Campaign Spending Commission

Campaign Spending Commission
Zoom Video Conference
September 8, 2021
10:00 a.m.

Commissioners Present
Stanley Lum, Maryellen Markley, Ph.D., Bryan Luke, Neal Herbert, Vic Bonfiglio

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

Guest
Sandy Ma (Common Cause)

Call to Order
Chair Lum called the meeting to order at 10:04 a.m.

Chair Lum went over the procedures for this meeting via Zoom.

Consideration and Approval of Minutes of Meeting on 7/29/21
Chair Lum asked for comments or changes to the minutes.  There were none.  Chair Lum called for a motion to approve the minutes.

Commissioner Herbert moved to approve the minutes of the 7/29/21 meeting.  Motion was seconded by Commissioner Luke.  Motion carried (5-0).

New Business
Executive Director Izumi-Nitao stated that the three (3) Conciliation Agreements on the agenda were a result of investigations 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 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 agreement.  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 each of the proposed agreements.

*Proposed Conciliation Agreement No. 22-01 – In Re the Matter of Friends of Simon Russell – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $166.83 to $55.61 as it is Respondent’s first violation. Chair Lum asked if there were any comments or questions.

Commissioner Luke moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Herbert.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 22-02 – In Re the Matter of Friends of Wayne Chen – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $200 to $66.67 as it is Respondent’s first violation. Chair Lum asked if there were any comments or questions.

Commissioner Luke moved to approve the proposed conciliation agreement.  Motion seconded by Vice Chair Markley.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 22-03 – In Re the Matter of Friends of Jenny Boyette – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $200 to $66.67 as it is Respondent’s first violation. Chair Lum asked if there were any comments or questions.

Commissioner Luke moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Herbert.  Motion carried (5-0).

*Docket No. 22-01 – In Re the Matter of Jack T. Shizuru, Jr., Reylene L. Yoshioka, and 808 Maintenance & Flooring, Inc. – Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against Jack T. Shizuru, Jr., Reylene L. Yoshioka, and 808 Maintenance & Flooring, Inc. for the failure to file the Supplemental Report.

She reported that in the Organizational Report filed with the Commission, Respondent Jack T. Shizuru, Jr., is the chairperson and Respondent Reylene L. Yoshioka is the treasurer of the noncandidate committee called 808 Maintenance & Flooring, Inc.

Pursuant to HRS §11-336(d), Respondents were required to file the Supplemental Report for the period covering 1/1/21 through 6/30/21 by 11:59 p.m. Hawaii standard time on 8/2/21.  Respondents did not file the report by the deadline.

On 8/3/21, Commission staff notified Respondents via first class mail of their failure to file the report and that a fine would be imposed.  Respondents did not file the report.

On 8/18/21, Commission staff tried to reach Respondent Yoshioka about the unfiled report, but was informed by Ms. Kristen Analani, who works for Respondent 808 Maintenance & Flooring Inc., that Respondent Yoshioka was no longer employed with them and requested access to the committee’s filing system account to file the report. Ms. Analani was informed that Respondent Shizuru, who is the committee’s chairperson, must first authorize Commission staff to disclose the access information to Ms. Analani since she was not listed on the committee’s Organizational Report.

On 8/23/21, Commission staff followed up with Ms. Analani and emailed her instructions for her and Respondent Shizuru to file the Noncandidate Committee Electronic Filing Form via eSign to appoint Ms. Analani as the committee’s new treasurer.

On 8/27/21, Commission staff called Ms. Analani to follow up, but she did not answer and was unable to leave a voicemail because it was not set up.   Commission staff then called Respondent Shizuru and left him a voicemail to follow up, but he did not return the staff’s call.

On 8/30/21, Commission staff mailed Respondents a hard copy of the Noncandidate Committee Electronic Filing Form.

Because this is Respondents’ first violation for failing to file a report, the Schedule of Fines provides for an administrative fine of $500.

On 8/31/21, Commission staff sent Respondents a copy of the complaint and set the matter on the 9/8/21 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 $500 for failure to file the Supplemental Report, order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-410 within two (2) weeks of receipt of the order, and order that Respondents file the Supplemental Report within two (2) weeks of receipt of the order.

Executive Director Izumi-Nitao added that after the complaint was filed and mailed to the Respondents, Respondent Shizuru filed the Noncandidate Committee Electronic Filing form to appoint himself as the committee’s treasurer, but he has yet to file the Supplemental Report.  Elections Assistant Tanna reported that Respondent Shizuru called the Commission office this morning and stated that he will pay the fine, file the report, and terminate his registration with the Commission.

Commissioner Herbert asked if there was any discussion about a conciliation agreement before the Docket.  Elections Assistant Tanna responded that there was no discussion about a conciliation agreement before the complaint was filed because the Respondents did not file the report.  She explained that if Respondents had filed the report and a fine was issued, she could have worked with them on a conciliation agreement for that fine.  Associate Director Baldomero further explained that this concerns an unfiled report, and therefore, the fine did not get issued until the complaint was filed with the Commission.

Commissioner Herbert asked if the Respondents submitted a written response to the complaint.  Executive Director Izumi-Nitao responded that they did not.

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

Vice Chair Markley 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 (5-0).

*Consideration, Discussion, and/or Approval of Commission Legislation for the 2022 Legislative Session – General Counsel Kam reported the following six (6) bills have been drafted for the Commission’s consideration for the 2022 Legislative Session:

• CSC-01 (22), RELATING TO CANDIDATE COMMITTEE AND NONCANDIDATE COMMITTEE ORGANIZATIONAL REPORT

This is a new measure that is a housekeeping matter.  It repeals references in HRS §11-322(b) and §11-323(b) concerning a paragraph in subsection (a) that has been repealed.

• CSC-02 (22), RELATING TO VIOLATIONS OF CAMPAIGN FINANCE LAW

This measure has been introduced every session since 2013.  This measure amends HRS §11-410 by increasing the amount of fine from $1,000 to $5,000 that may be assessed against a noncandidate committee making only independent expenditures that has received at least one contribution of more than $10,000, or spent more than $10,000 in an election period, for campaign finance violations.  Allows the Commission to order the fine be up to three times the amount of the unlawful contribution or expenditure, and to order that the payment of the fine assessed against a noncandidate committee, or any portion thereof, be paid from the personal funds of an officer of the noncandidate committee.

Vice Chair Markley asked why this bill did not pass in the prior sessions and if Commission staff met with legislators about getting it passed.  General Counsel Kam responded that he met with them prior to every session and while they seemed to be in support of it, they did not pass the bill.

Commissioner Herbert suggested to include additional background information to the summary description of the proposed bills.  General Counsel Kam stated that he will review them.

• CSC-03 (22), RELATING TO ORDERS OF THE CAMPAIGN SPENDING COMMISSION

This measure was introduced the last 2 sessions, but did not pass.  These amendments were suggested by the deputies in the Civil Recoveries Division of the Department of the Attorney General who are helping the Commission by enforcing its orders in the First Circuit Court.  This measure amends HRS §11-410 by:  (1) amending subsection (b) to provide that a person waives the right to a contested case hearing if the person fails to request a contested case hearing within twenty days of receipt of the Commission’s preliminary determination; and (2) amending subsection (d) to provide that a final order of the Commission may be filed in the First Circuit Court for confirmation as a civil judgment, enforceable and collectible as any other judgment issued in the circuit courts.

• CSC-04 (22), RELATING TO REPORTS FILED WITH THE CAMPAIGN SPENDING COMMISSION

This measure was introduced last session, but did not pass.  This is a housekeeping measure.  It provides that candidates do not need to file preliminary general reports if they are either unsuccessful or are elected to office in the primary election. Amends subsections (b) and (c) of HRS §11-339 to make them consistent with subsection (a) by aggregating contributions and expenditures in determining whether a committee need only file the final election period report.

• CSC-05 (22), RELATING TO ELECTIONEERING COMMUNICATIONS

This measure seeks to amend the current version of HRS §11-341 that was passed as Act 3 in the last session.  Act 3 greatly diminished transparency in spending on political advertisements.  This measure increases the threshold amount of aggregated expenditures for electioneering communications in a calendar year from more than $1,000 to more than $2,000 before statements of information would need to be filed.  Amends the definition of “disclosure date” from 24 hours of the contract being executed to 24 hours of the electioneering communications being broadcast, published, or sent by mail as well as to include the date of any subsequent expenditures for electioneering communications during the calendar year.  Lastly, it limits the applicability of the definition of “person” in subsection (d) of HRS §11-341 to that HRS section only.

Commissioner Herbert asked about the impacts of Act 3 to the Commission’s guidebooks and other materials.  Executive Director Izumi-Nitao responded that they will be modified.

Ms. Sandy Ma of Common Cause mentioned that they were very concerned when Act 3 was enacted and therefore, she was glad to see that this measure was being reintroduced.  She asked for clarification on the applicability of the definition of “person” in the measure.  General Counsel Kam explained that the definition of “person” in HRS §11-341 as amended through Act 3 does not match the definition of “person” in HRS §11-302, which is the general definition that applies to Chapter 11.  This measure makes it clear that the HRS §11-341 definition only applies to that section while the HRS §11-302 definition applies to the rest of the sections under Chapter 11.

• CSC-06 (22), RELATING TO LATE REPORTS AND UNFILED REPORTS

This is a new measure that amends HRS §11-340 to apply a minimum fine to all late reports.  Deems reports filed more than ten calendar days late to be unfiled for purposes of assessing a fine.

General Counsel Kam did not recommend resubmission of a Commission bill that amends HRS §11-311(b) and §11-402(b) to clarify that Commission staff may initiate complaints on behalf of the Campaign Spending Commission (SB 406, 2021).  He explained that when he met with the House Speaker before the last session started, he was told that such measure would be unnecessary since he felt that staff already had the authority under existing sections to conduct investigations and to initiate complaints signed by the Executive Director.  General Counsel Kam added that the bill not passing last session was reflective of that sentiment.

Vice Chair Markley moved to approve the proposed legislation for the 2022 Legislative Session.   Motion seconded by Commissioner Herbert.  Motion carried (5-0).

Vice Chair Markley stated that she will reach out to Commission staff about alternative wording on the bills, if necessary.  Commissioner Luke asked if there were any other measures that should be proposed.  There were none from the Commissioners.

Ms. Ma commented that Common Cause is interested in campaign finance disclosure bills for the upcoming session and shared that they are looking into SB 166 from last session on campaign finance for foreign corporation and foreign nationals, as well as disclosure bills concerning nonprofit organizations.  Executive Director Izumi-Nitao stated that Commission staff will meet with Ms. Ma and other groups to discuss legislative proposals in the coming months.

*Presentation, Discussion, and Approval of the Commission’s Annual Report for FY 2021 – Executive Director Izumi-Nitao presented the proposed draft of the Commission’s Annual Report for FY 2021 which discussed Commission activities covering the period of 7/1/20 to 6/30/21 as applied to the Commission’s Strategic Plan.  She commented that upon approval, the annual report will be posted on the Commission’s website.

Commissioner Herbert asked about the status of the SOCRATA contract (candidate and noncandidate committee dashboard apps).  Associate Director Baldomero responded that the current contract was executed for about $25,000 for a 16-month term which will expire on 6/30/22.  Commissioner Herbert asked if we would discontinue it once the contract expires.  Associate Director Baldomero responded that he is in discussion with them about extending the contract for at least 6 more months so that the dashboards can be available to the public for the duration of the 2022 election.

Discussion ensued about PayPal fees. Commissioner Herbert suggested to charge the fees to the users instead of the Commission absorbing them.  Associate Director Baldomero stated that the fees are currently being paid out of the Commission’s operating funds, but are being tracked to ensure that they are within budget.  Executive Director Izumi-Nitao stated that the online payment option has been effective for compliance and for now, it outweighs the cost.

Chair Lum commended Executive Director Izumi-Nitao for the report and congratulated Associate Director Baldomero and General Counsel Kam for the investigator certifications.

Commissioner Bonfiglio moved to approve the FY 2021 Annual Report. Motion seconded by Vice Chair Markley.  Motion carried (5-0).

Old Business – None

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

– Supplemental Report was due on 8/2/21:

• 395 candidate committees were expected to file
• 340 (86%) candidate committees filed on time
• 47 (12%) candidate committees did not file
• 8 (2%) candidate committees filed late
• 250 noncandidate committees were expected to file
• 230 (92%) noncandidate committees filed on time
• 16 (6%) noncandidate committees did not file
• 4 (2%) noncandidate committees filed late
• As of today, 11 candidate committees and 1 noncandidate committee still have not filed

Executive Director Izumi-Nitao also reported that there are currently 16 committees that have been referred to AG-CRD for collection proceedings.  For prior matters, Kaniela Ing is making his fine payments.

*Report on Special Election for Kauai Prosecutor – Associate Director Baldomero reported on the Special Election for the Kauai Prosecutor’s seat.  Special Primary Election will be on 12/18/21 and Special General Election will be on 2/26/22.  Proclamation will be issued on 10/1/21.  Nomination filing period will run from 10/4/21 through 10/15/21.  Currently, there is only one candidate that has filed an Organizational Report to run this election for the vacant seat.  Associate Director Baldomero went over the disclosure reports and revised forms for this special election which only applies to candidates running in this election and all registered noncandidate committees regardless of whether they participate in this election.

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

*Report on 2021 Annual Online Survey – Associate Director Baldomero reported that this is our 10th year of doing the survey to help improve and evaluate the effectiveness of Commission operations and communications for FY 2021 (i.e., 7/1/20 through 6/30/21) as well as provide us with any feedback.  The survey will launch on 9/13/21 for distribution to stay open until 10/11/21 whereupon the results will then be summarized, reported at the Commission’s public meeting, and posted on the Commission’s website.

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

Chair Lum encouraged everyone to contact the Commission staff for any feedback or input.

Commissioner Bonfiglio moved to adjourn the meeting.  Motion was seconded by Commissioner Herbert.  Motion carried (5-0).  Meeting adjourned at 11:53 a.m.

Next Meeting:
Scheduled for Wednesday, October 13, 2021 at 10 a.m.