Campaign Spending Commission

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
October 10, 2012
10:00 a.m.

Commissioners Present:
Michael Weaver, Tina Pedro Gomes, G. William Snipes

Staff Present:
Kristin Izumi-Nitao, Tony Baldomero, Gary Kam, Ellen Kojima
Deputy Attorney General Robyn Chun

Call to Order:
Meeting convened at 10:00 a.m. with Chair Weaver presiding.

Consideration of Minutes:
Commissioner Gomes moved to approve the minutes of September 12, 2012.  Motion seconded by Vice-Chair Snipes.  Motion carried unanimously.

New Business
Executive Director Izumi-Nitao stated that the following proposed conciliation agreements are a result of investigations that she initiated in September and October 2012 pursuant to HRS §11-314(7) to determine whether there has been a violation of the Hawaii campaign spending laws.

Respondents have been notified in a letter of the fine that Commission staff computed as a result of their late filed report.   Further, they have been notified of today’s meeting, received a copy of the proposed conciliation agreement, and waived the opportunity to explain or otherwise respond to the notice of violation.  She recommended that the Commission make a preliminary determination of probable cause that a violation has been committed, waive further proceedings, and approve the settlement amounts as stated in each of the proposed agreements.

Commissioners noted that each of the following proposed conciliation agreements had been reviewed and that they had no additional questions:

CA 13-33  In Re the Matter of Friends of Emil Svrcina
CA 13-34  In Re the Matter of Friends of Glenn V. Butler
CA 13-35  In Re the Matter of Native Hawaiian Political Action Committee
CA 13-36  In Re the Matter of Hawaii Building & Construction Trades Council
CA 13-37  In Re the Matter of Kauai Women’s Caucus
CA 13-38  In Re the Matter of Friends of Steven Araujo
CA 13-39  In Re the Matter of Friends of D. Ululani Beirne
CA 13-40  In Re the Matter of Insurance & Financial Advisors PAC Hawaii
CA 13-41  In Re the Matter of Electrical Contractors Association of Hawaii PAC
CA 13-42  In Re the Matter of West Hawaii Patriots
CA 13-43  In Re the Matter of Gary Safarik for State Senate D-2
CA 13-44  In Re the Matter of Friends of Adam Reeder
CA 13-45  In Re the Matter of Aloha Family Alliance
CA 13-46  In Re the Matter of Friends of Kalei Akaka
CA 13-47  In Re the Matter of United Food & Commercial Workers Union Local 480
CA 13-48  In Re the Matter of Creighton Pono Higa
CA 13-49  In Re the Matter of Sierra Club Hawaii PAC

Vice-Chair Snipes moved that the Commission make a preliminary determination that probable cause exists that a violation had been committed and accept the settlement terms and amounts as stated in each conciliation agreement.  Motion seconded by Commissioner Gomes.  Motion carried unanimously.

Docket No. 12-12 – In Re the Matter of Shaylene Iseri-Carvalho
General Counsel Kam reported that a complaint was filed by Diana Gausepohl-White against Shaylene Iseri-Carvalho alleging failure to report in-kind contributions.  Respondent Iseri-Carvalho was elected Kauai Prosecuting Attorney in the 2008 primary election.  The complaint alleges that a flyer promoting a jail diversion program of the prosecutor’s office was also campaign material for the Respondent, and that the cost of producing and copying the flyer should have been reported as an in-kind contribution by the Respondent.

Complainant Gausepohl-White claims that the flyer was campaign material because it contained personal information about the Respondent, referred to Respondent’s accomplishments as prosecutor, had more information about the Respondent than necessary to promote the jail diversion program, referred to Respondent’s personal email address instead of the county’s email address, and that some of the graphics on the flyer matched that on Respondent’s subsequent campaign fundraiser letter.

Respondent submitted a response claiming that the flyer was created and distributed at a community meeting in June 2011, that her personal email address was used because her portable electronic devices has not been set-up with the county email address when the flyer was created, that the graphic design is a common Hawaiian design, and that the flyer did not mention her campaign, candidacy, or the 2012 election.

Based on the investigation and information received, staff recommended that the complaint be dismissed.  The flyer had a county purpose and was used to promote a new program of the prosecutor’s office.

Vice-Chair Snipes moved to accept staff’s recommendation to dismiss complaint.  Motion seconded by Commissioner Gomes.  Motion carried unanimously.

Docket No. 12-09 – In Re the Matter of Tom Berg
General Counsel Kam reported that a complaint was filed by Carroll Cox against Tom Berg and James Kelii for the untimely deposit of campaign contributions.  Respondent Berg was elected to the City Council District 1 seat in a special election held in December 2010.  Respondent Kelii is named chairperson for Respondent Berg’s candidate committee.

Staff subpoenaed Berg’s bank account records and after reviewing the records found that the contributions were received by the campaign and deposited into the campaign account in a timely manner.  Staff recommended that the complaint be dismissed.  Also, when the complaint was filed in March 2012, Respondent was not yet required to report the contributions.  The contributions were required to be reported in the report that was due on July 12, 2012.

Commissioner Gomes moved to dismiss the complaint.  Motion seconded by Vice-Chair Snipes.  Motion carried unanimously.

Docket No. 12-10 – In Re the Matter of Tom Berg
General Counsel Kam reported that a complaint was filed by Carroll Cox and Patty Teruya against Tom Berg for the failure to report in-kind contributions.  Respondent Berg was elected to the City Council District 1 seat in a special election held in December 2010. The complaint alleges that Respondent Berg failed to report in-kind contributions received at campaign meetings or events where someone other than Respondent’s committee paid for the meal, failed to report in-kind contributions of t-shirts and stamps received from Patty Teruya, and that Respondent had council employees work on his campaign during city work time.

Respondent Berg responded that none of the meetings or events involved campaign activity and that he did not solicit any contributions.  The t-shirts received were t-shirts that had already been printed with Patty Teruya’s name and her campaign message from a previous election.  The t-shirts were printed over and used once, but because they were already printed on when he received them, he did not consider them to have any value.  She also gave him a roll of stamps, which was used to mail out City Council Christmas cards, and the unused stamps was returned to Patty Teruya.  Regarding council employees working during city work time, Respondent stated that none of his employees did any campaign work on city work time.

Staff recommended dismissal regarding the failure to report meals as an in-kind contribution, no evidence of any receipts were provided Respondent, failure to report stamps as an in-kind contribution, as the stamps was not used for campaign purpose, and failure to report in-kind contribution from the city since evidence was not provided that anyone did campaign work on city work time.  Regarding the failure to report the in-kind contributions of the t-shirts, staff recommended that the Commission make a preliminary determination of probable cause that a violation exists and assess a fine of $250.

Respondent Berg who was present at the meeting stated that the t-shirts he received were going to be discarded by Patty Teruya so he felt that they did not have any value and did not report them as a contribution.  General Counsel Kam noted that the law states if you receive something of value it must be reported.  Respondent Berg asked for leniency and that the matter be further considered.

Evelyn Souza, a staff member of Respondent Berg, stated that she and her husband picked up the t-shirts from Patty Teruya and that they did print over the t-shirts and used once.

Vice-Chair Snipes moved to dismiss the matters regarding failure to report in-kind contributions of meals, stamps, and the reporting of an in-kind contribution from the city.  Regarding the failure to report the receipt of t-shirts as an in-kind contribution, Vice-Chair Snipes moved to make a preliminary determination of probable cause that a violation has been committed and accept the fine of $250 as stated in Docket 12-10.  Motion seconded by Commissioner Gomes.  Motion carried unanimously.

Docket No. 12-14 – In Re the Matter of Tom Berg
General Counsel Kam reported that a complaint was filed by Eric Ryan against Tom Berg alleging several violations.  On 10/2/12, Complainant Ryan submitted a letter withdrawing without prejudice most of the claims except for 3 claims – i.e., failure to report an expenditure of a voter contact email list, failure to report 4 on-line contributions, and failure to report in-kind contributions from the City and County of Honolulu.

Respondent Berg admitted to purchasing the voter contact email list, but could not remember if he reported it.  A review of his committee bank records and committee’s Preliminary Special Election Report did not reflect an expense for the list.

Respondent Berg did not address the receipt of the 4 on-line contributions which totaled $325.  A review of his Preliminary Special Election Report reported $40 in monetary and non-monetary contributions of $100 or less.  Staff believes that the $40 involves other contributions of under $100 and not the on-line contributions.

The issue of in-kind contributions from the City and County of Honolulu involves the complainant’s employment with the city as a member of Respondent Berg’s staff.  Complainant’s affidavit states that during his employment with Respondent Berg and with Respondent Berg’s knowledge he worked on campaigning for the Tea Party and on Respondent Berg’s reelection during city work hours.

Staff recommended that the Commission make a preliminary determination of probable cause that violations exist and assess a fine of $250 each for failure to report an expenditure and failure to report the 4 on-line contributions received, $2,000 ($1,000 per occurrence) for the failure to report in-kind contributions from the City, and reimburse the City and County of Honolulu $28,646 for the unauthorized use of City resources.

Complainant Ryan, present at the meeting, stated after Respondent Berg won the special election, Respondent Berg asked him to come and work for him and from the beginning he and other staff members did work for the benefit of his political career and his reelection campaign.

Respondent Berg who was present at the meeting stated that he did nothing wrong.  The not reporting of the expense and contributions were not intentional. Respondent Berg went on to state that complainant is a liar and that he is making up all the allegations.  He also denied that any of his staff members did any campaigning during work time.

Evelyn Souza, Respondent Berg’s staff member, present at the meeting stated that she considers Respondent Berg a friend and that he is an honest man.  She also stated that the on-line contributions were never received and claims that staff members campaigning during work time did not happen.

General Counsel Kam noted that Respondent Berg did not address the issue of staff members doing campaign work during city work time in his response.  Chair Weaver also asked why the Respondent did not respond to the allegations before the meeting when he was given time and he had the complaint and the computer disc with the documents.  Respondent Berg admitted that he did not look at the documents because he has been bombarded by the complainant.

Vice-Chair Snipes moved to make a preliminary determination of probable cause that violations have been committed and approve the fine as stated.  Motion seconded by Commissioner Gomes.

After further discussions regarding the on-line contributions and complainant’s doing campaign work during city work time Commissioners deferred the matter to give Respondent Berg an opportunity to review and respond to complainant’s affidavit and for complainant to respond Respondent Berg’s response.

Vice-Chair Snipes moved to defer the matter until the November meeting pending receipt of responses from Respondent Berg and Complainant Ryan.  Motion seconded by Commissioner Gomes.  Motion carried unanimously.

Docket No. 13-08 – In Re the Matter of Bob McDermott
General Counsel Kam reported that a complaint was filed by Marilou Chin against Bob McDermott alleging that he filed a false Notice of Intent to Hold a Fundraiser.  Respondent McDermott is a candidate for a seat in the House of Representatives, District 40.  On 8/29/12, Respondent filed a Notice of intent to hold a fundraiser with the Commission.  The notice indicated that the fundraiser was to be held on 8/30/12 at Sam Snead’s at 11:30 a.m. with a price or suggested contribution per person of $250-$2,000.  Complainant Chin submitted with the complaint statements from 2 witnesses who went to the restaurant on the noticed date and time and did not see Respondent or any fundraiser being held.

Respondent McDermott submitted a written response claiming that the fundraiser was held as noticed.  Based on the information received, staff recommended that the Commission dismiss the complaint.

Complainant Chin who was present at the meeting stated that the issue is that the Respondent did not have a fundraiser as noticed.

Rida Cabanilla who was present at the meeting stated that Respondent’s opponent, candidate Christopher Manabat, is her son and that she went to the restaurant on the noticed date/time and did not see Respondent or any fundraiser being held.  She further stated that if the law is not going to be enforced it should be deleted and that if the Respondent received any monies it should be returned to the contributors and asked that the matter be further investigated.

Pam Smith, representing Respondent Bob McDermott, was present at the meeting and stated that the fundraiser was held and that there was a ticket for the fundraiser.  In response to Commissioner Gomes’ question regarding how many people attended the fundraiser, she responded that she was unsure.

Vice-Chair Snipes moved to implement staff recommendation to dismiss the complaint.  Commissioner Gomes seconded the motion.  Motion carried unanimously.

Docket No. 13-11 – In Re the Matter of Karen Awana and Friends of Karen Awana
Executive Director Izumi-Nitao reported that the complaint alleges the failure to pay a fine for a substantially defective or deficient report.  Respondent Awana is a candidate in the 2012 election for the State House of Representatives, District 13 seat.  On 9/7/12, Respondent was sent a Notice of Substantially Defective or Deficient Report for not reporting costs related to mailers, which were paid for and distributed to homes in the Respondent’s district the week of the 2012 Primary Election, and for new shirts.  The deadline to correct the applicable reports in the electronic filing system was 9/21/12.  The 2nd Preliminary Primary and Final Primary reports were amended on 9/25/12 to account for the mailers and shirts.  On 9/27/12, Respondent was sent a notice of fine assessing a fine of $200 for each report that was not timely corrected.

Staff recommended that the Commission make a preliminary determination that probable cause that a violation exists and assess a fine of $400.

Commissioner Gomes moved that the Commission make a preliminary determination that probable cause exists that a violation has been committed and to accept the fine of $400 as stated in Docket No. 13-11. Motion seconded by Vice-Chair Snipes.  Motion carried unanimously.

Docket No. 13-12 – In Re the Matter of Glenn Au
Executive Director Izumi-Nitao reported that the complaint alleges that Glenn Au failed to register with the Commission and file an Organizational Report.  Respondent Au filed nomination papers with the State Office of Elections on 8/30/12 for the Office of Hawaiian Affairs trustee position on Maui.  Respondent was informed of his need to register and file his Organizational Report.  He has not responded to calls or notices sent.

Staff recommended that the Commission make a preliminary determination of probable cause that a violation exists, assess a fine of $100, and order that the Respondent register with the Commission and file the Organizational Report.

Commissioner Gomes moved to make a preliminary determination of probable cause that a violation exists that a violation has been committed, accept the fine of $100 as stated in Docket No. 13-12, and orders that Respondent register and file the Organizational Report.  Motion seconded by Vice-Chair Snipes.  Motion carried unanimously.

Report and Discussion on Hawaii County Council Resolution No. 280-12
Associate Director Baldomero reported that Councilmember Brittany Smart introduced a resolution that asks the state legislature to adequately fund the Hawaii Campaign Spending Commission and to expand the comprehensive public funding program statewide. The resolution also recommends that the Hawaii county council comprehensive public funding program be extended through the 2020 election.  Resolution passed the committee hearing 7-2, and on 9/18/12, the resolution passed the full council 8-1.

Staff submitted testimony expressing concerns with expansion of the program when the Commission does not have the proper funding or staff to run such a program.  Associate Director Baldomero also attended a committee meeting in Hilo and was available for questions when this matter was heard before the full council.

Old Business:
Docket No. 13-04 – In Re the Matter of Colleen Meyer, Patricia Kamakana, and Friends Of Colleen Meyer
Executive Director Izumi-Nitao reiterated that as discussed at the September meeting the complaint alleges the untimely filing of the 2nd Preliminary Primary Report and that the recommendation is that the Commission make a preliminary determination of probable cause and assess a fine of $919.18 against Respondents.

Commissioners noted that ignorance of law is not a defense, but also took into consideration that Respondent Meyer’s treasurer was new and that some of the prior late fines were during the 2008 election.  Discussion ensued on treating this as a first offense for a new election and that the fine be reduced.

Vice-Chair Snipes moved that the Commission make a preliminary determination that probable cause exists that a violation has been committed and that the fine of $919.18 be reduced to $326.  Motion seconded by Commissioner Gomes.  Motion carried unanimously.

Searchable Database and Socrata
Associate Director Tony Baldomero reported that he and Executive Director Izumi-Nitao attended the official state launch of Socrata on 10/4/12. The data.hawaii.gov website is now host to 7,000 campaign spending searchable information records.  He is working with ICSD to make the information searchable in different forms.  A link will be created from the Commission’s website to Socrata.

Report from Executive Director:
Executive Director Izumi-Nitao reported on the following items:

Report on Compliance of Filing Timely Disclosure Reports
1 – 1st Preliminary Primary Report for the period 1/1/12 – 6/30/12 due on 7/12/12 for candidates whose names appear on the 2012 ballot:  Full compliance
2 – Supplemental Report for the period 1/1/12 – 6/30/12 due on 7/31/12 for candidates whose names are not on the 2012 ballot:  One candidate committee has not filed
3 – 2nd Preliminary Primary Report for the period 7/1/12 – 7/27/12 due on 8/1/12 for candidates whose names appear on the 2012 ballot:  Full compliance
4 – Preliminary Primary Report for the period 1/1/12 – 7/27/12 due on 8/1/12 for noncandidate committees and corporations:
 -Noncandidate Committees:  Full compliance
 -Corporations:  84 corporations registered and need to report only if they had activity – staff needs to review candidate reports
5 – Late Contributions Report for the period 7/28/12 – 8/7/12 due on 8/8/12:  Full compliance
6 – Final Primary Report for the period 7/28/12 – 8/11/12 due on 8/31/12
 -Candidate Committees:  Full compliance
 -Noncandidate Committees:  Full compliance
 -Corporations:  124 corporations registered and need to report only if they had activity – staff needs to review candidate reports
7 – Preliminary General Report for the period 8/12/12-10/22/12 or 1/1/12-10/22/12 due on 10/29/12

Update on Public Funding Programs – HCCCPF and Partial Public Funding
Associate Director Tony Baldomero reported that for the Hawaii County Council Comprehensive Public Funding Program (HCCCPF), 8 candidates were certified with $215,344.23 distributed ($195,000 for the primary period and $20,000 for the general period).  With regard to Partial Public Funding, 19 candidates have been certified and $109,438 distributed.  Last day to apply for funding is 12/6/12.

Update from Boards and Commissions Concerning Appointment of New Commissioners
Executive Director Izumi-Nitao reported that Boards and Commissions’ director Tony Benasbese anticipates appointments by the end of October.

Update on Request to Department of Taxation to Revalidate the Calculation of the $3 Campaign Spending Commission Tax Check-Off for FY 2012
Executive Director Izumi-Nitao reported that on 9/10/12 she requested Dept. of Taxation to recompute the $3 check-off for FY 2012 because of an $81,917 difference between FY 2011 and FY 2012.  On 10/3/12, the Dept. of Tax responded that the Hawaii Election Campaign trust fund should receive an additional $55,858 for FY 12 which will be reflected in FY 2013 totals.

Consideration of Legislation for 2013 Legislative Session
Legislation being considered for the 2013 session includes:
-Requiring the filing of a 1/31 Supplemental Report in an election year for candidate and noncandidate committees;
-Eliminating the filing of the 1st Preliminary Primary Report for candidate and noncandidate committees;
-Repealing Act 244, the Hawaii County Council Comprehensive Public Funding program;
-Adding a Late Expenditure Report;
-Identifying candidate(s) supported or opposed by independent expenditures in noncandidate committee reports;
-Adding definition of “matching payment period”;
-Correcting a statutory citation under family contributions to exempt §11-357 (candidate contribution limits) rather than §11-355 (government contractor ban); and
-Modifying the permissible expenditure of two tickets to an event.

Vice-Chair Snipes commented on possible legislation of posting fundraiser notices outside venue.

Vice-Chair Snipes moved to convene executive session to consult with attorney.  Motion seconded by Commissioner Gomes.  Motion carried unanimously.

Public Session reconvened

Next Meeting:
Scheduled for Wednesday, November 14, 2012 at 10:00 a.m.

Vice-Chair Snipes moved to adjourn meeting.  Motion seconded by Commissioner Gomes.  Motion carried unanimously.  Meeting adjourned at 12:55 p.m.