CSC Newsletter – July 2016, Vol. 22, No. 2Posted in Newsletter
NEW – DOWNLOADABLE CALENDAR AVAILABLE ON THE COMMISSION’S WEBSITE
A downloadable calendar of events including (but not limited to) the candidate committee and noncandidate committee reporting schedules, our 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 at https://ags.hawaii.gov/campaign/commission-calendar.
A warm mahalo to those of you who have called the Commission to let us know you are using this new tool!
NEW – ELECTIONEERING COMMUNICATIONS FORM
An electioneering communication means any advertisement that is broadcast from a cable, satellite, television, or radio broadcast station; published in any periodical or newspaper or by electronic means; or sent by mail at a bulk rate, and that: (1) Refers to a clearly identifiable candidate; (2) Is made, or scheduled to be made, either within 30 days prior to a primary or initial special election (i.e., July 14, 2016) or within 60 days prior to a general or special election (i.e., September 9, 2016); and (3) Is not susceptible to any reasonable interpretation other than as an appeal to vote for or against a specific candidate.
Persons, which include an individual, a partnership, a candidate committee or noncandidate committee, a party, an association, a corporation, a business entity, an organization, or a labor union and its auxiliary committees, who make electioneering communications in an aggregate amount of more than $2,000 during any calendar year, are statutorily required to file a Statement of Information for Electioneering Communications within 24 hours of each disclosure date with the Commission.
The new Statement of Information is available here (eSign version) and it must contain information set forth in HRS §11-341 and HRS §11-393. Persons who fail to submit this form timely will be in violation of the campaign finance laws.
Notably, for candidate committees and noncandidate committees, this form must be filed in addition to the filing of any other required report.
2016 ELECTION OBSERVATIONS
In 2016, there are 269 candidates running for 104 seats up for election out of 128 elective seats in the state of Hawaii and its four counties. The 104 seats up for election this year are: Senate (14), House (51), Honolulu Mayor (1), Hawaii Mayor (1), Honolulu Prosecutor (1), Hawaii Prosecutor (1), Kauai Prosecutor (1), Honolulu City Council (5), Hawaii County Council (9), Maui County Council (9), Kauai County Council (7), and Office of Hawaiian Affairs (4). View the list of candidates running in 2016 and their organizational reports which includes their committee officers such as their appointed chairperson and treasurer. Nineteen (19) candidates are unopposed this year and ten (10) incumbent candidates have decided not to run for their seat. 145 or 54% of the 269 candidates running this year have filed the Affidavit to voluntarily agree with the expenditure limit set for their office and 39 or 14% of the 269 candidates running this year have 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. So far this year, five (5) candidates have received a total of $17,685 in partial public funding. Future updates can be viewed on the “Public Funds Disbursed” page. Also, 181 fundraisers have been held in 2016 with 63 of those fundraisers being held during the legislative session by legislators. View a list of fundraisers held in 2016 and an interactive chart of the same information. Good luck to all candidates this year!
REMINDER OF UPCOMING REPORTS
The 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 or weeks after the reporting period is over so you can always file the report early to avoid any penalties.
We recommend that you add these reports now to your schedule in the CFS/NCFS.
NEW LAWS GOING INTO EFFECT AND REVIEW OF 2016 LEGISLATIVE SESSION
There are two new laws from the 2015 Legislative Session that went into effect on January 1, 2016. They are:
o Act 78 (S.B. No. 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 (H.B. No. 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 either (1) 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, (2) the name, address, occupation, and employer of each funding source that contributed $100 or more in the aggregate to that contributing entity, or (3) an acknowledgement that the contributing entity is not subject to any state or federal disclosure reporting requirements regarding the source of the contributing entity’s funds.
There was only one bill relating to campaign finance that was passed in the 2016 legislative session. H.B. No. 2156 amends HRS §11-381(a)(8) to include expenses incurred for memberships in civic or community groups and protocol gifts as ordinary and necessary expenses of a holder of office. This bill was not on the Governor’s veto list so it will pass with or without the Governor’s signature.
The Commission submitted four bills (eight, counting companion bills) this year – all were blocked by the House Finance Committee.
REVISING THE COMMISSION’S HAWAII ADMINISTRATIVE RULES
The Commission is proposing 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 updates the rules to address recent amendments to the HRS, including the implementation of the hardship waiver in HRS §11-393(c) (Act 112, Haw. Sess. Laws 2013), which requires Super PACs to identify its top contributors in their advertisements, and the defining of “close to depletion” and “near depletion” of the Hawaii Election Campaign Fund which will impact the operation of the partial public financing program.
The Commission will be issuing a Notice of Public Hearing informing all persons interested in the proposed amendments that a public hearing will be scheduled on Wednesday, August 31, 2016 at 9:30 a.m. at the Leiopapa A Kamehameha Building, 235 S. Beretania Street, Room 204, Honolulu, Hawaii 96813. All interested person shall be afforded the opportunity to submit data, views, or arguments, orally or in writing, at the time of the hearing.
GUIDANCE ON CANDIDATE COMMITTEE CONTRIBUTIONS TO CHARITABLE/COMMUNITY OR NON-PROFIT ORGANIZATIONS
Under HRS §11-381(a)(3), candidate committees may make donations to any community service, educational, youth, recreational, charitable, scientific, or literary organization as long as the total amount of all donations is no more than twice the maximum amount that one person may contribute to that candidate pursuant to HRS §11-357 and the donations cannot be made from the date the candidate files nomination papers to the date of the general election.
Candidate committee contributions made directly to charitable/community or non-profit organizations are permitted; however, if the contribution is being made and the candidate or candidate committee representatives are deriving a benefit such as attending a fundraiser banquet, dinner or golf tournament, Advisory Opinion No. 01-09 provides that these benefits would be deemed to be personal expenses, and therefore, not a proper expenditure of campaign funds. Hawaii Administrative Rules (“HAR”) §3-160-42(b) defines “personal expenses” as “expenses that would exist irrespective of a candidate’s campaign to seek the nomination or election to office or being elected to office.” The Advisory Opinion states that “[t]he personal decision to expend financial resources to attend these events would exist irrespective of the candidate’s campaign efforts.”
On another note, the Commission has also been aware of candidate committees’ donations to charitable/community or non-profit organizations being reported as advertising that is directly related to the candidate’s campaign under HRS §11-381(a)(1). In these instances, the candidate committee is characterizing its donation as advertising because the candidate committee is being recognized as a sponsor in the charitable/community or non-profit organization’s program or recognition materials. Given these circumstances, the Commission is likely to inquire further since HRS §11-381(a)(3) has amount and time limitations for donations to charitable or community organizations, while advertising directly related to a candidate’s campaign provision (i.e., HRS §11-381(a)(1)) has no limitations. Generally, if the nonprofit reports the expenditure by the candidate committee as a tax-exempt donation to the IRS, the Commission will treat the expenditure likewise, and thus the amount and time limitations will apply.
OVERWHELMING SUCCESS OF LAUNCH OF eSIGN FORMS
On February 1, 2016, the Commission launched eSign forms for committees to use as an additional and alternative way to submit forms for the 2016 election. The new tool was made available through ETS’ commitment to employ new technology to improve government efficiency, services, and communication. The success of this launch has been tremendous to the Commission. To date, we have received a little over 400 eSign documents since we launched this application.
For candidate committees, eSign is available for the following forms: (1) Electronic Filing Form; (2) Executed Loan Document; (3) Notice of Intent to Hold a Fundraiser; (4) Request for Termination of Registration; and (5) Public Funding – Statement of Intent to Seek Public Funds. For noncandidate committees, eSign is available for the following forms: (1) Electronic Filing Form; (2) Notice of Intent to Hold a Fundraiser; and (3) Request for Termination of Registration.
For those committees who are unfamiliar with eSign, these forms are completed, esigned, and emailed to the Commission. Forms requiring multiple signatures (i.e., Electronic Filing Form and Executed Loan Document) must be completed, esigned, and emailed separately by each person required to sign the form. The Commission will not process a multiple signature form until the form is complete with all the required signatures and will leave it to the committee to ensure that a proper and complete form has been submitted.
REMINDERS & TIPS IF YOU ARE RUNNING IN THE 2016 ELECTION
As the Primary Election is on August 13, 2016, we offer the following reminders and tips to all candidates and their committees. Of course, this is not a conclusive list so for more information please call us at (808) 586-0285, stop by our office at 235 South Beretania Street, Room 300, or visit our website.
- Make sure all your candidate committee’s contact information on the Organizational Report is updated and correct in the event that the Commission needs to contact you. If not, please update this information and file an amended Organizational Report. By law, any change in information previously reported in the Organizational Report must be electronically filed with the Commission within ten (10) days of the change being brought to the attention of the committee chairperson or treasurer.
- Once you file nomination papers to the date of the general election, candidate committees are prohibited from making charitable donations with campaign funds.
- From the nomination paper deadline to the date of the general election, candidate committees are prohibited from using campaign funds to award scholarships to full-time students attending an institution of higher learning or a vocational education school.
- If your committee’s aggregate contributions and aggregate expenditures for the election period will total $1,000 or less, remember to check off the box on the “Candidate Committee Electronic Filing Form” and file the form with the Commission. Pursuant to HRS §11-339, you need only electronically file the Final Election Period Report. If you exceed the $1,000 limit, you will then be required to electronically file all the other required reports.
- When you electronically file your reports with the Commission, candidates and treasurers are certifying that the information contained in the filed reports are true, complete, and accurate. Therefore, it is strongly advised that you verify your reports before you file them since the Commission will rely on the electronically filed information which could generate an inquiry/investigation.
- Be sure to check your reporting schedule and add the necessary reports to your schedule in the Candidate Filing System. 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.
- Remember if you use campaign funds to purchase 2 tickets to another candidate’s fundraiser that you retain the tickets for your records.
- If you need assistance and the Commission’s office is closed, please go to our website to see the various tools available (i.e., cyber videos, guidebooks, & manuals) that will hopefully assist you, answer any questions, and/or show you how to file reports in the electronic filing system.
- If a Super PAC approaches your candidate committee, it is important to remember that its support of your nomination to election to office must be “independent” and that you and your agents are not “coordinating” campaign activities with them. If either of these circumstances occur, then the spending done by the Super PAC on your behalf will be deemed to be a contribution to your campaign subject to your contribution limit and the Super PAC will lose its status as a Super PAC.
- A Super PAC’s use of your campaign material, without your knowledge or consent, in the Super PAC’s “independent” advertising on your behalf, will be considered a contribution to you. This will likely result in an excess contribution on the part of the Super PAC for which a fine will be assessed by the Commission against the Super PAC.
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 running in the 2016 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 or how they fared in a prior election. Click here to view their data in visual graphics.
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.
VIOLATIONS OF THE CAMPAIGN FINANCE LAWS
The following candidate 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), 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.
- Richard Fale
- Henry Kahula, Jr.
- Curtis Lake
- Noralyn Pajimola
- Faye Hanohano
- Hanalei Aipolani
- Creighton Higa
- Change Hawaii
- Protect Our Keiki
- Save Ewa Beach
- West Oahu 2010
- Learning Matters
STATUS OF THE HAWAII ELECTION CAMPAIGN FUND AND REMINDER TO CHECK OFF $3 ON YOUR 2016 TAX RETURN
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 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 2016), 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.
So, if you are a Hawaii taxpayer, please remember to mark the $3 tax check-off on your 2016 state income tax return so that the Commission can continue to “follow the money” of state and county elected officials, candidates, noncandidate committees, ballot issue committees, and Super PACs.
2016 STANDARD MILEAGE RATE ANNOUNCED BY INTERNAL REVENUE SERVICE (IRS)
For those committees that seek reimbursement from campaign funds for the campaign related use of a personal vehicle, the federal standard mileage rate for 2016 is 54 cents per mile (which is less than last year). See, IRS Notice 2016-01 which was adopted by Comptroller’s Memorandum No. 2015-27. 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).