Legislature(1993 - 1994)
05/03/1994 08:00 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
CSSB 333(FIN)am - DISCLOSURE OF EXECUTIVE BRANCH CLOSE ASSOCIATIONS CHAIRMAN VEZEY opened CSSB 333, by request of Legislative Budget & Audit, for discussion. TAPE 94-52, SIDE B Number 016 RANDY WELKER, LEGISLATIVE AUDITOR, addressed CSSB 333. He began CSSB 333 was introduced as a result of an audit Legislative Budget & Audit (LB&A) conducted on the Division of Fish & Wildlife (F&W), Department of Public Safety. He noted a couple years ago the legislature passed legislation, as a result of a prior audit, that prohibited F&W protection officers from being employed also as assistant guides. LB&A felt this was a direct conflict of interest and the legislature agreed. MR. WELKER explained CSSB 333 is focused on the aspect of close economic association between people who regulate industries and have the ability to exercise discretion, over people whom they may have economic associations with. He commented in the F&W audit they found officers, or spouses of officers, who held commercial fishing licenses or owned commercial fishing vessels. They found indications of significant property transactions between F&W protection officers and the industry they regulate. Presently, there is nothing in law requiring those associations to be disclosed to anyone. MR. WELKER emphasized this problem does not only relate to F&W. He gave a hypothetical example, whereby there is nothing in law that requires an alcoholic beverage control board inspector to inform anyone if he/she has an interest in a liquor license. The intent of CSSB 333, he stated, is to put a disclosure requirement in law, in the executive branch ethics act, similar to that which exists in the legislative ethics act. They are required to refrain from taking a withholding action that may be questioned because of their economic association. CSSB 333 further provides the supervisor "can or should" either reassign functions, or direct the divestiture of the interest if it is in the best interest of the state. MR. WELKER commented the other section of CSSB 333 is an expansion of the nepotism prohibition in statute. Currently, the only relationship prohibited by state law is an employee cannot be related to the commissioner of the department in which they work. LB&A does not believe it is appropriate for there to be any supervisor/subordinate relationships in state employment. The amendment prohibits relationships of a supervisor position for anyone in the employee's immediate family. This problem was noticed by the LB&A in an audit of the Alaska Psychiatric Institute where they found a supervisor had provided for the promotion and salary advancement of a member in their immediate family. The addition of this section, he believed, would improve public perception and remove any possible direct conflicts that might exist. (REPRESENTATIVE KOTT entered the meeting at 9:55 a.m.) CHAIRMAN VEZEY observed the current nepotism statute has been in place without amendment since 1959. He believed regulations also existed within agencies regarding nepotism. MR. WELKER replied there are some nepotism regulations in place, however, he was not sure they were solidly based in statute. He felt the reading of the nepotism statute was very clear as to what it covered. CHAIRMAN VEZEY interjected it read "department or agency," therefore the definition was a little broader. MR. WELKER further stated if there are any regulations that try to prohibit lower level relationships they "may be suspect." CHAIRMAN VEZEY replied they may be suspect in terms of their impact of law, but they are policy. He noted the problem of nepotism arises particularly in rural areas. Hiring of local people is often limited because of nepotism restrictions. MR. WELKER clarified the intent of LB&A is to place it permanently is statute so it applies equally to all departments and agencies. Number 164 CHAIRMAN VEZEY commented CSSB 333 may be wise for Anchorage and Fairbanks, but he questioned the impact on rural areas where the populations are significantly smaller. He inquired to what degree CSSB 333 went. MR. WELKER answered spouse, parent, children, grandparent, and regular members of the person's household. Number 190 CHAIRMAN VEZEY stated he did not intend to move CSSB 333 at this meeting, however, it was an interesting subject. He was surprised to see the nepotism statute had not been amended since 1959 considering the changes in the ethics which took place in the 1970s and 1980s. CHAIRMAN VEZEY held CSSB 333 in committee. ADJOURNMENT CHAIRMAN VEZEY, having no more business before the committee, adjourned the meeting at 10:00 a.m.