Campaign Spending Commission

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
September 12, 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

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

Consideration of Minutes:
Vice-Chair Snipes moved to approve the minutes of August 13, 2012.  Motion seconded by Commissioner Gomes.  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 July, August, and September 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 or an excess contribution.   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 13-13  In Re the Matter of Friends of Leolani Lagat Oyama
CA 13-14  In Re the Matter of Hawaii Medical Political Action Committee
CA 13-15  In Re the Matter of Hawaii Association for Justice-PAC
CA 13-16  In Re the Matter of Friends of Barbara J. Haliniak
CA 13-17  In Re the Matter of Friends of Christopher Murphy
CA 13-18  In Re the Matter of Friends of Henry Vincent
CA 13-19  In Re the Matter of Friends of Marcus Hester
CA 13-20  In Re the Matter of Ohana Coalition Maui
CA 13-21  In Re the Matter of Chad Kaukani
CA 13-22  In Re the Matter of Friends of Dwight Synan
CA 13-23  In Re the Matter of Friends of Valerie Poindexter
CA 13-24  In Re the Matter of Friends of Danny Villaruz Committee
CA 13-25  In Re the Matter of Friends of Alan Fukuyama
CA 13-26  In Re the Matter of Friends of Mike Breslin
CA 13-27  In Re the Matter of Friends of Christopher Manabat
CA 13-28  In Re the Matter of Kanohowailuku Helm State Senate
CA 13-29  In Re the Matter of NASW-Hawaii PACE
CA 13-30  In Re the Matter of Friends and Supporters of Bart Mulvihill
CA 13-31  In Re the Matter of John O’Neill
CA 13-32  In Re the Matter of Rojo Herrera for State State

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

CSC Annual Report for FY 2012
Executive Director Izumi-Nitao presented the Commission’s annual report for Fiscal Year 2012.  She highlighted items with respect to each of the goals of the strategic plan.

Goal 1 – To simplify and clarify campaign spending laws in order to improve implementation and compliance.
This past legislative session, although a number of bills had been submitted by the Commission, only SB 2508 passed and became Act 118.  This bill changed the due date for the 1^st Preliminary Primary Report.  Other bills which passed that were not submitted by the Commission were SB 2648 which allowed candidates to use campaign funds to award scholarships to full time students and House Resolution 5, House Concurrent Resolution 5, and Senate Resolution 68 which asked the congressional delegation to recognize that corporations are not natural persons.

Goal 2 – To increase public education, awareness, and access.
In October 2011, ICSD completed the subscribe-unsubscribe email program for the Commission which permits staff to send eblasts to stakeholders of time sensitive information such as reporting deadline reminders and changes in the law.  The Treasurer’s Guidebook for candidate and noncandidate committees was also revised and updated.

Goal 3 – Increase the technological capacity to improve access, reduce paperwork, and increase compliance.
Represents mostly daily operations.

Goal 4 – Upgrade the training for and ability of the committees to comply with campaign spending laws.
Because 2012 is an election year, a number of training sessions on all islands have been held.

Goal 5 – Encourage compliance.
Thirteen complaints were filed of which 5 were resolved resulting in fines totaling $7,164.50.  We also had 8 conciliation agreements and 5 applications were filed in First Circuit Court seeking judicial enforcement of Commission orders.

Goal 6 – Increase and stabilize CSC’s institutional capacity to carry out its mission.
In FY 2012, a total of $73,528 in revenue was generated and a total of $790,035 in expenditures/encumbrances leaving the Hawaii Election Campaign Fund (“HECF”) with a balance of $3,424,708.  Executive Director Izumi-Nitao expressed the need to be aware of the HECF balance as revenue is not enough to sustain operations.   Operations includes running two public funding programs – the partial public funding program and the Hawaii County Council comprehensive public funding program.  By law, the comprehensive public funding program provides for a statutory ceiling of $300,000 for the 2010, 2012 and 2014 elections, provided that the HECF has a balance of $3.5 million as of September 1 of the year prior to the elections.

Executive Director Izumi-Nitao highlighted significant events in FY 2012 to include the May 2012 online survey to assist Commission in better serving and communicating with the public as well as the development of a searchable database of the data filed on the Commission’s electronic filing systems.

Executive Director Izumi-Nitao also reported on future consideration for FY 2013 to include appropriation of funds, discussion of core business and 2013 strategic planning, considerations of newer applications in technology and social media, and updates to our Hawaii Administrative Rules.

Draft Advisory Opinion 13-01 – ActRight Fund Inquiry
General Counsel Kam reported that ActRight Fund, an unincorporated fund registered with the Internal Revenue Service and files IRS Form 8872 reports of contributions and expenditures, requested an advisory opinion seeking guidance on the acceptance, disbursement, and reporting of earmarked contributions as a noncandidate committee to be called ActRight Hawaii.  Kam noted that their request is similar to questions addressed in the ActBlue advisory opinion (see, AO 11-01).

Commissioner Gomes moved to approve Advisory Opinion 13-01.  Motion seconded by Vice-Chair Snipes.   Motion carried unanimously.

Docket No. 13-04 – In Re the Matter of Colleen Meyer, Patricia Kamakana, and Friends of Colleen Meyer
Executive Director Izumi-Nitao reported that the complaint alleges the untimely filing of the 2^ndPreliminary Primary Report.  Respondent Meyer is a candidate in the 2012 election for the State Senate, District 23 seat.  The 2^nd Preliminary Primary Report was due on 8/1/12 and Respondents filed the report on 8/7/12.  Respondents were sent a letter (Notice of Fine for Late Report) notifying them that a fine of $919.18 had been assessed, which is 25% of total expenses reported for the period.  Because the fine had not been paid and because Executive Director Izumi-Nitao was unable to recommend a reduced fine due to three prior late reports going back to 2008, this complaint was filed with a recommendation that the Commission make a preliminary determination of probable cause and assess a fine of $919.18 against Respondents.

Respondents Colleen Meyer and Patricia Kamakana (treasurer) were present.  Respondent Meyer commented that she has been filing reports for twenty years, that she was not aware of the law that changed the amount of the fine for late filing, that the $919.18 fine would be a hardship, and that the campaign account does not have enough to pay the fine.  Respondent Kamakana commented that this is the first time she is a treasurer and that she would take responsibility for the report not being filed on time.  She noted that she did receive the email reminder, but because of a number of events happening, she missed the deadline.

Vice-Chair Snipes moved to defer Docket No. 13-04 until the October meeting.  Motion seconded by Commissioner Gomes.  Motion carried unanimously.

Docket No. 13-05 – In Re the Matter of CP Investment REIT
Executive Director Izumi-Nitao reported that the complaint alleges the failure to file the Preliminary Primary Report and the Final Primary Report.  Respondent CP Investment REIT is a registered noncandidate committee.  The Preliminary Primary and the Final Primary reports were filed yesterday on 9/11/12 after the instant complaint had been issued.  Respondents are prepared to pay a fine of $1,000 ($500 for each report), and they have indicated they will be terminating their registration with the Commission.  She recommended that the Commission make a preliminary determination of probable cause and assess a fine of $1,000.

Vice-Chair Snipes moved that the commission make a preliminary determination that probable cause exists that a violation has been committed and to accept the fine of $1,000 as stated in Docket No. 13-05.  Motion seconded by Commissioner Gomes.  Motion carried unanimously.

Docket No. 13-06 – In Re the Matter of CP II Kukui Gardens, LLC
Executive Director Izumi-Nitao reported that the complaint alleges the failure to file an Organizational Report, failure to pay an administrative fine, and the failure to file the Preliminary Primary and Final Primary reports.  On 9/11/12, after the instant complaint had been issued, Respondent CP II Kukui Gardens, LLC, registered by filing the Organizational Report and also filed the Preliminary Primary and Final Primary reports.  Respondents are prepared to pay a fine of $1,100 ($100-Organizational Report, $500 each for the Preliminary Primary and Final Primary reports), and they have indicated  they will be terminating their registration with the Commission.  She recommended that the Commission make a preliminary determination of probable cause and assess a fine of $1,100.

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 $1,100 as stated in Docket No. 13-06.  Motion seconded by Vice-Chair Snipes.  Motion carried unanimously.

Docket No. 13-07 – In Re the Matter of Mele Carroll and Friends of Mele Carroll
Executive Director Izumi-Nitao reported that the complaint alleges the untimely filing of the 1^stPreliminary Primary Report.  Respondent is a candidate in the 2012 election for the State House of Representatives, District 13 seat.  The 1^st Preliminary Primary Report was due on 7/12/12, Respondent filed the report on 7/26/12, and she was notified of the late filing fine of $462.50.  She recommended that the Commission make a preliminary determination of probable cause and assess a fine of $462.50.

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 $462.50 as stated in Docket No. 13-07. Motion seconded by Vice-Chair Snipes.  Motion carried unanimously.

Old Business:
Consideration and Discussion of Strategic Planning
Chair Weaver noted that Commissioners now have available the Commission’s FY 2012 Annual Report and the on-line survey results for their consideration.  Previous discussions determined that the 6 goals are still valid.  Commissioners now need to determine if work on the plan will be done internally or work with a facilitator.  Commissioners to review the annual report and on-line survey and will continue discussion at the December meeting.

Docket No. 12-07 – In Re the Matter of Karen Awana and Friends of Karen Awana
General Counsel Kam reported that the complaint filed by Executive Director Izumi-Nitao alleges failure to report contributions and expenditures and the untimely deposits of contributions.  Respondent Awana is a candidate in the 2012 election and has been a candidate since the 2006 election.  A review of her reports and bank records found that checks were not promptly deposited, a number of checks written to Cash and unexplained bank debits.  Staff received no response to a request for records and an explanation for some of her expenses.  General Counsel Kam recommends that the Commission make a preliminary determination of probable cause and to fine the Respondent $6,800 for 10 counts ($500 for each of 8 inaccurate or false reports, $25 per check for 72 checks deposited late, and $1,000 for failure to keep and provide records).

Vice-Chair Snipes moved that the Commission make a preliminary determination that probable cause exists that violations have been committed and to accept the fine of $6,800 as stated in Docket No. 12-07.  Motion seconded by Commissioner Gomes.  Motion carried unanimously.

Searchable Database and Socrata
Associate Director Tony Baldomero reported that he is working with ICSD and OIMT with uploading and developing Socrata, the website which will host the searchable database information.  A link will be created from the Commission’s website to Socrata and 6 years of data will be available.  The launch of the Socrata searchable database website is tentatively set for September 20 or 27, 2012, subject to Governor Abercrombie’s availability.

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

Report on Compliance of Filing Timely Disclosure Reports
1 – 1^st 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 – 2^nd 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:  One candidate committee has not filed.
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
  -Looking at a few reports
6 – Final Primary Report for the period 7/28/12 – 8/11/12 due on 8/31/12
 -Candidate Committees:  One candidate committee has not filed
 -Noncandidate Committees:  Ten committees have not filed
 -Corporations:  124 corporations registered and need to report only if they had activity – staff needs to review candidate reports
7 – Public Funds Expenditure Report for the period 1/1/12 – 8/11/12 due on 8/31/12
 -Partial Public Funding:  Two committees did not timely file, but as of today, full compliance
 -HCCCPF: Full compliance

Report on OHA Maui Special Election
Associate Director Tony Baldomero reported that this special election will be held concurrent with the General Election on November 6, 2012.  Deadline for filing of nomination papers was on September 7th with 8 candidates filing nomination papers. The Preliminary General Report due on October 29th will be the first disclosure report for these candidates.

Report on Honolulu City Council Special Election
Associate Director Tony Baldomero reported that the special election will be held concurrent with the General Election on November 6, 2012.  Deadline for filing of nomination papers was on August 31st with 16 candidates filing nomination papers.  The Preliminary General Report due on October 29th will be the first disclosure report for these candidates.

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 $215,000 distributed ($195,000 for the primary period and $20,000 for the general period).  Four candidates have advanced to the general.  Discussion and review of some of the expenses that Hawaii County Council candidates made using public funds.

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

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, October 10, 2012 at 10:00 a.m.

Vice-Chair Snipes moved to adjourn meeting.  Motion seconded by Commissioner Gomes.  Motion carried unanimously.  Meeting adjourned at 1:30 p.m.