Minutes for December 13, 2006

Campaign Spending Commission Meeting
Leiopapa A Kamehameha Building, Room 204
December 13, 2006
10:00 a.m.

Members Present:
Paul Kuramoto, Steven Olbrich, Gino Gabrio, Dean Robb, Michael Weaver

Staff Present:
Barbara Wong, Tony Baldomero, Grant Tanimoto, Ellen Kojima

Call to Order:
Meeting convened at 10:04 a.m. with Chairperson Kuramoto presiding.

Consideration of Minutes:
Mr. Gabrio moved to approve minutes of October 11, 2006 and November 9, 2006.  Motion seconded by Mr. Weaver.  Motion carried.

Old Business:
Docket 06-05  In Re the Matter of Louis Erteschik, Friends of Lou Erteschik
Complaint filed by the Executive Director Wong against Louis Erteschik and Friends of Lou Erteschik for receiving excess nonresident contributions.

November 9 meeting it was determined that there was probable cause that the law was violated and a fine of $1.00 was assessed.

For Commissioners’ consideration and adoption of findings of fact and conclusions of law supporting a preliminary determination of probable cause that the law was violated.  After review and discussion Commissioners felt that #7 under Conclusions of Law is more a statement of fact and should be deleted.

Mr. Robb moved to approve the Findings of Fact and Conclusions of law with the deletion of #7 from the Conclusions of Law.  Motion seconded by Mr. Gabrio.  Motion carried (No-Olbrich)

New Business:
Docket 06-06  Lawrence Ford v. Citizens for Kona
Mr. Lawrence Ford filed a complaint alleging that the Citizens for Kona noncandidate committee had expended over $1,000 without registering as a noncandidate committee and not reporting the source of their funds.

Citizens for Kona has registered as a noncandidate committee and has filed all required disclosure reports and paid all assessed fines for failure to file timely reports.  Staff recommended dismissal of the complaint.

Mr. Robb moved to dismiss the complaint.  Motion seconded by Mr. Weaver.  Motion carried. (Mr. Gabrio-recused, a contributor to Citizens for Kona is a client.)

Docket 06-07  Lawrence Ford v. Virginia Isbell
Mr. Lawrence Ford filed a complaint alleging that Virginia Isbell did not file the Final Primary and Preliminary General reports for her campaign committee on time.

The Isbell campaign committee has since filed the two reports and paid the late penalties for each report.  Staff recommended dismissal of the complaint.

Mr. Robb moved to dismiss the complaint.  Motion seconded by Mr. Weaver.  Motion carried.

Docket 06-09  Gene Ward v. A. J. Halagao
A.J. Halagao, Gene Ward, and Dick Baker, a member of the Ward campaign present.

Mr. Gene Ward filed a complaint seeking disclosure of A.J. Halagao’s $100 and under contributions to determine if Mr. Halagao violated the non-resident contribution limit.

During the February workshop, which Mr. Halagao attended, the plain reading interpretation of section 11-204.5, HRS was being represented, which was that any non-resident individual’s contributions shall not exceed 20% of the total contributions received by a candidate.  When in late June 2006, the AG opinion came out, that non-resident contributions could not be more than 20% of a candidate’s total contributions for a reporting period, Mr. Halagao contacted the staff and asked what he would need to do to comply.

The Halagao committee has provided all of its $100 and under contributions information, as well as amended two disclosure reports because of deficiencies and paid the assessed penalties.  Mr. Halagao followed the initial interpretation and when that changed, he contacted the staff and asked what he would need to do to comply.  He complied with the required reporting and requests for documents by the Commission.  He did exceed the 20% threshold for non-resident contributions; however, because Mr. Halagao relied on the Commission’s initial interpretation of the law, the Staff recommended dismissal of the complaint.

Mr. Ward represented that on the face of the reports filed, there was a violation of the law and that even the amended reports are not clear as to what was corrected.  He further stated that the interpretation and application of the law is confusing and that the law is not specific in that it is not clear that the 20% also includes the $100 and under contributions.

Mr. Baker asked the Commission whether the staff has the power to investigate should a question arise from a candidate’s report.  Reason he asks is because when his wife, who is Gene Ward’s Treasurer, came into the office with some questions and asked whether the staff could request information regarding Mr. Halagao’s $100 and under contributions, she was told that the staff did not have the power to do that and that it would have to go before the Commission to decide.

Ms. Wong responded that Ms. Baker did come into the office with several questions, which she answered.  With regard to the question of requesting the$100 and under contributions, she was told that Halagao was not required to report these contributions individually and that she would have to file a complaint before staff would proceed.

Mr. Halagao represented that he followed the initial interpretation and that when the interpretation changed he contacted the staff and asked what he would need to do comply with the new interpretation, he then complied, and that he did not intentionally violate the law.

Mr. Gabrio moved to dismiss Docket 06-09 based on the fact that the candidate relied on staff interpretation.  Motion seconded by Mr. Robb.  Motion carried.

Docket 06-10  Gene Ward v. A.J. Halagao
Mr. Gene Ward filed a complaint alleging that Mr. Halagao’s non-profit group called “We Love Hawaii Kai” promoted his candidacy by placing a “We Love Hawaii Kai” bumper sticker in his campaign literature and by an implied endorsement in a mailer to voters.

Staff review found that the non-profit was established before Mr. Halagao filed nomination papers and the non-profit’s website made no reference to Mr. Halagao’s candidacy nor was there any appeal for funds.  Staff found no violation within jurisdiction of the campaign spending law and recommended dismissal of the complaint.

Mr. Ward presented a chronological sequence as to how the non-profit was established and used as a community entry point for Mr. Halagao’s campaign for office.  Mr. Ward’s concern is that Mr. Halagao’s candidacy preceded the establishment of the non-profit.

Mr. Robb moved to dismiss Docket 06-10 as there is no violation within the jurisdiction of the campaign spending law. Motion seconded by Mr. Olbrich.  Motion carried.

Docket 06-11  Gene Ward v. Friends of A.J. Halagao
Mr. Gene Ward filed a complaint alleging that Mr. Halagao violated HRS, section 84-13, where he used the name of the University of Hawaii in his campaign literature.  A violation of section 84-13 is not within the jurisdiction of the Commission and the matter has been referred to the Ethics Commission.  Staff recommended dismissal of the complaint.

Mr. Robb moved to dismiss Docket 06-11.  Motion seconded by Mr. Weaver.  Motion carried.

Docket 06-12  Alexander Achmat v. Mike Gabbard for State Senate
Alexander Achmat filed a complaint alleging that the Gabbard State Senate campaign used state campaign funds to pay for used signs, banners, stakes and t-shirts from his federal campaign.

Prior to purchase of signs from the federal committee, Treasurer for the Gabbard state committee called and inquired if is was permissible for the state committee to use signs and banners from the federal committee.  Staff advised that the federal committee could make a non-monetary contribution up to the contribution limit or the state committee could purchase the signs and banners from the federal committee at fair market value.  State and federal committee reports show the purchase of the signs and banners.  Staff recommended dismissal of the complaint.

Mr. Gabrio moved to dismiss Docket 06-12.  Motion seconded by Mr. Robb.  Motion seconded.

Draft Conciliation Agreement 06-22  PTW, Inc.
PTW, Inc. made two excess contributions to its noncandidate committee.  Excess contributions will escheat from the Lingle and Takai committees.  Staff recommended a fine of $500.

Mr. Gabrio moved to accept Conciliation Agreement 06-22.  Motion seconded by Mr. Weaver. Motion carried.

Draft Conciliation Agreement 06-23  Stoebner Holdings dba Honda Windward
Staff asked that the matter be deferred until the next meeting to do additional research and amendments.

Mr. Olbrich moved to defer matter until the next meeting.  Motion seconded by Mr.Robb.  Motion carried.

Draft Conciliation Agreement 06-24  Stanford Carr Development, LLC
Stanford Carr Development noncandidate committee made five excess contributions totaling $3,500 between February 28 and August 2, 2006.  Excess contributions will escheat from the Yamane, Chang, Baisa, Gabbard and Safarik committees.  Staff recommended a fine of $560, as Stanford Carr self-reported to the Commission.

Mr. Weaver moved to accept Conciliation Agreement 06-24 with a fine of $560.   Motion seconded by Mr. Olbrich.   Motion carried.

Draft Conciliation Agreement 06-25  Atlantis Adventures, LLC
Atlantis Adventures noncandidate committee made an excess contribution of $3,000 on June 1, 2006.  The excess contribution was returned within 30 days and not subject to escheat.  Staff recommended a fine of $375, as Atlantis Adventures self-reported to the Commission.

Mr. Robb moved to accept Conciliation Agreement 06-25 with a fine of $375.  Motion seconded by Mr. Olbrich.  Motion carried.

Draft Advisory Opinion 06-10
Green Party gubernatorial candidate Jim Brewer requested an opinion on whether “in-kind” contributions were made by the Society of Professional Journalists who sponsored a debate and the television stations who broadcasted the debate between the Republican and Democratic Party gubernatorial candidates, to which he was not invited.

Draft advisory opinion basically follows the federal guidelines with regard to a candidate being invited to take part in a public appearance with other candidates.  Based on information provided for this situation and following the federal guidelines no contributions were made by the sponsors or the stations broadcasting the debate.

Mr. Jim Brewer, present at the meeting, noted that regardless of party affiliation or whether the candidate is a viable candidate or not, if there are other candidates they should also be invited to participate, and if not, those that do would be receiving an in-kind contribution from the sponsors because they are promoting the candidacy of the participating candidates.

Discussion on this issue and Commissioners asked for additional criteria in the advisory opinion.

Mr. Weaver moved to defer matter until the next meeting for further revisions.  Motion seconded by Mr. Olbrich.  Motion carried.

Communication to Commission:
Web-based Candidate Filing System
Currently in the process of training users on the new web-based candidate filing system, and with the new system there is no software to install, is Mac compatible, and multiple users will be able to use the system at one time.

Next Meeting:
Scheduled for Wednesday, January 10, 2007at 10:00 a.m.

Mr. Gabrio moved to convene an executive session pursuant to HRS section 92-05(a)(8).  Motion seconded by Mr. Robb.  Motion carried.

Public session reconvened –
No further business to discuss Chair Kuramoto adjourned meeting.
Meeting adjourned at 1:00 p.m.