Legislature(2003 - 2004)
04/16/2003 08:15 AM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SB 45 - LB&A CRIMES AND COOPERATION Number 0039 CHAIR McGUIRE announced that the first order of business would be CS FOR SENATE BILL NO. 45(JUD), "An Act relating to the Legislative Budget and Audit Committee." Number 0044 SENATOR LYDA GREEN, Alaska State Legislature, sponsor, noted that current law provides that the Legislative Budget and Audit Committee has the power to require all state officials and agencies of state government to give full cooperation to the Legislative Budget and Audit Committee or its staff in assembling and furnishing requested information. Unfortunately, the current law is unenforceable, she opined, because it lacks penalties for those who are uncooperative or who seek to undermine the work of the Legislative Budget and Audit Committee. Therefore, the purpose of SB 45 is to provide prosecutors with the necessary tools to deter and punish those who hinder the investigative work of the Legislative Budget and Audit Committee. The proposed legislation also clarifies the process by which privilege is claimed and the process by which it is determined, she added. SENATOR GREEN posited that when the legislature created the Legislative Budget and Audit Committee, it was envisioned that it would have full access to all information necessary to carry out its work. When legislators request reports from or reviews of an agency, it is important for the Legislative Budget and Audit Committee to have all the cooperation it needs. Senate Bill 45 will ensure that this occurs. She noted that there is a proposed House committee substitute (HCS) for members' consideration. Number 0176 REPRESENTATIVE SAMUELS moved to adopt the proposed HCS for SB 45, Version 23-LS0205\U, Luckhaupt, 4/8/03, as the work draft. There being no objection, Version U was before the committee. REPRESENTATIVE GARA surmised that SB 45 was engendered by some circumstance wherein "things didn't work out well in the past," and noted that he would like to hear more about that situation. He said that he understands the sponsor's concern and applauds her for trying to do something about it. He mentioned, however, that he has a few concerns with [Version U], and directed attention to the top of page 2, which describes what hindering the Legislative Budget and Audit Committee process would entail. He surmised that one could be convicted of hindering if one either discouraged or prevented another from fully cooperating with the process. He said he is wondering whether the following example would cause someone to be convicted under SB 45: Legislative Budget and Audit [Committee] comes to, well, let's just say, Representative Samuels's office. And Representative Samuels is working on 30 different issues and all of them are priorities to him including the Legislative Budget and Audit issue, and so he tells his staff, "Well, there are these three other things that affect school kids, that I have to deal with right now; put the Legislative Budget and Audit thing fifth in line." And it takes an extra week for him to get the information to Legislative Budget and Audit. Has he discouraged or prevented another from giving full cooperation to the legislative auditor? It seems like full cooperation would mean immediate cooperation, and it seems like he would have committed a crime. SENATOR GREEN noted that the term "full cooperation " is currently in statute - AS 24.20.201 - regarding the Legislative Budget and Audit Committee; thus that term is merely replicated in Version U. With regard to Representative Gara's example, she suggested that had it referred to a state agency rather than another legislator, it would be more pertinent to the discussion. She opined that the intention is to ensure that requested information is forthcoming, and noted that a failure to provide full cooperation must rise to a certain level in order to be prosecuted. It can't be, "Oh, I think you have hindered me, therefore, ... I'm going to penalize you," she assured members, adding that the requested information, once received, goes through a process. REPRESENTATIVE GARA remarked that almost all prosecutors prosecute the law blindly; however, since, as in all professions, there is the possibility of there being "one bad apple," it is the legislature's job to ensure that there is no room for abuse in the legislation it passes. The term, "full cooperation", he opined, could leave room for a prosecutor with a politically motivated agenda to abuse the law by portraying a situation such as he used in his example as not providing "full cooperation". He pondered whether changing the term to "good faith cooperation", or something similar, would allay his concern and still achieve the sponsor's goal. He said his concern is that "full cooperation" says that 95 percent cooperation or really-good-but-not-full cooperation would be prosecutable under Version U. Number 0635 PAT DAVIDSON, Legislative Auditor, Division of Legislative Audit, Alaska State Legislature, explained that "hindering" as used in the bill refers to a failure to comply with a request from the legislative auditor or the legislative fiscal analyst. The language doesn't refer to either her staff or the fiscal analyst's staff being hindered; if her or her counterpart's staff is hindered, "they move it up the chain of command." Thus, if either the legislative auditor or the legislative fiscal analyst has had to request information from an agency, "it has already gone through the chain of command, and we've already decided that this is critical information to completing an audit" or analysis. She opined that the language in Version U ensures that at least a couple of internal processes would have already taken place before someone is subject to prosecution and penalties. REPRESENTATIVE GARA replied: I completely understand that [the Division of Legislative Audit] doesn't intend to have this statute enforced abusively, but if we allow the language to allow a future person at [the Division of Legislative Audit] to have the statute enforced abusively, then we've now created mischief in the statutes. So, I understand that you have circumstances in the past that you're trying to address, and that you currently do your job very well, and I think [the Division of Legislative Audit] does a great job; ... I'm just concerned about passing a statute that allows for mischief in the future. REPRESENTATIVE OGG, turning to Section 2 of Version U, opined that it reads awkwardly, and suggested that it could be clarified a little bit. Number 0819 STEPHEN BRANCHFLOWER, Director, Office of Victims' Rights (OVR), Alaska State Legislature, referred to Representative Gara's concern regarding "full cooperation", and said that given his background as a prosecutor, he understands completely the concern that someone bent on mischief could cause mischief via the language currently being used. He suggested that one solution would be to change the culpable mental state - page 2, line 1 - from "knowingly" to "intentionally", which, he explained, requires a specific intent and is defined in AS 11.81.900. He acknowledged that another solution would be to do as Representative Gara suggests, change "full cooperation" to "good faith cooperation". MR. BRANCHFLOWER said that SB 45 is intended to address situations in which a supervisor directs a subordinate to disregard requests from the Legislative Budget and Audit Committee or only provide partial compliance. He elaborated: I have seen that in my career, am aware of instances where that has occurred, and, as a result of such an order, information was not provided. It is particularly bad when the person to whom such a direction is made is an exempt employee or a partially exempt employee. And, of course, all lawyers within the Department of Law are partially exempt, so those are the people who are oftentimes aware of information that would be of great use to the [Legislative Budget and Audit Committee] or the fiscal analyst. MR. BRANCHFLOWER noted that the penalty for noncompliance is a class B misdemeanor, and that one of the consequences of being convicted is that the person immediately looses his/her position and is not eligible for rehire. He opined that this consequence provides a great disincentive to violate the statute, and puts teeth into the current statute. MR. BRANCHFLOWER then addressed Representative Ogg's concern regarding the language on page 2, line 17. He acknowledged that the language is a little cumbersome and indefinite, and that it could probably be smoothed out. He said that the intent of SB 45 is a good one, and that after looking in other areas of statute to find language that would put some teeth into AS 24.20.201, he'd realized that language would have to be tailored to fit the specific situation. In response to a question, he confirmed that he'd looked at the statute pertaining to legislative leadership's subpoena power, but had found that that particular statute alone would not be sufficient. Number 1076 MR. BRANCHFLOWER said that to his knowledge, the Legislative Budget and Audit Committee has never gone to court to challenge someone's refusal to provide information. Proposed AS 24.20.201(c) will provide a mechanism by which to address claims of privilege. He then mentioned that AS 39.90.140(3), which he called the "whistleblower statute," is also being amended by SB 45, in that the definition of, "matter of public concern" will now include, "interference or any failure to cooperate with an audit or other matter with the authority of the Legislative Budget and Audit Committee". He suggested that this latter change will promote truth telling by employees who "have to make tough decisions when they're told not to cooperate." REPRESENTATIVE GARA asked what steps, currently, the Legislative Budget and Audit Committee can take to force compliance. He suggested that if it involves a court process, then rather than adding a criminal statute, perhaps that court process could simply be expedited. He also reiterated that he would like to know more about the circumstances which have engendered SB 45. MS. DAVIDSON explained that for the most part, the Division of Legislative Audit does almost all of its work in the executive and judicial branches of government. An audit process involves interviewing agency people and reviewing records; it is very much an investigative process. She elaborated: Typically what happens is, when we are denied information that we know of -- and that's part of this problem: ... if we ask for something and somebody says, "We don't have it," if they're lying to us, we may find it in other ways, but then again we may not. And whether that piece of information is critical to the audit objective, it depends upon what it is. So you'll interview people. If people don't want to talk to you or they don't want to give you the information - [for example] they're claiming it's confidential - ... we move it up the chain of command. There's a discussion; we would involve the Department of Law, saying ..., "Statute requires cooperation and Legislative Audit has access to records whether they're confidential or not." And sometimes they'll listen to the Department of Law, and sometimes they continue to be stubborn. Number 1263 The Legislative Budget and Audit Committee actually does have subpoena powers; however, if you're going to go to a subpoena, you have to know what you're looking for. And in an audit process, you can't, oftentimes, specifically identify what it is that you're looking for, because you want to know, "Has 'this' ever happened or has 'that' ever happened." So trying to audit by subpoena would be an enormously difficult process. And that all has to do with whether or not you know that you're being denied. I think that ... this bill does ... two things. Number one, ... through ... adding ... [that] cooperating with Legislative Audit is part of the whistleblower [statute], it provides comfort for employees to talk to us - talk to us truthfully. The second thing that it does is, it would create a penalty for anybody or their supervisor's trying to hinder that cooperation. And so what it does, as I look at the audit process, is it is going to make it more efficient, it's going to make it more streamlined, and I think Mr. Branchflower used the [term] "sentinel effect." It's like, "Yes, it's out there; yes, you're going to cooperate; ... let's get through it." SENATOR GREEN, with regard to the circumstances that engendered SB 45, said that a friend of hers, whose agency was asked to supply information to the Legislative Budget and Audit Committee, was specifically told by his supervisor to not cooperate. Because this friend was an exempt employee and was putting his credentials on the line for lying, he looked into the current statute to see what sort of protections would be available to him for disobeying that order and what sort of penalties his supervisor would be subject to for giving the order. What he discovered was that he had no protection and his supervisor would not be subject to any penalties. Number 1384 SENATOR GREEN said that the purpose of SB 45 is to address situations in which somebody, for whatever reason, has decided not to cooperate with the legislative auditor or the legislative fiscal analyst. She offered that if information is being requested, there has already been a considerable amount of discussion to determine that, indeed, that information is critical to a particular investigation. She noted that there have been recent audits involving Medicaid and the Division of Agriculture, and that entities with sunset dates are all audited. These audits provide valuable information that can influence policy decisions and offer insight pertaining to whether an entity's sunset date should be extended. SENATOR GREEN, in conclusion, said that because the legislature must rely on good, truthful information, the goal of SB 45 is to ensure that people will tell the truth, that they will be forthcoming, and that they won't prevent someone else from providing information. REPRESENTATIVE GRUENBERG, after mentioning that he has had to use the threat of subpoena to get information from someone in the administration and that perhaps the legislature's subpoena policy should be scrutinized during the interim, agreed that it is essential for the legislature to have everybody's cooperation. The committee took an at-ease from 8:44 a.m. to 8:47 a.m. CHAIR McGUIRE closed public testimony on SB 45. Number 1640 REPRESENTATIVE OGG made a motion to adopt Conceptual Amendment 1: delete from page 2, lines 17-18, the words, "if the information is requested from a department or agency,". There being no objection, Conceptual Amendment 1 was adopted. REPRESENTATIVE OGG asked whether the Legislative Budget and Audit Committee has the ability to grant immunity. MR. BRANCHFLOWER replied that AS 24.25.070 addresses that issue and says that the legislature can grant immunity. However, if the matter goes to court on the basis of reviewing the assertion of the privilege, then the rules governing the judicial branch of government would apply. He opined that at that point, it might be problematic to grant immunity and thus it would become a question for the Department of Law to address. REPRESENTATIVE GARA, on the issue of subpoenas, said that he disagrees with the assertion that a subpoena has to specifically ask for a specific document. Historically, subpoenas have been used very effectively to ferret out the truth. One can ask for categories of documents, documents relevant to a subject; one does not have to point out a particular document. He opined that the existing subpoena provision would be a very effective tool if it is used right. REPRESENTATIVE GARA then turned attention to page 2, line 4. He indicated that in addition to the changes suggested by himself and Mr. Branchflower, there is another issue to consider. He elaborated: We need to make sure that legislative audits are also done properly, and historically they have been - and I've actually been very impressed with the work of legislative auditors in the past - but right now you will commit a crime if you don't furnish requested information to the committee or staff. I suppose requested information could be completely irrelevant information if we had a bad legislative auditor or legislative staff member working on a project. I suppose we could be investigating, for example, an issue of overspending by Representative Samuels's office, and the requested information could be, "Representative Samuels, please give me every contact you've ever had with a voter over you're last ... twenty years in office." And Representative Samuels would say, "Well gosh, what does that request have to do with your audit?" And so, I think we probably also have to make sure the requests are proper. And you could probably do that ... by changing "furnishing requested information" to "furnishing relevant requested information". I think we really have to sit down and make sure that we're doing what we intend here, so if we changed it to "furnishing relevant requested information", then that would protect the person [the information is] being requested from. ... Number 1957 CHAIR McGUIRE surmised, then, that are three possible changes to discuss: Page 2, line 1, change "knowingly" to "intentionally"; page 2, line 3, change "full cooperation" to "good faith cooperation"; page 2, line 4, change "furnishing requested information" to "furnishing relevant requested information". REPRESENTATIVE HOLM remarked that "relevant" is a subjective term. MS. DAVIDSON indicated that she had concerns regarding the term "relevant". Most of the debate the Division of Legislative Audit gets into with agencies involves the question of whether the information requested is really needed. Auditing standards require that auditors be in control of the auditing process, and that means that if auditors believe certain information is needed, then they have to be free to ask for it. Therefore, having an agency tell an auditor that the requested information is not relevant is contrary to auditing standards. She noted that the legislative auditor is required to be a CPA; thus audits will be performed in accordance with standards. She opined that adding the term "relevant" will create more difficulties. MR. BRANCHFLOWER remarked that the term "good faith" is also a subjective term, and counseled against adding the term "relevant". Number 2127 REPRESENTATIVE GARA made a motion to adopt Amendment 2, on page 2, line 1, change "knowingly" to "intentionally". There being no objection, Amendment 2 was adopted. Number 2137 REPRESENTATIVE GARA made a motion to adopt Amendment 3, on page 2, line 3, change "full" to "good faith". Number 2150 CHAIR McGUIRE objected. She said that although she understands Representative Gara's concerns, she believes that in addition to mirroring what is currently in AS 24.20.201, the term "full" more adequately describes what is being sought. REPRESENTATIVE GARA pointed out that although the term "full cooperation" is used elsewhere, it is not yet a crime to not engage in it. The language in SB 45 would make it a crime if the cooperation is not as full and as prompt as the legislative auditor wants. "Full" is full; "full" is 100 percent, not 95 percent; "full" is immediate; and "full" is sometimes an unreasonable objective, he remarked. "Good faith" has a historical definition; it is a term that is often used and is well defined in the courts, and it is the courts that will be imposing criminal sanctions for noncompliance. CHAIR McGUIRE opined that changing the mental state from "knowingly" to "intentionally" is sufficient to do what Representative Gara is striving for, which is to ensure that someone doesn't have the deck stacked against him/her. MR. BRANCHFLOWER agreed that there is a connection between the culpable mental state and the conduct. He said that as a prosecutor, he would first have to be satisfied that there was an intent, a conscious objective, to do any of the things thereafter described, with the goal of obstructing the work of the Legislative Budget and Audit Committee. Inherent in that analysis, he remarked, would be a consideration of the defendant's good faith and so there is a place for a good faith analysis. He also said to keep in mind that if there is a crime, it will be prosecuted by an experienced prosecutor from the Department of Law's Criminal Division, and he/she will be able to identify and distinguish between good faith efforts and bad faith efforts. Number 2289 MR. BRANCHFLOWER added, "Ultimately, in terms of the jury, that will be a defense; it may not be a legal defense, but it will be a de facto defense in terms of allowing the defense attorney to argue that there was substantial compliance and good faith conduct on the part of the [defendant]". He said that he did not see the term "full cooperation" as being problematic, adding, "We have to defer to the exercise of good judgment on the part of the people who we put in these positions, whether they be someone in Pat Davidson's office or someone in the Criminal Division, to observe good faith conduct and exercise discretion not to prosecute. He predicted that there won't be many prosecutions resulting from this language; essentially, it is a deterrent more than anything else. CHAIR McGUIRE agreed. REPRESENTATIVE SAMUELS said that he too objected to Amendment 3. REPRESENTATIVE GARA said he is not satisfied that changing the mental state to "intentionally" takes care of his concerns. He elaborated: If we adopt the bill ... without [Amendment 3], it's a crime to intentionally withhold full cooperation. So, you've been asked for 5,000 documents, you're on the verge of going on a family vacation, you're trying to leave town; to fully cooperate, you should stay in town and produce those 5,000 documents. Now, it would be good faith for you to say ..., "I'll get to it when I get back," but it will be a crime for you to go on vacation, under this statute the way we read it. If we sat here for five hours we could come up with 500 more examples of where we're criminalizing reasonable conduct. So, without the term "good faith", my concern is not satisfied. TAPE 03-40, SIDE B Number 2388 CHAIR McGUIRE pointed out that there are multiple steps prior to a situation ever reaching the point where the provisions of SB 45 would apply. REPRESENTATIVE GRUENBERG indicated that he preferred the term "full cooperation". He asked Mr. Branchflower whether he is aware of any criminal statute that uses the standard of "good faith". MR. BRANCHFLOWER said he is not aware of any criminal statutes that have "good faith" as an element of the offense. He offered that perhaps this is because it is just not definable for that purpose. REPRESENTATIVE GRUENBERG surmised that because it is such a subjective term, it would be a difficult to prosecute somebody if "good faith" were used as a criminal standard. Number 2256 A roll call vote was taken. Representative Anderson was not present for the vote. Representative Gara voted in favor of Amendment 3. Representatives Ogg, Holm, Samuels, Gruenberg, and McGuire voted against it. Therefore, Amendment 3 failed by a vote of 1-5. Number 2241 REPRESENTATIVE GARA made a motion to adopt Amendment 4, on page 2, line 4, after "furnishing" insert "relevant". Number 2239 CHAIR McGUIRE objected. Number 2215 A roll call vote was taken. Representatives Gara and Gruenberg voted in favor of Amendment 4. Representatives Holm, Samuels, Ogg, and McGuire voted against it. Therefore, Amendment 4 failed by a vote of 2-4. Number 2205 REPRESENTATIVE SAMUELS moved to report the proposed HCS for SB 45, Version 23-LS0205\U, Luckhaupt, 4/8/03, as amended, out of committee with individual recommendations and the accompanying zero fiscal notes. There being no objection, HCS CSSB 45(JUD) was reported from the House Judiciary Standing Committee. REPRESENTATIVE OGG complimented Senator Green on her efforts.