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The Honolulu Advertiser
Posted on: Thursday, September 28, 2006

Confusion on campaign finance

By Johnny Brannon
Advertiser Staff Writer

In a move that state Attorney General Mark Bennett said was unwarranted, the agency that oversees Hawai'i's campaign finance laws briefly suspended enforcement of new limits on Mainland political money.

The limits part of a larger campaign finance law approved last year require that no more than 20 percent of the total contributions to a candidate for state or county office come from out-of-state donors. Or do they?

Not everyone reads the statute the same way, and now a U.S. Supreme Court decision that struck down a Vermont campaign finance law in June is raising questions about the validity of Hawai'i's law, which took effect in January and has never been tested in court.

So far, no Hawai'i politicians have been penalized for excessive out-of-state donations. Barbara Wong, director of the state Campaign Spending Commission, said she is aware of several possible violations, but decided last week to hold off on enforcing the law because of the Supreme Court ruling.

Wong abruptly reversed course minutes after Bennett yesterday told The Advertiser that no suspension was warranted, then called Wong to inform her.

The situation is politically awkward since the limit on Mainland money was widely viewed as a way for the Democrat-controlled Legislature to prevent Republican Gov. Linda Lingle who appointed Bennett from raising big money on the Mainland in this election year.

Wong said she had told one candidate last week that the law would not immediately be enforced, after the candidate complained about possible violations by a rival. Wong declined to name either candidate because her investigation has not concluded, but said at least three Hawai'i politicians may have violated the provision.

Wong noted that Mainland donations from a candidate's immediate relatives are excluded from the limit, however.

At least one Democrat who was defeated in Saturday's election who happens to be an attorney said he received more than 20 percent of his tiny campaign fund from old Mainland buddies, but had interpreted the law differently than the campaign commission now does.

The law says that "contributions from any individual or any person ... who is not a resident of the state ... shall not exceed twenty percent of the total received."

Louis Erteschik, who lost the House District 23 (Waikiki, Ala Moana, Kaka'ako) Democratic primary race, said he believed the law meant that one person from out of state could not provide more than 20 percent of a candidate's donations not that the total in Mainland money could not exceed 20 percent.

Erteschik who worked for 14 years as a Legislature staff attorney and is now a lawyer for the Hawai'i Disability Rights Center filed campaign reports stating that he raised $5,648 between July and early September, with $3,575 coming from Mainland donors.

"Obviously, as a lawyer, I'm not going to intentionally flout the campaign law and report it on my forms," he said. "I was definitely over 20 percent in terms of the total. But to me, if you read the law, it's clear as day, and talking about one person."

And that's the same way Wong initially understood the law.

"There was at least one candidate that contacted us for an interpretation of the law, and we read it plainly, which said an individual can give no more than 20 percent of the total for the reporting period," Wong said. "Then we got an opinion from the attorney general, who said it just meant the candidate could not get a total of more than 20 percent from out of state."

In the meantime, the Supreme Court ruling noted that a lower court had declared unconstitutional a Vermont law with out-of-state contribution limits similar to Hawai'i's, she said.

Wong had requested a written opinion from Bennett's office on the ramifications of the Supreme Court case, and suspended enforcement in the meantime.

Bennett said he hopes to provide the written advice by next week, but that enforcement should continue because a reasonable legal argument can be made that Hawai'i's limits are not unconstitutional.

"The law was passed by the Legislature, and there is no court or agency or anyone else that's declared the law invalid or inapplicable," Bennett said. "And as far as I know, there has been no lawsuit contending that the law is unconstitutional."

He said Vermont's law was not exactly the same as Hawai'i's with regard to out-of-state donations, and he noted that the first ruling on the Vermont case was issued by the 2nd Circuit, which does not include Hawai'i. The later Supreme Court decision did not directly address out-of-state campaign donations, he said.

Staff writer Derrick DePledge contributed to this report.