Last Edited: 07/16/2020 3:13:13 PM Document ID: 1757210_1_JSM Bert T. Kobayashi, Jr.* Kenneth M. Nakasone* Christone M. Hanzawa Alan M. Goda* Gregory M. Sato* Travis Y. Kuwahara John R. Aube* Craig K. Shikuma* Brian D. Tongg Jesse W. Schiel* Charles W. Gall* Lex R. Smith* Clifford K. Higa* Anthony F. Suetsugu Robert K. Ichikawa* Maria Y. Wang Neal T. Gota Charles D. Hunter Christopher T. Kobayashi* Jan M. L. Y. Kutsunai* David M. Louie* Joseph A. Stewart* Caycie K. G. Wong David B. Tongg* *A Law Corporation Nicholas R. Monlux Of Counsel: Jonathan S. Moore Kenneth Y. Sugita* Bruce A. Nakamura* Jonathan A. Kobayashi Aaron R. Mun Chelsea C. Maja Wendell H. Fuji* Burt T. Lau* John F. Lezak* Larry L. Myers* July 16, 2020 Via Electronic Mail Ms. Kristin Izumi-Nitao Mr. Gary Kam Re: Aloha Aina Oiaio / Keith Amemiya Dear Ms. Izumi-Nitao and Mr. Kam: We write on behalf of the Amemiya for Mayor Campaign to bring your attention to two issues raised by the recent campaign activities of Aloha Aina Oiaio (“Aloha Aina”). First, in its most recently amended electioneering communication report, Aloha Aina reported that one of its three top contributors was Jimmy Up Home Improvement LLC. You should be aware that Jimmy Up Home Improvement LLC is not in good standing with the Department of Commerce and consumer affairs because it has failed to file its 2019 annual report. As such, the DCCA lists its status as “1”, which means that the company has been involuntarily dissolved.1 According to the last annual report filed by Jimmy Up Home improvement LLC in 2018, the company had 3 members whose names are not listed. The company is anonymously owned, and manager-managed. The manager as identified in the annual filling of 2018 (the last filing) was James Auld, who is listed as residing at 98-1972 Wilou St., Aiea, HI 96701. See Exhibit “A”. HRS § 428-802 governs the effect of dissolution on an LLC. That section provides that: 1 See https://hbe.ehawaii.gov/documents/business.html?fileNumber=166269C5. 999 Bishop Street, Suite 2600, Honolulu, HI 96813 Tel: 808-535-5700 Fax: 808-535-5799 www.ksglaw.com @ksglaw.com Last Edited: 07/16/2020 3:13:13 PM Document ID: 1757210_1_JSM Ms. Kristin Izumi-Nitao & Mr. Gary Kam September 9, 2020 Page 2 (a) Subject to subsection (b), a limited liability company continues after dissolution only for the purpose of winding up its business. (b) At any time after the dissolution of a limited liability company and before the winding up of its business is completed, the members, including a dissociated member whose dissociation caused the dissolution, may unanimously waive the right to have the company's business wound up and the company terminated. In that case: (1) The limited liability company resumes carrying on its business as if dissolution had never occurred and any liability incurred by the company or a member after the dissolution and before the waiver is determined as if the dissolution had never occurred; and (2) The rights of a third party accruing under section 428-804(a) or arising out of conduct in reliance on the dissolution before the third party knew or received a notification of the waiver are not adversely affected Here, donations to a noncandidate committee would clearly not be permitted as a part of winding up the company’s business. As such, the CSC should consider that the donation from Jimmy Up Home Improvement LLC is either (a) a false name contribution, or (b) an anonymous contribution made by the dissolved LLC’s unnamed members. In either case, the contribution is in violation of campaign spending laws. HRS § 11-352 prohibits false name contributions, and requires that such contributions escheat to the Hawaii election campaign fund: §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. (b) All contributions made in the name of a person other than the owner of the money, property, or service shall escheat to the Hawaii election campaign fund. [L 2010, c 211, pt of §2] If the contribution is instead considered to be anonymous, then it should be returned: §11-353 Anonymous contributions prohibited. (a) Except as provided in subsection (d), no person shall make an anonymous contribution to any candidate, candidate committee, or noncandidate committee. (b) A candidate, candidate committee, or Last Edited: 07/16/2020 3:13:13 PM Document ID: 1757210_1_JSM Ms. Kristin Izumi-Nitao & Mr. Gary Kam September 9, 2020 Page 3 noncandidate committee shall not knowingly receive, accept, or retain an anonymous contribution, or report such contribution as an anonymous contribution, except as provided in this section. (c) An anonymous contribution shall not be used or expended by the candidate, candidate committee, or noncandidate committee, but shall be returned to the contributor. If the contributor cannot be identified, the contribution shall escheat to the Hawaii election campaign fund. (d) This section shall not apply to amounts that aggregate to less than $100 that are received from ten or more persons at the same political function. The receipt of these contributions shall be disclosed in a report filed pursuant to sections 11-333 and 11335. [L 2010, c 211, pt of §2; L 2015, c 78, §1] Secondly, under HRS § 11-393, an advertisement paid for by a non-candidate committee must contain: [A]n additional notice in a prominent location immediately after or below the notices required by section 11-391 [which requires notice that an advertisement has not been approved by a candidate], if the advertisement is broadcast, televised, circulated, or published, including by electronic means, and is paid for by a noncandidate committee that certifies to the commission that it makes only independent expenditures. This notice shall start with the words, “The three top contributors for this advertisement are”, followed by the names of the three top contributors[.] See HRS § 11-393(a). Further, subsection (d) provides that “Any noncandidate committee that violates this section shall be subject to a fine under section 11-410.” That section provides: §11-410 Administrative fines; relief. (a) The commission may make a decision or issue an order affecting any person violating any provision of this part or section 281-22 that may provide for the assessment of an administrative fine as follows: ... (2) If a corporation, organization, association, or labor union, an amount not to exceed $1,000 for each occurrence; provided that whenever a corporation, organization, association, or labor union violates this part, the violation may be deemed to be also that of the individual directors, officers, or agents of the corporation, organization, association, or labor union, who have knowingly authorized, ordered, or done any of the acts constituting the violation. Here, Aloha Aina has admitted through its amended CSC filings that it had top contributors, but it mailed out thousands of flyers to Honolulu voters without providing the statement required by § 11-393(a). Aloha Aina has bombarded Honolulu with advertisements containing false information, has accepted donations from unqualified entities and anonymous persons acting through the shell of a dissolved LLC, has failed to disclose its contributors to the public as required by statute, and has filed untimely and incomplete reports to the Campaign Spending Commission. Enclosed as Exhibit “B” is a copy of their recent flyer. There is no way to repair Last Edited: 07/16/2020 3:13:13 PM Document ID: 1757210_1_JSM Ms. Kristin Izumi-Nitao & Mr. Gary Kam September 9, 2020 Page 4 the damage that has been done, but the Commission at least has the power to investigate and levy fines. We respectfully request that it do so. Very truly yours, BERT KOBAYASHI, JR. JONATHAN S. MOORE for KOBAYASHI, SUGITA & GODA Counsel for the Amemiya Campaign Committee Exhibits: “A” and “B”