CSC Newsletter – January 2023, Vol. 29, No. 1Posted in Newsletter
REMINDER – NEW LAWS GOING INTO EFFECT JANUARY 1, 2023 FROM THE 2022 LEGISLATIVE SESSION
From the 2022 legislative session, two (2) campaign finance related bills went into effect on January 1, 2023. They are:
Act 169 (H.B. 2416, HD 2, SD 1, CD 1), RELATING TO CAMPAIGN SPENDING
This law enhances existing campaign finance laws to address dark money. It specifies consent procedures for when 501(c)(4) nonprofit organizations operating as noncandidate committees can use donations for electioneering communications, independent expenditures, or contributions, and requires these organizations to provide certain written notice to donors. Further, it requires 501(c)(4) nonprofit organizations operating as noncandidate committees to disclose the name and address of donors who make a donation individually or in an aggregate of more than $10,000, with certain exceptions. Lastly, it amends Hawaii Revised Statutes (HRS) §11-341 by changing the definition of “disclosure date” to when an electioneering communication is publicly distributed and the date on which subsequent electioneering communications are publicly distributed, provided the person making the expenditure has made expenditures for electioneering communications of more than $2,000 in the aggregate. For mailers, the disclosure date means the date the mailers are first mailed.
Act 283 (S.B. 555, SD 1, HD 1), RELATING TO CAMPAIGN FUNDRAISING
This law amends HRS §11-342 to prohibit elected state and county officials from holding any fundraiser or fundraiser event to raise contributions for which any price is charged or any contribution is suggested for attendance during a regular session or special session of the state legislature.
REMINDER TO ALL COMMITTEES TO FILE THE SUPPLEMENTAL REPORT
The next report for all committees is the Supplemental Report covering the period November 9, 2022 to December 31, 2022 (for all noncandidate committees and candidate committees whose candidates ran in the 2022 election) or July 1, 2022 to December 31, 2022 (for candidate committees whose candidates did not run in the 2022 election). This report must be electronically filed on your respective filing systems (i.e., candidate filing system (CFS) or noncandidate committee filing system (NCFS)) no later than 11:59 p.m. Hawaiian standard time on Tuesday, January 31, 2023.
Failure to file this report by the deadline will result in a fine and, if you are a candidate committee or noncandidate committee, your committee’s name will be posted on the Commission website under “Candidate Committees That Failed to File or Correct a Report” or “Noncandidate Committees That Failed to File or Correct a Report.” Moreover, if a fine is assessed against your committee and you fail to timely pay it, Commission staff will issue a complaint against your committee and set it for consideration at the next public Commission meeting. Therefore, we encourage all committees to timely file their reports.
As a reminder, committees do not have to wait until the January 31st deadline to file the report. The reporting period for the Supplemental Report ended on December 31st so the report can be filed as early as January 1st, but no later than January 31st.
New reporting schedules have been posted on our website and are provided via the link below for your convenience to track upcoming reporting deadlines. The reporting schedules are also available in the Commission’s downloadable calendar and can be downloaded to your digital calendar on your computer or mobile device.
The Commission will add the necessary reports to your reporting schedule in your respective electronic filing system (CFS and NCFS). These reports must be electronically filed no later than 11:59 p.m. Hawaiian standard time on the day of the deadline. You may also want to consider filing the reports early to avoid penalties because the reporting deadline is always a few days or weeks after the reporting period has closed.
Failure to file any report by the deadline will result in a fine and the name of your committee will be posted on the Commission’s website under “Candidate Committees That Failed to File or Correct a Report” or “Noncandidate Committees That Failed to File or Correct a Report.” Further, if a fine is assessed against your committee and you fail to timely pay it, Commission staff will issue a complaint against your committee and set it for consideration at the next public Commission meeting. Therefore, we encourage all committees to timely file their reports and pay any fines.
Lastly, please remember that when you electronically file your reports with the Commission, candidates, treasurers, and chairpersons (for noncandidate committees) are certifying that the information contained in the filed reports are true, complete, and accurate. Therefore, it is strongly advised that you verify and validate your reports before you file them since the Commission will rely on the electronically filed information which could generate an inquiry/investigation if inaccurate.
UPDATING ORGANIZATIONAL REPORTS
As of January 1, 2023, candidate committees that login to the candidate filing system (CFS) and noncandidate committees that login to the noncandidate committee filing system (NCFS) will be presented with their Organizational Report. Please take the time to review your Organizational Report and make any needed changes.
HRS §§11-322(b) and 11-323(b) provides that any change in information previously reported in the organizational report shall be electronically filed with the commission within 10 days of the change being brought to the attention of the committee chairperson or treasurer. Failure to do so may result in a fine as well as prevent the Commission from communicating with you.
Also, if you are a candidate who intends to run for office in the next election and would like to carry over surplus campaign funds, you must file an amended Organizational Report on the CFS. This applies to candidates who failed to be elected to office who will be running again and candidates who are elected to office who will be running again for a different office to which they were elected and includes term-limited candidates.
COMMISSION’S BILLS FOR THE 2023 LEGISLATIVE SESSION
For the 2023 legislative session, the Commission submitted eleven (11) bills to the House Speaker and Senate President for introduction. Notably, they were all approved by the House Resolution No. 9 (2022) Commission to Improve Standards of Conduct (CISC) which was established to ensure state laws and rules relating to standards of conduct of public officers and employees contain clear standards, enforcement, and penalties, and provide recommendations to increase awareness of, compliance with, and deterrent effects of the code of ethics, lobbying laws, campaign finance laws, and other relevant laws and rules. As such, these bills were discussed in and appended to the CISC’s final report to the legislature which was due on December 1, 2022.
- RELATING TO VIOLATIONS OF CAMPAIGN FINANCE LAW
This bill 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 (Super PAC) 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.
- RELATING TO CAMPAIGN SPENDING COMMISSION ORDERS
This bill has been suggested by the deputies in the Civil Recoveries Division of the Department of the Attorney General who have been assisting 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.
- RELATING TO CANDIDATE COMMITTEE AND NONCANDIDATE COMMITTEE ORGANIZATIONAL REPORTS
This bill amends HRS §11-322 and §11-323 by requiring the Commission to publish on its website the names of candidates and persons who qualify as noncandidate committees who fail to register with the Commission. Pursuant to HRS §11-321, candidates are required to file their Organizational Report with the Commission within 10 days of the filing of their nomination papers for office or the date they receive contributions or makes or incurs expenditures of more than $100 in the aggregate during the election period. Further, noncandidate committees are also required to file their Organizational Report with the Commission within 10 days of receiving contributions or making or incurring expenditures of more than $1,000 in a 2-year election period. The Commission has found that in every election there are candidates and persons who qualify as noncandidate committees who fail to register, and thus, the public is unable to see who is in charge of these committees as well as their disclosure reports. The Commission believes that it is important for the voters/public to know that the candidates running in their districts are not incompliance with campaign finance laws. As for noncandidate committees, there are anywhere from 20 to 40 new organizations that are required to register who contribute more than $1,000 to candidates and fail to register with the Commission. The Commission believes that it is important for the voters/public to know what organizations/businesses are contributing more than $1,000 to candidates and who are not in compliance with campaign finance law.
- RELATING TO CANDIDATE COMMITTEE AND NONCANDIDATE COMMITTEE FUNDRAISERS
This bill amends HRS §11-342 to require candidate committees and noncandidate committees to file fundraiser notices regardless of the price or suggested contribution for attending the function (i.e., more than $25) to increase transparency.
- RELATING TO CAMPAIGN CONTRIBUTIONS
This bill amends HRS §11-357 to prohibit elected officials from soliciting and accepting campaign contributions during any regular session or special session of the state legislature, including any extension of any regular session or special session and any legislative recess days, holidays, and weekends,
- RELATING TO CAMPAIGN SPENDING CASH CONTRIBUTIONS
This bill amends HRS §11-351 to limit the amount of cash a candidate committee and noncandidate committee can receive to $100 per election period. The Commission has found that it is difficult to follow the money with cash transactions and may lead to fraud and abuse. Further, the Commission believes that $100 is a sufficient amount to permit the public to participate in the electoral process as well as it mirrors the amount permitted for calabash bowls as provided in HRS §11-353(d). It will also require receipts for each contribution.
- RELATING TO CAMPAIGN CONTRIBUTIONS
This bill amends HRS §11-355 to expand the government contractor ban by including state and county grantees in the ban as well as the owners, officers, employees and their immediate family, of the government contractor and government grantee.
- RELATING TO PRELIMINARY DETERMINATION OF PROBABLE CAUSE
This bill amends HRS §11-405 to provide for the service of the Commission’s preliminary of determination of probable cause orders via first class mail rather than certified mail. The Commission has found instances where the candidate has refused to claim the letter and the letter was returned to the Commission thereby preventing service of the document as required by law.
- RELATING TO COMPLAINTS ALLEGING VIOLATION OF CAMPAIGN SPENDING LAWS
This bill amends HRS §11-403 to provide for a presumption that a violation has occurred for respondents who fail to explain or otherwise respond to complaints alleging campaign spending violations. In consideration of Commission staff resources and the number of committees registered with the Commission, this proposal will allow the Commission to more timely and efficiently address campaign finance violations which are especially critical in an election year.
- RELATING TO CANDIDATE COMMITTEE EXPENDITURES
This bill amends HRS §11-381 to eliminate the use of campaign funds to purchase up to 2 tickets for an event or fundraiser held by another candidate or committee. Pursuant to this statute, a candidate committee has 8 authorized uses of campaign funds. The practice of using campaign funds to purchase up to 2 tickets for an event or fundraiser held by another candidate or committee has led to candidates building factions and buying influence. Further, it is inconsistent with HRS §11-382 which prohibits the use of campaign funds to support the campaigns of other candidates or campaign against another candidate not directly opposing the candidate with which they are directly associated. Pursuant to HRS §11-383, the only exceptions to HRS §11-382 are for political parties who may support more than one candidate as well as a candidate for the office of governor or lieutenant governor on the same ticket may support each other in the general election.
- RELATING TO PARTIAL PUBLIC FINANCING OF ELECTIONS
This bill increases the amount of partial public financing available for all elected offices. Specifically, it increases the maximum amount of public funds available for all offices except Office of Hawaiian Affairs (“OHA”) candidates by fifty per cent. It increases the maximum amount of public funds available for an OHA candidate from $1,500 to ten per cent of the expenditure limit established by statute for each election. It increases the amounts of qualifying contributions for OHA from more than $1,500 in the aggregate to more than $5,000 in the aggregate. It provides a downward adjustment to the minimum amount of qualifying contributions for the Office of Prosecuting Attorney for the City and County of Honolulu, and counties of Hawaii and Kauai, and for the Office of County Council for the County of Maui. Lastly, it establishes two full-time equivalent (2.0 FT) positions in the Commission and appropriates funds.
2022 ELECTION OBSERVATIONS
In 2022, there were 368 candidates running for 115 seats up for election out of 128 elective seats in the state of Hawaii and its four counties. The 115 seats up for election in 2022 were: Governor (1), Lt. Governor (1), Senate (25), House (51), Maui Mayor (1), Kauai Mayor (1), Honolulu City Council (4), Hawaii County Council (9), Maui County Council (9), Kauai County Council (7), and Office of Hawaiian Affairs (6). View the list of candidates running in 2022 and their Organizational Reports which includes their committee officers such as their appointed chairperson and treasurer.
12 incumbent candidates ran unopposed, and 28 seats were open meaning there was no incumbent running in that race due to term limits, the incumbent vacating the office, or as a result of reapportionment. Notably, there were 4 Aloha Aina candidates running in 4 of the 76 legislative races up for election, 139 Democratic candidates with 7 running for Governor, 6 for Lt. Governor and 126 running in 74 of the 76 legislative races, 4 Green candidates running in 4 of the 76 legislative races, 3 Libertarian candidates running in 3 of the 76 legislative races, 7 Non-Partisan candidates with 2 running for Governor, 1 running for Lt. Governor and 4 running in 4 of the 76 legislative races, and 92 Republican candidates with 10 running for Governor, 3 running for Lt. Governor and 79 running in 63 of the 76 legislative races. 119 candidates ran as Non-Partisan Special candidates for County and OHA races.
Some of the key points of this election include the following:
- 78 or 88% of the 89 incumbent candidates who ran for reelection were successful. 12 of the 78 successful incumbent candidates were unopposed (Kurt Fevella, Troy Hashimoto, Linda Ichiyama, Dru Kanuha, Gilbert Keith-Agaran, Carmen Lindsey, Nicole Lowen, Mark Nakashima, Scott Nishimoto, Richard Onishi, Rebecca Villegas, Gene Ward). The 11 unsuccessful incumbent candidates were Maui Mayor Mike Victorino (seat won by Richard Bissen), Senator Laura Acasio (affected by reapportionment and seat won by incumbent Senator Lorraine Inouye), Senator Gil Riviere (seat won by Brenton Awa), Senator Bennette Misalucha (seat won by term-limited Honolulu Councilmember Brandon Elefante), Representative Linda Clark (seat won by Mahina Poepoe), Representative Stacelynn Eli (seat won by Kanani Souza), Representative Sharon Har (seat won by Diamond Garcia), Representative Dale Kobayashi (seat won by Andrew Garrett), Representative Matt LoPresti (seat won by David Alcos), Representative Roy Takumi (affected by reapportionment and seat won by incumbent Representative Gregg Takayama), and OHA At-Large Trustee Lei Ahu Isa (seat won by Brickwood Galuteria). 7 of the 11 candidates who defeated incumbents never held elected office before (Richard Bissen, Brenton Awa, Mahina Poepoe, Kanani Souza, Diamond Garcia, Andrew Garrett, David Alcos).
- 28 candidates won open seats with 18 of those candidates never holding elected office before. 7 candidates vacated their offices or were term-limited and won open seats for a different office (Henry Aquino, Carol Fukunaga, Josh Green, Sylvia Luke, Angus McKelvey, Val Okimoto, Herbert Richards) and 3 candidates who held elected office in the past won open seats (Elle Cochran, Cindy Evans, Melvin Rapozo).
- The top 2 candidates receiving the most contributions were Governor candidate Josh Green ($4,140,273.54) and Lt. Governor candidate Sylvia Luke ($1,403,811.83).
- The top 2 candidates making the most expenditures were Governor candidate Josh Green ($3,972,925.10 with a cost-per-vote for the primary and general elections of $9.48) and Governor candidate Vicky Cayetano ($3,266,281.41 with a cost-per-vote for the primary election of $62.28).
- The top 2 candidates receiving the most loans were Governor candidate Vicky Cayetano ($2,370,000 in personal loans) and Lt. Governor candidate Keith Amemiya ($310,000 in personal loans of which $50,000 was loaned in November 2020 after his run for Honolulu Mayor).
- The top 2 candidates receiving the most support from independent expenditures were Lt. Governor candidate Ikaika Anderson ($2,834,551.70) and Governor candidate Josh Green ($700,772.32).
- The top 2 candidates receiving the most opposition from independent expenditures were Lt. Governor candidate Sylvia Luke ($1,134,901.91) and Governor candidate Josh Green ($234,000).
- 172 or 47% of the 368 candidates running in 2022 filed the Affidavit to voluntarily agree with the expenditure limit set for their office and 40 or 11% of the 368 candidates running in 2022 filed the Statement to notify the Commission of their intent to seek partial public funding. View the list of Affidavit filers and the list of Statement filers. 15 candidates running in 2022 received a total of $71,878.29 in partial public funding with the most going to Maui County Council candidate Yuki Lei Sugimura totaling $10,695 followed by Kauai County Council candidate Melvin Rapozo totaling $10,415. 6 of the 15 candidates receiving public funds won their races (Micah Aiu, Mahina Poepoe, Rose Martinez, Melvin Rapozo, Keani Rawlins-Fernandez, Yuki Lei Sugimura).
- 358 fundraisers were held in 2022 which is an increase of 192 fundraisers or 116% from the 166 fundraisers that were held in 2020. 28 or 8% of the 358 fundraisers were held virtually via Zoom in 2022 compared to the 73 or 66% of the 110 fundraisers that were held virtually via Zoom or Facebook Live in 2020 resulting from the pandemic. View a list of fundraisers held in 2022.
With respect to noncandidate committees, there were 328 registered noncandidate committees in 2022 of which 296 were standard noncandidate committees, 24 were Super PACs, 6 were political parties, and 2 were ballot issue committees.
- The top 2 Super PACs receiving the most contributions were Be Change Now ($2,086,436.92) and HiVISION2020 ($358,719.32).
- The top 2 Super PACs making the most independent expenditures were Be Change Now ($5,678,965.16) and HiVISION2020 ($352,737.69).
- The 2 ballot issue committees were Maui Pono Initiatives who received $18,000 in contributions and made $10,438.96 in expenditures to support Charter Amendments and Community Initiatives on Maui, and Water and Housing for Maui County who received $19,400 in contributions and made $19,400 in expenditures to support Maui County Charter Amendments.
TERM LIMITED CANDIDATES
If you are a candidate who is term limited for the office for which you presently occupy, contributions may be sought only if the committee has no surplus and has debt, unpaid expenses, or unpaid loans. See, Hawaii Administrative Rules (HAR) §3-160-31(b)(2). If this does not apply and you intend to seek contributions to run for elective office in the next subsequent election, then you must amend your Organizational Report to notify the Commission and the public of the office you intend to run for within 10 days of receiving contributions or making or incurring expenditures of more than $100 for that office. The contribution limits of the 2024 or 2026 election period will apply to these contributors.
TERMINATION OF COMMITTEE REGISTRATION WITH THE COMMISSION
If you are a candidate who does not anticipate running in a future State or county election, or you are a noncandidate committee that does not intend to participate in future State or county elections, and your committee has no surplus or deficit in campaign funds, you may want to consider terminating your registration with the Commission. If so, you will need to complete and submit the following documents: (1) A “Request for Termination of Registration” form for candidate committees or “Request for Termination of Registration” form for noncandidate committees; and (2) A closing bank statement verifying that your committee’s bank account has been closed. Further, you must not have any outstanding fines or unresolved matters with the Commission. Assuming everything is in order, the Commission will approve your termination request and you will no longer be required to electronically file reports with the Commission.
VIOLATIONS OF THE CAMPAIGN FINANCE LAWS
The following candidate committees violated the Hawaii campaign finance laws and have failed to comply with the Commission’s orders by refusing to file required disclosure reports and/or pay assessed fines. Pursuant to HRS §11-410(d), the Commission has been pursuing enforcement actions with the assistance from the Attorney General’s Office – Civil Recoveries Division. Furthermore, pursuant to HRS §11-156, a candidate who has unfiled disclosure reports or unpaid fines will not receive a certificate of election should that candidate win in a subsequent election.
- Thomas Belekanich, Friends of Tom Belekanich
- Kristina Kim-Marshall, Friends of Kristina Kim-Marshall???
- Laurent Zahnd, Team Mr L – Laurent R.B. Zahnd (L) for Mayor
- Beau Hawkes, We the People
- Lenson Sonoda, Friends of Lenson . . . OHA Trustee At Large
- Chelsea Yagong, Friends of Chelsea Yagong
- Henry Cho
- Candace Linton
- Shaena Hoohuli, Hoohuli Headquarters
- Lono Mack
REMINDER TO CHECK OFF THE $3 BOX ON YOUR 2023 TAX RETURN
The Commission continues to urge you to check off the $3 “yes” box on your 2023 tax return which permits $3 from state funds (or $6 if married and filing a joint return) to be allocated to the Hawaii Election Campaign Fund. The health and sustainability of public funding depends on greater participation of Hawaii taxpayers in checking off the $3 box. Checking off this box does not increase your tax or reduce your refund.
RESULTS OF THE COMMISSION’S 2022 ONLINE SURVEY
Mahalo to everyone who responded to our 2022 online survey. View the 2022 Survey Results and the Report on 2022 Annual Online Survey in the minutes of the Commission’s monthly meeting held on December 16, 2022.
2023 MEETING SCHEDULE
Commission meetings for 2023 are generally scheduled for the 2nd Wednesday of each month at 10:00 a.m. via remote Zoom video conferencing and/or in-person in Conference Room 204, Leiopapa A Kamehameha Building, 235 S. Beretania Street, Honolulu, Hawaii 96813. View the 2023 Meeting Schedule. Meeting location, dates and times are subject to change so please check the “2023 Meeting Schedule” page prior to attending a meeting.
DOWNLOADABLE CALENDAR AVAILABLE ON THE COMMISSION’S WEBSITE
An updated and downloadable calendar of events including (but not limited to) the candidate committee and noncandidate committee reporting schedules, the Commission’s monthly meeting schedule, and the State holidays can be downloaded by individuals into their Apple, Google, Microsoft Outlook, and Yahoo calendars as well as many other calendar programs that use the standard iCal format, from the Commission’s website. View the Commission’s Downloadable Calendar.
2023 AMENDED STANDARD MILEAGE RATE ANNOUNCED BY THE INTERNAL REVENUE SERVICE (IRS)
Effective January 1, 2023, for those committees that seek reimbursement from campaign funds for the campaign related use of a personal vehicle, the federal standard mileage rate is 65.5 cents per mile as announced in IRS Notice 2023-03 (up 3 cents from the 2022 midyear adjustment of 62.5 cents). The Commission reminds these committees that a daily mileage log noting the campaign use and personal use of the personal vehicle satisfies recordkeeping requirements of HAR §3-160-23. See, HAR §3-160-45(b)(1)(B).
MAHALO TO ADMINISTRATIVE ASSISTANT YAYOI TUMAMAO
The Commission would like to acknowledge and thank Yayoi Tumamao for her years of service as our Administrative Assistant and wish her well as she begins a new position at the State of Hawaii Judiciary in 2023.