Prosecutor gets PAC gripes

The city prosecutor’s office is now tasked with deciding whether criminal charges are warranted in connection with two complaints related to the 2012 mayoral campaign activities of the Pacific Resource Partnership Political Action Committee.

The state Campaign Spending Commission voted 3-1 Wednesday to refer the complaints filed earlier this year by former governor and former mayoral candidate Ben Cayetano and Kristin Izumi-Nitao, the commission’s executive director, to the prosecutor’s office.

A third complaint filed last week by commission staff against PRP was deferred until next month, to give attorneys additional time to review it.

"We were concerned that the issue was arising under repetitive circumstances — that it wasn’t just one case, but we have two or three on the docket," G. William Snipes, commission chairman, said after the meeting. "We were concerned that they were repetitive, that they were substantial sums of money involved and we thought it warranted further investigation."

Cayetano, who did not attend the meeting due to a previously scheduled trip to San Diego, said by telephone that it was appropriate for the prosecutor to further examine the case.

"That’s where the full evaluation should be done," he said. "The commission is not equipped to do that kind of analysis."

In a statement, PRP expressed disappointed with the decision.

"We have been working closely with commission staff over the last several months, and we have fully cooperated, answered all their questions, amended our reports and agreed to pay fines," the statement read. It continued, "We do not believe that alleged reporting mistakes, as opposed to more serious issues, should be the subject of this type of referral."

The prosecutor’s office can either pursue criminal charges or decline the case and send it back to the commission, which would then issue a decision.

Cayetano’s complaint alleges that the PRP PAC schemed to defeat his mayoral candidacy months before it filed formally as a PAC, failed to state clearly that expenditures were made to oppose his candidacy, and failed to report several hundred thousand dollars of expenditures to hire several consultants and public relations people.

Last month, commission staff recommended that Cayetano’s case be dropped because in September the PRP PAC paid a $1,250 fine for failing to report payment of more than $200,000 to campaign consultant Andrew Winer, public relations firm Hoakea Communications and mainland political consultant Jason Stanford. The super PAC also amended its 2012 reports to reflect the additions.

Cayetano urged the commission to rescind the fine and instead refer the complaint to the prosecutor’s office so that the PRP PAC and John White, its executive director, could be prosecuted criminally for a Class C felony, as allowed when a campaign financing violation is suspected to be intentional.

He argued that White and PRP had shown "a pattern of disrespect and contempt" for campaign spending laws.

Leroy Colombe, an attorney for PRP, acknowledged that mistakes were made in reporting but argued that considering prosecution is an extraordinary step.

Colombe said money spent in the months prior to the formation of the PRP PAC was for exploratory work aimed at determining whether a successful campaign could be mounted against Cayetano, who was opposed to the city’s rail project, which was strongly supported by PRP.

Such exploratory work should not be construed as money spent on "express advocacy," such as taking out ads or mailing fliers. He disagreed that such expenditures needed to be reported prior to the formation of the PAC.

The second complaint sent to the prosecutor, filed by Izumi-Nitao of the Campaign Spending Commission, charges the super PAC with failing to report an invoice for more than $86,000 for money spent to help the 2012 campaigns of Hono­lulu Mayor Kirk Caldwell and two others.

The invoice was for fliers mailed by mainland advertising firm Mission Control Inc. to help the successful campaigns of Caldwell, Hono­lulu City Councilwoman Carol Fukunaga and Hawaii County Councilwoman Valerie Poindexter.

Commission staff urged commissioners to accept its recommendation to either fine the super PAC $1,000 or send the matter to attorneys for possible prosecution.

Colombe said that the matter was an isolated incident and merited only a fine.

The PRP PAC was dissolved in January 2013, but its Hawaii Carpenters Market Recovery Program Fund has since set up the group Forward Progress as a separate super PAC that was active in the 2014 elections.

The complaint filed by the Campaign Spending Commission staff alleges that the Recovery Program Fund failed to register with the commission and file reports upon donating $5,000 to the Good Beginnings Alliance. It also alleges that Forward Progress failed to identify a candidate on Maui supported by an independent expenditure and also failed to identify expenditures spent for mailers to oppose Hawaii County Council candidate Margaret Wille.

The commission staff is recommending fines totaling $3,100 or referral of the complaint to the prosecutor’s office.