance.  She further reported that on 3/3/16, Respondent Nora Pajimola submitted a letter to the Commission of her intent to resolve these matters and enclosed a check for $743.15 to partially pay the fine.  Because the prior matters were referred to the Attorney General’s Office, her letter and check were given to them for appropriate action.

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 $1,000, and order that Respondents file the Supplemental Report within 2 weeks of receipt of the Order.

Vice Chair Yoshihara asked what the total amount of fines were owed by Respondents.  Executive Director Izumi-Nitao responded that it appears to be $3,750 before this complaint.

Vice Chair 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 the complaint (i.e., assess a fine of $1,000 and order that the report be filed).  Motion seconded by Commissioner Goodenow.  Motion carried (4-0).

Docket No. 16-23 – In Re the Matter of Faye Hanohano, Leslie Julian, and Friends of Faye Hanohano
Executive Director Izumi-Nitao reported that a complaint was filed alleging that Respondents failed to file the Supplemental Report which was due on February 1, 2016.

On 2/2/16, Commission staff sent a “Notice of Late Report” informing Respondents that the Supplemental Report had not been filed and the imposition of a fine.

Respondents have not filed the Supplemental Report.

On 2/19/16, Commission staff sent Respondents a copy of the complaint and informed them that the matter would be set on the 3/9/16 Commission Agenda.

Executive Director Izumi-Nitao reported that there have been 3 prior complaints issued against Respondents and that all 3 complaints have been referred to the Attorney General’s Office to obtain compliance.

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 $1,000, and order that Respondents file the Supplemental Report within 2 weeks of receipt of the Order.

Vice Chair 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 the complaint (i.e., assess a fine of $1,000 and order that the report be filed).  Motion seconded by Commissioner Ching.  Motion carried (4-0).

Docket No. 16-24 – In Re the Matter of Henry Kahula, Jr., Darnelle Kahula, and Henry Kahula for Council
Executive Director Izumi-Nitao reported that a complaint was filed alleging that Respondents failed to file the Supplemental Report which was due on February 1, 2016.

On 2/2/16, Commission staff sent a “Notice of Late Report” informing Respondents that the Supplemental Report had not been filed and the imposition of a fine.

Respondents have not filed the Supplemental Report.

On 2/19/16, Commission staff sent Respondents a copy of the complaint and informed them that the matter would be set on the 3/9/16 Commission Agenda.

Executive Director Izumi-Nitao reported that there have been 5 prior complaints issued against Respondents and that all 5 complaints have been referred to the Attorney General’s Office to obtain compliance.

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 $1,000, and order that Respondents file the Supplemental Report within 2 weeks of receipt of the Order.

Commissioner Goodenow 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 the complaint (i.e., assess a fine of $1,000 and order that the report be filed).  Motion seconded by Commissioner Ching.  Motion carried (4-0).

Docket No. 16-25 – In Re the Matter of Honua Group, LLC and Nainoa Kuna
Executive Director Izumi-Nitao reported that a complaint was filed alleging that Respondents failed to file the Supplemental Report which was due on February 1, 2016.

On 2/2/16, Commission staff sent a “Notice of Late Report” informing Respondents that the Supplemental Report had not been filed and the imposition of a fine.

Respondents have not filed the Supplemental Report.

On 2/22/16, Commission staff sent Respondents a copy of the complaint and informed them that the matter would be set on the 3/9/16 Commission Agenda.

As an update to the filing of this complaint, Executive Director Izumi-Nitao reported that on 3/1/16, Respondents filed the report and that on 3/2/16, Respondents paid the $500 fine.  Executive Director Izumi-Nitao therefore recommended dismissal of the complaint for compliance.

Commissioner Goodenow moved to dismiss the complaint.  Motion seconded by Chair Shoda.  Motion carried (4-0).

Docket No. 16-28 – In Re the Matter of Beth Fukumoto, Kenneth Fukumoto, and Friends of Beth Fukumoto
Executive Director Izumi-Nitao reported that a complaint was filed alleging that Respondents were late in filing the Supplemental Report which was due on February 1, 2016 and failed to pay the late filing report fine of $200.

On 2/2/16, Commission staff sent a “Notice of Late Report” informing Respondents that the Supplemental Report had not been filed and the imposition of a fine.

On 2/5/16, Respondents electronically filed the report.  On 2/5/16, Commission staff sent a “Notice of Fine for Late Report” notifying Respondents that a fine of $200 would be assessed for the late filing of the report.  The notice further informed Respondents that they could avoid the complaint process by waiving their rights to be heard at a HRS chapter 92 public meeting and a HRS chapter 91 contested case hearing, and voluntarily paying the fine amount by 2/19/16.

Respondents did not pay the late report fine of $200.

On 3/1/16, Commission staff sent Respondents a copy of the complaint and informed them that the matter would be set on the 3/9/16 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 and assess an administrative fine of $200.

Commissioner Goodenow 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 the complaint (i.e., assess a fine of $200).  Motion seconded by Vice Chair Yoshihara.  Motion carried (4-0).

Docket No. 16-29 – In Re the Matter of Mark Nakashima, Kevin Yasutake, and Friends of Mark Nakashima
Executive Director Izumi-Nitao reported that a complaint was filed alleging that Respondents were late in filing the Supplemental Report which was due on February 1, 2016 and failed to pay the late filing report fine of $50.

On 2/2/16, Commission staff sent a “Notice of Late Report” informing Respondents that the Supplemental Report had not been filed and the imposition of a fine.

On 2/2/16, Respondents electronically filed the report.  On 2/5/16, Commission staff sent a “Notice of Fine for Late Report” notifying Respondents that a fine of $50 would be assessed for the late filing of the report.  The notice further informed Respondents that they could avoid the complaint process by waiving their rights to be heard at a HRS chapter 92 public meeting and a HRS chapter 91 contested case hearing, and voluntarily paying the fine amount by 2/19/16.

Respondents did not pay the late report fine of $50.

On 3/1/16, Commission staff sent Respondents a copy of the complaint and informed them that the matter would be set on the 3/9/16 Commission Agenda.

As an update to the filing of this complaint, Executive Director Izumi-Nitao reported that on 3/4/16, Respondents paid the $50 fine.  Executive Director Izumi-Nitao therefore recommended dismissal of the complaint for compliance.

Vice Chair Yoshihara moved to dismiss the complaint.  Motion seconded by Commissioner Ching.  Motion carried (4-0).

Docket No. 16-21 – In Re the Matter of Matthew LoPresti v. Bryan Jeremiah
General Counsel Kam reported that on 2/2/16, Matthew LoPresti filed a complaint against Bryan Jeremiah alleging:  (1) Respondent’s calabash bowl from a fundraising event on 7/28/15 exceeded the permitted amount in violation of HRS §11-353(d); and (2) Respondent accepted a $250 contribution from a false name contributor (i.e., Marissa Dipasuli) in violation of HRS §11-352 or received an anonymous contribution in violation of HRS §11-353(b).

Upon reviewing the complaint, Bryan Jeremiah’s reports, and Bryan Jeremiah’s response, General Counsel Kam recommended that the Commission dismiss the complaint.  General Counsel Kam reported that the calabash bowl contribution did not exceed the $500 limit that was applicable at the time the contributions were received and that “Marissa Dipasuli” (formerly Capelouto) is a real person who was a former candidate for State Senate (and known to the Commission as a registered candidate committee) and Congressional District 2.  “Dipasuli” is her legal maiden name which she returned to following her divorce approximately a year ago.  General Counsel Kam shared this information and his recommendation to dismiss with Matthew LoPresti who did not submit any rebuttal.

Commissioner Goodenow moved to dismiss the complaint.  Motion seconded by Commissioner Ching.  Motion carried (4-0).

Commissioner Ching asked staff if Commission rules address complainants using the Commission’s complaint to the point where it could amount to harassment.  General Counsel Kam responded that there are no provisions in the statutes or rules regarding complainants and that staff treats everything as a valid complaint unless the Commission has no jurisdiction over the matters alleged.  For example, General Counsel Kam recalled a situation where a complaint (issued by the same person) alleged the inappropriateness of another candidate dressed in a service uniform as well as a complainant asking the Commission to have his brother stop asking him for contributions.

Old Business
Consideration, Discussion, and Update of Commission Legislation and/or Other Campaign Finance Related Bills/Resolutions for the 2016 Legislative Session
General Counsel Kam presented Commissioners a spreadsheet of the House and Senate bills.  He summarized the Commission’s bills as only SB 2029, SB 2030, SB 2031, and SB 2032 as moving on.  Companion House bills are dead.  He noted that SB 2031 is set for hearing tomorrow before the House JUD committee at 3:15 p.m.

General Counsel Kam then summarized the remaining status of surviving bills concerning campaign spending:

-SB 2445  Amends HRS §11-381 to establish an exemption from the prohibition against using campaign funds to make charitable donations or to award scholarships during the period from the filing of nomination papers to the date of the general election, for candidates who are elected to office after running unopposed in an election.  Set for hearing tomorrow before the House JUD committee at 3:15 p.m.

-SB 2438  Amends HRS §11-314 to change the funding source for the operating expenses of the Commission from HECF to the general revenues of the State.  Staff prefers this bill over companion HB 2156.

-HB 2156  Amends HRS §11-314 to change the funding source for the operating expenses of the Commission from HECF to the general revenues of the State.  Authorizes B&F to transfer HECF fund to the general fund which would be used to pay for the Commission’s operating expenses.  Companion SB 2438.

Also added in HB 2066 which amends HRS §11-381 to limit the amount of campaign funds that may be spent by an elected official on memberships in civic/community groups or on protocol gifts up to 2x the allowable contribution limit.  Staff previously submitted testimony that opposed this bill.

Also added in HB 1473 (2015) which amends HRS §11-381 to permit the use of campaign funds to include contributions to other candidate committees and eliminate the need for tickets to a fundraiser.  Staff previously submitted testimony that opposed this bill.

Commissioner Ching asked whether it is a problem if a bill becomes unrecognizable.  General Counsel Kam stated that the content is okay as long as it conforms with the title of the bill.  Brian Yamane further added that any new content should have been discussed/proposed when the bill was being heard so that the committee may consider such material if the bill goes to conference.  Corie Tanida (Common Cause) added her comment about Frankenstein bills.  General Counsel Kam stated that the Commission has one last crack if the content is substantially and unfavorably altered such that we can recommend to the Governor to veto the bill.

Report from Executive Director
Report on Compliance of Filing Timely Disclosure Reports
Executive Director Izumi-Nitao reported that with respect to the Supplemental Report that was due on 2/1/16, out of 302 candidate committees that were required to file this report, only 5 remain who did not file, and that out of 233 noncandidate committees that were required to file this report, only 5 remain who did not file.

Executive Director Izumi-Nitao reported that she hopes to be able to report on those committees that have been referred to the Attorney General’s Office for collections at the next meeting.

Report on E-File Forms
Associate Director Baldomero reported that eSign forms were offered as of 2/2/16 and that we have received 57 eSign forms to date.  The convenience in using this forms has been demonstrated for those candidates who filed nomination papers on the neighbor islands and needed to register with the Commission.

Update on Government Private Cloud Migration.
Associate Director Baldomero updated the Commission on the government private cloud migration.  He has sent 3 notices to committees that the electronic filing systems will be down 3/14/16 – 3/16/16, and that they will not be able to enter information or file reports during this time.  Committee reports, however, will be available to the public to view on the Commission’s website.

Update on Credit Card Payments
Associate Director Baldomero reported that this matter is still pending.  The Commission received a Statement of Work from HIC which would assess fees to the Commission for anyone using a credit card to pay a fine(s).  However, in talking with ETS, we were advised that there may be another vendor who could implement this system at no cost to the Commission.  He will continue to update the Commission.

Chair Shoda moved to convene Executive Session to consult with attorney pursuant to HRS §92-5(a)(4).  Motion seconded by Commissioner Ching.  Motion carried (4-0).

Commissioner Goodenow moved to go back into open session to permit Chair Shoda to announce the reasons why the Commission is convening Executive Session.  Motion seconded by Vice Chair Yoshihara.  Motion carried (4-0).

Chair Shoda requested a motion to go into Executive Session for the following reasons:  (1) Pursuant to HRS §92-5(a)(5), to investigate proceedings regarding criminal misconduct in Docket No. 16-26 concerning four noncandidate committees’ failure to file the Supplemental Report; (2) Pursuant to HRS §92-5(a)(5), to investigate proceedings regarding criminal misconduct in Docket No. 16-27 concerning a candidate committee’s failure to file the Supplemental Report; and (3) Pursuant to HRS §92-5(a)(4), to consult with an attorney regarding the status of proposed amendments to the Hawaii Administrative Rules affecting the Commission.  Commissioner Goodenow moved to convene Executive Session for the aforementioned reasons.  Motion seconded by Vice Chair Yoshihara.  Motion carried (4-0).

Public session reconvened at 11:40 a.m.

Next Meeting:
Scheduled for Wednesday, April 20, 2016.

Vice Chair Yoshihara moved to adjourn meeting.  Motion seconded by Commissioner Goodenow. Motion carried unanimously.  Meeting adjourned at 11:40 a.m.