Campaign Spending Commission

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 1403
November 18, 2015
9:00 a.m.

Commissioners Present
Gregory Shoda, Adrienne Yoshihara, Eldon Ching, Bryan Luke

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

Call to Order
Chair Shoda called the meeting to order at 9:00 a.m.

Consideration and Approval of Minutes of October 14, 2015 Meeting
Amendments proposed by Deputy Attorney General Kunimoto –

Page 3, New Business –
Docket No. 16-20 – In Re the Matter of Hawaii Independent Party and JoAnne Trask
-Last paragraph, first sentence amended to read:  “Commissioner Ching moved to make a preliminary determination that probable cause exists that a violation has been committed and to accept the fine as stated in Docket No. 16-20 (i.e., assess a fine of $200).”

-First paragraph, amended to read:  “Executive Director Izumi-Nitao reported that a complaint was filed alleging that Respondents were late in filing the Supplemental Report which was due on 7/31/15 and failed to pay the late filing report fine.”

Executive Director Izumi-Nitao stated that the second change should also be made on the following page:

Page 2, New Business – Docket No. 16-19 – In Re the Matter of Christy Ann Gusman, Aysia Valdez, and Friends of Christy Ann Gusman, first paragraph amended to read: “Executive Director Izumi-Nitao reported that a complaint was filed alleging that Respondents were late in filing the Supplemental Report which was due on 7/31/15 and failed to pay the late filing report fine.”

Commissioner Ching moved to approve the minutes of October 14, 2015 as amended.  Motion seconded by Commissioner Luke.  Motion carried (3-0) with Vice Chair Yoshihara abstaining because she was not in attendance for the October meeting.

New Business
Docket No. 16-15 – In Re the Matter of Matthew LoPresti v. Rida Cabanilla
General Counsel Kam reported that a complaint was filed by Complainant Matthew LoPresti alleging that Respondent Rida Cabanilla failed to report an expenditure in violation of HRS §11-333 and failed to place a disclaimer on an advertisement in violation of HRS §11-391.

Complainant LoPresti was Respondent Cabanilla’s challenger in the 2014 primary election.  Complainant LoPresti was elected into office in the general election.

On 11/1/15, Commission staff received a response from Respondent Cabanilla.  Respondent Cabanilla indicated that she paid for the mailer with personal funds which did not require reporting in a disclosure report.

Commission staff also found that the mailer is not an “advertisement” as defined in HRS §11-302 and the disclaimer would not be required.

Staff requested that Respondent Cabanilla provide Commission staff a copy of the check or credit card statement showing that she paid for the mailer.  To date, the information has not been received.  Staff recommended that the matter be deferred until the next meeting.

Vice Chair Yoshihara moved to defer the matter until the next meeting.  Motion seconded by Commissioner Luke.  Motion carried (4-0).

Docket No. 16-19 – In Re the Matter of Matthew LoPresti v. Bryan Jeremiah
General Counsel Kam reported that a complaint was filed by Complainant Matthew LoPresti  alleging that Respondent Bryan Jeremiah failed to report the purchase of a mailing list in violation of HRS §11-333.

On 10/19/15, Commission staff received Respondent Jeremiah’s response to the complaint.  Respondent claims that the vendor Reskyu provided the mailing list and that the cost for the list was included with the cost of the printing.

Commission staff confirmed with the vendor that they do provide mailing lists to customers upon request, and the cost of the list, if any, will be added to the customer’s invoice.

Staff recommended that the complaint be dismissed for failure to provide sufficient statements to support a claim that a law or rule had been violated pursuant to Hawaii Administrative Rule §3-160-71(3).

Commissioner Ching moved to dismiss the complaint pursuant to Hawaii Administrative Rule §3-160-71(3).  Motion seconded by Vice Chair Yoshihara.  Motion carried (4-0).

Report on 2015 Annual Online Survey
Executive Director Izumi-Nitao stated that this the 4^th year of the survey which was launched on 9/14/15.

Associate Director Baldomero reported that the survey consisted of 37 questions in 6 categories. The survey closed on 11/1/15 and yielded 128 responses.  The following are some of the responses to questions in the 6 categories:

• 1 – Background Info highlights
  • Mostly treasurers followed by candidates did the survey.
  • 70% were from candidate committees or noncandidate committees.
  • 59% of the responses were from Oahu.
  • 55% have had a Campaign Spending Commission (“CSC”) relationship for more than 3 years (i.e., experienced with CSC).
  • 2/3 filed CSC reports, been involved in campaign activities, or made a contribution or loan to a candidate committee.

• 2 – Communication/Access highlights
  • Website continues to be #1 source for obtaining information followed by phone calls or visits to the office. Guidebooks, manuals, and eblasts are also popular.
  • Social media engagement is still lacking.

• 3 – Education/Training highlights
  • 57% never attended CSC training so may not be a favorable method or classes not at convenient time/location.
  • About ½ have viewed guidebooks/manuals.
  • Filing reports followed by viewing reporting schedules and candidate committee reports seem to drive people to our website.
  • Searchable database is a helpful tool that is being used to obtain information.

• 4 – Compliance/Enforcement highlights
  • Majority are a compliant group having always filed their reports on time (under 50%), never entered into a conciliation agreement, and never had an administrative complaint filed against them.

• 5 – Public Funding highlights
  • Majority support public funding but only a small number have qualified/received public funding, and for those who did, only a very small amount received the maximum amount for the office that they were seeking.

• 6 – Other highlights
  • Majority knew CSC operations depend on the $3 check-off, that it did not affect their tax liability, that they will check-off the next time they file their state tax return, and that they support a general fund appropriation to see public funding continue.
  • Concern over Super PACs is split in half.

The following are some suggestions to the open-ended questions:

• Hold workshops earlier in the year;
• Provide videoconference training;
• Allow unlimited voluntary donation to the Hawaii Election Campaign Fund;
• Provide higher fines for late reporting and have a de minimus penalty for honest errors;
• No corporate contributions;
• Weekly contribution reports;
• Provide a CSC email address (to which Associate Director Baldomero commented that this will be launched in the upcoming future);
• Provide for multiple emails for eblast reminders; and
• Provide for email confirmation for faxed documents.

Executive Director Izumi-Nitao stated that following this meeting, the survey findings will be posted on the Commission’s website.  She further recommended that the survey be done every year.

Commissioner Shoda commented that the survey provides feedback for the Commission and should be done every year.

Consideration and Discussion of Commission Legislation for 2016 Legislative Session
General Counsel Kam presented Commissioners the proposed legislation for the upcoming 2016 Legislative Session.   He stated that staff will be submitting the following 4 amendments for consideration:

• HRS §11-334 → to clarify the language pertaining to the due dates of disclosure reports for candidates. The proposed amendment also makes clear that all candidates must file the January 31^st Supplemental Report every year, not just after an election year.  Staff has been trying to amend this section for the last four legislative sessions.
• HRS §11-340(c) → to include the new 2^nd Preliminary General Report for noncandidate committees (Act 79, SLH 2015) in the fine provision.
• HRS §11-363 → to place the treatment of the republication of a candidate’s campaign material in a separate subsection and to add four allowable uses of a candidate’s campaign material.
• HRS §11-410 → to raise the amount of the fine that can be assessed against a person other than an individual from $1,000 to $5,000 and to permit for the fine to be up to three times the amount of the unlawful contribution or expenditure. Also allows the Commission to recover its costs (e.g., investigative services) when pursuing violations of the law.

Discussion ensued on whether the recovery of costs (e.g., investigative services) would be allowable.  General Counsel Kam stated that it has not been done, but we are asking that it be considered.

Vice Chair Yoshihara moved to approve the proposed legislation for the 2016 Legislative Session.  Motion seconded by Commissioner Ching.  Motion carried (4-0).

Old Business
Draft Advisory Opinion 16-01 – Government Contractors
General Counsel Kam reported that staff has not heard from the Attorney General’s Office regarding the draft advisory opinion and requested that the matter be deferred until the next meeting.

Mr. Imran Naeemullah of Chun Kerr LLP, representing the contractor, has been informed as to the status of the draft advisory opinion.

Commissioner Luke moved to defer the matter until the next meeting.  Motion seconded by Chair Shoda.  Motion carried (4-0).

Discussion and Approval of Proposed Amendments to the Hawaii Administrative Rules Affecting Campaign Spending Commission
General Counsel Kam stated that since the last meeting, the staff has additional amendments and comments concerning the Hawaii Administrative Rules (“HAR”).  Specifically, the proposed new section to the HAR §3-160-54 “Depletion of fund” has been amended to include language to define “near depletion”; in HAR §3-160-42(b)(9) the original language regarding compensation of personal services paid to candidate’s immediate family has been restored; and, HAR §3-160-45(b)(2) the reference to (4) has been changed to (3).

Executive Director Izumi-Nitao stated the proposed rule regarding “near depletion” is important and necessary because under HRS §11-422(a), the Commission shall be under no obligation to provide public funding to candidates if the Hawaii Election Campaign Fund is near depletion.

Associate Director Baldomero provided 3 scenarios for the life expectancy of the Hawaii Election Campaign Fund (“HECF”).

-For Scenario 1, using 5-year averages on the receipts and expenditures of the HECF, his calculation for “close to depletion” would be $818,329 which would be reached in February 2018, and “near depletion” would be $628,048 which would be reached in August 2018, with the end of life for the HECF being in fiscal year 2020.

-For Scenario 2, using fiscal year 2015 HECF receipts and expenditures, his calculation for “close to depletion” would be $818,329 which would be reached in August 2017, and “near depletion” would be $628,048 which would be reached in December 2017 with the end of life for the HECF being in fiscal year 2019.

-For Scenario 3, using fiscal year 2015 HECF receipts and expenditures with lower or adjusted public fund totals (due to the anomaly created when a gubernatorial candidate qualified and received public funding in the 2014 election), his calculation for “close to depletion” would be $818,329 which would be reached in August 2017, and “near depletion” would be $628,048 which would be reached in December 2017, with the end of life for the HECF being in fiscal year 2019.

Discussion ensued regarding the definition of “near depletion” and “close to depletion.”  General Counsel Kam stated that if operating expenses including salaries become general funded, near depletion may not be an issue, but if it is not, the near depletion question will come up and a definition will be needed.

Executive Director Izumi-Nitao stated that she has had discussions with DAGS and Budget & Finance regarding the status of the Hawaii Election Campaign Fund.

Commissioner Luke moved to approve the proposed administrative rule amendments.  Motion seconded by Commissioner Ching.  Motion carried (4-0).

Report from Executive Director
Report on Compliance of Filing Timely Disclosure Reports
Executive Director Izumi-Nitao reported that there were no new updates on the Supplemental Report that was due on 7/31/15.

Report on Upcoming 2015 COGEL Conference
Executive Director Izumi-Nitao reported that the conference is being held on 12/6/15 through 12/9/15 in Boston, MA, and that she, Associate Director Baldomero, and Commissioner Ching will be attending.  Commissioner Ching will also be doing a Breakfast Table Topic.  Executive Director Izumi-Nitao will also be attending Steering Committee meetings on 12/5/15 and 12/9/15.

Report on E-Signature Filings
Executive Director Izumi-Nitao reported that staff is working to be able to accept e-signed forms.  Staff is working with the Office of Enterprise Technology Services (“ETS”) to employ 5 candidate committee forms and 3 noncandidate committee forms to be electronically filed.  The Commission’s website is being modified to allow for both electronic and paper filing.  Target launch date is 2/1/16.

Report on Government Private Cloud (“GPC”) Migration
Executive Director Izumi-Nitao reported that the state is working to migrate the filing system information to the GPC server.  The stabilization of the filing systems have been completed, and the migrating of the 8 systems to the GPC has been scheduled for 11/30/15 to 12/2/15 which means that the filing systems would be offline.

Associate Director Baldomero stated that during his testing on the GPC system, the response time of the filing systems was slow with just a few users and he was concerned that it would be a problem during a reporting period.  He stated that ETS is working on improving the response time and that the migration would not happen until the response time improves.

Vice Chair Yoshihara 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).

Public session reconvened – 10:42 a.m.

Next Meeting:
Scheduled for Wednesday, December 16, 2015.

Vice Chair Yoshihara moved to adjourn meeting.  Motion seconded Commissioner Luke. Motion carried (4-0).  Meeting adjourned at 10:45 a.m.