Anti-Caldwell PAC’s Inaccurate Reporting Leads To $15,000 Fine
The Hawaii Campaign Spending Commission investigated the PAC for vast discrepancies between its campaign reports and bank records.
The state Campaign Spending Commission slapped a political action committee and the local businesswoman who ran it with more than $15,000 in fines Wednesday for missing deadlines and misreporting information.
鈥淲e went though a whole election where the public didn鈥檛 see the full flow of money. A whole election, and we didn鈥檛 know where the money came from,” Campaign Spending Commission Director Kristin Izumi-Nitao said.
The PAC, run by Sarah Houghtailing, ended up in the hot seat in 2016 after it failed to disclose its primary funder, Dennis Mitsunaga who owns the engineering firm Mitsunaga & Associates, in advertisements attacking Honolulu Mayor Kirk Caldwell.
Now, the PAC and Houghtailing are the target of a months-long investigation by the commission, which revealed multiple instances of misreported campaign donations that total in the hundreds of thousands of dollars.
Many of the discrepancies had to do with transactions reflected in the PAC’s bank account but not in its campaign reports or vice versa.
For instance, the PAC reported a $170,000 donation from Mitsunaga, but that donation never showed up on bank records. Neither did a $700 contribution from Houghtailing and a $300 contribution from Stephanie Chong.
Commission staff wanted the five-member panel to refer the case to the attorney general鈥檚 office but the commission declined to take that step Wednesday.聽聽
Sheri Tanaka, who has previously represented Mitsunaga & Associates and now represents Houghtailing, described the violations as honest mistakes.
鈥淪he鈥檚 not an accountant. She鈥檚 not an attorney. She was running a non-candidate committee for the first time,鈥 Tanaka, who Houghtailing retained as legal counsel just this week, told the commission.
Houghtailing said it will also be her last time running a PAC.
鈥淗onestly, I鈥檓 not doing it again,鈥 she told the commission during the meeting. 鈥淭his is way too much for me.鈥
Officials at the Campaign Spending Commission, including Izumi-Nitao and Kam, said they tried to reach Houghtailing several times over the past couple months but didn’t get the answers they were seeking.
鈥淚 didn鈥檛 realize how serious it was,鈥 Houghtailing told the commission.
鈥淵ou see how voluminous the complaint is?鈥 Izumi-Nitao asked, holding up Houghtailing鈥檚 case file. 鈥淲e tried to convey the seriousness multiple times.鈥
The commission found about $163,265 of PAC spending in bank records but not in campaign reports. Conversely, they found more than $200,000 in campaign report spending not listed in the bank records.
For example, bank records showed about $50,446 paid to a media production company that were not listed in campaign reports.
Houghtailing also made out a check to herself for about $24,000 in March 2018, which was not noted in campaign reports.
Tanaka told the commission that Houghtailing was reimbursing herself for money she spent on the PAC. Houghtailing plans to reopen the PAC account and deposit the $24,000 there.
Many of the expenses that were reported in campaign filings but not in the bank records were related to local ad buys and contracts with companies to produce advertising.
Tanaka attributed the discrepancies to donors paying for expenses directly. If that鈥檚 the case, then the PAC needs to report those as in-kind contributions, commission attorney Gary Kam said.
On top of the fines, Houghtailing must amend her previous filings, as well as file the seven reports she missed. She could face additional penalties.
鈥淚f we see potential violations, yeah, we鈥檒l bring another complaint,鈥 Kam said.
Read the full complaint below.
