Legislature(1999 - 2000)
04/29/1999 08:07 AM House STA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HB 179-APOC REPEAL: CAMPAIGN/DISCLOSURE/LOBBYIST Number 702 CHAIR JAMES announced the next order of business is SSHB 179, "An Act eliminating the Alaska Public Offices Commission and all campaign contribution and expenditure limits; transferring the administration of lobbying, conflict of interest, and financial disclosure statutes from the Alaska Public Offices Commission to the division of elections; relating to reporting of campaign contributions and expenditures; defining 'full disclosure,' 'purposely,' 'recklessly,' and 'resident'; amending the definition of 'contribution,' 'group,' and 'political party'; changing the residency requirements for candidates for public offices; and providing for criminal penalties for violation of these provisions." CHAIR JAMES mentioned Representative Coghill will explain the changes and that this will be more of a work session. Number 719 REPRESENTATIVE COGHILL said his main goal is to bring a clear open disclosure to the Alaska voters and that his main aim is to make sure that the voters are able to have immediate access to campaign spending and open reporting which is available on the Internet and that there is a clear candidate and that an affidavit is required - an open file. He further explained that the Division of Elections will have clear penalties for a candidate's failure to disclose because he thinks (if you're going to have an open disclosure with limits taken off) their needs to be a clear and immediate action taken on failure to disclose. Representative Coghill further believes the accountability is high if the limits are removed. In repealing the APOC (Alaska Public Offices Commission) he said his the basic premise was he is not convinced that having a police agency within the Administration is really the wise thing to do because there has to be a separation of powers where if we really are going to demand a civil or criminal activity that should happen over in the legal system, in the court system. He said the original bill brought the hammer down a little hard and the Department of Law asked him if he really wanted to make people criminals for smaller infractions. He said it was a good point so he went back and revisited it. Number 763 REPRESENTATIVE COGHILL directed the member's attention to page 34 of the working draft, Section 39.50.025 Filing, and asked them to flag that because he wants them to know, if APOC is repealed, how it would affect the conflict of interest report. REPRESENTATIVE COGHILL stated Title 24, Sections 30 and 31, page 24, deals with lobbying, the back two sections of this deal with the lobbying conflict of interest statements and the first section deals with Title 15 is the campaign disclosure reporting procedure (mostly under APOC). REPRESENTATIVE COGHILL continued, beginning on page 16, Sections 22 and 23, addresses civil penalties, Section 6, page 4, refer to criminal penalties. REPRESENTATIVE COGHILL explained his main premise for HB 179, in repealing APOC, is to take the police agency work out of it and turn that court judicial action over to the legal system. Number 803 REPRESENTATIVE COGHILL referred to the question, "should there be limits as to who should give and how much should be given." He said he addressed that in Section 4, Full Disclosure Reports, by taking information from regulations and some from statutes he tried to make what he thinks should come up on a screen (Internet) or stay in a file (spreadsheet) so it is very clear. REPRESENTATIVE COGHILL directed the members' attention to pages 1, 2, and 3 which address full disclosure. 1. all expenditures 2. contributions 3. loans Number 821 REPRESENTATIVE COGHILL explained that HB 179 requires each expenditure and contribution, the date, how it was paid (with a check, credit card or cash) and the contributor's name. He said he omitted the contributor's address because he questioned whether he wanted to put somebody's address on the screen. He added, however, if there's going to be full disclosure he guesses there's a need for that and is open for discussion. TAPE 99-32, SIDE B [Approximately four minutes of blank space on tape which is due to flipping the tape over - no testimony was lost]. Number 007 REPRESENTATIVE KERTTULA asked Representative Coghill if he means to require reporting of, "all of this information for donations under and over $100.00," for contributions. REPRESENTATIVE COGHILL replied that it was brought up (at the last meeting) that contributions under $100.00 would be a problem. REPRESENTATIVE KERTTULA noted it currently isn't required. CHAIR JAMES said, for example if someone gives you $25.00, the fifth time that person contributes $25.00 you would have to report that, "valued at more than $100.00 a year." REPRESENTATIVE COGHILL said his aim was to show an accumulation. He indicated that he isn't sure if he has it correct on how it is to be shown if someone wishes to only donate $25.00. CHAIR JAMES said that can be fixed by the legal drafter. REPRESENTATIVE COGHILL believes it will have to show that a candidate did receive the money. He mentioned that this was pulled from APOC regulations and that he is trying to show what reporting needs to be in this one area. Number 053 REPRESENTATIVE HUDSON pointed out his concern with the original bill was that there was no limitation on the amount that could be contributed to a candidate from either a corporation, union, or individuals. REPRESENTATIVE COGHILL read Section 11, page 7 (of the working draft), noting that he took Representative Hudson's suggestion: Prohibited contributions. (a) a person or group may not make a contribution if the making of the contribution would violate the chapter. (b) a person or group many not make a contribution anonymously, using a fictitious name, or using the name of another. (c) a corporation, company, partnership, firm, association, organization, business trust or surety, labor union, or publicly funded entity that does not satisfy the definition of group in as 15.13.400 may not make a contribution to a candidate or group. REPRESENTATIVE COGHILL pointed out that (c) came from existing APOC regulations. Number 079 REPRESENTATIVE COGHILL explained that a provision is provided for folks who want to form a pack (similar to what they have now) with a full recognition that corporations, public entities, were not formed for the specific purpose of promoting candidates or propositions. They would have to have full-consent of the pack before making a contribution. He said he remembered reading a court case that made him think that through. REPRESENTATIVE HUDSON remarked, "They could make up to $1,000." CHAIR JAMES said she believes it is currently $500 that any one person can give and isn't it $1,000 for a group? REPRESENTATIVE COGHILL replied, "It couldn't come from this arena but they still would be able to give under a pack or a group." He then referred to the "Definitions," (page 20, Section 24) and reiterated that the aim was to take the limits off, but the immediate disclosure (every 15 days) in his thinking is that the people are going to be the judges of the matter rather than the state. Therefore, he didn't put the limits on them. Number 157 CHAIR JAMES said it seems like HB 179 is going on a different philosophy than the legislature has been headed with campaign finance reform. She indicated Representative Coghill's theory is that only some people are not to be trusted. REPRESENTATIVE COGHILL replied there is no doubt that this is viewed as a radical departure and it certainly is not meant as an attack. He noted that what has been done is we've limited campaign spending up until the time they actually put their name on the list. "That's the time you sign up is the time that you can begin raising money, so that's the time that you begin disclosing." Number 223 REPRESENTATIVE COGHILL further explained that and the affidavit is sworn testimony that a candidate has not spent money. He referred to Section 25, Declaration of candidacy, stating that this section is pretty much what we're doing now, it's just that it all starts at one point. REPRESENTATIVE COGHILL pointed out that allowance is made for some polling and personal travel so that a candidate can "test the waters," but that's not campaign spending under the current rules and that it would be a constitutional problem if you tried to stop them from asking people, "Should I run." REPRESENTATIVE COGHILL summarized his previous testimony and emphasized the Department of Law made a good point about making somebody a criminal based on small infractions. He said there had to some leeway for the department to say that under certain conditions it was worthy of an administrative fine, then a civil penalty, and a civil court action. He said it was at that point that he wanted to separate it from the department. REPRESENTATIVE COGHILL referred to the question, "Can this money be taken for personal use," and directed the members' attention to page 11, Section 18, Uses of campaign contributions held by candidate or group, for an example some of these funds can be used to pay civil penalties, used to attend functions that are political in nature, and maybe used to co-sponsor an event. He said, "The idea of turning it over to another candidate for example, we left that prohibition in there." REPRESENTATIVE COGHILL indicated there can be some discretion as to penalties for late filing. He said we can put those into statute and a flag would come up on failure to disclose but that would begin the marking time for a penalty on late filing. Number 361 REPRESENTATIVE SMALLEY applauded Representative Coghill's efforts to have clear and open disclosure. He said, if the campaign were nine-months long, there would be 18 reports to a month, and a final report and asked what about reports for the 24-hour period prior to primary election, prior to the general election, what about contributions over a certain amount. REPRESENTATIVE COGHILL replied that a 24-hour report was added because they thought things should be reported and done clearly and that there should be a reporting procedure (the closer you get to an election) so somebody can't come in with $100,000 in the last three days. He said that's the high degree of accountability he is seeking. REPRESENTATIVE SMALLEY asked if the 24-hour report is tied to a specific amount. REPRESENTATIVE COGHILL replied anything over $250. Number 389 REPRESENTATIVE SMALLEY asked if the Division of Elections would be able to input all the information because it will require a great amount of time if it's faxed. He also mentioned someone in a candidate's office can input that information and can follow up with a hard-copy with the required signature. REPRESENTATIVE COGHILL said he is open for suggestions on how to give incentives to do that. CHAIR JAMES suggested that if they can't get it on the Internet, they would have to send a check with it. REPRESENTATIVE COGHILL added when you obtain anything from the Division of Elections, you pay for the hard-file copy. Number 405 REPRESENTATIVE SMALLEY emphasized that it would probably make it easier for the Division of Elections (time-wise and perhaps cost-wise) however, there will be the cost in setting that program up. He said the candidates may also attach reports to forms that are already on-line, however, a candidate might not have that expertise or might not have that availability. Therefore, they'll have to send the hard-copy with the required signature attached to it. REPRESENTATIVE COGHILL said, "I understand that, and in pulling APOC their responsibility and put it into the Division of Elections it was my understanding that we would have to have some of the staff people from the Division of APOC right now." He noted his reluctance to put it in the Division of Elections was because of the workload, however, his emphasis is to make full open disclosure get to the populace quickly. REPRESENTATIVE COGHILL mentioned another issue that was brought to his attention is the integrity of the election process being tied to the campaign process. He said he believes there are five regional offices in the Division of Elections which would serve the populace well as a reporting place and that he thought of having an APOC center (Alaska Public Offices Center) within the Division of Elections (in a separate office) because they're not going to be the police action so much as the administrative action. He further noted that once they get to a certain civil penalty, they can fine up to so many late days and may report it to the district attorney, and then a court action happens whether it's civil or criminal. Number 463 REPRESENTATIVE OGAN doesn't think "John Q. Public" is going to care months ahead of an election on how much money a candidate is raising every two weeks because that information more important closer to an election. He suggested reporting would start every two months, maybe narrow it down to every month, and then every two weeks. Another concern of his is that it's narrowed down the influence to the wealthy few, through companies and through higher paid employees who have more influence than others. REPRESENTATIVE OGAN said he is also concerned with "no limits." For example, a business which is affected by a state decision can contribute to up to $100,000 to a candidate who has a leadership position or influential committee chairmanship, and they're going to get their issues through. REPRESENTATIVE COGHILL replied, human nature being what it is (and rich people being able to manipulate) they can do that now. He added that the system also currently allows for the pooling of money and that just becomes a little more burdensome and as far as taking the limits off, let the people be the judges. Number 573 REPRESENTATIVE WHITAKER said he didn't know if that's all that bad because he has concerns with APOC. His concern is that he doesn't know if it's getting any simpler and confirmed that the proposed notion is that the candidates will simply have full disclosure judged by the electorate and fewer regulations. He asked if there are additions to that. REPRESENTATIVE COGHILL replied the basic philosophy is that the state becomes the judge of the matter rather than a general electorate and that Alaska should have an open disclosure so the people can see that rather than the government first. He said he also believes the electorate should regulate the candidate rather than the government. REPRESENTATIVE WHITAKER said he will need time to go through the working draft to understand it [49 pages]. Number 689 REPRESENTATIVE KERTTULA pointed out APOC had glitches with their software last year. And, as Representative Smalley mentioned, if you could have on-line filing that might be a good idea. She said she believes it would helpful if all the information between APOC and the Division of Elections can be coordinated into a guidebook which goes 1, 2, 3, because there are cross references. She also emphasized that they will have to have increased staff because APOC is so bare-boned that they can hardly keep up with their work. Representative Kerttula also suggested training be offered, or maybe even required before a candidate can run because it's a whole new process. REPRESENTATIVE KERTTULA is concerned about completely lifting the amount and about all the reports that would be required. She said she thinks it would find to be too onerous because a candidate couldn't keep up with that if they're in an intense race - unless you do something like the on-line filing. Number 734 CHAIR JAMES said the reports last year didn't necessarily follow accounting principals and they worked well. The particular problem was when you counted in non-cash and cash. She indicated the final page was the most difficult and being an accountant didn't help. REPRESENTATIVE COGHILL agrees on-line filing is going to be an important part of this and if they had to keep double-records and everything had to be handled 15 times it could become a burden. CHAIR JAMES asked if obligation liability is included in HB 179 because it was brought to her attention that people committed to television advertising near the end of the campaign and didn't pay for that until after the election. In other words, if the obligations aren't there, people could do things that people wouldn't be aware of. Number 783 REPRESENTATIVE COGHILL said he doesn't know if he addressed the obligation. He further stated that he thinks if the model is based on computer input the workload would go down some, there is going to be a monitoring process and a degree of administration and each region of the Division of Elections will have to make sure that it is monitored. REPRESENTATIVE SMALLEY said he echoes Representative Kerttula's comments and agrees with Representative Ogan's comments regarding the frequency of reporting. TAPE 99-33, SIDE A Number 001 REPRESENTATIVE SMALLEY continued. "Then during the 22 session we're basically in limbo do we continue filing because we have in fact begun a campaign even though we have no activity, there's another 10." REPRESENTATIVE COGHILL replied if you had no activity, then it wouldn't be much of a report. REPRESENTATIVE SMALLEY said it's still going into the Division of Elections, it's still adding up. The election-year swings in, seven more months, 14 more reports plus an end-of-the-year report, 24-hour filing, plus, plus, plus. He further stated, "My thought was perhaps during the off-election year, every two months - an end-of-the-year report, during the session and end of the session, perhaps report that there was no activity, and then during the actual election year (June through November) monthly with the 14-day filing prior to the primary, prior to the general and the end-of-the-year report. And again that's a lot fewer but it's still very very frequent as far as disclosure, the only people that are really going to make much about the disclosure of information are your opponent - that's where it's going to go to the public is from your opponent and/or the press. But it's still frequent, I think enough that it's going to keep the public active and involved. I wonder about myriad of 38 plus reports." Number 083 REPRESENTATIVE OGAN said it's just another burden and not to mention the significant cost associated with staff to make sure those reports are filed. There are more things to get tripped up on, and more chances of becoming criminals for not filing. He reiterated that he doesn't see a need for that much reporting, especially early on. CHAIR JAMES said when the reports become available to the public, if they don't like it, they can complain and have it audited. She further explained the reports aren't necessarily automatically audited and indicated that it isn't that much more work to do. REPRESENTATIVE COGHILL stated reporting is a matter of the burden of responsibility and that burden needs to be placed on the candidate rather than the state, and disclosure is for the general populace it's not for a government agency. He reiterated that HB 179 is meant for open disclosure and a degree of freedom (in the ability to receive contributions) and the tradeoff is a responsibility that goes with that accountability and that needs to be more out in the open. Number 183 CHAIR JAMES said she personally has a problem with the Division of Elections monitoring these things only because the APOC is supposed to be more nonpartisan (or if it is bipartisan) and the Division of Elections is not. She mentioned the person who manages the division was once a political candidate. So putting a lot of that information in the hands of the Division of Elections is expanding the division to an area that it probably shouldn't be involved in. She said she agrees that we have given too much responsibility to the APOC and that they have been overworked and it's not going to get any better because the legislature never takes away rules, we only add more by giving them huge challenges because we don't think in the same terms as they have to work. CHAIR JAMES said she can't believe that there won't be a group who is sort of insulated from politics. She further stated, "Now when you start making limits on the money, even that, if there is a reporting of too much money spent, or money spent in a wrong way, if the public would complain ... that they're not subject to review this, but the public is and they only respond to whatever the direction is." She said HB 179 would simplify it and every change has to have a really good understanding and has to work. Number 277 REPRESENTATIVE COGHILL noted that he will talk to the effected departments. [SSHB 179 was held for further consideration].
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