Campaign Spending Commission

Campaign Spending Commission Meeting
Zoom Video Conference
May 8, 2024
10:00 a.m.

Commissioners Present
David Chee, Vic Bonfiglio, Jon Itomura, Stanley Lum

Commissioners Excused
Neal Herbert

Staff Present
Kristin E. Izumi-Nitao, Tony Baldomero, Gary Kam, Terence Lau, Anthony Diep
Deputy Attorney General Candace Park 

Guests
Kaniela Ing, Evan Weber, Dan Nakaso, Blaze Lovell, Ashley Mizuo, “DaysogR”, Mike Kaspar, Daryl Huff

Call to Order
Vice-Chair Chee called the meeting to order at 10:05 a.m.

Vice-Chair Chee went over the procedures for the remote meeting via Zoom and introduced the Commissioners and Commission staff who were present.  He stated that he will preside over this meeting because Chair Herbert had a last minute conflict.

Vice-Chair Chee stated that at the start of this meeting, he received Respondent Kaniela Ing’s response to Docket No. 23-29 – In Re the Matter of Mark Ing and Friends of Kaniela Ing.  To permit the Commissioners the opportunity to review the response, he stated that the matter would be placed at the end of the agenda after a break so the Commissioners could review the 12-page response.

Consideration and Approval of Minutes of Meeting on 3/13/24
Commissioner Bonfiglio moved to approve the amended minutes of the meeting held on 3/13/24.  Motion seconded by Commissioner Lum.  Motion carried (4-0).

New Business
*Proposed Conciliation Agreement No. 24-12 – In Re the Matter of Dr. Nick’s Supporters – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requested that they assess a reduced fine from $200 to $66.67 as it is Respondent’s first violation.  Vice-Chair Chee asked if there were any comments or questions.

Commissioner Bonfiglio moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Lum.  Motion carried (4-0).

*Docket No. 24-05 – In Re the Matter of Thora-Jean Cuaresma, Judy Miram, and TJ CUARESMA – CANDIDATE SD22 – Executive Director Izumi-Nitao stated that the complaint was mailed to Respondents on 4/10/24 and there has been no response.  She confirmed that Respondents were not present at the meeting, and recommended that the matter be continued to the Commission’s next meeting on 6/12/24 to permit the rebuttable presumption that a violation has occurred under HRS §11-403(c) to mature.

Commissioner Lum moved to continue this matter to the Commission’s meeting on 6/12/24.  Motion seconded by Commissioner Bonfiglio.  Motion carried (4-0).

Old Business
*Proposed Conciliation Agreement No. 24-11 – In Re the Matter of Sue Martin – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns an excess contribution of $1,000 to a candidate committee (Friends of Ernest Z. Kanamu Balinbin) and requested that they assess a reduced fine from $350 to $116.67 as it is Respondent’s first violation. She reported that this matter was continued from the 3/13/24 Commission meeting because staff had not received the $1,000 escheat to the Hawaii Election Campaign Fund from the candidate committee.  She stated that staff has received the escheat.

Commissioner Bonfiglio moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Lum.  Motion carried (4-0).

*Per Vice-Chair Chee, place Docket No. 23-29 – In Re the Matter of Mark Ing and Friends of Kaniela Ing at the end of the agenda to permit Commissioners time to review Respondent Kaniela Ing’s response.

*Consideration, Discussion, Approval, and/or Update of Commission Legislation and Other Related Bills/Resolutions for the 2024 Legislative Session – General Counsel Kam reported on the status of the Commission’s bills as well as other campaign finance related bills.  He stated that all of the Commission’s bills died and that there are only 2 campaign finance bills that remain – HB 2072 (prohibits deceptive solicitations of contributions connected to disasters) which was signed into law as Act 16, SLH 2024, and SB 2687 (prohibits deep fake advertising) which staff recommended approval, but noted concerns, and is before the Governor for consideration.

General Counsel Kam asked if there were any questions.  There were none.

Report from Executive Director
*Report on Compliance of Filing Timely Disclosure Reports – Executive Director Izumi-Nitao provided an update on compliance of past disclosure reports. With respect to the last report that was due (i.e., 1A Preliminary Primary Report), she reported that there were 45 candidate committees who were required to file this report of which 42 filed on time and 3 failed to file.  As of today, all candidate committees have filed this report.  With respect to prior reports, she stated that many of the non-filers represent the same committees that have failed to file prior reports and have been referred to the Attorney General’s Office – Civil Recoveries Division for enforcement proceedings.

*Update on CSC In-Person Training – Associate Director Baldomero reported that staff has scheduled in-person trainings on all islands for candidate committees at 9:30 a.m.  He reported on the following information:

(1) 5/21/24 Training on Hilo – 5 registered;
(2) 5/23/24 Training on Kauai – 1 registered;
(3) 5/28/24 Training on Maui – 7 registered; and
(4) 5/30/24 Training on Oahu – 20 registered for candidate committee training and 17 registered for noncandidate committee training scheduled for 1:30 p.m.

He stated that staff will confirm the trainings with registered participants and encouraged Commissioners to attend if they are available so they can be introduced to the committees.  If there is less than 5 people confirmed to attend, staff will cancel in-person training in consideration of the expense and resources.

*Update on Obtaining Additional Staff Positions – Executive Director Izumi-Nitao reported that she was unsuccessful in obtaining additional staff positions this year, but will request for positions and funds in next year’s budget as well as submit in a legislative bill(s).

*Consideration and Approval of Executive Session Minutes of Meeting on 3/13/24 – Vice-Chair Chee asked if there were no corrections or amendments to the proposed executive session minutes on 3/13/24, he would ask for a motion in open session.

Commissioner Bonfiglio moved to approve the executive session minutes on 3/13/24.  Motion seconded by Commissioner Lum.  Motion carried (4-0).

*At 10:35 a.m., Commission recessed for 20 minutes to permit Commissioners to review Respondent Kaniela Ing’s response in Docket No. 23-29 – In Re the Matter of Mark Ing and Friends of Kaniela Ing.  Returned to Old Business at 10:55 a.m.

*Docket No. 23-29 – In Re the Matter of Mark Ing and Friends of Kaniela Ing – General Counsel Kam reported that this matter was continued by the Commissioners at the 2/14/24 and 3/13/24 meetings to permit Respondent Ing to provide any written materials to the Commission by 4/24/24 (i.e., 2 weeks before this meeting).  At the 3/13/24 meeting, Respondent indicated that he understood that 4/24/24 was a hard deadline and non-negotiable.

He stated that no written materials were sent to the Commission on 4/24/24.  However, in the afternoon of 4/24/24, Respondent Ing sent an email to staff asking for an extension of time to submit his response and suggested a new deadline of 5/01/24.  On 4/25/24, General Counsel Kam sent an email to Respondent Ing informing him that only the Commission could extend the deadline as the deadline was ordered by the Commission, but staff would forward the extension deadline to the Commissioners.  On 5/01/24, staff did not receive Respondent Ing’s written response.  However, on 5/6/24, less than 48 hours before this meeting, Respondent Ing emailed Commission staff a 12-page response which was sent to the Commissioners at 10 a.m. this morning in compliance with Sunshine laws.

General Counsel Kam reported also that no attorney has contacted him, and in Respondent’s 5/6/24 response, he acknowledged that attorney Bill Harrison will not be representing him.

General Counsel Kam stated that upon review of Respondent’s response, no evidence was presented to show that the amended reports filed by Respondent were true and accurate.  The response cites to procedural issues and requests dismissal of all counts.

General Counsel Kam recommended that the Commission make a preliminary determination, pursuant to Hawaii Revised Statutes (“HRS”) §11-405(a), that there is probable cause to believe that the Hawaii campaign finance law has been violated by Respondents, assess an administrative fine in the amount of $18,250 against Respondents in accordance with HRS §11-410 and the Schedule of Fines adopted by the Commission pursuant to Hawaii Administrative Rules (“HAR”) §3-160-73(a) as follows:

Count I (Failure to Keep Records):  $1,000
Count II (False Report):  $750
Count III (False Report):  $750
Count IV (False Report):  $750
Count V (False Report):  $750
Count VI (False Report):  $750
Count VII (False Report):  $750
Count VIII (False Report):  $750
Count IX (False Report):  $750
Count X (False Report):  $750
Count XI (False Report):  $750
Count XII (False Report):  $750
Count XIII (False Report):  $750
Count XIV (False Report):  $750
Count XV (False Report):  $750
Count XVI (False Report):  $750
Count XVII (False Report):  $750
Count XVIII (False Report):  $750
Count XIX (False Report):  $750
Count XX (False Report):  $750
Count XXI (False Report):  $750
Count XXII (False Report):  $750
Count XXIII (False Report):  $750
Count XXIV (False Report):  $750

Further, General Counsel Kam recommended that the Commission order that any and all administrative fines be paid within thirty days of Respondent Ing’s receipt of the order and that the fines be deposited in the general fund, pursuant to HRS § 11-410(e).  Lastly, he recommended that Respondents be placed on inactive status with the Commission (as long as Respondents do not trigger the campaign finance laws to file mandatory disclosure reports) pending payment of the fine.  He stated that staff believes that it would be pointless to again order Respondents to correct or amend their inaccurate disclosure reports, and thus, does not recommend an order requiring them to do so.

Vice-Chair Chee asked and confirmed with Respondent Ing that he was not being represented by an attorney, and that a hard deadline had been discussed with him at the 3/13/24 Commission meeting to which he had agreed to.  He further stated that he was interested in seeing if Respondent Ing had facts or information that would negate or challenge the counts in the complaint.

With respect to Count I, Failure to Keep Records, Vice-Chair Chee asked Respondent Ing if he understood the count.  He further clarified that by records, he is referring to items such as bank records, receipts, and debit card statements.

Respondent Kaniela Ing was present by zoom.  He stated that he did not hear from Mr. Harrison until just 2 days ago and that Mr. Harrison spoke with Commission staff.  He further stated that he understood that he had to keep records for 5 years, but that the reports were filed over 13 years ago and that there was no legal requirement to keep bank records.  He said that he only has access to his debit card records and receipt of purchases, but not bank records.

General Counsel Kam stated that this case does not deal with the reports filed in Docket #18-08, but with the amended reports he filed in 2018 which are the subject of this complaint.  He stated that the law requires that Respondent Ing maintain records for a period of not less than 5 years after the amended reports were filed in 2018, or 2023 which is within the time period that this complaint was filed.  General Counsel Kam further reported that the Commission has given Respondent Ing his bank records twice, the second time which occurred recently before this meeting.  He commented that the 2018 amended reports contained over 150 new expenditures some of which appeared to be personal expenses and were not previously reported.  As such, he asked Respondent Ing for records to verify these expenditures on July 2, 2021.  To this day, Respondent Ing has not produced any records to substantiate the expenses reported in the amended reports.  He therefore found it unbelievable that Respondent Ing was able to amend reports without any records.

Respondent Ing stated that he is not in violation of the laws in the complaint; that it is irregular and illegal to charge him with false reports, but rather, a case should have been made that his reports were substantially defective and deficient, and that staff should have given him a chance to correct the defective reports; that it is impossible to be in violation if the legal process was illegal; that the recordkeeping requirement is well past 5 years since the corrections were made in August 2018; that he had no reason to falsify reports on records that Commission staff were in possession of; that he had no intent; that he has not run for office; that this is a serious hardship to him; and, that it is inappropriate for the Commission to single him out.

Commissioner Lum stated that Respondent Ing’s response sets forth comments he previously expressed as well as arguments against the procedure, but failed to address the counts in the complaint.  He said the law is the law and it was broken, and that the Commission is not picking on him.

Respondent Ing stated that he appreciated the empathy, but that the impact has been profound, that he is not guilty of false reports, that the charges are illegal, and that the reports are substantially deficient.  He said that the prosecutor has said that there is no probable cause.  He also stated that it was unusual for the Commission to suddenly revisit a case 5 years later.

General Counsel Kam stated that there is no statute of limitations in civil matters and commented that the case was not brought sooner because of a pending federal investigation.  He stated that Respondent Ing was aware of the Commission’s concerns of the amended reports pursuant to staff’s letter July 2, 2021 and that Respondent Ing claimed to have had records to substantiate the amended reports, but did not turn them over due to the advice of his attorney Bill Harrison because of the pending federal investigation.

Evan Weber was present by zoom and testified in support of Respondent Ing.  He said that he joined Respondent Ing 3 years ago to found Our Hawaii, a non-profit organization to get big money out of elections and support grassroot efforts.  He stated that the Commission should not be pursuing something Respondent Ing did many years ago over small items that he has already been fined for, and that the Commission should be pursuing larger issues.  He questioned the timing of the proceeding, stated that no other cases have been treated this way, and said that Respondent Ing has been instrumental to their cause and that the mistakes in this case are small.

Commissioner Lum asked Evan Weber what if Respondent Ing’s opponents were found in violation of campaign finance laws.  Evan Weber said that he would expect the Commission to pursue those matters in a fair and just manner.

Commissioner Itomura asked Evan Weber if his testimony has any relation to the facts in the complaint.  Evan Weber said that his testimony goes to Respondent Ing’s character and that he had no involvement (legal or formal) in Respondent Ing’s campaign.  Commissioner Itomura then asked for clarification if his position is that the Commission should not pursue candidates who make small mistakes or incur small violations.  Evan Weber said that it is important to ensure that reports are accurate, but that the Commission should focus on embezzlement and cases amounting to public harm rather than Respondent Ing’s case which involve minor discrepancies.  He stated that recordkeeping is harder for working class and grass roots candidates.

Commissioner Itomura asked Respondent Ing if he was asked to amend his reports in 2018 and whether it contained additional expenses.  Respondent Ing said yes.  Commissioner Itomura then stated that what the Commission had as of 2018 was the information provided to it by Respondent Ing in the amended reports.  Respondent Ing stated that the reports were wrong and that he amended them.  Commissioner Itomura said that in 2018, Respondent Ing had records to prepare the amended reports and that he needed to keep these records for 5 years upon filing the amended reports.  Respondent Ing said that he has records for the corrections, but nothing to explain the nature of the expenses and whether they were campaign related.

Commissioner Lum moved to go into 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.  Motion seconded by Commissioner Bonfiglio.  Motion carried (4-0).

*Commission went into Executive Session at 12 p.m.  Executive Director Izumi-Nitao, General Counsel Kam, and Associate Director Baldomero were excused.

*Commission returned into public session at 12:48 p.m.  Executive Director Izumi-Nitao, General Counsel Kam, and Associate Director Baldomero returned.

Vice-Chair Chee stated that the Commissioners consulted with their attorney, Deputy Attorney General Candace Park, and that they have concluded their attorney-client communication.

Vice-Chair Chee commenced to break up the complaint into 3 issues.  With respect to the first issue, he stated that Respondent Ing’s response requests declaratory relief concerning the application of recordkeeping rules (i.e., HAR §3-160-23).  Commissioner Itomura stated that Respondent Ing admitted to filing reports in 2018 and that even if those records may have been dated earlier, the law requires that he maintain them for 5 years from the date of filing the amended reports.  He was therefore required to keep his records from the report filing in 2018.

Commissioner Itomura moved to deny Respondent Ing’ request for declaratory relief because HAR §3-160-23 was correctly applied.  Motion seconded by Commissioner Lum.  Motion carried (4-0).

With respect to the second issue, Vice-Chair Chee stated that he would like to address whether the Commission is able to make a preliminary determination of probable cause that Respondents violated the campaign finance laws as set forth in the complaint.

Commissioner Itomura moved to make a preliminary determination that probable cause exists to believe that Respondents violated provisions of the Campaign Finance Law as set forth in the complaint.  Motion seconded by Commissioner Lum.  Motion carried (4-0).

With respect to the third issue, Vice-Chair Chee stated that he would like to discuss the remedies.  He asked Commission staff if the fines set forth in the complaint are consistent with the Standard Fine Guidelines.  General Counsel Kam stated that the fines in the complaint are from the guidelines which were voted on and adopted by the Commissioners at a public meeting and are posted on the Commission’s website.  Pursuant to the Standard Fine Guidelines, Count I has a $1,000 fine and Counts II-XXIV have a $750 fine because it is Respondent Ing’s second violation (i.e., the first violation was assessed in Docket #18-08).  Executive Director Izumi-Nitao further stated that the statutory basis for these fines is HRS §11-410 and HAR §3-160-73(a).

Vice-Chair Chee asked if the Commission has ever deviated from the guidelines.  Commissioner Lum also asked what mitigating circumstances have been presented in the past to lower fines (if any).  General Counsel Kam recalled the following instances, all of which concerned the late filing of a report, where it was impossible for the committee to file the report on time:  A noncandidate committee was unable to file its report due to Super Storm Sandy, and thus, no Internet service was available to electronically file the report on the deadline; and, two candidate committees whose treasurer was taken to the hospital in an emergency on or about the date a report was due, and thus, was unable to file the report on time. The candidates did not know about the hospitalization of the treasurer until they received notice of the unfiled report from the Commission.

Vice-Chair Chee asked staff how long they have been with the Commission, and based on the responses (i.e., Executive Director Izumi-Nitao and General Counsel Kam for around 13 years, and Associate Director Baldomero for over 30 years), concluded that in the last 30+ years, there has been very limited times of deviation from the Schedule of Fines.

Commissioner Bonfiglio stated that in consideration of Respondent Ing’s letter, his belief that fines should be affordable, and that fines may be assessed in accordance with their discretion, he recommended that a total of fine of $100 be assessed.

Vice-Chair Chee asked what the impact would be if a nominal fee is assessed.  Executive Director Izumi-Nitao commented that it would weaken transparency and accountability as well as impact compliance and deterrence.  She further commented that mitigation of the fine has only occurred when it was impossible to file the report on time and that Respondent Ing has been given numerous opportunities to amend his reports properly.

Commissioner Itomura inquired about a payment plan.  General Counsel Kam stated that staff works out payment plans with Respondents.

Commissioner Bonfiglio moved to reduce the fines to $100.  There was no second to the motion.  The motion failed.

Commissioner Lum moved to approve staff’s recommendation to assess administrative fines and place Respondents on inactive status as set forth in the complaint.  Motion seconded by Commissioner Itomura.

Discussion ensued in amending the motion concerning a payment plan, but was withdrawn as staff could negotiate that with the Respondent.

Before the motion was voted on, Commissioner Bonfiglio asked if they could ask for Respondent Ing’s input.  Deputy Attorney General Park stated that there was no reason they could not.

Respondent Ing reiterated his concerns and said that he is willing to post all of his records online and that filing reports is challenging for him. He encouraged the media to look into his reports as the mistakes are minimal such as the wrong gas station address and name of the business.  He further commented that he was not offered a conciliation agreement.

Executive Director Izumi-Nitao stated that Respondent Ing was not eligible for a conciliation agreement per the Standard Fine Guidelines.

Vice-Chair Chee asked if Respondent Ing could come up with a proposed fine amount for the Commission’s consideration upon conclusion of this matter.  Executive Director Izumi-Nitao stated no.

Vice-Chair Chee called for the vote.  Motion carried (3-1) (Commissioner Bonfiglio opposed).

Executive Session
*Pursuant to Hawaii Revised Statutes section 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 Hawaii Revised Statutes section 11-352 concerning straw donors and section 11-355 concerning government contractors – Vice-Chair Chee recommended that this be moved to the Commission’s next meeting on 6/12/24.

Commissioner Bonfiglio moved to continue this matter to the Commission’s meeting on 6/12/24.  Motion seconded by Commissioner Lum.  Motion carried (4-0).

Next Meeting:
Scheduled for Wednesday, June 12, 2024.

Vice-Chair Chee asked for a motion to adjourn the meeting.  Commissioner Bonfiglio moved to adjourn the meeting.  Motion seconded by Commissioner Lum.  Motion carried (4-0).

Meeting Adjourned at 1:38 p.m.