Campaign Spending Commission

Campaign Spending Commission Meeting
Leiopapa A Kamehameha Building, Room 204
May 14, 2008
10:00 a.m.

Members Present:
Paul Kuramoto, Steven Olbrich, Gino Gabrio, Dean Robb, Michael Weaver

Staff Present:
Barbara Wong, Tony Baldomero, Grant Tanimoto, Ellen Kojima

Call to Order:
Meeting convened at 10:00 a.m. with Chairperson Kuramoto presiding.

Consideration of Minutes:
Commissioner Olbrich moved to accept the minutes of April 9, 2008.  Motion seconded by Commissioner Robb.  Motion carried.

Old Business:
Docket 08-01  Mark G. Hyde v. Association for Improved Health Care, Jan Shields, Jim Foster
Mr. Mark Hyde and Ms. Jan Shields present.

Chairperson Kuramoto reconfirmed that Commissioners Robb and Gabrio are recused.

Complainant Mark Hyde filed a complaint against the Association for Improved Healthcare (AIHM), Jan Shields and Jim Foster alleging failure to register as a noncandidate committee, excess contributions, committees with same officers acting in concert, and seeking various cease and desist orders, as well as specified reimbursements.

Executive Director Wong presented general background information on the health care system on Maui, including Malulani’s application for a Certificate of Need to build a second hospital on Maui, Mr. Hyde’s consultant service with Maui Memorial Hospital, and Ms. Shields and Mr. Foster’s creation of the Association for Improved Health Care.

The circumstances surrounding AIHM involve three areas of regulation: non-profits, lobbying, and campaign contributions and expenditures.  The Commission only regulates campaign contributions and expenditures.

Executive Director Wong then referenced the Wisconsin Right to Life case decided by the U.S. Supreme Court in which Chief Justice Roberts opined that “discussion of issues cannot be suppressed simply because the issues may also be pertinent in an election.  Where the First Amendment is implicated, the tie goes to the speaker, not the censor.  (F.E.C. v. Wisconsin Right to Life, 127 S.Ct. 2652, 2669 (2007)).

The first issue is whether the Respondent AIHM crossed the threshold of making expenditures of more than $1,000, requiring registration as a noncandidate committee.  Expenditures would be for a two-year election period, which is November 8, 2006 to November 4, 2008.

Commissioners were provided with Hyde’s complaint and all supporting documentation, including copies of emails.  Commissioners needed to determine whether each email was an expenditure or whether it was an educational or informational issue, and provide a value for all emails that are expenditures.  The value of an email list that AIHM provided to Shields’ candidate committee also was considered.

Discussion took place on whether each email needed review or whether to review the list as a whole.  It was decided to review page by page.  Commissioner Olbrich commented that he didn’t think that some of the 18 emails considered expenditures were expenditures.

Executive Director Wong said the standard for the Commission’s approach to express advocacy is based upon the Furgatch case.  Commissioners reviewed the list and determined that at least 16 emails involved express advocacy, and were expenditures, while two emails were questionable, and the remaining e-mails were not expenditures.

Executive Director Wong presented two methods of calculation commissioners could use to determine the cost of the 16-18 emails.  One used Shields hourly rate, and one used the hourly rate and the rate of typing words.  Voter Contact Services, a company commonly used by candidates that provides mailing lists to candidates, was contacted to determine rates for name and address lists and e-mail lists.

Chairperson Kuramoto commented that in his opinion that even if an hour was spent on each email at the cost of $771.30 for all 18 emails, AIHM would still not have crossed the $1,000 threshold.  Commissioner Weaver commented that a standard charge for emails should be established because if this issue comes up again we will be faced with the same questions.  Commissioner Olbrich noted that every case is different and that it would be difficult to develop a standard formula.

Chairperson Kuramoto thanked Mr. Hyde for sending in his brief before the meeting. Chairperson Kuramoto moved that the $1,000 threshold for registration purposes was not met.  Motion seconded by Commissioner Olbrich.  Motion carried.

The second issue was whether AIHM acted in concert with the Maui County Republican Party in violation of H.R.S. section 11-204 (h).  Investigation found that the Maui County Republican Party officers did not include Shields or Foster and that because AIHM noncandidate committee did not exceed the threshold of $1,000, it did not have to register and list officers.  Staff recommended dismissal.

Commissioner Weaver moved to accept staff recommendation to dismiss with respect to HRS section 11-204(h).  Motion seconded by Commissioner Olbrich.  Motion carried.

Thirdly, the issues regarding anonymous contributions, excess contributions and fundraising activity were addressed.  Because funds raised by a non-profit or L.L.C. is not within the jurisdiction of the commission, staff recommends dismissal.

Commissioner Weaver moved to accept staff recommendation to dismiss.  Motion seconded by Commissioner Olbrich seconded.  Motion carried.

Draft Advisory Opinion 08-01 / Rescind Advisory Opinion 03-05
Draft advisory opinion rescinds AO 03-05 and clarifies permissible and impermissible uses of campaign funds for “ordinary and necessary” expenses.  Commissioner Robb expressed concern about a blanket approach for travel and conference expenses. 

As discussed, staff to redraft advisory opinion to clarify this area for the next meeting.

New Business:
No new business.

Communication to Commission:
Legislation Update
HB 2656
Adds reciprocal beneficiaries to the definition of “immediate family”.  Bill has been signed by the Governor (Act 11).

SB 2202, HD 1
Partial public funding for prosecutor.  Bill did not pass, but public funds will be provided under the “other offices” provision.

SB 2579, SD 2, HD 1
Increases late filing fines, increases tax check-off from $2 to $3, and fines go to the general fund. Some content of bill incorporated into HB 661.

HB 661, HD 1, SD 2, CD 1
Comprehensive public funding for Hawaii county council elections in 2010, 2012 and 2014, increases late filing fines, increases tax check-off from $2 to $3, and fines go to the general fund.  Bill passed and has been transmitted to the Governor.

Executive Director Wong discussed that the public has not yet weighed in on the comprehensive public financing program for the Big Island county council election, the impact on the Hawaii election campaign fund, and the need for increased staffing for the Commission if HB 661 is signed by the Governor.

Commissioner Gabrio moved to recommend that the Governor veto HB 661.  Motion seconded by Commissioner Weaver.  Motion carried.

Ballot Issue Committees
Informational sheet on requirements of a ballot issue committee has been posted on the website.

Commissioner Robb moved to convene executive session at about 11:50 a.m., pursuant to HRS 92-5(a)(2).  Motion seconded by Commissioner Weaver.  Motion carried.

Public session reconvened at 11:55 a.m.

Next Meeting:
Scheduled for Thursday, June 12, 2008

Commissioner Olbrich moved to adjourn meeting.  Motion seconded by Commissioner Gabrio.  Motion carried.

Meeting adjourned at 12:00 p.m.