Category Archives: Campaigns

It’s an LLC…It’s a political party…It’s two things in one!

3 Replies

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.

“Go ask your CIA operatives,” said the Aloha Aina Party chair

9 Replies

I have to admit that trying to report that story about the Aloha Aina Party yesterday was very, very strange.

A couple of months ago, I had noticed something odd about the new Hawaiian party. It is registered as a limited liability company. Major parties are set up as nonprofits, and some small 3rd parties appear to be unincorporated associations. To my knowledge, Aloha Aina Party LLC is unique in being set up as if it were a business.

It isn’t clear just how you fit a square peg LLC into the round hole meant for a political party. Can the LLC have business that is outside of the party? Could it have two sets of books, one of politics and one for, well, business? I made a quick check with the Campaign Spending Commission, and it turns out they had not been aware the party was an LLC and had not considered what issues, if any, this would present.

Then early yesterday morning I checked the status of Aloha Aina Party LLC in the online business registration database of the Department of Commerce and Consumer Affairs. I was shocked to see that the party’s former officers had been removed, and it is now listed as controlled by something called Forerunner Consulting Inc. That sent me scrambling back to review earlier filings and trace the change of control.

What does this mean? My closest analogy is that the former leaders of the political party are going to get back home and discover someone has changed the locks and they can no longer get in the door.

I started making calls, and finally reached the chairman of the Aloha Aina Party. Or, atleast, the chairman listed in the organizational report on file with the Campaign Spending Commission.

And this is where it got really weird. He said the former treasurer, the one who has essentially “changed the locks” and taken control of the underlying LLC, may be a CIA plant assigned to infiltrate the party. It felt right out of a QAnon conspiracy. I asked why the party reported neither receiving any campaign contributions or making any expenditures, although what appears to be the party’s official website explains the party’s background, touts its candidates, offers logo merchandise for sale, and solicits funds. If I understood it correctly, he said the party got no money and therefore any website must have been unauthorized. This despite the fact that most of the Aloha Aina Party candidates referred to the party website in their candidate filings with the office of elections. And when I pointed out another site soliciting contributions on behalf of the party, he again said it was not authorized.

It was now clear that I wasn’t going to get any more useful information, so I ended the call, intending to call the party’s attorney.

First, I tried to call the person listed as the party’s social media coordinator at a Southern California phone number. Again, no answer. Again, I left a voicemail. My message was not returned.

Not long afterwards, I received a text message from the chairman, prefaced by a photo of Pierre Omidyar, the entrepreneur billionaire known here for founding and supporting Civil Beat.

It is certainly going to be interesting to see how this plays out.

In the meantime, if this were my political party as a voter or a candidate, I would be mighty worried about what the heck is going on.

Bank records of anti-Amemiya Super-PAC subpoenaed in campaign spending probe

3 Replies

The Campaign Spending Commission last month subpoenaed records from several financial institutions as part of an investigation into contributions to Aloha Aina Oiaio, a local “super PAC” which spent over $100,000 this year attacking mayoral candidate Keith Amemiya.

The records being subpoenaed include bank records of Aloha Aina Oiaio as well as many of its major early donors, according to copies of subpoenas made public by Lokahi Cuban, the sole officer of the PAC, according to its organizational report filed with the commission.

A hint of what the commission may be investigating appears in a September 16, 2020, letter from commission General Counsel Gary Kam to Garrick Lau and James Auld of Jimmy Up Home Improvement LLC in Aiea. The letter asks for further details of a July 14 contribution of $4,000 from the company to Aloha Aina Oiaio, and a cash deposit of $4,000 on the same day to the Jimmy Up bank account, which was disclosed in the company’s records provided by Central Pacific Bank in response to an earlier subpoena.

“The Commission requests that you identify the source(s) of the $4,000 cash deposit and provide the Commission with documents that verify that the cash came from the source(s) identified by you,” Kam wrote. The contribution to the PAC was by check signed by Auld, according to Kam’s letter.

State election law prohibits so-called “false name contributions.”

[§11-352] False name contributions prohibited. (a) No person shall make a contribution to any candidate, candidate committee, or noncandidate committee in any name other than that of the person who owns the money, property, or service.

Subpoenas were also issued to other donors, including Renell L. Ribeiro of Booth Road, who contributed $6,000; Byron and Roblyn Cuban at the same Booth Road address ($1,000); Robert Park and Odetta Auld-Park of Aiea ($1,000); Dexter Shuichi Sato ($1,000); Shozo Sato, of Kaneohe ($8,000); and Island Wide Flooring Solutions LLC ($5,000).

The next commission meeting where this matter could be discussed is scheduled for November 18, 2020.

See:

“Newly formed PAC behind the anti-Keith Amemiya attack ads“, iLind.net, August 5, 2020.

“Campaign Spending Commission Investigating Anti-Amemiya PAC,” Civil Beat, September 4, 2020.

Megan Kau: “I help people. That’s what I do.”

8 Replies

Honolulu attorney and candidate for Honolulu prosecutor, Meghan Kau, bristles at the suggestion that an offer she made to assist people cited for violating COVID emergency rules is like “buying votes.”

That was one of the criticisms aimed at Kau on the “My Kailua” Facebook page, where the administrator solicited readers to submit any citations received to be forwarded to Kau for her “assistance.”

I asked Kau what she was doing to assist people, and how she would respond to the critics. She was direct and straightforward in her responses.

Kau said she has provided “hundreds of people” with a form letter that a person who has been charged with violating emergency rules can submit to the court contesting the charges and asking that they be dismissed.

She said it is just another instance of pro bono assistance she has offered families who can’t afford an attorney, both before and after becoming a candidate for prosecutor.

“That’s what I do on a daily basis,” she said, and went on to say she has helped obtain services for families trying to find missing children, or who have children with mental health or drug issues, and who cannot afford a lawyer.

“Lawyers are expensive,” she said, referring to her own regular hourly rate of $350. She said her law practice makes plenty of money, giving her the ability to offer time to assist families with advice and support.

Kau’s financial disclosure, required of all candidates for public office, reports personal earnings from her law practice of between $200,000 and $299,000 during 2019.

“I’m not trying to buy votes,” she said, expressing irritation at the criticism her offer of assistance has generated. “I helped people before becoming a candidate, and I’m not going to change.”

Kau said most citations are already being dismissed when they get to court. But she has provided a generic boilerplate letter that a person who has been charged with violating emergency rules can submit to the court contesting the charges.

The letter begins with some fill-in-the-blank portions for the person’s name, citation number, offense date, and the date and time of their court date.

Then it states:

This charge should be dismissed because it is vague and ambiguous. It is not clear under the statute’s language what was or was not permitted on April 19, 2020. The ticket that was issued states that I violated Haw. Rev. Stat. § 127A-25 but does not indicate what I did to violate that statute. Indeed, Haw. Rev. Stat. § 127A-25 itself is
extremely vague….

The letter then goes on to cite Section 127A-25 at length. This is the law authorizing emergency rules during an emergency. The sections cited are very general.

The letter concludes: “This language does not give me enough information to understand the charge against me. As such, this charge should be dismissed with prejudice.”

Kau also provided a sample email she sends when forwarding a copy of the form letter. Her email explains the person will still have to appear in court, or more likely appear for the court hearing via Zoom. She advises that most citations are already being dismissed, even without use of a letter like this. If the person does use her form letter, she advises them not to say anything other than to refer to the letter asking for the charge to be dismissed.

“Do not agree to a plea agreement and do not pay a fine,” her email advises. “If you plead guilty to this charge, you will FOREVER have a full misdemeanor on your record. It does not go away. If the court dismisses the case, then great—there will be nothing more to do.”

If the case is not dismissed at that time, she advises the person to contact her.