CSC Newsletter – July 2015, Vol. 21, No. 2

Posted in Newsletter

REMINDER TO FILE SUPPLEMENTAL REPORT

The next report for all committees is the Supplemental Report covering the period January 1, 2015 to June 30, 2015.  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 July 31, 2015.

Failure to file this report by the deadline will result in a fine and, if you are a candidate committee, your committee’s name will be posted on the Commission website under “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.  Be advised that at this meeting it is very possible that a higher fine may be assessed.  Therefore, we encourage all committees to timely file their reports to avoid having to pay any fines.

As a reminder, the reporting period for the Supplemental Report ended on June 30th so the report can be filed as early as July 1st but no later than July 31st.  Committees do not have to wait until the July 31st deadline to file this report.

YAMADA & A-1 A-LECTRICIAN, INC. V. SNIPES, ET AL.

On May 20, 2015, the Ninth Circuit Court of Appeals affirmed the U.S. District Court for the District of Hawaii’s decision, which had mostly rejected a comprehensive challenge to Hawaii’s campaign finance law.  The lower court had ruled that (1) the definitions of “noncandidate committee,” “expenditure,” and “advertisement” are not unconstitutionally vague or overbroad, (2) the noncandidate committee disclosure requirements are constitutional under the First Amendment, (3) the noncandidate committee disclosure requirements may be applied to organizations that do not have political activity as their primary or only purpose, (4) the disclaimer requirement for advertisements is constitutional, (5) the electrical contractor plaintiff did not have standing to challenge the electioneering communication’s registration requirements because by administrative rule, the contractor, as a noncandidate committee, was not required to comply with the requirements, and (6) the ban on government contractors’ contribution contained in HRS §11-355 is constitutionally permissible.  The state also prevailed on the attorneys’ fee award issue on appeal.

View the case here – Yamada, et al. v. Snipes, et al.

NEW LAWS GOING INTO EFFECT

For the 2015 Legislative Session, three bills were signed into law by Governor David Ige.  They are:

o     Act 79 (SB 508) – Effective July 1, 2015, HRS §11-336(a) was amended to require noncandidate committees to file an additional preliminary report on October 1 of the year of a general election.

o     Act 78 (SB 654) – Effective January 1, 2016, HRS §11-353(d), relating to the prohibition of anonymous contributions, was amended to reduce the threshold amount on the calabash bowl exception from less than $500 to less than $100 from 10 or more persons at the same political function.

o     Act 209 (HB 1491) – Effective January 1, 2016, HRS §11-323(a), HRS §11-335(b), and HRS §11-338(b) were amended to require additional reporting by noncandidate committees solely making independent expenditures (i.e., Super PACs) for contributions aggregating more than $10,000 on their disclosure reports and greater than $5,000 on their late contribution reports from contributing entities that are not individuals, for-profit business entities or labor unions.  This bill requires independent expenditure committees to report the internet address where a contributing entity’s disclosure report can be publicly accessed, if the contributing entity is subject to any state or federal disclosure reporting requirements regarding the source of the contributing entity’s funds.

Notably, this is the fourth year that the Commission has unsuccessfully attempted to amend HRS §11-334(a)(4) to require candidate committees to file supplemental reports on January 31st regardless of whether it is an election year.  This comports with present practice as well as conforms with the reporting requirements of noncandidate committees.

VIOLATIONS OF THE CAMPAIGN FINANCE LAWS

The following candidate committees and noncandidate 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), we will be pursuing court enforcement up to and including contempt orders.  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.

CANDIDATE COMMITTEES

  • Richard Fale
  • Larry Gering
  • Stuart Gregory
  • Debbie Hecht
  • Creighton Higa
  • Henry Kahula, Jr.
  • Thornton Kekipi
  • Curtis Lake
  • Noralyn Pajimola
  • Adam Reeder
  • Christopher Stump
  • Nelson Waikiki
  • Hanalei Aipolani
  • Faye Hanahano
  • Gene Leslie
  • Edwin Miranda
  • Alex Sonson

NONCANDIDATE COMMITTEES

  • Change Hawaii
  • Protect Our Keiki
  • Save Ewa Beach
  • West Oahu 2010
  • Learning Matters

STATUS OF THE HAWAII ELECTION CAMPAIGN FUND

As many of you know, the Commission operates from a trust fund called the Hawaii Election Campaign Fund.  However, you may not know that in addition to providing public funding of political campaigns to qualified candidates, this fund pays for operations such as staff salaries, investigative services, expenses for subpoenas and process servers, training, and office supplies.

For the past nine fiscal years (FY 2007-FY 2015), the Commission has been operating at a net deficit and the fund has not been generating enough revenue to sustain operations.  The health and sustainability of this Commission depends on greater participation of Hawaii taxpayers in checking off the $3 “yes” box which permits $3 from state funds (or $6 if married and filing a joint return) to be allocated to the Hawaii Election Campaign Fund.  Checking off this box does not increase your tax or reduce your refund.

If you want the Commission to continue to “follow the money” of state and county elected officials, candidates, noncandidate committees, ballot issue committees, and Super PACs, please help us by marking the $3 tax check-off on your state income tax return.

RUNNING IN THE 2016 ELECTION?  TAKE A LOOK AT YOUR COMMITTEE DATA (OR YOUR OPPONENT’S COMMITTEE DATA) IN A VISUAL REPRESENTATION

Did you know that the Commission has transformed committee data into searchable data and visual graphics?  In colorful visuals, you will see pie charts, geo maps, and bar graphs of candidate committee and noncandidate committee data entered into our system.

If you are a candidate who ran in the last election, you may want to see how your committee performed with regard to monies raised and spent.  You may want to compare this data with your opponent or see how other candidates did in other districts or races.  If you are thinking about running in the next election, you may want to look at the candidate’s data who won in your district.  Click here for a quick summary of the 2014 election.

You might also be interested in seeing noncandidate committees, Super PACS, and ballot issue committee data.  Of interest might be what races they got involved in, which candidates they supported (or opposed), who gave them money, or how they spent their money.  Click here to view their data in visual graphics.

NEW – REPORTING SCHEDULES

The new reporting schedules have been posted on our website and are provided via the link below for your convenience to track upcoming reporting deadlines:

These reports must be electronically filed on your respective filing systems (CFS and NCFS) no later than 11:59 p.m. Hawaiian standard time on the day of the deadline. Failure to file any of these reports by the deadline will result in a fine and, if you are a candidate committee, posting of your committee’s name on the Commission website under “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.  Be advised that at this meeting it is very possible that a higher fine may be assessed.  Therefore, we encourage all committees to timely file their reports and pay any fines.  As a reminder, the reporting deadline is always a few days after the reporting period is over so you can always file the report early to avoid any penalties.

As a reminder, the Corporate Reporting System was repealed on November 5, 2014.  Corporations engaging in political activity regulated by the Commission must now register as noncandidate committees and report their activities on the NCFS.

NOT RUNNING IN THE 2016 ELECTION?  CONSIDER 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 completed and signed “CC Request for Termination of Registration” or “NC Request for Termination of Registration” form; and (2) A closing bank statement verifying that your committee’s bank account(s) have 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.

REMINDER – REPRODUCTION OF CANDIDATE MATERIAL BY NONCANDIDATE COMMITTEES

Pursuant to HRS §11-363(a), the financing by a person of the republication of a candidate’s campaign material is an in-kind contribution to that candidate.  For example, if an independent expenditure committee (Super PAC) obtains campaign material (e.g., a family photograph) from the candidate’s website or social media account, without the consent or knowledge of the candidate, and then uses that image in its own “independent” mailer in support of the candidate, the cost of the advertisement is an in-kind contribution to the candidate.

NEW COMMISSIONER

The Commission is composed of five volunteers representing the general public who are appointed by the governor from a list of ten nominees submitted by the judicial council. Recently, Bryan Luke was selected to serve on the Commission.  His term expires on June 30, 2019.

Bryan Luke is the President and Chief Operating Officer at Hawaii National Bank, a local community bank that specializes in serving individual account holders and locally owned, closely held businesses.  A graduate of Punahou School, he received his BA from Amherst College and MBA from Harvard University.  Bryan has served on a number of community boards including The Rehabilitation Hospital of the Pacific, Pacific and Asian Affairs Council, and Teach for America – Hawaii.

MAHALO TO COMMISSIONERS G. WILLIAM SNIPES AND TINA PEDRO GOMES

After serving four years on the Commission, Commissioner G. William “Bill” Snipes and Calmentina “Tina” Pedro Gomes completed their terms on June 30, 2015.  We extend our deepest gratitude for their dedication, support, and guidance in improving campaign finance in the State of Hawaii.

UPCOMING EVENTS

Be on the lookout for the following events which will be posted on our website and Facebook accounts, e-blasted to subscribers, and tweeted on our Twitter page when they are available.

1 – The Commission’s Annual Online Survey for 2015 – We are planning to post our annual online survey on our website in September 2015.  Please take a moment to complete this survey as it will help us improve our services and give us a chance to hear from you.  The results of the online survey will then be posted on our website.

2 – FY 2015 Annual Report – We will post and publish our annual report for fiscal year 2015 once we have obtained Commissioners’ approval in fall 2015.

3 – Hawaii Administrative Rules – We will propose amendments to Chapter 3-160 (Election Campaign Contributions and Expenditures) and Chapter 3-161 (Administrative Practice and Procedures Before the Commission) of the Hawaii Administrative Rules.  The proposed amendments for the most part updates obsolete references to the HRS and makes technical and grammatical corrections.  It also proposes a new section that implements section 2 of Act 112, Haw. Sess. Laws 2013, which requires Super PACs to identify its top contributors in their advertisements.