I’m still trying to wrap my brain around the status of the Aloha Aina Party LLC as an entity with two corporate personalities.

I should make it clear up front that any issues or questions related to the status of the Aloha Aina Party do not involve or reflect on any of the individual candidates who are running for office this year under the party label. Each candidate is required to have their own candidate committee which is independently responsible for complying with the campaign finance laws, separate from any obligations of the party. So candidates aren’t affected.

As to the party, on the one hand, it is an LLC governed by Chapter 428 Hawaii Revised Statutes, the Hawaii Uniform Limited Liability Company Act.

And, on the other hand, it is also a registered political party subject to Part V of Chapter 11 HRS, Hawaii’s election law.

Neither statute appears to have sole jurisdiction over this hybrid entity, so presumably it must comply with the requirements of both in order to be both an LLC and a political party.

Section 11-61(a) of the election law provides, in part:

A political party shall be an association of voters united for the purpose of promoting a common political end or carrying out a particular line of political policy and which maintains a general organization throughout the State, including a regularly constituted central committee and county committees in each county other than Kalawao.

By definition: “A limited liability company is a legal entity distinct from its members.” So it is not “an association of voters,” although its members as individuals may be voters, and its purpose may be to further their common political goals.

Section 11-62(a) provides, in part:

Any group of persons hereafter desiring to qualify as a political party for election ballot purposes in the State shall file with the chief election officer a petition as provided in this section.

Whether an LLC can be considered a “group of persons…desiring to qualify as a political party” will probably have to be left for lawyers to consider. From my perspective, it does seem to be quite a stretch to equate a legally separate LLC with a group of persons or voters.

But let’s accept it for now a continue on. It does seem clear that the dual LLC/Party status does create problems.

As a limited liability company, members of the LLC have a “duty of loyalty” and “duty of care” to the company, as these are defined in Section 428-409 HRS.

As a limited liability company, Aloha Aina is required to regularly report changes in its members, its name, or its articles of organization to the Business Registration Division.

As a political party, Aloha Aina is required to report the its roster of officers, and its rules, to the Office of Elections, and then must file regular reports with the Campaign Spending Commission, including an organizational report, identifying its chair and treasurer, as well as disclosing details of its finances, including contributions and loans received, any expenditures made, and any debts incurred but not paid.

The Aloha Aina Party LLC filed an organizational report with the Campaign Spending Commission on July 7, 2020, and amended it twice since then, most recently on September 16, to report changes in its officers or members. It is required to disclose such changes within ten days of becoming known to the party chair or treasurer.

But Aloha Aina Party LLC first registered as an LLC in November 2015, and has amended its list of members six times between June 4, 2020 and September 25, 2020.

Filing knowingly or recklessly false statements, either as a party or as an LLC, could be punished as criminal violations, up to and including in some cases a Class C felony.