Campaign Spending Commission

Campaign Spending Commission
Zoom Video Conference
May 13, 2020
10:00 a.m.

Commissioners Present
Bryan Luke, Gregory Shoda, Stanley Lum, Maryellen Markley, Ph.D., Neal Herbert

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

Guests
Samuel Fieldman (Wolf-PAC Hawaii Super PAC), Sandy Ma (Common Cause Hawaii), Marc Masuno (ETS), Victor Huang (ETS)

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

Chair Luke and Executive Director Izumi-Nitao went over the rules for this virtual meeting.  Chair Luke conducted roll call of Commissioners and staff present.

Consideration and Approval of Minutes of Meeting on 3/11/20
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 Shoda moved to approve the minutes of the 3/11/20 meeting.  Motion seconded by Commissioner Lum.  Motion carried (5-0).

New Business
Executive Director Izumi-Nitao stated that the Conciliation Agreement 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 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. 20-15 – In Re the Matter of Wolf-PAC Hawaii Super PAC
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 $66.67.  Chair Luke asked if there were any comments or questions.

Mr. Samuel Fieldman on behalf of Wolf-PAC Hawaii Super PAC was present and apologized for filing the Supplemental Report late.  He stated that the committee registered with the Commission in anticipation that they might get involved with the election, but they ultimately decided not to.  Thus, the committee never raised or spent any money and their reports show zero activity.  He further explained that when the first disclosure report was filed, he accidentally filed the report twice and thought he filed for the second one.  He was not sure if there was a third report that needed to be filed or that the second report did not actually get filed, but one of those two things is what resulted in missing the deadline.  He added that once this matter is resolved, they will dissolve this committee as they have no intention of getting involved in this election.

Commissioner Herbert stated that although a mistake was made, he would recommend approval if they do not discontinue filing, but if they do discontinue filing, he does not think there’s any grave harm being done since the committee had no activity.  He asked for input from the Commissioners and staff on his comments.

General Counsel Kam responded that it is up to the discretion of the Commission as a whole whether or not to assess a fine and that it is not mandatory.  However, he disagreed with Commissioner Herbert’s statement about committees with no activity because he believes reporting no activity is just as important as reporting a lot of activity.  He emphasized that it is important for the public to know even if the committee had no activity.  Further, the law requires that all committees file reports even if there is no activity.

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

Old Business
Docket No. 20-12 – In Re the Matter of Eric Ryan v. John Carroll for Governor
Executive Director Izumi-Nitao stated that this matter was continued from the 3/11/20 Commission meeting upon request from complainant Eric Ryan.  Complainant Eric Ryan informed Commission staff on 3/10/20 that he would like to continue the matter to the Commission’s next meeting because he may have the flu.

The Commission staff reached out to complainant Eric Ryan and Respondent John Carroll informing them that this matter will be on the May 13, 2020 agenda and that the meeting will be conducted via video conference only.  They were permitted to choose whether they would like to handle the matter via video conference or wait until the Commission can safely meet face-to-face with them.  Respondent Carroll requested the matter not be heard via video conference and to be deferred until the Commission is safely able to schedule a face-to-face public meeting.

Chair Luke asked if the matter should be continued to the next Commission meeting or be deferred until the Commission can safely meet face-to-face.  General Counsel Kam recommended that the matter be continued to the next Commission meeting and that staff reach out to the parties again if the Commission decides to conduct the next meeting via video conference.

Vice Chair Shoda moved to continue the matter set in Docket No. 20-12 to the 6/10/20 Commission meeting.  Motion seconded by Commissioner Lum.

Commissioner Markley asked if the parties provided any explanations as to why they did not want to address the matter via video conference.  General Counsel Kam responded that they did not provide a specific reason as to why a face-to-face meeting was preferred.

Motion carried (5-0).

*Docket No. 20-13 – In Re the Matter of Eric Ryan v. Friends of Tom Berg
General Counsel Kam stated that this matter was continued from the 3/11/20 Commission meeting upon request from complainant Eric Ryan.  Complainant Eric Ryan informed Commission staff on 3/10/20 that he would like to continue the matter to the Commission’s next meeting because he may have the flu.

The Commission staff reached out to complainant Eric Ryan and Respondent Thomas Berg informing them that this matter will be on the May 13, 2020 agenda and that the meeting will be conducted via video conference only.  They were permitted to choose whether they would like to handle the matter via video conference or wait until the Commission can safely meet face-to-face with them.  Respondent Berg requested the matter not be heard via video conference and to be deferred until the Commission is safely able to schedule a face-to-face public meeting.

Vice Chair Shoda moved to continue the matter set in Docket No. 20-13 to the 6/10/20 Commission meeting.  Motion seconded by Commissioner Lum.  Motion carried (5-0).

*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.

With regard to H.B. 1706, HD1, Commissioner Herbert asked what the Commission’s testimony meant when it stated that it is preferable that all mixed benefit acquisitions be done by way of a lease, as opposed to purchase. He asked for clarification on what it meant by “mixed benefit acquisitions.”  General Counsel Kam responded that it was to address the amendments made to this bill by the House Judiciary which allows the use of campaign funds to lease—not purchase—a car, even though there is a mixed benefit to the candidate personally and to the campaign.

With regard to S.B. 2149, SD1, Commissioner Herbert asked if Commission staff was provided any reasons for the changes made to this bill.   General Counsel Gary Kam responded that he was told since candidates are now required to file three preliminary reports, it would be unnecessary for them to file statements of electioneering communication.  However, he pointed out to the legislators that not all candidates are required to file first of the three preliminary primary reports—only 41 candidates were required to file it.  He further explained that filing statements of electioneering communication and disclosure reports are different as statements of electioneering communication are filed closer to the election dates.

Commissioner Herbert asked if the Commission’s objections to these amendments are usually considered by the legislators.  General Counsel Kam stated that he believes they do take Commission’s objections into consideration.

General Counsel Kam informed the Commission that the Legislature recessed on March 16, 2020 due to COVID-19.  The Legislature since reconvened on Monday, May 11, 2020 and will be open for a few days.  The Legislature may be considering only budget bills and Governor appointees, in which case these bills are probably dead.

Report from the Executive Director
Report on Compliance of Filing Timely Disclosure Reports
Executive Director Izumi-Nitao reported that the 1^st Preliminary Primary Report that was due on 4/30/20 was only for candidates who filed nomination papers by 4/25/20.

• 41 candidate committees were expected to file
• 41 (100%) filed on time
• 0 (0%) did not file
• 22 candidate committees filed, but were not required to

With respect to prior reports, there are 1-3 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 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 an HRS chapter 91 contested case proceeding.  A hearing has been reset for June 19, 2020.

Reminder to File 2020 Annual Financial Disclosure Form with State Ethics Commission
Executive Director Izumi-Nitao stated that the 2020 Annual Financial Disclosure Form is due on May 31, 2020 via e-File on State Ethic’s website. She reported that the State Ethics Commission office has confirmed all Commissioners and relevant staff members have already filed this report.

Update on the Status of the Appointment of New Commissioners
Executive Director Izumi-Nitao reported that Boards & Commissions have been notified about the appointment of a new commissioner and possible reappointment of Commissioner Lum.  Vice Chair Shoda’s term expires on 6/30/20 and is not eligible for another term.  Commissioner Lum’s term also expires on 6/30/20 and he is seeking another term.

Update on Commission Operations
Executive Director Izumi-Nitao reported that Commission staff has been teleworking as of 3/20/20 due to the Governor’s proclamation to stay-at-home, which has continued to his 7^th proclamation now called safer-at-home.  She stated that the public and the committees were informed that the Commission’s office is closed due to safety concerns through Commission’s internal and external pieces of communications, including posting on the Commission’s website.  Commission staff goes into the office once to twice a week and as needed.  Overall, she believes teleworking has been successful and will continue for now; however, she noted that staff is considering the next steps to prepare the office to safely open to the public.

In terms of the Commission’s budget, Executive Director Izumi-Nitao reported that Commission staff has been asked to analyze scenario reductions of 16%, 25% and 30%.  This data has been submitted to DAGS, who then shared the information to B&F.  She emphasized that they are merely scenarios until the Governor and the legislature make their decisions.  She also stated that Commission staff is aware that furloughs are still on the table and are grateful to have a job.  Chair Luke commented a concern on Commission budget reductions, especially in an election year.  Executive Director Izumi-Nitao stated that she would keep them posted.

Ms. Sandy Ma of Common Cause Hawaii asked if any of the budget shortfall as a result of the reduction will be made up with moneys from the Hawaii Election Campaign Fund (“HECF”).  Executive Director Izumi-Nitao responded that while the statute permits the Commission to look at the HECF for operations, staff’s priority has always been to protect the HECF for public funding and not use it for operations.

Commissioner Herbert asked about the outer-island trainings.  Executive Director Izumi-Nitao stated that all committee face-to-face trainings to the neighbor islands have been cancelled.  However, Commission staff is currently rebuilding its training presentations so that they can be conducted via video conference.  She added that the guidebooks and manuals for committees have been updated and posted on Commission’s website.

Vice Chair Shoda asked how Commission staff is handling incoming phone calls and auditing reports.  Executive Director Izumi-Nitao responded that all direct personal lines have been forwarded to staff’s cell phones.  Commission office’s main line and emails are being answered or screened and forwarded to the appropriate staff members.  Commission staff also maintains a call log.  She stated that the overall feedback from the committees and the public concerning Commission teleworking has been good from those who she had been in communication with and from staff.  For the auditing of reports, since all disclosure reports are filed electronically, they are being audited remotely and business has been seamless.

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 3/11/20; and (2) 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.

Vice Chair Shoda moved to convene in Executive Session for the aforementioned reason(s).  Motion seconded by Commissioner Lum.  Motion carried (5-0).

Chair Luke informed the public that the audio and visual of the Commissioners and staff in Zoom will go dark; however, when Executive Session is over, the audio and visual of the Commissioners and staff will resume.

Public Session reconvened at 11:32 a.m.

Commissioner Markley moved to adjourn the meeting.  Motion seconded by Commissioner Lum. Motion carried (5-0).  Meeting adjourned at 11:34 a.m.

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