Legislature(2017 - 2018)GRUENBERG 120
01/27/2017 01:00 PM House JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| HB44|| HCR1 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 44 | TELECONFERENCED | |
| *+ | HCR 1 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 44-LEGISLATIVE ETHICS: VOTING & CONFLICTS
HCR 1-AMEND UNIFORM RULES: ABSTAIN FROM VOTING
1:01:47 PM
CHAIR CLAMAN announced that the only order of business would be
HOUSE BILL NO. 44, "An Act requiring a legislator to abstain
from taking or withholding official action or exerting official
influence that could benefit or harm an employer or to request
to be excused from voting in an instance where the legislator
may have a financial conflict of interest; and providing for an
effective date," and, HOUSE CONCURRENT RESOLUTION NO. 1,
Proposing an amendment to the Uniform Rules of the Alaska State
Legislature relating to voting and abstention from voting.
[HB 44 and HCR 1 were before the committee jointly.]
1:02:45 PM
REPRESENTATIVE JASON GRENN, Alaska State Legislature, explained
that the intent of the legislation is to increase transparency
within the state legislature, and allow the public to see that
conflicts of interest are taken seriously. In asking the public
to trust the legislature with their votes, these pieces of
legislation are important steps in increasing the transparency
constituents expect. Currently, he explained, the legislature
uses a system of abstention allowing for no record of why a
person was not allowed to abstain. A single objection can be
raised, and the legislator requesting to abstain is required to
vote. Alaska is the only state in the country to require
unanimous consent in allowing an abstention from voting. These
two pieces of legislation do not allow for a legislator to be
excused from voting on an appropriation bill, they do not take
away a legislator's ability to vote on the budget. As
legislators guide Alaska through these troubled times,
increasing the public's trust is more important than ever and
creating transparency is critical. House Bill 44 establishes a
clear and concise standard for legislators to use when they are
determining whether they have a conflict of interest in line
with existing statutes. House Concurrent Resolution 1 does that
with a vote on the public record.
1:04:44 PM
RYAN JOHNSTON, Staff, Representative Jason Grenn, Alaska State
Legislature, turned to the sectional analysis for HB 44 and
paraphrased as follows: [original punctuation provided]
Section 1: Defines the conflict of interest standards
under which a Legislator may vote on a particular
issue. Conflict is defined as substantial benefit or
harm to the financial interest of the legislator's
immediate family member, the legislator's employer,
and immediate family member's employer, a person with
whom the legislator is negotiating employment, or from
whom the legislator or immediate family member has
received more than $10,000 in income within the last
12 months.
Exceptions to this include those outlined in Section
2, or while participating in public discussion or
debate.
Section 2: A legislator may not vote on a question in
a committee and must request to abstain from voting on
the floor if the legislator or an immediate family
member has a substantial financial interest. A
legislator may vote on an appropriations bill that
meets the requirements of AS 37.07.020(a) or 37.07.100
(Executive Budget Act).
Section 3: Defines "substantially benefit or harm" as
the effect on the person's financial interest being
greater than the effect on the financial interest of a
substantial class of persons to which the person
belongs as a member of a profession, occupation,
industry, or region.
Section 4: Defines "financial interest" as ownership
of an interest or involvement in a business, property
ownership, or relationship that is a source of income
or financial benefit.
Section 5: Provides that this Act only takes effect
upon passage of a resolution amending Uniform Rule
34(b).
Section 6: Provides for an effective date later than
that of the resolution to Uniform Rule 34(b) referred
to in Section 5.
1:07:01 PM
MR. JOHNSTON paraphrased the sectional analysis for HCR 1, as
follows: [original punctuation provided]
Section 1: Amends the rule to state that a legislator
may abstain from a vote with a majority consent.
Currently, Uniform Rule 34(b) states that a legislator
may abstain from a vote by a unanimous consent. It
also amends the Uniform Rule to include two instances
when a member may not vote: a legislator may not vote
on their own abstention from a vote; and, a legislator
may not vote on an issue if the body casts a majority
vote for the legislator to abstain.
MR. JOHNSTON stated that the flowchart "Current Procedure" is
included within the committee packet, and explained that it
reflects the current procedure for a legislator to abstain, and
what the procedure would look like under HB 44 and HCR 1. He
then explained the two procedures depicted on the chart.
1:09:48 PM
REPRESENTATIVE LEDOUX asked why the person who objected isn't
recorded in the journal.
MR. JOHNSTON opined that it is an unwritten rule that someone
always stands up and, currently, the statute reads that there is
no record of it.
1:10:29 PM
REPRESENTATIVE LEDOUX questioned whether the statute itself
reads that there is no record of it.
MR. JOHNSTON advised there is no language in that regard in the
statute.
REPRESENTATIVE LEDOUX surmised there is no language one way or
the other in the statute.
MR. JOHNSTON answered in the affirmative.
1:10:53 PM
REPRESENTATIVE KOPP suggested that Representative Grenn is
referring to the uniform rule rather than the statute
Representative LeDoux was discussing. He agreed there should be
good transparency and public process, and asked that the
committee consider the unintended consequences. He asked the
committee to imagine a situation where the majority decides a
bill is important to them and that someone in the minority has a
conflict, and "we're all going to vote that that person does,
and kind of vote on party lines versus how they really feel if
that person has an interest that is greater than someone else in
their class of people that are similarly situated." He offered
that he had been attempting to imagine situations where it was a
majority/minority split based upon how the bill was written.
1:12:13 PM
REPRESENTATIVE GRENN answered that his office researched how the
other 49 states dealt with conflicts of interest, and found that
the vast majority of states that allow for an abstention to be
voted on use a majority vote of the body. He said that after
reviewing Alaska's statutes he was advised the Anchorage
Assembly has a majority vote allowing a member to abstain on a
conflict of interest issue. He stated that the state
legislature should meet what the state is asking municipalities
to do, as well. He extended that Representative Kopp is
correct, this does not take politics out of what can happen.
The hope is that legislators recognize that someone's vote is
the most important action they can take as a legislator, and to
take that vote away from someone for political reasons or
vindictive reasons, cannot be dealt with through legislation, he
said. The intent of this bill is to create a public record of
the vote, and in the event a legislator rises to their conflict
of interest and one side or the other wants to play politics and
vote party lines, that vote now is public record. Therefore,
the public can see that one side or the other is engaging in
politics as opposed to good policy, which is the transparency
layer where the public knows what is happening on the floor of
the House of Representatives.
1:14:41 PM
REPRESENTATIVE KOPP noted that Alaska has a citizen legislature,
legislators have other jobs of which APOC discloses, and they
are elected because they bring the perspective and view point of
their constituents into the public arena of discussions on
public policy ideas. Currently, he surmised, when a legislator
declares a conflict it is on the record, the only difference is
absolutely calling for a vote each time. There could be a fish
tax bill with legislators involved in the fishing industry, or
perhaps the bill is related to the legal field and it affects an
attorney legislator's clientele whose fees exceed $10,000.
Possibly, he offered, it would come back to how the majority and
minority feel about the bill, although, who their clients are or
who the legislator is in their profession, is important.
Legislators are elected by their districts because people
believe in them and want their perspective represented. He
posited that sometimes an action is taken that is thought to
decrease finger pointing and increase the flow of process. Yet,
he said, it may be an unintended stumbling block based on the
fact this is a citizen legislature and people come out of
various backgrounds and interests. He asked for Representative
Grenn comments.
1:17:11 PM
REPRESENTATIVE GRENN agreed with Representative Kopp's comments,
and noted that they reviewed other citizen legislatures and how
they dealt with conflict of interest issues. He explained that
a New Mexico state legislator receives no salary but does
receive per diem, and they have other incomes and jobs for their
livelihood. He described it as the epitome of a citizen
legislature. New Mexico's conflict of interest statute is
similar to this bill and in some ways it is stricter as to
stocks, the percentage of a business ownership, and so forth.
He said, "And I think if we go back to the bill where it says,
you know, we're talking lawyers or other cases, these are bills
that would substantially benefit you as a legislator more so
than the rest of the class maybe you are representing or more so
than the rest of the class that -- that this legislation goes
towards." He deferred to Doug Gardner, Director of Legislative
Legal and Research Services to respond to the hypothetical
examples.
1:19:14 PM
REPRESENTATIVE KOPP said he would like to hear from Legislative
Legal and Research Services regarding a situation where he was
representing a class of clients and received more than $10,000
in income ....
1:19:51 PM
CHAIR CLAMAN interjected that he would present the following
three hypotheticals. Chair Claman said, within the first
hypothetical he worked for ARCO Petroleum which is no longer
involved in the North Slope, his salary was more than $10,000,
and there was an oil and gas tax credit bill in front of the
legislature affecting any oil company doing business in Alaska.
He asked whether he would have a basis to rise and declare that
he has a conflict.
REPRESENTATIVE GRENN responded that under this bill, Chair
Claman would not have a conflict of interest. He explained that
the main pivot on this is found ...
1:21:11 PM
MR. JOHNSTON interjected there would not be a conflict because
ARCO was not substantially benefited or harmed more than the
rest of the industry, and the oil taxes were equal across the
board, with no caveat in the legislation that ARCO would receive
"X" amount more than any other company.
1:21:49 PM
CHAIR CLAMAN said the second hypothetical involves him working
for Laborer's Union "X" and he earned more than $10,000 a year.
A bill was in front of the legislature that read that Laborer's
Union "X" would be treated a certain way in this legislation, he
asked how he would be impacted under this bill.
REPRESENTATIVE GRENN opined that if the bill was discussing
Laborer's Union "X" and excluding all other unions, Chair Claman
would need to rise and disclose to the body his conflict of
interest.
CHAIR CLAMAN surmised that the legislature would then vote yea
or nay whether to accept that conflict.
REPRESENTATIVE GRENN answered the vote would be based on Chair
Claman's explanation of the conflict of interest.
1:22:52 PM
CHAIR CLAMAN noted that he is an attorney, and in the third
hypothetical ARCO is a client and pays his firm, and him, more
than $10,000 in a given year. ARCO has a bill that is tax
credit specific to ARCO and not the oil and gas industry, ARCO
doesn't employ him but ARCO pays his firm. He asked what
happens in that hypothetical.
REPRESENTATIVE GRENN deferred to Doug Gardner, Legislative Legal
and Research Services.
1:23:44 PM
DOUGLAS GARDNER, Director, Legal Services, Legislative Legal and
Research Services, Legislative Affairs Agency (LAA), related
that he is an attorney, a member of the Alaska Bar Association
(ABA), and if he had to answer that question as a legislator he
would rise and declare that conflict because the vote he places
may directly benefit a client who ultimately pays Mr. Gardner.
Although, he explained, it would not be necessary to disclose
any confidentiality in that he could rise and declare a conflict
because his employment, as an attorney, involved representation
in the oil and gas tax area and this bill may create a conflict.
He explained that it can be done topically in such a way as to
avoid the disclosure of different individual clients, and under
that hypothetical he does not have to declare ARCO as his named
client. There is a way to address that without getting into the
attorney client privilege in representation confidentiality. He
said that while listening to this hearing he had been trying to
construct a hypothetical where he would have to disclose a
client, and he hasn't come up with one just yet but believes one
is out there.
1:25:13 PM
REPRESENTATIVE EASTMAN referred HB 44, and noted that "effect on
a substantial class of persons" is not defined. He asked
Representative Grenn his intent, what he was trying to get at
under "substantial class of persons," and how specific the
phrase is currently defined in statute.
MR. JOHNSTON pointed to [Sec. 2. AS 24.60.030(g), page 2, lines
25-27, which read:
(g) ... interest of the action to be voted on is
greater than the effect on a substantial class of
persons to which the legislator or
Belongs as a member of a profession, occupation,
industry, or region.
MR. JOHNSTON explained that [line 27 represents the "substantial
class of persons"]. The language was derived from existing
statute and it is the substantial number within an industry or
"X" amount of businesses, he said.
1:26:50 PM
REPRESENTATIVE EASTMAN asked his understanding of how much is
"substantial."
MR. JOHNSTON replied that the bill leaves it as the
discretionary choice of the legislator because each business,
industry, and region is different. For example, he explained,
"substantial" would have to be a good portion of an industry
such that if the legislator was part of three businesses being
affected and 80 businesses were left out, that would be
substantial."
1:27:37 PM
REPRESENTATIVE EASTMAN related that, currently, it is difficult
to abstain from a vote in that there is not a lot of precedence
for abstentions, and [the bill] would make it somewhat easier to
abstain from a vote. On the other hand, he said, he is unaware
of an instance where a legislator has been forbidden from
casting a vote. The bill language puts forth two situations
where a legislator would actually, by law, be forbidden from
casting a vote, and he asked whether that is cross-purposes from
the idea of permitting a legislator to abstain. He further
asked how many other examples inspired the requirement that, by
law, a legislator would be prohibited from voting.
REPRESENTATIVE GRENN responded that the bill does not forbid
anyone from voting, rather it constructs a standard for the
legislator to discuss their conflict and ask to abstain
themselves, then putting that vote to the body of the
membership. He clarified that the bill is not saying a
legislator is forbidden based on this, but rather that a
legislator may have a conflict of interest that needs to be
discussed.
1:29:39 PM
REPRESENTATIVE EASTMAN asked whether previous testimony
indicated there would be two different types of situations, for
example, where a legislator voting on their own abstention would
be legally prohibited from casting a vote for their district.
MR. JOHNSTON explained that the two situations have to do with
the legislator in question voting on their own abstention. In
reviewing other state statutes, it makes no practical sense to
allow the legislator to vote on their own abstention, and in
that situation they shouldn't be allowed to vote. He explained
this is a uniform rules change to allow for this abstention to
take effect. In the second situation the legislator is granted
an abstention from voting, not forbidden to vote, but after they
are granted an abstention they must abide by that abstention and
not vote, he said.
1:30:55 PM
REPRESENTATIVE LEDOUX related that she is pleased this issue is
being addressed because she has believed for a long time there
was a problem here. She asked whether other states and
municipalities have far broader rationales for letting people
abstain. She noted that within some of the hypotheticals Chair
Claman posited, she would have expected a person to be viewed as
having a conflict of interest. For example, she recalled there
was someone in the municipality that was involved in the
cannabis industry and there were ordinances relating to that
industry. She opined that he was not allowed to vote on that
issue even though the ordinance in question did not relate
specifically to his business. She said she was trying to
remember votes in the House of Representatives that may have
been viewed as a conflict of interest that someone may have
wanted to abstain from, and she said she could think of
virtually zero instances in which a [bill] was specifically
related to just one business or one union, for example.
Although, she said she was sure there would be some. She
offered a scenario of a person working for a union, with right-
to-work legislation before the legislature, she said it would
seem to her that there would be a conflict in voting on that
legislation. Yet, she continued, it appears from Representative
Grenn's answers that it would be perfectly appropriate for that
person to vote on that legislation under this bill
1:33:39 PM
REPRESENTATIVE GRENN agreed, and he said there are states that
have municipalities with stricter parameters of what a conflict
of interest entails. He offered that the intent was to make
this a starting place, add some transparency, have votes take
place, and what constitutes a conflict of interest. He pointed
out that contained within the committee packets is a list of the
threshold of a number of other states, such that if a person
owns 5 percent of a company and that company is involved with a
bill, the person would have to declare their conflict of
interest. He explained that this bill takes small steps in
adding to the transparency of how Alaskan legislators declare
conflict of interest and the public record.
MR. JOHNSTON opined that the issue Representative LeDoux was
pointing to is the rank and file type of issue. For instance, a
legislator was an everyday electrician in a union and as part of
that union he did not believe in right-to-work and wanted to
vote against it. That scenario poses the question of whether it
is a substantial benefit or harm to that legislator, he related.
In the event the legislator believes right-to-work will
substantially harm him as an everyday electrician, the
legislator would have the option to rise and declare that
conflict of interest.
1:36:25 PM
REPRESENTATIVE LEDOUX posited a scenario wherein the legislator
is the president of a union and the legislation impacts all
unions, possibly the legislator would rise and declare a
conflict. Although, she pointed out, in the event Mr.
Johnston's analysis of this bill is correct, there would be no
reason for anyone to [rise and declare] a conflict because the
legislator was not impacted more substantially than any of the
other unions in the state.
REPRESENTATIVE GRENN answered that Representative LeDoux is
correct.
REPRESENTATIVE LEDOUX queried that if someone were to offer an
amendment tightening that threshold, would it be considered a
friendly or unfriendly amendment.
REPRESENTATIVE GRENN answered that question would be up to the
body to decide, or at least this committee.
1:38:03 PM
REPRESENTATIVE KREISS-TOMKINS asked Mr. Gardner whether the
legislature had interpreted the conflict of interest rule to be
more stringent than the actual letter of the conflict of
interest rules. Legislators often rise to disclose a conflict
of interest even if they do not have a conflict rising to the
level greater than the effect on a substantial class of persons.
He asked whether it was Mr. Gardner's impression, having
observing members rising and disclosing conflicts, whether there
have been a majority of instances where the legislator was not
actually obligated to disclose by the letter of the uniform
rules.
MR. GARDNER related that he will make a general comment and not
focus on any particular time period or legislator. He opined
that in the recent past the Select Committee on Legislative
Ethics issued a couple of opinions where it found violations for
failure to disclose. Particularly, he noted, in the area where
legislators have a contract for a state service and ultimately
they are voting on a budget or an appropriation vehicle. He
offered, those ethics opinions may have driven a concern of
political stigma in not declaring a conflict and being found in
violation of the ethics laws. More than the political stigma, a
legislator can be fined and theoretically expelled from the
legislature which, he commented, is extreme and probably
unlikely in those cases. He noted there has been a trend toward
considerable disclosure, such as the circumstances in the last
several years wherein leadership stood up on the floor of the
House of Representatives and made comments about the scope of
disclosure and, subsequently, there have been a large number
disclosures in the last two years. Having said that, he
related, a legislator is probably wise to disclose because the
net result, as has been observed, is that there is usually an
objection to an abstention from voting, and in the end the
legislator votes "because the ethics statute is ultimately made
subordinate to the uniform rules -- uniform rule decision and an
abstention objection exonerates the legislator from any
conflict." Perhaps that process, in the end, does what it is
intended to do such that it allows constituents, the public, and
other legislators to know where that legislator is coming from.
They declare that they provide this service, or they are an
attorney for a particular group of clients. In the end, it is
out there but the person is required to vote and represent their
constituents. He described it as the ongoing balance, and that
balance has shifted a bit more in terms of disclosure in the
last several years.
1:42:59 PM
REPRESENTATIVE KREISS-TOMKINS described the current letter of
the uniform rule as minimalistic, independent of the bill. He
commented that the possible amendment Representative LeDoux
discussed may have merit independent of the bill, and that the
substantial class clause throws a curve ball and waters down the
conflict of interest disclosure rules.
REPRESENTATIVE FANSLER referred to unintended consequences and
asked whether there is a worry this may actually result in a
suppression of people declaring a conflict of interest due to
the substantial class clause.
REPRESENTATIVE GRENN responded that the clause puts a bar
requiring someone to rise for a conflict of interest, it doesn't
take away from someone rising and declaring a conflict just to
be safe. He said, the clause sets a standard he believes can be
followed better, and the public would know the level of the bar.
1:45:30 PM
REPRESENTATIVE FANSLER related that he is personally
experiencing a difficult time envisioning bills that will
selectively single out one or two entities in a class. He
referred to Representative Grenn's comment that Alaska is the
only state without these laws on its books, which played a part
in his idea for this bill and he applauds Representative Grenn
because he like uniformity. He asked whether Representative
Grenn had statistics on the number of times conflicts of
interest have been declared [in other states], whether [a state]
has the substantial group clause, and also statistics on the
number of times, after that conflict has been declared, that the
majority has then voted to allow the legislator to abstain.
MR. JOHNSTON advised that the sponsor's office reached out to
states and are awaiting their responses, he will then provide
their responses.
1:47:16 PM
REPRESENTATIVE REINBOLD thanked the sponsor for the bill and
offered that the intent is one worth vetting. She asked him to
explain any subjectivity concerns he may have related to
legislators who have a more or less sensitive conscience when
deciding to rise.
REPRESENTATIVE GRENN explained there is a current process in
place through the Select Committee on Legislative Ethics for a
person who wishes to lodge a complaint due to an undisclosed
conflict. He offered that it has happened, and the Select
Committee on Legislative Ethics has provided statistics. He
reminded the committee there are well known stories regarding
some of those complaints in Alaska's history.
1:49:27 PM
REPRESENTATIVE REINBOLD noted that financial disclosures are
transparent and a matter of public record. She offered her
concern that some legislators are far more sensitive in rising
to declare a conflict of interest, and noted that the ethic
process is a quiet and time consuming process. She advised
Representative Grenn there is an elephant in the room because
"some know that your caucus is very interested in changing oil
and gas tax policy." Historically, she said, the oil and gas
industry has contributed approximately 90 percent to the state
budget. She asked whether there was any motivation in any
manner to alienate or target anyone associated with the oil and
gas industry by any legislators, including the 11 co-sponsors
and himself, or any caucus members,
REPRESENTATIVE GRENN responded that in watching government from
the outside, he had always hoped the elected legislators would
act in a manner that was mindful of being integrity filled,
honest, and open with everything they do. His emphasized that
his motivation in putting this legislation forward is from a
personal and policy perspective to add transparency and build
the public's trust. Personally, he advised, the day he filed to
run for office was the day he had to resign from his employment
due to a perceived conflict of interest. He offered that
legislators can always put themselves to a higher standard when
it comes to building trust with the public. When he filed HB
44, he had not discussed its purpose with anyone in his caucus
or anyone other than his staff members. He said that in direct
response to Representative Reinbold's question, this legislation
is not directed toward anyone in the building, any industry, or
region in Alaska, it is about setting guidelines for future
legislators. Thereby, giving them a path and knowledge of what
a conflict of interest might be, to vote on the possible
abstention on the public record, and add another layer of
transparency to what the legislature is doing while in session.
1:53:33 PM
REPRESENTATIVE REINBOLD reiterated her question and posited that
he has had no discussion amongst his caucus, no discussion
amongst any of the 11 co-sponsors, this legislation is not
targeted toward any member associated with the oil and gas
industry, and the bill has no intention of moving Representative
Grenn's caucus agenda forward.
REPRESENTATIVE GRENN again emphasized and restated that he did
not discuss the pre-filing of this bill with anyone in his
caucus, and there was no target within this legislation outside
of the desire to build public trust and add transparency to the
actions of the legislature.
1:54:23 PM
REPRESENTATIVE KOPP referred to [Section 1, AS
24.60.030(e)(3)(d)], page 2, lines 15-17, which read as follows:
(D) from whom the legislator or a
member of the legislator's immediate family has, in
the immediately preceding 12-month period, received
more than $10,000 of income.
REPRESENTATIVE KOPP offered concern regarding the two standards
as to voting in committee and on the floor of the House of
Representatives.
[Sec. 2, AS 24.60.030(g)], page 2, lines 19-23, which read as
follows:
(g) ... a legislator may not vote on a question
before a committee of the legislature, and shall
request to be excused from voting on a question before
a house of the legislature, ...
REPRESENTATIVE KOPP explained that the provision related to a
legislator having a conflict. He surmised that if the
legislator, while on the floor of the House of Representatives,
can rise and at least have their colleagues vote, although, if
the legislator is in a committee they lose their vote. Along
the friendly amendment lines, he said, one vote in a committee
can be significant, particularly in the other body with less
members.
MR. JOHNSTON noted that the sponsor has been discussing that
issue and is open to a friendly amendment.
1:55:55 PM
REPRESENTATIVE LEDOUX asked Mr. Gardner whether the substantial
interest test in this bill mirrors what is required by the
ethics rules. She further asked whether the ethics rules
require a legislator to report "just about everything?" She
then turned to the example of someone working for a union and
right-to-work legislation before the legislature, and asked
whether the ethics rules requires a legislator to reveal that
information.
MR. GARDNER answered, probably not. He opined that in expanding
the hypothetical a bit, say a member was part of a larger state
union, or even a smaller boutique union, according to the ethics
opinions he read and the thinking of the Select Committee on
Legislative Ethics, if a legislator is in a substantial class of
persons similarly situated and the legislator's interest is
neither here nor there with respect to the issue, a legislator
would not have to disclose in that circumstance. He returned to
an earlier question and commented that he suspects many
legislators would chose to do so out of an abundance of caution,
but technically they would probably not need to disclose in that
circumstance.
1:57:45 PM
REPRESENTATIVE LEDOUX followed up and noted that when the
legislature was voting on a tax bill, approximately ten year
earlier, someone ended up with ethics problems for not declaring
a conflict before they voted when they had allegedly discussed
employment with a company involved in oil field services.
MR. GARDNER offered that in preparing for his testimony, he
reviewed a couple of advisory opinions, and then referred to
Advisory Opinion, Number 2013/01. He explained that the issue
was whether a legislator, who also worked for a natural resource
company that made money extracting natural resources, had a
conflict in terms of voting on bills affecting that industry.
He explained the process was a fact intensive inquiry. The
committee reviewed the duties of the individual in relation to
the company, weighed whether or not the legislator had a key
financial interest or just strategic decision making
responsibilities and their annual salary was compensated the
same as other members, and whether or not the person was on
unpaid leave from the employer during the session. The
committee concluded there was no conflict in that situation. He
explained that the Select Committee on Legislative Ethics will
conduct a factual inquiry, more of a drill down to exactly what
interest a person may have in an organization, and in the case
of the 2013 Advisory Opinion, the answer was no, no conflict.
2:00:31 PM
REPRESENTATIVE LEDOUX asked whether there is currently anything
in the uniform rules precluding the clerk from identifying the
person who made the objection when a legislator has asked for
abstention.
MR. GARDNER responded that Uniform Rules 9 and 34 instructs the
clerk on what to include in the Journal, and opined that those
rules are basically silent on this issue. The question may be
past practice and precedent with respect to the Chief Clerk and
the Senate Secretary including abstention requests or other
aspects of that process in the Journal. The answer is no, but
he said he will follow up if he learns something else later.
2:01:45 PM
REPRESENTATIVE EASTMAN asked, under this bill, after a
legislator declares a conflict of interest, whether there is a
point a legislator can pause or withdrawn their request to be
excused from the vote on the floor of the House of
Representatives. He noted that Alaska is different from other
states wherein Alaska may have only five members on a committee
and in certain situations possibly not all five members are
present and a single vote directly impacts a district, which is
unlike New Hampshire with 12 times as many members in its state
house. He opined that a reason Alaska's process is the way it
is today, is so that it does not come into a situation where a
district is being deprived of their vote unless there is a very
good reason for doing so. He queried whether there is a
[process], under this bill, for a legislator who wants to
declare a conflict but doesn't want to disadvantage their
district. Currently, he asked, can a legislator rise and
declare their conflict and not be under the impression there is
a high likelihood their district would be deprived of their
vote. Or, he asked, once the legislator starts down the road of
declaring a conflict whether there is a point in which they can
say they want to take it back. He remarked that a legislator
does not have the ability to vote against their own abstention
under this legislation.
2:05:47 PM
REPRESENTATIVE GRENN reiterated that it is the choice of the
legislator themselves to rise and declare their conflict of
interest and in the event there is a conflict of interest based
on this legislation, the hope is that they would rise and
declare the conflict. With regard to whether a legislator can
take back their declaration mid-objection, he opined that is
something he would look into to determine what it might look
like, and how the uniform rules may be affected. He reiterated
that in making a public declaration of an actual honest conflict
of interest based on this legislation, the legislator would have
to question themselves whether they should be voting.
2:06:53 PM
CHAIR CLAMAN opened public testimony on HB 44 and HCR 1.
2:08:02 PM
MARGO WARING, League of Women Voters, said she is speaking on
behalf of Pat Redmond, President of the Board of the League of
Women Voters, and read Ms. Redmond's letter as follows:
Dear Representative Claman, Chairman of the House
Judiciary Committee.
The League of Women Voters of Alaska urges you to
support House Bill 44 and send it on to its next
committee of referral. Transparency in government is
important to the League at all levels, local, state,
and national. When an elected official has a conflict
of interest, that official should not be voting on the
legislation under consideration. One of democracy's
greatest challenges comes when citizens no longer
think government represents, or cares, about them, and
in response fail to participate.
We can see this erosion of confidence in the declining
numbers of citizens who participate in our elections.
Part of what restores confidence is making it clear
that legislators do not use their position for
personal gain.
We applaud the bill's sponsor for seeing that one way
to restore confidence is to change the rule that has
allowed legislators with a conflict to be excused from
voting -- from not voting. In this way, voters can be
sure that the vote cast is not done for personal
benefit. We often hear supporters of the current
practice say that to not vote is to deprive a district
of its voice. The answer to that is that a vote cast
under a cloud also deprives voters of knowing that the
vote was cast for the benefit of the district, and the
state.
Again, thank you for giving the League the opportunity
to speak in support of a bill that strengthens our
democracy. Sincerely, Pat Redmond, President
2:10:14 PM
REPRESENTATIVE LEDOUX asked whether she believes this bill goes
far enough.
MS. WARING, answering as a private citizen and not representing
the League of Women Voters, said her personal opinion is that
the bill does not go far enough.
2:11:07 PM
FRED TRIEM, Attorney, said his opposition to HB 44 is based on
the Separation of Powers Doctrine in that it teaches that one
branch of government cannot regulate the internal affairs of
another branch, and the court system has its own regulation
about recusal of judges for conflict of interest. His objection
to HB 44 is based upon the notion that it would transfer
authority from the legislature to the judicial branch the
authority to regulate internal affairs within the legislature,
and the legislature's internal affairs can be properly addressed
within the legislature's uniform rules. The legislature should
not convey through the judicial branch the authority to make
decisions about the legislature's internal process, and the
uniform rules should address the issues presented in HB 44. As
a footnote, he added that in the event the committee goes
further with HCR 1, he suggested that the committee address the
two categories of objections or concerns Representative LeDoux
raised when considering amending the uniform rules.
2:14:05 PM
MR. TRIEM noted that the fiscal note is not a complete
description of the potential effect of this legislation because
it overlooks the litigation that would be generated and the
effect on the judicial branch by the duty of having to decide
cases sent to the judicial branch as a result of legislation
enacted here. For example, he referred to the chart and stated
that in the event HB 44 is enacted, it depicts where disputes
will arise and what a person would do if they were adversely
involved in a dispute created by this legislation. The
judiciary branch should not be involved in deciding issues
within the province of the legislature, which is the Separation
of Powers Doctrine, and that is the ultimate source of his
objection, he said.
2:16:44 PM
REPRESENTATIVE EASTMAN referred to his statement that he shares
the two categories of objection Representative LeDoux had
referenced earlier, and asked him to summarize those objections.
MR. TRIEM said that Representative LeDoux identified a problem
found in the upper right hand corner of the chart. The first
issue is that the objection made under the current rules, the
objector is not identified in the record which is a form of
anonymous legislation, and he opined that it offends the notion
of a public legislature with accountability. He deferred to
Representative LeDoux regarding the second objection.
2:17:44 PM
REPRESENTATIVE EASTMAN said he simply wanted it in the record
again.
2:17:55 PM
REPRESENTATIVE LEDOUX said she was discussing the soft threshold
and opined that this bill is a good start. In thinking of the
number of things someone would have to declare the conflict on
and perhaps not vote, she said she could only think of things
that might have been in the capitol budget in the old days when
there was still a capital budget. Under this bill, a legislator
would still vote on a capital budget, so any little grant that
might go to an organization a legislator may have interest in,
the legislator would still be required to vote because it is a
budget item. For example, say motor fuel is before the
legislature and a legislator is president of an airlines and the
legislation impacts all airline companies, it would not be a
conflict. Even though, she commented, it appears to her that it
is a conflict, which is why people in an excess of caution would
declare them as conflicts. After nine years in the legislature,
she said she has never seen an instance where someone declares a
conflict and someone does not object, so no matter the conflict
the person is voting on it. That is, of course, a policy
question and it sounds like virtually every other state and
municipality has resolved that conflict question differently.
2:20:56 PM
MR. TRIEM advised that the judicial system resolves the conflict
of interest issue by a common law rule that relies upon the
individual judgment and conscience of judicial officers. He
opined that the legislature can follow that example and rely
upon individual judgments without this formal rule, and
suggested pursuing HCR 1, but not enact HB 44.
2:21:50 PM
REPRESENTATIVE FANSLER surmised that Mr. Triem supports this as
an adjustment to the uniform rules, and that is where he
believes a change similar to this should be made.
MR. TRIEM agreed emphatically.
2:22:15 PM
REPRESENTATIVE FANSLER asked whether there was still the
potential, even if it is in the uniform rules, that it would
eventually find its way into the judicial system if there was a
conflict.
2:22:28 PM
MR. TRIEM responded that it is less likely because the
Separation of Powers Doctrine and courts are extremely reluctant
to mess in the internal affairs of other branches of government,
particularly in the legislative branch. He related that a
person would have an extraordinary burden to try to convince a
superior court judge to decide an issue involving the
interpretation of the uniform rules of the Alaska State
Legislature.
2:23:18 PM
DOUGLAS MERTZ advised that for many years he was an assistant
attorney general and his duties included being the "ethics
guru," the person in charge of administering the Alaska
Executive Branch Ethics Act (Chapter 39.52). He pointed out
that as an attorney of 40 years he is also familiar with the
Alaska Rules of Judicial Conduct and how it affects judicial
conflicts of interest. Gleaned from his experience, he related,
is that two-thirds of the branches of government in Alaska have
the rule that if a person has a conflict of interest, the person
does not take official action. It is only the legislature that
has arrogated to itself an exemption from that rule, one that
for many years has resulted in no one being disallowed to vote
on particular measures. This is not only the sole exception to
the way ethics are administered in Alaska, as has been noted, it
is also the exception among the states.
MR. MERTZ pointed out that the common law of ethics is
consistent with the rule in the two other branches of government
wherein if a person has a conflict they do not take official
action. Currently, the sponsor substitute to HB 44 is still
defective in that it would allow a majority to say the person
has to vote anyway. He stressed that this is a major exception
to the common law rule and to the rule in the other two branches
of government. This leads him to question whether the way
elected officials are held in regard by the public has something
to do with the fact that the legislature considers itself exempt
from the usual ethics rules. He urged the committee to move
forward with HB 44 and HCR 1 and to essentially enact the common
law rule that if a legislator has a conflict of interest, that
legislator may not take official action. It is fair that
legislators can tweak the definition of what is a conflict of
interest but, he reiterated, once a legislator has a conflict of
interest they should not take official action.
2:26:10 PM
REPRESENTATIVE LEDOUX offered that a legislator is working for a
company which is impacted by legislation, so the legislator
declares a conflict, and under this bill the legislator would
still vote. She asked how that would work in the other two
branches of government.
2:27:02 PM
MR. MERTZ explained that in those cases, the legislator would
still have to look at the definition of what a substantial
conflict of interest is, what the threshold is, and whether it
is minor and something that affects everyone. For example, he
opined no judge would recuse herself when a question was before
her regarding the permanent fund dividend (PFD) because everyone
receives a PFD. On the other hand, if it had something to do
with the employer of the judge's spouse, or the executive branch
official's spouse, directly affecting them and no one else,
that's on the other side of the ledger. He extended that it is
difficult to determine where to draw the line, and he was unsure
whether it made sense to do it legislatively other than saying
"substantial conflict of interest" and defining it in general
terms, as the bill does. He warned that it can't be defined too
closely because by defining it too closely, situations are left
out and later it could be decided they should have been
included.
2:28:16 PM
REPRESENTATIVE LEDOUX pointed out that as the bill currently
reads, it clearly allows the president of a company to vote on
legislation that is not targeted at his specific company,
although the industry is impacted by the legislation.
MR. MERTZ stipulated that Representative LeDoux was correct if
the legislation impacted a substantial number of companies, and
not just the one.
REPRESENTATIVE LEDOUX said that that is what this legislation
does.
MR. MERTZ agreed.
2:29:19 PM
REPRESENTATIVE LEDOUX offered a scenario that a judge's husband
is the president of a company that would be impacted by a
judicial decision, and asked how that would work in the judicial
branch. For example, a couple of years ago there was litigation
about the constitutionality of retroactive legislation related
to the real estate industry. She explained that many real
estate people believed that if a particular piece of legislation
was declared unconstitutional that it would have a significant
deleterious effect on everyone in the profession. In the event
the judge's husband owned a real estate company, would that
judge be allowed to rule on that case, she queried.
MR. MERTZ opined that in the judicial branch, the judge would
have to recuse herself if for no other reason than out of an
abundance of caution and to avoid the appearance of impropriety.
On the other hand, if the legal question had to do with an
application of a tax to all corporations, it probably wouldn't
have that result.
2:31:41 PM
CHAIR CLAMAN referred to Mr. Triem's analysis suggestion that
amending the statutes creates a separation of powers issue and
he asked whether Mr. Mertz concurred.
MR. MERTZ replied that he appreciates Mr. Triem's sensitivity to
constitutional issues, and opined that he is probably wrong.
CHAIR CLAMAN surmised that his view was that the statute could
be amended without creating a conflict in the constitutional
area of separation of powers.
MR. MERTZ agreed.
2:32:37 PM
RAY METCALFE said that he works with Emphasis for Ethical
Government, and advised that he was working with the federal
government before it "busted VECO and jailed six legislators for
taking bribes." He said he was in the legislature in the 1970s
and 1980s, and it was obvious to him that bribery was rampant.
He watched a chairman in the Senate Finance Committee, buy a
pipeline camp for $300,000, and then try to sell it back to the
state for $3 million for a prison. This chairman was the
legislator who put the money into the Senate Finance Committee
bill, he stated. He said he saw another legislator move a
Certificate of Need to her family, another legislator took a
$10,000 payment to assist a private organization in receiving
appropriations.
MR. METCALFE advised that in 1801, Thomas Jefferson wrote the
rules for the U.S. Senate, and Mr. Metcalf paraphrased "and if
you were a member of the U.S. Senate, and you had any interest
whatsoever in the issue before you, you not only had to not
vote, you had to withdraw, you had to leave the room." In
recent years, the U.S. Supreme Court gave America Citizens
United v. Federal Election Commission, 558 U.S. ___ (2010), and
also a way to fix it, yet a lot of people are not paying much
attention. He turned to a State of Nevada ethics case that went
before the U.S. Supreme Court, and explained that after a
campaign manager got his person elected, he brought his best
friend in, the campaign manager advised the elected official
that his best friend needed a gaming permit, and the elected
official helped the best friend obtain a gaming permit. He
described the Nevada conflict of interest statute as "totally
broad," and said he would loosely paraphrase the Nevada conflict
of interest statute, as follows: "If you have a conflict, you
may not vote. It's not quite that simple but that's effectively
what it says." The jury in this case decided that the elected
official did the campaign manager a favor to repay him for the
work he did on his campaign. The elected official was
convicted, and the Nevada Supreme Court overturned the
conviction because it decided the conviction violated his free
speech, and his obligation to represent his constituency. The
State of Nevada took the case to the U.S. Supreme Court and the
U.S. Supreme Court "slammed the Nevada court" in a 9 to 0
decision. The U.S. Supreme Court said that speech did not
belong to him - it belonged to his constituents, and that the
statute in the State of Nevada said that under these
circumstances the elected official cannot vote; therefore, the
elected official cannot not vote. He then turned to the VECO
Corporation deal.
CHAIR CLAMAN interjected that Mr. Metcalf had about 15 seconds
on his five minutes.
MR. METCALF said he has heard "a bunch of reasons for
objection", he has been working on this issue for many years,
and would answer any questions regarding this type of
legislation.
2:38:23 PM
JOHN PUGH said he was testifying as a citizen living in Juneau,
and would like to comment on two important issues regarding
transparency, not specifically on the bill. Currently, he
opined, legislators are erroring on the side of [caution] as
most members will rise and say they are a member of a union, or
work for an oil company, and so forth. He said he would hope
that that continues and this bill does not suppress the fact
that people do error on the side of disclosing a possible
perceived conflict, if not in their district, across the state.
It is important, he stressed, to not have this bill somehow
suppress legislators from rising when they believe there may be
a perceived conflict.
MR. PUGH referred to the idea of putting it on the record, and
described that as transparency, and why it is not currently put
on the record is a mystery to him because that information is
important as well. In that regard, citizens can look at the
record and ascertain who declared they may have a perceived
conflict of interest. In moving forward, he asked that the
committee put those two issues into context, and make sure this
bill doesn't actually suppress perceived conflicts by
legislators because that would be less transparency, he
stressed.
2:40:29 PM
REPRESENTATIVE LEDOUX asked whether it is appropriate that the
person objecting also be put on the record.
2:40:38 PM
MR. PUGH expressed yes, and further expressed that it is very
important because it is part of the legislative process and the
record should be the record.
2:41:06 PM
CHAIR CLAMAN, after ascertaining no one further wished to
testify, closed public testimony in HB 44 and HCR 1.
CHAIR CLAMAN commented that it appears there may be some
interest in amending the bill.
2:41:16 PM
The committee took an at-ease from 2:41 p.m. to 2:47 p.m.
2:47:20 PM
MR. GARDNER said he was available for questions.
2:47:43 PM
REPRESENTATIVE EASTMAN asked whether there are other Alaska
constitutional prohibitions against the types of bills a
legislature may pass. He explained that many of the
circumstances discussed today dealt with issues that may not be
necessarily expected to come before the legislature, and asked
whether there are any larger prohibitions at the constitutional
level limiting these types of conflict of interest situations
from ever taking place in the form of a bill.
MR. GARDNER replied that in the event the legislature passes an
unconstitutional bill, such as eliminating the right to a jury
trials in criminal cases. Clearly, the constitutional limits on
what the legislature can do is the function of the court to make
the call on whether a statute is unconstitutional. He said he
was unsure exactly what Representative Eastman was asking in the
context of this bill.
2:49:27 PM
REPRESENTATIVE EASTMAN responded that he is not thinking in the
context of that broad of a situation, but rather more specific
types of legislation in ex post facto law. For example, a bill
of attainder, corruption of blood, or any of those types of
prohibitions imposed upon the state legislature as a branch of
government by the state constitution.
MR. GARDNER asked whether Representative Eastman was looking for
an example of a situation where there was a constitutional
restriction on the legislatures, on legislators.
2:50:15 PM
REPRESENTATIVE EASTMAN said Mr. Gardner was correct, and he was
wondering what those might be, if any.
MR. GARDNER answered it could be the restriction the legislature
has under Article II, Section 19, Local or Special Acts, which
read:
The legislature shall pass no local or special act if
a general act can be made applicable. Whether a
general act can be made applicable shall be subject to
judicial determination. Local acts necessitating
appropriations by a political subdivision may not
become effective unless approved by a majority of the
qualified voters voting thereon in the subdivision
affected.
MR. GARDNER explained that a legislature cannot pass a bill that
benefits a particular community because bills must all have
statewide application. Therefore, he related, the legislature
does have a restriction on what it can do in certain
circumstances.
CHAIR CLAMAN advised Representative Eastman that his questions
appear to be far afield of the topic of the bill.
2:51:28 PM
MR. JOHNSTON related that Representative Grenn had to leave to
attend another meeting, Representative Grenn extended his thanks
for allowing him to present today, and that Representative Grenn
looks forward to working with the committee on the bill.
[HB 44 was held over.]
[HCR 1 was held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB044 ver D 1.20.17.PDF |
HJUD 1/27/2017 1:00:00 PM |
|
| HB044 ver O 1.23.17.PDF |
HJUD 1/27/2017 1:00:00 PM HJUD 1/30/2017 1:30:00 PM HJUD 2/3/2017 1:15:00 PM |
HB 44 |
| HCR001 ver J 1.20.17.PDF |
HJUD 1/27/2017 1:00:00 PM |
HCR 1 |
| HB044 Sponsor Statement 1.23.2017.pdf |
HJUD 1/27/2017 1:00:00 PM HJUD 1/30/2017 1:30:00 PM HJUD 2/3/2017 1:15:00 PM |
HB 44 |
| HB044 Explanation of Changes 1.23.17.pdf |
HJUD 1/27/2017 1:00:00 PM HJUD 1/30/2017 1:30:00 PM HJUD 2/3/2017 1:15:00 PM |
HB 44 |
| HB044 Sectional Analysis 1.23.17.pdf |
HJUD 1/27/2017 1:00:00 PM HJUD 1/30/2017 1:30:00 PM HJUD 2/3/2017 1:15:00 PM |
HB 44 |
| HCR001 Sectional Analysis 1.23.17.pdf |
HJUD 1/27/2017 1:00:00 PM HJUD 1/30/2017 1:30:00 PM HJUD 2/3/2017 1:15:00 PM |
HCR 1 |
| HCR001 Conflict of Interest flow Chart 1.27.17.pdf |
HJUD 1/27/2017 1:00:00 PM HJUD 1/30/2017 1:30:00 PM HJUD 2/3/2017 1:15:00 PM |
HCR 1 |
| HB044 Supporting Document-Letter AKPIRG 1.23.17.pdf |
HJUD 1/27/2017 1:00:00 PM HJUD 1/30/2017 1:30:00 PM HJUD 2/3/2017 1:15:00 PM |
HB 44 |
| HB044 Leg Research Report 15-422m 1.20.17.pdf |
HJUD 1/27/2017 1:00:00 PM |
HB 44 |
| HCR001 Leg Research Report 15-423m 1.20.17.pdf |
HJUD 1/27/2017 1:00:00 PM HJUD 1/30/2017 1:30:00 PM HJUD 2/3/2017 1:15:00 PM |
HCR 1 |
| HB044 Fiscal Note LEG-SESS 1.25.17.pdf |
HJUD 1/27/2017 1:00:00 PM HJUD 1/30/2017 1:30:00 PM |
HB 44 |