DOCKET NO, 18-08 COMPLAINT EXHIBITS 1-80 IN RE THE MATTER OF MARK K. ING and FRIENDS OF KANIELA ING, Mark K. Ing’s Response to Complaint Aloha Chair Luke, Vice-Chair Goodenow, and honorable members for the Campaign Spending Commission (CSC) Thank you for the opportunity to testify before you today and for granting a continuance on our hearing last month. The extended time has allowed me to offer my best effort in responding to each count outlined in this complaint. First off, all mistakes | made in my campaign finance reports throughout my grassroots State House campaigns fall on me. | take full responsibility. | am sorry to the Commission, to my campaign team and volunteers, to my campaign donors, to my constituents, and to the people of Hawaii for my mistakes. While my mistakes were inadvertent, | understand the seriousness of such mistakes, their ability to erode public trust in government, and the utmost importance of adhering to campaign finance regulations. | appreciate the critical purpose of the Campaign Finance Commission and the extensive work done by your staff in regards to this matter. In this response, | will explain and provide evidence to the following: 1. Ihave worked in good faith, and to the best of my ability, to file complete, accurate, and timely campaign finance reports since my first day as a candidate for public office 2. Despite my efforts, | have made mistakes that were unintentional and without malice or intention to deceive. 3. My mistakes ultimately hurt me and did not result in neither long- or short-term political, financial, or personal gain 4. Early mistakes went unrecognized and recurred throughout subsequent reports. In turn, every one of my reports were inaccurate, and the aggregate discrepancy became increasingly significant. o6. Extenuating circumstances such as expiring or full PO Boxes, banking errors, and overdrafted accounts made accurate reporting more difficult 7. Ihave not knowingly, recklessly, or intentionally committed any campaign finance violation. 8. When alerted of any mistake, | swiftly corrected it to the best of my ability and made any reimbursements necessary. 9. Many of the filings outlined in this complaint were already corrected since the original filings but are not reflected in the counts. 10. This experience has resulted in significant stress on me, my finances, my reputation, and my family. Albeit the hard way, this ordeal has taught me extremely valuable lessons. 11.1 have promptly taken remedial steps and preventative actions to correct my mistakes and work to ensure this never happens again Timeline of Rec 1g Complaint | received a request for information from Gary Kam, CSC General Counsel, dated November 21, 2017. | obtained bank records that same day, and responded by the requested date of December 5, 2017 truthfully to the best of my knowledge. | was unaware at the time that these questions were a piece of the larger complaint before you today. | received the entire complaint in person on May 15, 2018. | was surprised by the allegations and how the complaint reached back nearly six years throughout my entire career and subpoenaed my campaign and personal bank accounts. | took immediate action to make sure | was fully cooperating with the commission to the best of my ability: 4. Within hours, | met with a representative from a well-respected accounting firm to “-énsure that my records were available and up-to-date. | also immediately requested my bank (Bank of Hawaii) to obtain all records cited in the complaint. 2. However, my bank alerted me that they could not access any of my “Friends” accounts before the current one (Account #4), as they advised in the past. This means | have lacked the access that CSC has had to my own bank records. 3, My accountant and | reached out to Gary Kam, CSC General Counsel, to ask about the timeline and how to best cooperate. Mr. Kam advised that all of the relevant bank documents are included as exhibits in the complaint, but graciously agreed that I could come into the CSC office to access any more of my subpoena bank records.4. limmediately addressed the media and campaign supporters upon receiving the complaint, due to my current status as a candidate for an open Congressional seat. | issued an apology, promised to cooperate any way | can, and gave a statement of appreciation for the CSC and the work it has done on this matter. 5. lattended the CSC hearing on May 23, 2018 with accountant and Deputy Treasurer, Ryan Akamine. | requested a continuance to extend my time to adequately respond to the complaint from eight days to four weeks and to consider obtaining counsel. The commission graciously granted a continuance to 6/20/2018. 6. | attended CSC's candidate training on June 8, 2018, where | learned about many of the mistakes | have regularly made. 7. | decided against attaining counsel, because | could not find an attorney who was knowledgeable in this field that | could afford. 8. | again called Mr. Kam to ask various questions about how to best move forward in cooperation with the CSC. | inquired about drafting a “Proposed Conciliation Agreement,” based on the precedent set by Docket 14-22 (2014) and various other questions. Mr. Kam graciously provided answers to the best of his knowledge and agreed to meet on June 19 at 9:00 a.m. 9. | personally wrote this response for your consideration, and appreciate the ‘opportunity to appear before you today. Background and Context Many assume that all winning candidates for public office coordinate well-oiled campaign infrastructure, wherein any mistakes made must have been done intentionally or through recklessness. For me, this was never the case. | launched my first campaign for State House in 2011 at age 22. During the Primary Election, | was an unknown, young person running against the president of one of Maui's largest non-profits. My opponent entered the race with massive support of most major unions, corporations, and a network of political professionals. | was also up against a well-known environmental activist and a former State Representative. | knew that | would not outraise my opponents, and that if | were to stand a chance, | would have to work ten times harder than everyone else and rely on the grassroots. Thus, | opted-in to public financing, It was extremely time-consuming and hard work. | would regularly wake up at 3:00 a.m. to work at the Four Seasons Resort Maui. | worked a fulltime shift, 40 hours a week, cleaning the fitness and locker rooms usually from 4:00 a.m.-noon. Then, | would campaign door to door until sunset. Then finally, | would do all my campaign emails, calls, website edits, schedule social media posts for 3the next day, and report before bed. | kept check images by taking photos with my iPhone, and stored all of my physical receipts in a large manila envelope at home. | served as the campaign manager, volunteer coordinator, communications professional, graphic designer, website programmer, fundraiser, treasurer, and the candidate. | was a one-man-band, but | tried my best to not let anything slip through the cracks. | would recruit volunteers to signwave and help with events, but due to my lack of connections and general apprehension to ask for favors, | was unsuccessful at finding a treasurer on Maui who was willing to take up the responsibility other than myself, my then-girlfriend, and family members. Extenuating Circumstance 1, wrong type of account. | opened my campaign bank account for my first election at Bank of Hawaii (BOH Account #1). | was advised by the bank employee that business accounts could not be used for campaign accounts. The employee opened a “Special Donation Account” instead. | later learned that this was faulty advise, and that a “Business Checking Account” would have been more appropriate. As it turns out, “Special Donation Accounts” are better suited for raising funds for temporary causes like events or disaster relief. Neither he nor | realized that a “Special Donation Account” meant no use of Debit Cards, and that the account would automatically close. The non-usage of debit cards made online purchases difficult, but the real problem was the automatic closure. Having to open new accounts in the middle of my campaign made it very difficult to maintain adequate records. | won the 2012 Primary Election by an unexpectedly large margin, which resulted in much more money than | expected to receive for my General Election campaign. | spent many more hours in the General Election than in the Primary Election on bookkeeping, reporting, and maintaining receipts and records. | was not alerted to any mistakes, so | continued to believe that my reports were complete and accurate. After winning the General Election, | rented another apartment in Honolulu to stay during session. Like most neighbor island legislators, | flew back home on weekends. This arrangement continued throughout my six sessions while in officeExtenuating Circumstance 2, unable to make Pt My PO Box in Kihei was small and often full when I checked it weekly, because | did not have someone to check it for me in Kihei. When full, mail would be available in the Kihei Post Office during its hours of operation. If overfill mail was not picked up within a certain time frame, the USPS employees would return the mail to sender. Thus, many checks from ActBlue and various donors were sent back, some without me knowing, This resulted in receiving checks weeks and sometimes months after they were written. These discrepancies appeared to constitute a failure to make timely deposits because, as | mentioned above, | was reporting the date on the check rather than the deposit date. However, | would deposit my checks as soon as possible after receiving them. Among the overfill mail were notices of payments due for my PO Box. Kihei Post Office does not utilize much of the technology seen in Oahu post offices. So | was not alerted of payments due by email, nor was | able to make PO Box payments online. The only way to make payments was in person. This made it exceedingly dificult to keep my PO Box current, because | was only home on days that Kihei Post Office was either closed or was open for very limited hours of operation had an especially difficult time keeping up with my PO Box during session, due to the intense nature of the work. On more than one occasion over my six years in office, my PO Box was shut down, forcing me to reconcile all bounced mail, request reissuances of all returned mail, and reapply for PO Boxes, | made my best effort to do so each time. However, the effects of late-arriving checks and closed PO Boxes in conjunction with ongoing debits from (MailChimp, Facebook, and Adobe) resulted in overdrafted and closed bank accounts which made my reporting even more difficult. However, | continued to make my best effort, spending tens of hours pouring through all of my records prior to many reporting deadlines. In 2016, | was running for re-election to a third-term in the Hawaii House of Representatives. My re-election in 2014 did not demand significant fundraising or campaigning. | did not expect 2016 would be different, especially because | was no longer a freshman legislator, and most of my peers were running unopposed. So, | did not feel the need to build a more robust campaign organization.However, the former aide of a former Governor filed to run against me, and gamered vast support from many of the Governor's connections. She raised a record amount.of money for our district in just a few months. My work was cut out for me. To make matters even more interesting, my partner and | also welcomed our first child into the world on April 25, 2016, right at the start of campaign season Not having support from my usual donors, | had to get creative. | put out viral internet content and emails that elicited hundreds of small dollar contributions. Many donors gave $3 dollars or less, which made reporting much more time-consuming than | expected. Between the lack of sleep as a new parent, my duties as a legislator, and a tough campaign, | tried my best keep everything in balance. Extenuating Circumstance 3: stolen phone, vandalized car. On June 3, 2016, my car was broken into, vandalized, and rendered unusable right outside my house in Kihei. My cellphone was also taken out of my bag while | was at a ‘community event around the same time period. | typically took photos of checks and receipts and reported them off the images from my phone. Without a phone, | had to file my reports off my iCloud account which | believed to be up-to-date at the time. But looking through this complaint, they may not have been. The vandalism caused significant stress on me, the campaign, and my family. | posted the following on Facbeook on June 3, 2016 along with photos showing the damage from the incident (httes:/Avww.facebook.com/VoteKaniela/photos/pcb. 1140262352684728/1 14021799602 7/?type=38theater): “Someone broke-in and vandalized my car, rendering it completely unusable. They also lifted the signs and tools inside, and knifed-up nearby banners. Despite it being the only car hit in the neighborhood, | choose to believe this incident was random and apolitical. While it's tough losing my car with campaign season in high gear, 'm keeping in good spirits. Nothing will deter us from resisting Maui's ‘ol boy political machine and fighting for the everyday people of South Maui. #OurRepresentative #ING2016 Please contact MPD with any information, and keep watch in your neighborhood. It happened on Mehani Circle near Kalama Park.” Repeated, unrecognized mistakesOver the past month, | have worked to improve my campaign finance reporting, to make sure this never happens again. | spent hours meeting with experts in the field, and attended CSC's training on June 8, 2018. | leamed that | had been making some of the same inadvertent reporting mistakes throughout all of my campaigns for State office, because | did not realize | was doing anything wrong. Although these errors are seemingly minor individually, committing these errors regularly means that not one of my reports were correct, and that the errors added up to. significant discrepancies over time: 4. ActBlue checks - | would regularly report each donor from the backend of ActBlue, then report ActBlue's fee as an expenditure. | reported the date the credit cards cleared rather than the date the ActBlue check was deposited. 2. Physical checks - | would regularly report the date the check was written rather than the date the check was deposited into my campaign account. 3. I did not utilize or fully understand the validification features of the CSC website. This would have helped me catch a number of unintended mistakes. Particular Counts Counts VIl,_IX. X_XIL_XIV, XIV, XV, XVI_XXIL_ XX! XVI- “False Reports” In full cooperation and earnestness with the CSC, | agree that | have filed substantially deficient or defective reports for each of these counts. I humbly ask that the Commission considering lowering the fines for each of these counts, specified on (“Relief Requested’) page 11 of this response, for the reasons described above (good faith, unknowingly inaccurate, stolen records, reported checks based on dates not deposit slip, ActBlue earmark errors, etc.), Count XXVII This count alleges an excess contribution in the amount of $2000 from Jeffrey Bronfman through ActBlue, a third-party online campaign donation website. Upon registering a campaign, ActBlue asks for the maximum contribution for a race. | was under the impression that the website will not allow contributions from the same individual over that limit ($2000), as | believe is the case for candidates running for Federal offices. | did not believe excess contributions through ActBlue were possible. 7Checks from ActBlue are written out weekly, directly from ActBlue to “Friends of Kaniela Ing” without earmarks showing which donors it came from. | did not recognize the double contribution while reporting from the back end of ActBlue. In full cooperation and eamestness with the CSC, | agree to escheat $2,000 to the Hawaii Election Campaign Fund, as it clearly was an excess contribution. Count XXVIIl The “commingling of campaign and personal funds" is confounding to me. | am not aware of how or why the ActBlue check written out to “Friends of Kaniela Ing” got deposited into my personal account. The bank should not have allowed the deposit, because it was was not written out to me personally. | imagine it got mixed up between stacks of checks, or the teller missed it. I respecttully request that the Commission dismiss this count, on the grounds that this particular mistake was not of my own doing. However, again, | admit that | could have avoided these errors through setting up more responsible campaign organization. This situation demonstrates why candidates should not handle their own campaign finances. If the Commission desires, | will offer my story for future candidate trainings as testimony to such dangers. Count XXIX As described in the email below, the alleged “prohibited use of campaign funds for personal use” were mistakes meant to come out of my personal account. They are payments for rent and credit cards that | regularly pay from my personal account. | often do my personal and campaign banking simultaneously with the same teller to save some time waiting in line, and accidentally withdrew from the wrong account. Upon seeing these transactions in my bank statement, | immediately reimbursed my campaign account with personal funds (11/5/16). When Mr. Kam asked about these transactions, | promptly provided a candid response via email, Please see below (from Docket 18-08 Exh 19 - Page 1) Aloha Gary, The owner of Bank of Hawaii Account # i! ‘she transfe unt into this account f mber 2, 2016 was a mistake ft reimbursed when discovered. ‘The purpose of the transfer of $750 from my campaign account into thi of October 4, 2016 was a mistake that was promptly corrected and reimbursed when di if The owner of Bank of Hawaii Account # i. ‘s aaa om my campaign account into this account 1 i was promptly corrected and reimbursed when discovered. The owner of the Bank of Hawaii Account # is is I ‘The purpose of the transfer of $21: .ccount of October 4, 2016 was a mistake th: r reimbursed when discovered, Last year, | acted as my own treasurer after my previous treasurer moved off-island. | often did my campaign banking and personal banking at the same time, with the same teller. These transfers were withdrawn from my campaign account, when I meant to withdraw them from my personal account. These are personal expenses. ES and II are the landlords for the spaces | rent on Honolulu and Kihei, respectively. i is my domestic partner, and this was a payment to pay down her personal credit card. On November 5, 2016, | saw these mistakes on a statement. | alerted the bank on the mistake and promptly reimbursed the funds (see attached). Please advise if you have any other questions. -Mark Kaniela Ing Count XXIX “recommends that the Commission access a fine in the amount of $1172 against Respondents and order Respondent ing to personally reimburse his campaign account in the amount of $2344.55."As explained above, | have already reimbursed the campaign as soon as | could upon seeing the mistake in my bank statement (see Docket 18-08, exh 19). | respectfully request that this count be dismissed. | recognize that these mistakes could have been avoided by hiring a campaign treasurer. | thought | could manage as an incumbent running for reelection, because tough opponents are unusual for incumbents seeking a third-term. So | did not anticipate the need raise and spend as much money as | did. It was an exceedingly tough election, especially as a first-time parent with a newborn baby. However, even for easier races, campaign finance is too important and too easy to make mistakes to not have adequate assistance and a second pair of eyes. This allegation has already done significant damage to my current campaign and my professional reputation due to the high profile nature of my race. It's a hard lesson learned. Count XXX! This count alleges that | failed to file a “General Election Late Contribution Report” because "Respondents received a $2000 contribution from the Operating Engineers Local No. 3 PAC on November 1, 2012. Exhibit 80. This was within the fourteen calendar days through four calendar days prior to the 2012 general election held on November 6, 2012." However, the check from Operating Engineers Local No. 3 PAC was dated 10/24/2012. As stated above, | was unaware that donations were tracked through their date of deposit. | believed the most accurate, transparent, and correct way to report checks were based on the date written, not deposited. Therefore, neither the system nor | recognized any contribution during the late contribution date | respectfully request that the Commission dismiss this count. Precedence and Ability to Pay My situation differs from those of most incumbent candidates who appear before the CSC, because | am not seeking reelection. My campaign account has been depleted due to a lack of fundraising, and all fines ordered will probably come from me personally. As a young parent and public servant strapped with over $50k of student loans and no assets, fines in the amounts proposed, even in the form of payment plans, will devastate the financial future of my family. ‘http://disclosures.civilbeat.org/disclosures/mark-kaniela-ing/) 10Many other incumbent candidates who appeared before you have ample funds in their campaign accounts, while not facing serious opponents. When such Respondents are fined thousands of dollars, they receive little to no personal hurt. Even their campaigns are relatively unphased, as the fines usually only constitute a fraction of their campaign funds available. | could not afford to retain counsel for this hearing because of cost barriers, nor will | be able to if the CSC refers this matter to prosecution. | have taken responsibility and am fully willing to face the painful consequences for my mistakes. However, given the circumstances and seriousness of these allegations, | humbly ask that the commission agree to the relief requested below, These amounts are also out of my range of affordability, will hurt immensely, but may give us a chance to recover financially over time. Relief Requested For the reasons provided above, | humbly ask that you please consider the following relief is complaint to prosecution: A. Make a preliminary determination, pursuant to HRS 11-405(a), that there is probable cause to believe that the Hawaii campaign finance law has been unintentionally violated by Respondents as described above. B. Assess a fine in the amount of $3,855 (all Counts except Count XXVII, XXVIII, XXIX, and XXX) against Respondents and order Respondent Ing to use personal funds to pay the fine if Respondent Friends does not have sufficient campaign funds to pay the fines C. Order that any and all administrative fines be deposited in the general fund, or a payment plan be set, pursuant to HRS 11-410(e) within twenty days of Respondents receipt of this order. D. Order Respondents to escheat $2000 (excess contribution) to the Hawaii Election Campaign Fund (Count XXVIl). E. Provide receipt stating that Respondent Ing has already personally reimbursed $2344.55 to Respondent Friends’ campaign account (Count XXIX, Exh 19 - pp. 2-4). F. Order Respondents to amend the twenty-three (23) disclosure reports referenced in Counts IV through XXVI, so that the reports accurately reflect the activity in the bank statements, within ninety days of receipt of this Order. G. Order Respondents to file the 2012 General Election Late Contributions Report within twenty days of receipt of this order. "1H. Order Respondent Ing to issue a public apology to traditional and social media platforms. |. Order Respondent Ing to participate in subsequent CSC trainings as a spokesperson as to why candidates should recruit a treasurer, prioritize reporting throughout your campaign, and pay attention to every minute detail. Conclusion | grew up understanding that if | worked for the right reasons, to help and not to hurt people, and put forth my best effort, everything would work out positively. Throughout this experience, | have learned that sometimes trying my best is not enough Sometimes, leaders need to ask for help and rely on others. | have always feared that if | asked for too much from people close to me, | would create an inconvenience for them, | am learning sometimes requesting help is simply necessary, and friends and loved ones typically want to help. They just need to be asked. | appreciate the CSC’s professionalism and all the work you have done on this matter. Many of the mistakes you have pointed out, | have admitted to making them, owned up to my responsibility, and apologize to everyone | disappointed. While these mistakes were inadvertent and made without ill-intent, they were preventable. | am working to correct my mistakes, and | am in the process of making necessary changes to prevent them in the future. Thank you in advance for your kind consideration. 12