Campaign Spending Commission

Campaign Spending Commission
Zoom Video Conference
November 18, 2022
9:00 a.m.

Commissioners Present
Stanley Lum, Maryellen Markley, Ph.D., Neal Herbert, Vic Bonfiglio, Bryan Luke (joined at 9:24 a.m.)

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

Guests
Mark Kaniela Ing, Robert M. Armstrong

Call to Order
Chair Lum called the meeting to order at 9:08 a.m.

Chair Lum went over the procedures for this meeting via Zoom and introduced the Commissioners and Commission staff who were present.  He also asked the Commissioners if anyone else was with them.  All the Commissioners present stated that no one else was with them.

Consideration and Approval of Minutes of Meeting on 10/26/22
Chair Lum called for approval of the 10/26/22 meeting minutes. Commissioner Bonfiglio moved to approve the minutes on 10/26/22.  Motion seconded by Commissioner Herbert.  Motion carried (4-0).

New Business
Executive Director Izumi-Nitao stated that the Conciliation Agreements on the agenda were 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 the 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 agreements.  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 the proposed agreements.

*Proposed Conciliation Agreement No. 23-25 – In Re the Matter of Maui Pono Initiateves – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the 1st Preliminary General Report and requests that they assess a reduced fine from $250 to $83.33 as it is Respondent’s first violation. Chair Lum asked if there were any comments or questions.

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

*Proposed Conciliation Agreement No. 23-26 – In Re the Matter of Dr. Nick’s Supporters – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the failure to have advertisement disclaimers and requests that they assess a reduced fine from $50 to $16.67 as it is Respondent’s first violation. Chair Lum asked if there were any comments or questions.

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

*Proposed Conciliation Agreement No. 23-27 – In Re the Matter of Kelly J Armstrong – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the 2nd Preliminary General Report and requested that they assess a reduced fine from $300 to $100 as it is Respondent’s first violation.  She informed the Commissioners, however, that Mr. Kelly Armstrong submitted a statement via email before this meeting requesting for an elimination of the fine and the emailed statement was distributed to the Commissioners at the start of this meeting.  Commission staff called Mr. Armstrong and left him a voicemail to explain that if he wants to contest the fine, the matter will need to go through the complaint process, but the staff has not heard back from him.

Commissioner Herbert moved to defer the matter to the next meeting in light of Mr. Armstrong’s email statement.  Motion seconded by Commissioner Bonfiglio.  Motion carried (4-0).

*Docket No. 23-19 – In Re the Matter of Ilya Barannikov and Friends of Ilya – Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against Respondents for the failure to amend their Organizational Report and the late filing of the Final Primary Report.

She reported that Respondent Barannikov filed nomination papers to be a candidate in the 2022 election.

She reported that in the Organizational Report filed with the Commission, Respondent Barannikov is the candidate and treasurer of the candidate committee called Friends of Ilya.

Pursuant to HRS §11-322(a), a candidate committee’s Organizational Report must include, among other things, “the name and address of each depository institution in which the committee will maintain any of its accounts and the applicable account number.”

HRS §11-322(b) provides that any change in information previously reported in the organizational report under HRS §11-322(a) “shall be electronically filed with the commission within ten days of the change being brought to the attention of the committee chairperson or treasurer.”

Upon review of Respondent Barannikov’s Organizational Report filed on 5/12/22, Commission staff noticed that Respondents failed to provide their bank account information.

On 8/9/22, Commission staff sent Respondents a letter via first class mail informing them that their Organizational Report had to be amended by 8/23/22 and that their failure to amend their Organizational Report violates campaign finance laws and of the imposition of an administrative fine if it was not amended.

Respondents did not amend their Organizational Report by 8/23/22.

On 9/7/22, Commission staff sent Respondents a letter via first class mail notifying them that a fine of $50 will be assessed against them for failing to amend the Organizational Report pursuant to HRS §11-322(b).  The letter informed Respondent Barannikov that he could avoid the complaint process by waiving his rights to be heard at a HRS chapter 92 public meeting and a HRS chapter 91 contested case hearing, and voluntarily paying the fine amount and filing an amended Organizational Report by 9/22/22.

On 10/6/22, Respondent Barannikov electronically filed his Organizational Report to include his committee’s depository information.

Pursuant to HRS §11-334(a)(2), Respondents were required to file the Final Primary Report for the period covering 7/30/22 through 8/13/22 by 11:59 p.m. Hawaii standard time on 9/2/22.  Respondents did not file the report by the deadline.

On 9/6/22, Commission staff notified Respondents via first class mail of their failure to file the report and that a fine would be imposed.

On 10/6/22, Commission staff called Respondent Barannikov regarding his Final Primary Report, but was unable to leave a voicemail because his voicemail was not set up; however, Respondent Barannikov returned Commission staff’s call and Commission staff told him to file his Final Primary Report.

On 10/6/22, Respondent Barannikov electronically filed the Final Primary Report.

On 10/6/22, Commission staff sent Respondent Barannikov a letter via first class mail notifying him that a fine of $210.94 will be assessed against them for the late filing of the Final Primary Report pursuant to HRS §11-340.  The letter informed Respondent Barannikov that he could avoid the complaint process by waiving his rights to be heard at a HRS chapter 92 public meeting and a HRS chapter 91 contested case hearing, and voluntarily paying the fine amount by 10/20/22.

Respondent Barannikov did not voluntarily pay the late $50 fine for his failure to timely amend his Organizational Report or the $210.94 fine for failing to timely file the Final Primary Report.

On 10/28/22, Commission staff attempted to phone Respondent Barannikov at the phone number listed on his Organizational Report to follow-up on the outstanding fines, but the number was no longer working.

On 11/7/22, Commission staff sent Respondent Barannikov a copy of the complaint and set the matter on the 11/18/22 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 $50 for the failure to amend the Organizational Report and $210.94 for the late filing of the Final Primary Report, order that the fine be paid from the candidate’s personal funds if the candidate committee’s funds are insufficient to pay the fine, and order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-340(g).

Commissioner Herbert inquired as to when the law goes into effect regarding concurrent criminal prosecution.  Commission staff noted that it goes into effect in January 2023.

Commissioner Bonfiglio 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 Herbert.  Motion carried (4-0).

Commissioner Luke joined the meeting at 9:24 a.m.

*Docket No. 23-20 – In Re the Matter of Tiana Wilbur, Chablis Cambra, and Tiana for Truth – Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against Respondents for the late filing of a Notice of Intent to Hold a Fundraiser.  She reported that Respondent Wilbur was a candidate in the 2022 election but was unsuccessful in the general election.

Respondents held a fundraiser on Sunday, 9/18/22 for which the price or suggested contribution was more than $25 per person.  Respondents electronically submitted their Notice of Intent to Hold a Fundraiser via eSign on Saturday, 9/17/22.  Notably, at the bottom of the Notice of Intent to Hold a Fundraiser form, it states that: “Notices for fundraisers held on Saturday, Sunday or state Holidays must be submitted to our office before 4:30 p.m. on the last business day prior to the Saturday, Sunday or State Holiday.”  Because it was electronically submitted on a Saturday, Respondents’ Notice of Intent to Hold a Fundraiser did not get filed with the Commission until Monday, 9/19/22 which was after the fundraiser.

HRS §11-342(b) provides that the Notice of Intent to Hold a Fundraiser shall be filed with the Commission prior to the fundraiser.  Therefore, for it to have been timely filed, the fundraiser notice should have been filed with the Commission by Friday, 9/16/22 by 4:30 p.m.

On 9/19/22, Commission staff sent Respondents a letter via first class mail informing them that a fine of $25 would be imposed.  Respondents did not voluntarily pay the late notice of fundraiser fine.  Upon following up with Respondent Wilbur about the outstanding fine payment, she informed the Commission staff that she wanted to contest the fine.  However, Respondent Wilbur has made her $25 fine payment on 11/17/22, and therefore, Executive Director Izumi-Nitao recommended that the Commission dismiss the complaint due to compliance.

Commissioner Bonfiglio moved to dismiss the complaint. Motion seconded by Vice Chair Markley. Motion carried (5-0).

Old Business
*Docket No. 23-13 – In Re the Matter of Mark Ing and Friends of Kaniela Ing – General Counsel Kam reported that a complaint by the Executive Director had been filed against Mark Ing and Friends of Kaniela Ing for the failure to file the Supplemental Report.

He reported that in the Organizational Report filed with the Commission, Respondent Mark Ing is the candidate and treasurer of the candidate committee called Friends of Kaniela Ing.

Respondent Ing did not run as a candidate in the 2022 election.

Pursuant to HRS §11-334(b), Respondents were required to file the Supplemental Report for the period covering 1/1/22 through 6/30/22 by 11:59 p.m. Hawaii standard time on 8/1/22.  Respondents did not file the report by the deadline.

On 8/2/22, Commission staff notified Respondents via first class mail of their failure to file the report and that a fine would be imposed.

On 8/29/22, Commission staff phoned Respondent Ing and left a voicemail informing them that if the report was not filed, a complaint would be filed.

Respondents did not file the report.

On 9/6/22, Commission staff sent Respondents a copy of the complaint and set the matter on the 9/22/22 Commission agenda.

At the 9/22/22 Commission meeting, the complaint was deferred to the October meeting because it was returned as undeliverable. Upon being informed by the Commission staff that Respondents’ address needed to be updated on their Organizational Report, Respondent Ing filed an amended Organizational Report with a current mailing address and the complaint was sent to Respondents with an amended Certificate of Service.

Respondents did not file the Supplemental Report or pay the fine.

At the 10/26/22 Commission meeting, the complaint was deferred to this meeting because staff requested that staff be allowed to amend the complaint and because Respondent Ing requested a continuance of his case.

On 11/4/22, Commission staff sent Respondents a copy of the amended complaint and set the matter on the 11/18/22 Commission agenda.

Respondent Ing was elected to serve in the House of Representatives, District 11, in the 2012, 2014, and 2016 elections. There have been seven (7) prior complaints filed against Respondents for campaign finance violations.

In 2012, Respondent Ing was fined $250 for filing a late 1st Preliminary Primary Report and $300 for filing a late 2nd Preliminary Primary Report. Two complaints were filed by third parties and Respondent Ing was fined $25 for failing to file a fundraiser notice (i.e., Docket No. 13-03) and $350 for failing to report expenditures as well as the untimely submission of loan documents (i.e., Docket No. 13-10).  Respondent Ing paid the fines.

In 2014, Respondent Ing was fined $200 for filing a late Final Primary Report.  Respondent Ing paid the fine.

In 2015, a Commission complaint was filed for Respondent Ing’s failure to pay a $50 fine for the late filing of the Supplemental Report (i.e., Docket No. 16-13).  Respondent Ing paid the fine.

In 2016, a Commission complaint was filed for Respondent Ing’s failure to pay a $300 fine for the late filing of the Preliminary General Report and a $50 fine for failing to file an amended Organizational Report (i.e., Docket No. 17-25).  Respondent Ing paid the fine.

In 2017, a Commission complaint was filed for Respondent Ing’s failure to pay a $25 fine for the late filing of a fundraiser notice (i.e., Docket No. 17-35).  Respondent Ing paid the fine.

In 2018, a Commission complaint containing thirty-two (32) campaign finance law violations was filed (i.e., Docket No. 18-08):

• Counts I & II – Failure to Amend Organizational Report – $50 fine/each;
• Count III – Unauthorized Handling of Campaign Funds – $100 fine;
• Count IV-XXVI – 23 False Reports (2011-2016) – $500 fine/each and file 23 amended reports;
• Count XXVI(A) – Failure to Timely Deposit Contributions – $300 fine;
• Count XXVII – Excess Contribution – $2,000 escheat;
• Count XXVIII – Commingling of Campaign & Personal Funds – $1,000 fine and $2,000 personal reimbursement to candidate committee;
• Count XXIX – Prohibited Use of Campaign Funds / Use of Campaign Funds for personal use – $1,172 fine and $2,344.55 personal reimbursement to candidate committee;
• Count XXX – Exceeding Expenditure Limit as a Publicly Funded Candidate – $500 fine; and
• Count XXXI – Failure to File Late Contributions Report – $750 fine and file report.

At the 6/20/18 Commission meeting, Respondent Ing was ordered to pay a $15,422 fine, escheat $2,000 of an excess contribution, personally reimburse $4,344.55 to Respondent Friends of Kaniela Ing, amend twenty-three (23) disclosure reports, and file a Late Contributions Report.  Respondent Ing paid his last fine payment on 4/13/22 and staff has been in communication with Respondent Ing regarding his amended reports.

In 2020, a Commission complaint was filed for Respondent Ing’s failure to pay a $200 fine for the late filing of the Supplemental Report (i.e., Docket No. 21-14).  Respondent Ing paid the fine.

HRS §11-411 provides that “[i]n addition to an administrative determination that a violation of this part has been committed, the commission may refer the complaint to the attorney general or county prosecutor at any time the commission believes the respondent may have recklessly, knowingly, or intentionally committed a violation.”

HRS §11-412(a) provides that “[a]ny person who recklessly, knowingly, or intentionally violates any provision of this part shall be guilty of a misdemeanor, unless another criminal penalty is specified.”

Given Respondent Ing’s extensive past history of campaign spending violations, Respondent Ing has recklessly, knowingly, and/or intentionally violated campaign finance law by not filing the Supplemental Report and paying the $500 fine.

Since the filing of the complaint, Respondent Ing filed the Supplemental Report on 11/4/22 but did not pay the $500 fine.

General Counsel Kam stated that the staff recommended the Commission makes a finding that it believes that Respondent Ing may have recklessly, knowingly, or intentionally committed a violation of law and refer this complaint to the state Attorney General or county prosecutor for further investigation and potential prosecution pursuant to HRS §§11- 404(4), 11-411, and 11-412(b).

Respondent Ing was present and addressed the Commission. He explained that he had requested for a continuance when the matter was heard at the last meeting because he was out of the country at the time.  However, now that the recommendation has been amended and elevated to a possible criminal referral, he needs another continuance so he can retain an attorney to represent him.  Respondent Ing mentioned that Mr. Bill Harrison, an attorney who had represented him in previous matters spoke to General Counsel Kam at his request to try to work out a fine instead of what is now being recommended in the amended complaint.  Mr. Harrison, however, has not been retained by Respondent Ing yet.  General Counsel Kam stated that Mr. Harrison was informed that based on the number of past violations, the staff will recommend referral.

With regards to the $500 fine, Respondent Ing stated that he has not paid the fine because it was not clear to him that it was in fact assessed.  He was under the impression that the Commission needed to decide on the $500 fine first.  If he had known that he could have filed the report and paid $500 to resolve the matter, he would have done so.

Commissioner Luke asked about the status on the 23 reports that were amended in a prior matter.  General Counsel Kam responded that it is still outstanding as there are questions that were raised about the matters contained in the amended reports and he is still waiting on the committee for more information.

Respondent Ing stated that he has been a private citizen for 4 years now and has not spent or received any contributions.  He explained that the only reason why his campaign account is still open is because he was on a payment plan to pay off the fine that was assessed in 2018.  Respondent Ing acknowledged the pattern of violations in the past but stated that they have already been addressed which led him to the consequences he faced.  He further added that while it is not an excuse and understands that it was irresponsible to have failed to file the report on time, it was difficult for him to differentiate all the reminder emails he received to figure out which ones applied to him.

Respondent Ing continued that there has not been any activity as he does not have any campaign funds.  He would like to put all this behind him and close his account.  He has no intention of running for office again. In a prior matter, he filed amended reports based on the records he had and his bank statements.  He does not know how else to resolve it.

Chair Lum stressed that Respondent Ing’s history of violations has led to the recommendation of referral.  He asked Respondent Ing how he can stop these issues from continuously arising.  Respondent Ing responded that he will be sure to keep up with the reporting deadlines as he has marked them on his calendar.  However, the real resolution would be to close his account as he is not in the public world anymore.  He stated that he would have done so 4 years ago but he was advised to keep the account open while he paid off the fine.

General Counsel Kam mentioned that if the Commission decides to refer the matter, the law enforcement agency will do their own investigation and make their own determination.  Commission’s referral is not a guarantee that it will lead to prosecution as some cases come back after being referred.

Chair Lum asked for a motion to refer the matter to the state Attorney General or county prosecutor for further investigation and potential prosecution.  No motion was taken.

Commissioner Bonfiglio proposed to accept Respondent Ing’s request to defer the matter to the next meeting so he can obtain counsel.  Commissioner Herbert agreed and stated that referral is premature at this point and that he would like to hear from the attorney.  Vice Chair Markley also agreed.  Commissioner Luke stated that deferring the matter and Respondent Ing retaining legal representation will only cost him more money.

Chair Lum asked for a motion to defer the matter to the next meeting.  Commissioner Bonfiglio moved to defer the matter to the next Commission meeting.  Motion seconded by Commissioner Herbert.  Motion carried (4-1).  Commissioner Luke objected.

Commissioner Luke stated that he objected to the motion because he feels that it will only end up in the same predicament and deferring the matter only prolongs the situation costing Respondent Ing more money.

Commissioner Bonfiglio asked for a motion to convene in an 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 Docket No. 23-13 – In Re the Matter of Mark Ing and Friends of Kaniela Ing.

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

Public Session reconvened at 10:38 a.m.

*Consideration, Discussion, and/or Approval of Commission Legislation for the 2023 Legislative Session General Counsel Kam reported that CSC-11 (23), Relating to Partial Public Financing of Elections which was approved at the 10/26/22 Commission meeting was presented at the Committee to Improve Standards of Conduct (CISC) meeting on 11/9/22 and was unanimously approved.  As such, he recommended that the Commission support the CISC bill if it gets a hearing.

He stated that at the 11/9/22 CISC meeting, bills concerning criminal fraud enhancements were discussed and approved.  Further, the CISC considered and approved a proposal to enhance HRS §11-412(c) which would disqualify candidates from holding elective public office for 10 years from the date of conviction.  He recommended that the Commission support these CISC bills as it will help prevent and deter fraud and public corruption in our elections.

General Counsel Kam stated that although the CISC has substantively approved the CSC bills as presented, because CISC is a House creation and since CSC has historically submitted its own legislative package to the House and Senate every session, he recommended that staff submit the CSC bills as approved by the Commission at prior meetings as the CSC 2023 legislative package.  To the extent that the CISC bills are substantially the same as the CSC bills, he further recommended that CSC support those bills if they get a hearing.

Commissioner Herbert moved to approve the submission of all eleven (11) CSC bills as approved at prior CSC public meetings as the CSC 2023 legislative package and support comparable CISC bills including criminal fraud enhancements which provide for a disqualification from public office for fraud convictions.   Motion seconded by Commissioner Bonfiglio.  Motion carried (5-0).

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

• Late Contributions Report for candidate committees and Late Contributions/Expenditures Report for noncandidate committees for the period of 10/25/22 through 11/4/22 was due on 11/7/22:
  • 86 candidate committees filed.
  • 64 noncandidate committees filed.
• 2^nd Preliminary General Report for the period of 9/27/22 through 10/24/22 was due on 10/31/22:
  • 179 candidate committees were expected to file.
    • 166 (93%) filed on time.
    • 10 (7%) did not file.
    • 3 (1%) filed late.
    • As of today, only one candidate has not filed the report.
  • 255 noncandidate committees were expected to file.
    • 243 (93%) filed on time.
    • 9 (6%) did not file.
    • 3 (1%) filed late.
    • As of today, only one noncandidate committee has not filed the report.

Chair Lum asked if there were any questions or comments.  There were none.

*Report on Commission to Improve Standards of Conduct (CISC) – Executive Director Izumi-Nitao reported that the CISC held a meeting on 11/2/22 and 11/9/22.  At the 11/9/22 meeting, the CISC approved the Commission’s public financing bill as well as 3 bills which included an amendment to prohibit holding elective office for 10 years if convicted of fraud.  She further reported that CISC is drafting the final report which is due on 12/1/22 and do not anticipate any more meetings.

*Report on Memos to Committees Post General Election – Associate Director Baldomero reported on the memorandums that were prepared for candidate committees and ballot issue committees to provide information about their next steps.  He further reported that the memorandums were posted on CSC website on 11/14/22 and will be mailed to all the committees in the coming days.

Mr. Robert Armstrong commented that as a member of the public, a former candidate, and someone who has been attending the monthly meetings, he wanted to remind the Commissioners that they represent the public.  Mr. Armstrong urged the Commissioners to seriously look at Docket No. 23-13 and take into consideration the rest of the candidates who complied and filed the reports appropriately, as well as the public which the Commission represents.  Chair Lum thanked Mr. Armstrong for his comments.

Chair Lum asked for a motion to adjourn this meeting.  Commissioner Herbert moved to adjourn.  Motion seconded by Commissioner Luke.  Motion carried (5-0).  Meeting adjourned at 10:57 a.m.

Next Meeting:
Scheduled for Friday, December 16, 2022, at 10 a.m