At a combined total of 12 pages, the story of who is funding Pilago's campaign and how he is spending that money is a light, quick read -- something a child could understand.
As of July 2008, Pilago brought in $39,893 with a third of it in amounts of $100 or less and the rest at over $100. In the latter category, 90 percent of his money came from Hawai`i Island sources.
On the expenditure end, money goes out for straight-up campaign stuff -- promotion in the form of signs, shirts, brochures, bumper stickers, newspaper ads and airtime. With $642 spent on stakes for planting yard signs, it is easy to imagine the story morphing into a dragon slayer tale, with the dragon standing in for corrupt campaign tactics in the metaphor.
Overall it is a wholesome story -- a regular guy chugging away to surmount a big obstacle and making slow, steady progress. Before the primary election, the Little Engine that Could will get a boost from the cleanest burning fuel local politics has to offer. By raising $15,000 in the '$100 and under' category, he has earned the same about in public campaign funds.
Lorraine Inouye-- Gone with the Wind
Give your self plenty of time for this saga. Inouye has been involved in politics for 24 years, far longer than her opponents, so to get the whole story you must peruse previous Campaign Spending Commission (CSC) reports along with the 42 pages added this election cycle.
The latest chapter represents a transition -- gone are the contributions from big tobacco (2005 was the latest), GMO interests (none after 2005) and Hawai`i Superferry (2006) -- still there are throwbacks to Hawai`i's own plantation days -- unions and political action committees (PACs) next to the names of missionary descendents.
By and large, Inouye is bringing in funds from a long list of local contributors whose names are well known and whose roots run deep -- the political equivalent of old money. Richard Henderson, Robert Atebara, Paula Helfrich, Steve Christensen, Gene Tao, Hugh Willocks, Bob Bethea, Patti Cook, Norm Hayashi, Ben Tsukazaki, Rex Mastuno, Linus Chao . . . the list goes on and on. If you don't recognize these names, either you are not interested in local politics or you haven`t been here long.
While the amounts from these sources tend to be modest, all tallied, they add up.
From July 1-December 31, 2007, Inouye raised $18,475 in the over $100 category with all but $1,750 of this from Hawai`i Island sources. Two local donors gave $4,000 each, which amounted to 43 percent of this total, while the rest accumulated from 49 donors. Included in this pool were a handful of contributions over $300 (Michael Kahikina of Puna Geothermal Ventures kicked in $350.)
Over the same period, Inouye takes in $20,384 worth of contributions at $100 or less. These figures add up to an extensive support system that is, for the most part, grassroots. Keep in mind that the calabash can obscure things -- many of Inouye's low-level contributors donate more than once.
Then, in the next cycle, from January 1- June 30, 2008, things change. The contribution report jumps from five to 19 pages as the local base gets augmented by big off shore drops. One $4,000 contribution comes from Honolulu resident Terry Telfer, President of Reynolds Recycling -- a fact that is not disclosed on the CSC report where Telfer is listed as a self-employed businessman instead of the owner of a firm that does a whopping business with the state through the HI-5 redemption program.
Here the names of James Striker, International Union of Painters and Allied Trades, Alexander & Baldwin, the Ironworkers Union, IBEW, Maui Land & Pineapple, Hawai`i Operating Engineers, the State Towing Association, HMSA, Hawai`i Association of Realtors, First Hawaiian Bank, Castle and Cooke, Kaupulehu Developments and Ivan Mochida Contracting all appear, with some contributing through PACs and some not. For those who don't know Striker, he owns Fire Development and is listed as another self-employed businessman, who also donated $4,000. (In 2005, he gave $5000 to Governor Linda Lingle.)
In this period, Inouye brought in $55,844 in the above $100 range. Added to this was $23,028 at under $100 for a total of $78,872.
Inouye's campaign spending habits are best described as lavish -- a total of $162,377 recorded with the CSC so far.
There's the stately, ante bellum style Kaikodo digs in Downtown Hilo (average $1500/mo); and the Kona headquarters ($2000/mo). Note that the latter is unoccupied but boasts a colorful banner with the candidate's face and name from a strategic vantage point.
Then there's the quaint subplots: Inouye receives $2,000 from Rex Matsuno of Suisan and buys nearly $3,000 worth of goods from him for fundraisers.
In general, Inouye rakes it in and spreads it out locally, with all the money going to straightforward campaign expenses provided by Hawai`i Island vendors. As for consultants, Inouye pays a modest amount to Sharon Raniada, who is obviously on the job both in the field and interacting with the media, including the BIW.
Big-ticket items on Inouye's expenditure report include a poll from SMS Research (conducted Jan/Feb at a cost of $5,863.87), along with lots and lots of food and lots and lots of flowers.
Like the Gone With the Wind heroine, Inouye is a classic beauty, fond of social events and scrappy underneath it all. Like that great novel's plot, there's a bit of tragedy when one considers that, having gone to all this trouble and expense, Inouye did not earn a statistically significant edge over Angel Pilago in the Stephens Media poll even though she spent a full $134,000 more.
Billy Kenoi -- The Trojan Horse
The tale of the appealing gift left behind as the Greeks sailed away from Troy in feigned defeat is well known. As an inanimate object, the horse couldn't know what it contained and here we find the parallel to the Billy Kenoi campaign funding story. While Kenoi mimics the Trojan Horse's oblivion, the campaign spending reports reveal what's inside the belly of this beast.
Kenoi's filing with the Campaign Spending Commission (CSC) is 40 pages detailing the pro-development (many of them off shore) interests that make up the bulk of his funding. The reader also gains insights into the well-oiled machine that has been outfitted with the cash. Still, in this report things aren't always what they appear to be.
Take the case of Russell Figueiroa, listed as a mere surveyor for R.M. Towill by the Kenoi campaign. Figueiroa is in fact the president of the company -- one of the state's largest engineering firms. R.M. Towill is routinely hired by developers to prepare environmental assessments for projects that need state and county approval. The also do business with government directly.
In 2004, Honolulu City and County prosecutors filed charges against Figueiroa alleging he made illegal donations to Honolulu Mayor Jeremy Harris' campaign. Although he plea bargained to avoid consequences for the misdemeanor charges, Figueiroa was fined $50,000 by the CSC. The scheme involved using R.M. Towill employees to make excessive political donations to the Jeremy Harris campaign. Figueiroa gave $1,000 to Kenoi as did R.M. Towill employee Ryan Suzuki.
Similarly, 13 donors listed simply as investors by Kenoi are in fact Campbell Estate heirs. Their combined contribution amounted to $26,150 -- more than one third of Kenoi's take at the time.
Kenoi claims his is a grassroots campaign but the bulk of the $160,082 he has taken in comes from the wealthy with much of it from O`ahu and the mainland. He is backed by people and companies that stand to gain the most from increased development, the sort that work with R.M. Towill on a regular basis.
About 75 percent of the 2007 'over $100' haul came in donations of $1,000 or more, with about 64 percent of that from off-island. During the first half of 2008, 58 percent of the 'over $100' contributions were $1,000 or more with 30 percent coming from off-island sources.
Count Royal Kona Resort, Kaupulehu and Kukio as supporters along with big time contractors Larry Isemoto, Ivan Mochida, Gary Okamoto, Glen Kaneshige and Baywest Property president Jonathon McManus. Robert Iopa, the Honolulu-based WCIT Architecture president who boasts his company as a leading resort and luxury residential designer, dropped the maximum $4000 on this campaign.
Other lesser players in the game, like employees of the Kobayashi Group and the Delaney Group and even Millie Kim, are all betting this horse will be good for business if he gets in. Likewise for Republican operatives Lorraine Shin and Diana Cornacchia.
Most curious is what we call the Area 40 listings. There are six contributions traceable to the mysterious office located at 40 Kamehameha Avenue -- mysterious because it seems tiny for so much business, the windows are blacked out with reflective tinting and there is no signage. Note all the contributions came on the same day. Two of the businesses are not registered with the Department of Commerce and Consumer Affairs (DCCA).
On the payables end, KMA Communications, which received a total of $15,682 from Kenoi's campaign for website development and marketing services, is also not registered with the DCCA.
IES Jobs is the other big draw on the campaign at $13,520 to date. IES was incorporated in December 2007, just as the Kenoi campaign machine kicked in. BIW was unable to confirm what services this agency provides the candidate because the company spokesperson did not return our call. If this expense is for temporary help, Kenoi is the only candidate using a paid staff.
On the food front, once again Rex Mastuno of Suisan donates $2,000 and gets about $3,000 worth of purchases in return. As for accomodations, Kenoi is part owner of the building where his Hilo office is located but he uses campaign funding to pay utilities -- nearly $1,200 just for the April electric bill. Kenoi pays about $1,400/mo for his Kona digs which get used a couple days a week.
Otherwise the money goes for promotional materials, and while Kenoi is not as generous as Inouye in spending on island (some big printing jobs go to mainland and O`ahu), he does put much of his money back into the local economy.
Stacy Higa -- "Branded"
Was Stacy Higa's low ranking in the Stephens Media poll due to prior accusations of sexual harrassment or failure of his high-priced PR campaign? Either way it's all about branding.
Wherever he goes for the rest of his life (as the theme song for that way old school TV show "Branded" goes), the untold portion of the Melissa Chang story puts Higa in the position of having to prove himself to voters.
The most interesting thing to be found in Higa's Campaign Spending Commission (CSC) reports is not where his money came from. It should come as no surprise to anyone who follows his politics that he (like Kenoi) is supported by developers as well as consultants who profit from development, this along with what is commonly referred to here in the islands as 'the good old boy network.' Despite claims he made to the Hawai`i Tribune Herald when news of his candidacy first leaked out, Higa's campaign is anything but grassroots.
In 2007, 95 percent of his donations came in increments of $1,000 or more as the wealthy ponied-up to give their guy a jumpstart. Over half the money Higa raised came from O'ahu. Russell Figueiroa -- the RM Towill chief executive who was fined $50,000 by the CSC for making illegal conributions -- put up $1,000.
Kaupulehu Developments donated as did Hual-lai Realty. Other developers listed as Higa donors are Ronald Hedani and Richard Wheelock. Ken Fujiyama, owner of the Naniloa Resort, gave $3,500 while the manager of his Volcano House operation, Lee Harlow, gave $4,000.
From Jan.1-June 30, 2008, the ante was upped as Higa brought in a number of even higher donations -- most notably $4000 each from Theodora (Asha)Mallick and Sharon Handgis.
These donors might want to look at where their money went. Considering Higa's 2 percent showing in the recent SMS Research poll and his comparatively inactive campaign, the question of whether or not they got their money's worth is a legitimate one. If the Suisan factor is any indicator, Rex Matsuno gave Higa $2,500 (more than he gave Inouye or Kenoi) and only got $227 back.
Voters on the other hand can compare the claim Higa made during the Bar Association debate with the story these campaign expenditures tell. When asked if he became mayor, how would he want to be remembered when his term was over, Higa said he wanted to be known as the guy who saved the county money.
The registered owner of Kupa`a Business Planners, a consulting business located in H-lualoa and incorporated July 2006, is Rebecca Inaba. Payments to her company began before Higa declared his candidacy for mayor. In 2007, she walked away with $18,655 from his war chest. From January 1 through June 30, 2008, Higa gave Kupa`a another $10,722. Each time the expenditure is listed as "campaign marketing, P/R fees."
According to Inaba, her company provided Higa "event planning and execution, campaign research, general consulting, advertising concepts, website content." Inaba refused to provide the name of any other candidate clients as a means to demonstrate she had experience in the business of campaign consulting. CSC rules state that a candidate must pay fair market value for goods and services, making the question of what experience Inaba has in political consulting highly relevant.
Kupa`a is not the only high priced consultant paid by Higa. A Hilo based company received over $9,000 to create the 'Higa for Mayor' brand. The bill for his website, design and maintenance came to a pricey $10,000 from the Aloha Media Group, also in Kona.
In 2007, Higa's nearly $37,655 bill for these services, amounted to about 65 percent of the campaign funds he raised. His grand total of $48,377 for PR work, so far, is about 50 percent of his take.
Here's a bit of inside information: When BIW wrote a fluff piece about Higa's campaign he could not direct us to anyone who could provide a photo to accompany it. That's right -- $48 grand spent and no one who could with a quality image of the Higa brand.
Higa also lists the most in reimbursements to himself, including $7,276 for the purchase of a printer and paper he already owned.
Higa spent most of the rest of his money on the usual T-shirts, banners, brochures and advertising.
According to the latest spending reports, The Friends of Stacy Higa are $11,453 in debt.
Bang for the buck
With little else to go on, we used the mayoral candidates' ranking in a recent SMS Research poll as a means to measure what each contender spent and what they got it return. The survey of likely voters was commissioned by Stephens Media and conducted mid-July.
Pilago comes in with the most bang for his buck. He spent $39,893 as of the end of July and earned 14 points, giving him a ratio of $2849 per point. Kenoi does the next best spending a little more than twice as much ($6,403) for each of his 25 points. Inouye spent $10,148 for each point she earned. While Stacy Higa spent $47,123 for each of his two points.
Campaign Spending 101
Campaign Spending Commission (CSC) rules require each candidate to track contributions as either at or below $100 or above $100. In the lesser category, the candidate does not need to report who made the contribution. For anything above $100, a name and address is required. When the amount hits $1,000 or above, the commission wants to know how this person is employed.
In the mayoral race, any single entity -- business, organization or person -- cannot contribute more than $4,000. The tally is kept throughout the election cycle, which may vary for the candidates depending on the last time they ran.
When tracking donations, things are not always what they seem. Take the under $100 donations (often referred to as 'calabash' here in Hawai`i) for example. By spreading donations out in small increments, a contributor can go undetected and help give the appearance of a grassroots campaign.
Ira Rohter, a professor of Political Science at UH-M-noa, says, "the ability to raise money is an indication of something," although he won't say what. He also says that beyond what any commission can require, when it comes to donations over $500, the candidate has a moral obligation to know who gave that money.
The reports used to create this analysis will be supplemented by an update due September 10. You can view these electronic filings the same day at http://www.state.hi.us/campaign
The Law wrote on Sep 17, 2008 3:34 PM: