Minutes for May 15, 2019 Meeting

Posted in Minutes

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
May 15, 2019
10:00 a.m.

Commissioners Present
Bryan Luke, Gregory Shoda, Kenneth Goodenow, Stanley Lum, Maryellen Markley, Ph.D.

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

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

Consideration and Approval of Minutes of Meeting on 4/10/19
Chair Luke asked for comments or changes to the minutes.  There were none.  Chair Luke called for a motion to approve the minutes.

Commissioner Goodenow moved to approve the minutes of the 4/10/19 meeting.  Motion seconded by Commissioner Markley.  Motion carried (5-0).

New Business
*Welcome and Introduction of New Elections Assistant Ellisa Vendiola
Executive Director Izumi-Nitao introduced the Commission’s new Elections Assistant Ellisa Vendiola who started on 5/1/19.  She stated that Ellisa graduated from the University of Hawaii at Manoa with a BA in Political Science and Leeward Community College with an AAS in Culinary Arts.  Ellisa has experience in sales, customer service, and office management.  Lastly, she came from Bargreen Ellingson Foodservice Supply Design and previously worked at Armstrong Produce, Watabe Wedding where she was pastry cook, and Walmart as a Buyer Assistant.

Executive Director Izumi-Nitao stated that the three (3) Conciliation Agreements on the agenda were a result of investigations 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 Respondents have been informed in a letter from Commission staff of the violation and have 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 amounts stated in each of the proposed agreements.

*Proposed Conciliation Agreement No. 19-167 – In Re the Matter of ILWU Hawaii Political Action Committee
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Preliminary Special Report and requests that they assess a reduced fine from $50 to $25.  Chair Luke asked if there were any comments or questions.

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

*Proposed Conciliation Agreement No. 19-168 – In Re the Matter of Bank of Hawaii Corporation Special Political Education Committee – State PAC
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Preliminary Special Report and requests that they assess a reduced fine from $300 to $100.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

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

*Proposed Conciliation Agreement No. 19-169 – In Re the Matter of TRUSTA, An Accountancy Corporation
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Preliminary Special Report and requests that they assess a reduced fine from $500 to $166.67.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

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

*Docket No. 19-36 – In Re the Matter of Melissah Shishido and Vote Shishido
Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against Melissah Shishido and Vote Shishido for the late filing of the Final Election Period Report and the Supplemental Report.

Respondent Shishido filed nomination papers to run in the 2018 election for Senate District 6.  In the Organizational Report filed with the Commission, Respondent Shishido is listed as the candidate of the candidate committee called Vote Shishido.  The treasurer Lynn Miller has relocated to the mainland and Respondents have yet to amend their Organizational Report.

Pursuant to HRS §11-334(a), Respondents were required to file the Final Election Period Report for the period covering 1/1/18 through 11/6/18 by 11:59 p.m. Hawaii standard time on 12/6/18.  Respondents did not file this report by the deadline.

On 12/7/18, Commission staff notified Respondents via first class mail of their failure to file this report and that a fine would be imposed.

On 12/31/18, Respondents filed the Final Election Period Report.

On 1/3/19, Commission staff notified Respondents via first class mail that a fine of $200 was assessed for the late filing of the report.

On 1/11/19, Respondents requested a Conciliation Agreement which would reduce the fine from $200 to $66.67.  Proposed Conciliation Agreement No. 19-143 was prepared and mailed to Respondents as well as approved by the Commission at a meeting on 2/20/19.  On 2/20/19, Commission staff informed Respondents via first class mail to sign the agreement and remit the reduced fine payment by 3/6/19.

Pursuant to the terms of Conciliation Agreement No. 19-143, Respondents were informed that “[i]f this assessment is not paid by the deadline, the Commission will consider Respondent to be in breach of this Agreement and will then assess Respondent the original amount of the fine pursuant to appropriate proceedings.”

Pursuant to HRS §11-334(b), Respondents were required to file the Supplemental Report for the period covering 11/7/18 through 12/31/18 by 11:59 p.m. Hawaii standard time on 1/31/19.  Respondents did not file this report by the deadline.

On 2/1/19, Commission staff notified Respondents via first class mail of their failure to file this report and that a fine would be imposed.

On 2/5/19, Respondents filed the Supplemental Report.

On 2/5/19, Commission staff notified Respondents via first class mail that a fine of $200 was assessed for the late filing of the report.

On 2/22/19, Respondents requested a Conciliation Agreement which would reduce the fine from $200 to $100.  Proposed Conciliation Agreement No. 19-156 was prepared and mailed to Respondents as well as approved by the Commission at a meeting on 3/13/19.  On 3/13/19, Commission staff informed Respondents via first class mail to sign the agreement and remit the reduced fine payment by 3/27/19.

Pursuant to the terms of Conciliation Agreement No. 19-143 and No. 19-156, Respondents were informed that “[i]f this assessment is not paid by the deadline, the Commission will consider Respondent to be in breach of this Agreement and will then assess Respondent the original amount of the fine pursuant to appropriate proceedings.”

On 2/22/19, 3/11/19, 3/14/19, and 3/29/19, Commission staff called Respondent Shishido regarding compliance of the two Conciliation Agreements.  Respondent Shishido informed Commission staff that she wanted to terminate the candidate committee’s registration and that she would pay the fines and sign the agreements.  On 4/5/19, 4/8/19, and 4/15/19, Commission staff left messages with Respondent Shishido regarding payment of the fines and signing the agreements as well as informing her that a complaint would be filed for failure to comply.

Respondent Shishido did not comply with the terms of Conciliation Agreements No. 19-143 and No. 19-156.

On 4/22/19, Commission staff sent Respondents a copy of the Complaint and set the matter on the 5/15/19 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, assess an administrative fine of $200 for each late report (i.e., $400), order that the fine be paid from the candidate’s personal funds if the committee funds are insufficient or if the Commission so orders, and order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-340(g) within two (2) weeks of receipt of this order.

Commissioner Goodenow moved to make a preliminary determination that probable cause exists that a violation had been committed and to accept the fine and terms stated in the complaint.  Motion seconded by Vice Chair Shoda.  Motion carried (5-0).

Commissioner Markley expressed her concerns about the Respondents accumulating late report fines.  Associate Director Baldomero responded that Respondents are eligible to terminate their registration once the fines are paid.  Termination of registration will relieve Respondents of filing any further disclosure reports with the Commission.

*Docket No. 19-37 – In Re the Matter of Hawaii Laborers-Employers Cooperation and Education Trust and Mark Matsumoto
Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against Hawaii Laborers-Employers Cooperation and Education Trust and Mark Matsumoto for the failure to timely report expenditures in the Preliminary Special Report.

Respondent is a registered noncandidate committee with the Commission and Respondent Matsumoto is listed as the treasurer in the Organizational Report filed with the Commission.

Pursuant to HRS §11-331 and §11-335, Respondents were required to file complete and accurate reports that disclose all the committee’s expenditures made or incurred during a reporting period.

Respondents’ Preliminary Special Report for the period covering 1/1/19 to 3/29/19 was filed on time on 4/3/19.  On 4/10/19, Respondents filed an amended report to include additional expenditures of contributions given to the following candidate committees:  (1) $2,000 for Kouchi for Senate on 2/14/19; (2) $500 for Friends of Mark Hashem on 3/7/19; (3) $500 for Friends of Alan Kekoa Texeira on 3/7/19; and (4) $1,000 for Friends of Aaron Johanson on 3/26/19.

On 4/12/19, Commission staff notified Respondents via first class mail of their failure to timely report these expenditures and that a fine of $250 would be assessed.  Respondents did not pay the fine by the deadline of 4/26/19.

On 4/24/19, Joy Kimura, identified as the Custodian of Books and Accounts and Deputy Treasurer on the Organizational Report, informed Commission staff that they received the Commission’s fine letter and that Respondents would be contesting the fine.

On 4/26/19, Commission staff sent Respondents a copy of the complaint and set the matter on the 5/15/19 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, assess an administrative fine of $250, and order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-410 within two (2) weeks of receipt of this order.

Ms. Joy Kimura was present and stated that she was new at filing campaign finance reports.  She stated that she was under the impression that based on the reporting schedules and the Commission’s memorandum concerning the Special Election, Respondents only had to report contributions to the candidates running in the Special Election in the Preliminary Special Report.  She further stated that when she learned that Respondents were required to include contributions made to other candidates who were not running in the Special Election, she filed an amended report.  Ms. Kimura argued that Respondents should not have to pay the fine.

Discussion ensued on the reporting schedules, the Commission’s memorandum, discussions with Ms. Kimura and Commission staff, and the 6 e-blasts that were distributed to the committees regarding the filing of the Special Election reports.

Chair Luke commented that Respondents were in this position before in 2018.  Executive Director Izumi-Nitao stated that Respondents failed to report candidate contributions in the 2018 election and failed to file the Late Contributions/Expenditures Report in the primary election.  She said that Conciliation Agreement No. 19-76 was approved at the 9/12/18 Commission meeting which reduced the fine from $500 to $250.  At the Commission meeting, a violation for the late filing of the report was found, but the fine was waived due to mitigating circumstances presented by Ms. Kimura.

Executive Director Izumi-Nitao commented that the reporting schedules cover consecutive periods and that Ms. Kimura’s position does not make sense because it would mean that the 4 contributions to candidates contained in the amended report would never be reported.  She further commented that Commission staff applied the Schedule of Fines to assess the $250 fine, but that the remedy including the fine amount is at the discretion of the Commission.

Vice Chair Shoda stated that Respondents cannot submit inaccurate reports and that the expenditures (i.e., contributions to 4 candidates) totaled a lot of money.

Commissioner Markley commented that she could see how Ms. Kimura came to her conclusions and stated that she would recommend waiving the fine.

Commissioner Goodenow moved to make a preliminary determination that probable cause exists that a violation had been committed and to accept the fine and terms stated in the complaint.  Motion seconded by Commissioner Lum.  Motion carried (4-1) (Commissioner Markley opposed).

*Docket No. 19-38 – In Re the Matter of Maui Pono Network and Paul C. Deslauriers
Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against Maui Pono Network and Paul C. Deslauriers for the late filing of the Preliminary Special Report.

Respondent is a registered noncandidate committee with the Commission and Respondent Deslauriers is listed as the chairperson and treasurer in the Organizational Report filed with the Commission.

Pursuant to HRS §11-336(a), Respondents were required to file the Preliminary Special Report for the period covering 1/1/19 through 3/29/19 by 11:59 p.m. Hawaii standard time on 4/3/19.  Respondents did not file this report by the deadline.

On 4/4/19, Commission staff notified Respondents via first class mail of their failure to file this report and that a fine would be imposed.

On 4/18/19, Respondents filed the Preliminary Special Report.

On 4/18/19, Commission staff notified Respondents via first class mail that a fine of $200 was assessed for the late filing of the report.

On 4/18/19, Respondent Deslauriers informed Commission staff that Respondents will contest the $200 fine.  Respondents did not pay the fine by the deadline.

On 5/3/19, Commission staff sent Respondents a copy of the Complaint and set the matter on the 5/15/19 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, assess an administrative fine of $200 for the late filing of the report, and order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-340(g) within two (2) weeks of receipt of this order.

Commissioner Goodenow moved to make a preliminary determination that probable cause exists that a violation had been committed and to accept the fine and terms stated in the complaint.  Motion seconded by Vice Chair Shoda.  Motion carried (5-0).

Old Business
*Consideration, Discussion, and/or Update of Commission Legislation and Other Campaign Finance Related Bills/Resolutions for the 2019 Legislative Session
General Counsel Kam informed the Commission of the status of the Commission’s bills, other campaign finance related bills, and budget bills for the 2019 legislative session.

  • H.B. 165 – Governor Ige signed into law on 4/15/19 as Act 8 (committees to notify the Commission if they intend to spend $1,000 or less by a specified due date).
  • S.B. 138 – Pending Governor Ige’s approval or veto. Requires an October 1st report for candidate committees and added another report on April 30th for candidate committees.
  • S.B. 197 – Pending Governor Ige’s approval or veto. Allow donations to charities and full-time scholarship awards if the candidate wins outright or loses in the primary election.

Report from the Executive Director
Report on Compliance of Filing Timely Disclosure Reports
Executive Director Izumi-Nitao reported the following:

  • Final Election Period Report (reporting period 3/30/19 to 4/13/19 or 1/1/19 to 4/13/19) due on 5/13/19
    • Candidate Committees
      • 2 filed on time (100%)
    • Noncandidate Committees
      • 245 registered committees
      • 52 declared $1,000 or less
      • 226 filed on time (92%)
      • 0 filed late
      • 19 did not file (8%) (18 as of today)

The next report due will be the Supplemental Report (reporting period 4/14/19 to 6/30/19) due 7/31/19 to applicable committees.

As for prior reports, there was no new update.

With respect to compliance on prior matters before the Commission, Executive Director Izumi-Nitao and General Counsel Kam reported the following:

  • Kaniela Ing – Respondent has been making fine payments and amended reports are pending review.
  • Trinette Furtado – Parties are preparing for contested case hearing proceeding.

Reminder to File 2019 Annual Financial Disclosure Form with State Ethics Commission
Executive Director Izumi-Nitao reported that the Commissioners should have received an email from the State Ethics Commission on or about 4/18/19 informing them to file their annual financial disclosure form with the State Ethics Commission.  She reminded them that the form is due by 5/31/19.

EXECUTIVE SESSION
Chair Luke asked for a motion to convene Executive Session to consider and approve Executive Session minutes from the Commission meeting on 4/10/19.

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

*Public Session reconvened at 11:02 a.m.

Commissioner Markley moved to adjourn the meeting.  Motion seconded by Commissioner Lum.  Motion carried (5-0).

Meeting adjourned at 11:03 a.m.

Next Meeting:
Scheduled for Wednesday, June 12, 2019 at 10 a.m