{"id":1895,"date":"2019-01-19T07:07:09","date_gmt":"2019-01-19T17:07:09","guid":{"rendered":"https:\/\/hawaii.concon.info\/?p=1895"},"modified":"2019-01-22T07:42:17","modified_gmt":"2019-01-22T17:42:17","slug":"hawaiis-failed-campaign-finance-law-the-case-of-the-star-advertisers-missing-front-page-ad-disclaimer","status":"publish","type":"post","link":"https:\/\/hawaii.concon.info\/?p=1895","title":{"rendered":"Hawaii\u2019s Failed Campaign Finance Law: The Case of the Star-Advertiser\u2019s Missing Front Page Ad Disclaimer"},"content":{"rendered":"\n\n[et_pb_section fb_built=”1″ fullwidth=”on” admin_label=”Section Header” _builder_version=”3.17.5″ global_module=”145″][et_pb_fullwidth_header text_orientation=”center” header_fullscreen=”on” header_scroll_down=”on” _builder_version=”3.16″ title_font=”|700|||||||” subhead_font=”|700|||||||” subhead_text_align=”center” background_color=”rgba(255, 255, 255, 0)” background_image=”https:\/\/hawaii.concon.info\/wp-content\/uploads\/2017\/07\/HawaiiStateCapitol.jpg” background_layout=”light” button_one_text_size__hover_enabled=”off” button_one_text_size__hover=”null” button_two_text_size__hover_enabled=”off” button_two_text_size__hover=”null” button_one_text_color__hover_enabled=”off” button_one_text_color__hover=”null” button_two_text_color__hover_enabled=”off” button_two_text_color__hover=”null” button_one_border_width__hover_enabled=”off” button_one_border_width__hover=”null” button_two_border_width__hover_enabled=”off” button_two_border_width__hover=”null” button_one_border_color__hover_enabled=”off” button_one_border_color__hover=”null” button_two_border_color__hover_enabled=”off” button_two_border_color__hover=”null” button_one_border_radius__hover_enabled=”off” button_one_border_radius__hover=”null” button_two_border_radius__hover_enabled=”off” button_two_border_radius__hover=”null” button_one_letter_spacing__hover_enabled=”off” button_one_letter_spacing__hover=”null” button_two_letter_spacing__hover_enabled=”off” button_two_letter_spacing__hover=”null” button_one_bg_color__hover_enabled=”off” button_one_bg_color__hover=”null” button_two_bg_color__hover_enabled=”off” button_two_bg_color__hover=”null”]

The Hawai\u02bbi <\/strong><\/span><\/h1>\n

State Constitutional Convention Clearinghouse<\/strong><\/span><\/h1>\n
Information Related to Hawai\u02bbi’s November 6, 2018 State Constitutional Convention Referendum<\/strong><\/span><\/h5>[\/et_pb_fullwidth_header][et_pb_fullwidth_post_title categories=”off” comments=”off” featured_image=”off” disabled_on=”on|on|on” _builder_version=”3.17.5″ disabled=”on”][\/et_pb_fullwidth_post_title][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”3.19.5″][et_pb_row _builder_version=”3.19.5″][et_pb_column type=”4_4″ _builder_version=”3.19.5″ parallax=”off” parallax_method=”on”][et_pb_text _builder_version=”3.19.5″]

Hawaii\u2019s Campaign Spending Commission claims<\/a><\/u> that its \u201cmission is to maintain the integrity and transparency of the campaign finance\u00a0process by enforcing the law,\u201d including<\/a><\/u> \u201cmaking sure everyone has the opportunity to \u2018follow the money,\u2019\u201d especially for \u201cballot issue committees.\u201d Unfortunately, in the leadup to last November\u2019s state constitutional convention referendum, this language proved to be mere feel-good political pablum.<\/p>\n

The Violation<\/strong><\/p>\n

On November 5, 2018, one day before the election, convention opponents ran an ad on the front page of the Honolulu Star-Advertiser<\/em><\/a>, the most valuable print real estate in the State of Hawaii, as the Star-Advertiser<\/em> is Hawaii\u2019s dominant daily newspaper.<\/p>\n

Missing from the ad was the legally required disclosure<\/a> of who paid for it. This disclosure requirement is important because without it voters cannot \u201cfollow the money,\u201d which, as noted above, is the reason the Campaign Spending Commission exists. If Hawaii\u2019s most powerful special interests found it in their self-interest to voluntary disclose their campaign spending, Hawaii wouldn\u2019t need a Campaign Spending Commission.<\/p>\n

The Campaign Spending Commission\u2019s Response<\/strong><\/p>\n

On the morning of Nov. 5, immediately after I spotted the violation, I called the Commission after first notifying the Board of Elections. Given that it was only one day before the election, time was of the essence. After the election, people wouldn\u2019t care, as breaking the campaign disclosure law would make no practical difference. So, after calling, I emailed and then called again. My hope was that the Commission would issue a press release\u2014or at least send out one of its innumerable tweets\u2014notifying the public of the violation.\u00a0<\/p>\n

The day after the election, General Counsel Gary Kam finally got back to me. He immediately acknowledged that the ad violated the law, but he said he couldn\u2019t do anything until the Star-Advertiser<\/em>, which ran the ad, confirmed that Preserve Our Hawaii had bought it. The penalty to Preserve Our Hawaii for the violation would be $25; the penalty to the Star-Advertiser<\/em> would be nothing, as newspapers are not penalized for running illegal political ads even if they know they are illegal.<\/p>\n

Two days later I received an email from the Commission claiming that for them to pursue the $25 fine against Preserve Our Hawaii, I would have to fill out, sign, and notarize their formal complaint form alleging the violation the Commission had already acknowledged was an obvious violation.<\/p>\n

I explained to General Counsel Kam that such a request would make \u201ca mockery of the Campaign Spending Commission, and the trust the public has placed in it.\u201d He apparently agreed. On November 13, he withdrew the request and notified me that both the Star-Advertiser<\/em> and Preserve Our Hawaii were being asked for information regarding the violation and that he would notify me when he heard back.<\/p>\n

The complete correspondence<\/a> can be found on the Hawai`i State Constitutional Convention Clearinghouse<\/a>.<\/p>\n

The Bystander Effect<\/strong><\/p>\n

Perhaps the most remarkable feature of the front page political ad violation was that no one else reported it to the Commission despite the fact that thousands of people, including most Star-Advertiser<\/em> staff, anyone who has ever run as a political candidate in Hawaii, and every Commission staff member, presumably both saw the front page ad and immediately knew it was illegal.<\/p>\n

Such behavior reminded me of the \u201cbystander effect,\u201d often taught to social psychology students by means of the Kitty Genovese story. While Ms. Genovese was murdered in front of her New York City apartment building, dozens of the apartment dwellers heard the drawn-out and very loud murder as it was taking place. But no one alerted the police, reasoning that they had more to lose than gain by doing so.<\/p>\n

In the ad disclaimer case, the bystanders could have reasonably worried about needlessly getting on the bad side of some of Hawaii\u2019s most feared political players, including the Star-Advertiser<\/em>, the government unions who paid for the ad, the Campaign Spending Commission, and the politicians who created Hawaii\u2019s dark money ballot issues system while pretending to do otherwise. To alleviate such fears of retribution, inspectors general and other government watchdogs (but not the Campaign Spending Commission) institute systems allowing citizens to report waste, fraud, and abuse through anonymous \u201chotlines.\u201d<\/p>\n

The Violators\u2019 Responses<\/strong><\/p>\n

After eight weeks had passed and I hadn\u2019t heard back from the Commission, I requested an update on the case. General Counsel Kam replied that on December 4, more than a month earlier, Preserve Our Hawaii had paid the $25 fine. Although December 4 was before the Commission\u2019s final December 6 deadline<\/a><\/u> for reporting campaign expenditures, the $25 penalty was apparently not disclosed because only expenses prior to the election needed to be reported. Thus, any reporter looking at the Commission\u2019s final report on Preserve Our Hawaii, let alone its November 5 report deadline (more than 12 hours after the violation occurred), would have had no knowledge of either the violation or the penalty.<\/p>\n

After the Star-Advertiser<\/em> was asked who had paid for its front-page ad violating the campaign finance law, it presumably didn\u2019t think the violation newsworthy, as it didn\u2019t report on it, even to bury it in a short notice on its rarely read back pages.<\/p>\n

The Deterrence Effect of the $25 Fine<\/strong><\/p>\n

The deterrence of the $25 fine on Preserve Our Hawaii was obviously negligible. As of the Nov. 6 election, Preserve Our Hawaii had raised $740,000.00 and spent<\/a><\/u> $662,529.5 to defeat the referendum. Virtually all that reported sum went to advertising, including the design and distribution of the ads.\u00a0 Note that most non-media expenditures were exempt from disclosure, including in-house staff used for conducting polls, focus groups, and other research on the referendum; organizing the no coalition; and hiring and then managing the various outside contractors.<\/p>\n

Preserve Our Hawaii\u2019s last payment to the Star-Advertiser was $23,283.01<\/a>\u00a0<\/u>on Oct. 30, presumably for its Nov. 5 front page ad. Adding the disclaimer to the ad covering the most expensive print advertising real estate in Hawaii would have taken up far more than $25 worth of space. My guess, then, is that the payback for violating the law and thus saving on extraordinarily precious ad space was more than 100:1.\u00a0<\/p>\n

Obeying the law would also have significantly reduced the effectiveness of the ad. All of Preserve Our Hawaii\u2019s contributions came from government unions, including four-fifths from two of Hawaii\u2019s most powerful unions, the Hawaii Government Employees Association and the Hawaii State Teachers Association (most of the latter\u2019s contribution came from its parent union\u2019s $60+ million ballot campaign fund). Disclosing this information would have undercut Preserve Our Hawaii\u2019s message about powerful special interests supporting but not opposing a convention.<\/p>\n

Some readers would also have reasonably assumed that the front-page message was the Star-Advertiser<\/em>\u2019s own editorial position. After all, not only was the message its editorial position<\/a>, but the law required that if it wasn\u2019t the ad would have to include a disclaimer. Trusting readers would presumably have expected the Star-Advertiser<\/em> to comply with Hawaii\u2019s campaign finance disclosure laws, given that it has often editorialized in favor of the principle behind those laws.<\/p>\n

In short, on strictly economic grounds, the deterrence effect of the $25 penalty, the equivalent of about a .1% tax, was negligible. It was like having the government offer a blatant lawbreaker the following two options: pay a $25 fine to earn a $1,000 profit or don\u2019t break the law and earn nothing.<\/p>\n

The Court of Public Opinion Rationale<\/strong><\/p>\n

Politicians and the media often argue that small penalties for campaign finance violations are all that is necessary because the most practical deterrent for such violations is the court of public opinion, not the court of law. But Preserve Our Hawaii, unlike candidates who will be up for election in the future, had no reputation to lose after the election because it ceased to exist.\u00a0<\/p>\n

If the public had been widely informed of the violation on Nov. 5, this argument would have been credible.\u00a0 But the Campaign Spending Commission refused to issue a press release or other communications alerting the public of the violation. And the Star-Advertiser<\/em> not only had no incentive to alert the public to the violation but had a significant economic incentive to turn a blind eye.<\/p>\n

To be fair, it\u2019s very hard to enforce conventional campaign finance disclaimer laws in the court of public opinion shortly before an election, as there isn\u2019t enough time to correct the record. But it should never have been necessary to correct the record, as the Star-Advertiser<\/em> should simply have refused to run an ad that its political advertising staff and senior editors undoubtedly knew was illegal.<\/p>\n

Recommendations<\/strong><\/p>\n

The conventional villains in campaign finance disclosure stories, as told by news media, are politicians and special interests. But I\u2019d suggest the greatest villain in this story is the Star-Advertiser<\/em>, which has more monopoly power over its state\u2019s news than any other newspaper in any other state in the United States. For example, the Star-Advertiser<\/em> ranks 12th<\/a> in total daily circulation, even though Hawaii is only the 40th<\/a> largest state in the United States.<\/p>\n

Why did the Star-Advertiser<\/em>\u2019s editorial and advertising staff choose to run an ad that they must have known was illegal? From a short-term business perspective, the answer is clear. There is no financial penalty in Hawaii when a media outlet publishes a political ad that fails to include a disclaimer. The penalty only applies to the entity placing the ad, not the entity that runs it.\u00a0 In this case, the financial reward was great (ads running the day before an election often cost the most) and the reputational risk the least (which helps explain why negative ads predominate just before an election).\u00a0\u00a0\u00a0<\/p>\n

But if Hawaii had a competitive media system the Star-Advertiser<\/em> would have had to think twice about not only abetting the violation of a law but violating the type of law it claims it supports as the people\u2019s tribune. When you have substantial monopoly power over information\u2014whether you\u2019re a politician or media outlet\u2014you have much less reputational risk to fear from bad behavior.<\/p>\n

A good starting point to break the Star-Advertiser<\/em>\u2019s monopoly power in Hawaii would be to end its highly profitable monopoly over government mandated legal advertising, which the state legislature granted it. No government should grant one competitor in a marketplace a 15% revenue advantage, which results in a 50% profitability advantage (due to the very high profitability of the legal ads), over potential competitors. (These amounts are only estimates, as the actual amounts and profits the Star-Advertiser<\/em> receives from legal ads is a closely guarded secret.) The subsidy also makes the Star-Advertiser<\/em> beholden to legislative leaders, which is bad for press independence.<\/p>\n

Government mandated legal ads once fulfilled an important information function, just as newspaper classified ads provided a valuable information service before the advent of the Internet and the emergence of more efficient and effective services such as Craigslist. But they now hinder the public\u2019s right to know, just as would a government mandate to continue using the horse-and-buggy after the automobile had been invented. Many Hawaii politicians are aware of the problem.\u00a0 But they are terrified of getting on the Star-Advertiser<\/em>\u2019s bad side.\u00a0 As the famous political adage goes, \u201cNever pick a fight with someone who buys ink by the barrel.\u201d\u00a0 (The same adage also applies to reporters who want to preserve their option open of one day working at the Star-Advertiser<\/em>.)<\/p>\n

Hawaii deserves an honest and open discussion about the Star-Advertiser<\/em>\u2019s role in subverting Hawaii\u2019s campaign finance disclosure laws, just as it deserves an open and honest discussion about the merits of government mandated legal ads. Alas, neither the Star-Advertiser<\/em> nor Hawaii\u2019s politicians are likely to engage in such a discussion.<\/p>\n

Fixing the perverse incentives in Hawaii for last minute violations of its campaign finance disclosure law regarding Hawaii\u2019s periodic state constitutional convention referendum could arguably require a state constitutional convention, as Hawaii\u2019s dominant media outlet and most powerful politicians benefit from such violations. If so, the incentives constitute a Catch-22.<\/p>\n

LINK:\u00a0<\/span>Articles by J H Snider PhD<\/span><\/a><\/p>\n

\n

S<\/strong>ource:<\/strong>\u00a0<\/span>Snider, J.H.,\u00a0<\/span>Hawaii\u2019s Failed Campaign Finance Law:\u00a0The Case of the Star-Advertiser\u2019s Missing Front Page Ad Disclaimer<\/a>,<\/span>\u00a0<\/span><\/span>Hawaii Press Press, January 19, 2019.<\/span><\/p>\n

 <\/p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]\n\n","protected":false},"excerpt":{"rendered":"

Published in Hawai`i Free Press<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[9],"tags":[],"class_list":["post-1895","post","type-post","status-publish","format-standard","hentry","category-blog"],"yoast_head":"\nHawaii\u2019s Failed Campaign Finance Law: The Case of the Star-Advertiser\u2019s Missing Front Page Ad Disclaimer - The Hawaii State Constitutional Convention Clearinghouse<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/hawaii.concon.info\/?p=1895\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hawaii\u2019s Failed Campaign Finance Law: The Case of the Star-Advertiser\u2019s Missing Front Page Ad Disclaimer - The Hawaii State Constitutional Convention Clearinghouse\" \/>\n<meta property=\"og:description\" content=\"Published in Hawai`i Free Press\" \/>\n<meta property=\"og:url\" content=\"https:\/\/hawaii.concon.info\/?p=1895\" \/>\n<meta property=\"og:site_name\" content=\"The Hawaii State Constitutional Convention Clearinghouse\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Hawaiiconcon-1907012029554279\/\" \/>\n<meta property=\"article:published_time\" content=\"2019-01-19T17:07:09+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-01-22T17:42:17+00:00\" \/>\n<meta name=\"author\" content=\"J.H. 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