Legislature(2017 - 2018)GRUENBERG 120

03/07/2017 05:30 PM STATE AFFAIRS

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Heard & Held
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Heard & Held
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          HB 44-LEGISLATIVE ETHICS: VOTING & CONFLICTS                                                                      
5:32:56 PM                                                                                                                    
CHAIR KREISS-TOMKINS  announced that the first  order of business                                                               
would  be SPONSOR  SUBSTITUTE  FOR  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 immediate  family member or certain employers;                                                               
requiring a  legislator 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."   [Before the                                                               
committee was CSSSHB 44(JUD).]                                                                                                  
5:33:21 PM                                                                                                                    
CHAIR KREISS-TOMKINS opened public testimony on CSSSHB 44(JUD).                                                                 
5:34:46 PM                                                                                                                    
BARBARA  HOOD  testified that  she  supports  CSSSHB 44(JUD)  and                                                               
believes it  to be a step  in the right direction.   She asserted                                                               
that  if a  legislator has  a conflict  of interest,  it is  very                                                               
important that he/she  not act on the public's  behalf unless the                                                               
full legislative  body is aware  of the conflict of  interest and                                                               
has weighed in  on the merits of the  advantages or disadvantages                                                               
of allowing  the member to  vote.  She  stated that with  so many                                                               
issues  facing legislators,  public faith  and confidence  in the                                                               
process  are  of  utmost  importance.    She  offered  that  when                                                               
conflicts   of  interest   are  not   addressed  openly,   public                                                               
confidence in legislative actions  is undermined.  She emphasized                                                               
that  the  integrity  of  the   legislative  process  depends  on                                                               
Alaskans knowing that all the  decisions made on their behalf are                                                               
in  their  best  interest  and not  influenced  by  conflicts  of                                                               
5:37:15 PM                                                                                                                    
JAKE  JACOBSEN  testified  that he  supports  passage  of  CSSSHB
44(JUD).   He  expressed his  belief that  legislators should  be                                                               
ashamed  of  themselves for  their  lack  of  ethics rules.    He                                                               
asserted that  an honest  person would want  to "put  teeth into"                                                               
the ethics rules.                                                                                                               
5:39:02 PM                                                                                                                    
MARGO  WARING  testified  that she  appreciates  the  attempt  to                                                               
provide  more  guidance  to  legislators  regarding  conflict  of                                                               
interest, but  she opined that  the proposed  legislation "leaves                                                               
things  to be  desired."    She expressed  her  belief that  most                                                               
voters mistakenly  believe that legislators are  not permitted to                                                               
vote when they  have conflicts of interest, because  they feel it                                                               
is inappropriate.                                                                                                               
MS.  WARING explained  her  concerns with  CSSSHB  44(JUD).   She                                                               
stated  that on  page 2,  Section 1(e)(3),  the standard  that is                                                               
used [for conflict  of interest] is employment,  and she asserted                                                               
that  other   financial  aspects  should  be   recognized.    She                                                               
mentioned that  subparagraph (D)  [under Section  1(e)(3)] refers                                                               
to receiving a financial benefit  of more than $10,000 of income,                                                               
but there is no mention of  a comparable increase in the value of                                                               
one's assets or  other financial interests.  She  opined that the                                                               
standard  is  artificially  high  and referred  to  the  "Corrupt                                                               
Bastards Club" [a group of  former Alaskan legislators implicated                                                               
in a  federal corruption investigation], who  accepted bribes for                                                               
less than $10,000.                                                                                                              
MS. WARING  referred to  AS 24.60.030(g),  which states  that the                                                               
Uniform Rules  take precedence over  the statute.   She suggested                                                               
that there is a lack of "teeth"  in the Section 1 of the proposed                                                               
legislation if  any change to  the Uniform Rules can  negate what                                                               
the section states.  She  concluded by offering that the proposed                                                               
legislation  represents  a  move  in  the  right  direction,  but                                                               
additions  are  needed.    She opined  that  the  most  important                                                               
addition would be the requirement  that a legislator must abstain                                                               
from voting if he/she has a conflict of interest.                                                                               
5:43:07 PM                                                                                                                    
REPRESENTATIVE  WOOL  referred to  Ms.  Waring's  mention of  the                                                               
[Corrupt  Bastards  Club]  bribery  case  and  offered  that  the                                                               
proposed legislation includes nothing about bribes.                                                                             
MS.  WARING responded  that the  point  she was  making was  that                                                               
experience  demonstrates  that  people  will "do  things"  for  a                                                               
financial benefit of less than $10,000.                                                                                         
5:44:08 PM                                                                                                                    
REPRESENTATIVE KNOPP  agreed that  changes to CSSSHB  44(JUD) are                                                               
needed.   He asserted that  there are many conflicts  of interest                                                               
that are not financial.  He  also agreed that the current process                                                               
for declaring  conflicts of  interest on the  floor of  the House                                                               
and Senate is  inadequate.  He opined that  the legislature seems                                                               
to  "err  on  the  side  of caution,  and  our  floor  procedures                                                               
sometimes  don't function  very  well."   He  stated  that he  is                                                               
reluctant  to  create  a situation  in  which  legislators  over-                                                               
declare  [conflicts of  interest].    He said  that  he does  not                                                               
recall  that anyone  in the  Corrupt  Bastards Club  truly had  a                                                               
conflict of  interest.  He  asked Ms. Waring  if she is  aware of                                                               
any   specific  instances   of   conflict   of  interest   [among                                                               
MS.  WARING replied  that  she agreed  that  there are  potential                                                               
conflicts of  interest that  are not financial.   She  added that                                                               
she thinks that  the standard for financial  conflict of interest                                                               
specified in  CSSSHB 44(JUD) is a  high bar.  She  mentioned that                                                               
in recent  years, people have  been excused from  abstaining from                                                               
voting, thus made to vote.  She  stated that in her many years of                                                               
experience  and involvement  with the  legislature, she  believes                                                               
that many legislators with conflicts of interest have voted.                                                                    
5:47:22 PM                                                                                                                    
REPRESENTATIVE TUCK  commented that  in the  Twenty-Eighth Alaska                                                               
State Legislature, 2013-2014, a  representative failed to declare                                                               
a  conflict  of  interest  and  was found  in  violation  [of  AS                                                               
5:48:03 PM                                                                                                                    
DOUGLAS MERTZ testified  that for many years he  was an assistant                                                               
attorney general for  the State of Alaska.  He  relayed that part                                                               
of  his duties  was  to administer  the  Alaska Executive  Branch                                                               
Ethics Act  passed by the  legislature to apply ethics  rules and                                                               
procedures  to members  of the  executive branch  and members  of                                                               
boards and commissions.  He said  that as an attorney, he is also                                                               
aware of  the Code of  Judicial Conduct, which applies  to judges                                                               
and others  in the  judicial branch.   He  attested that  for the                                                               
other two branches  of state government, the rules  are clear and                                                               
strict:   if you  have a  conflict of interest,  you do  not take                                                               
official action.   He maintained that it is  only the legislature                                                               
that has effectively  exempted itself from that rule.   He stated                                                               
his belief  that the public  is aware  and aghast at  the current                                                               
procedure  on  the  House  and Senate  floor  allowing  a  single                                                               
objection  to excuse  a conflict  of  interest.   He opined  that                                                               
Alaskans  believe  legislators  are not  consistent  in  applying                                                               
[conflict of interest]  rules to the branches of  government.  He                                                               
asserted  that the  rules should  be  the same  for every  public                                                               
servant:   if  someone has  a conflict  of interest,  then he/she                                                               
should not take official action.                                                                                                
MR. MERTZ said that he is  aware of the argument that requiring a                                                               
legislator  to   abstain  from  voting  deprives   that  member's                                                               
constituents  of  that  vote.    He asserted  that  most  of  the                                                               
constituents would  not mind  being deprived of  a biased  vote -                                                               
one motivated by money or an improper interest.                                                                                 
MR. MERTZ referred  to Section 1 of CSSSHB  44(JUD) and contended                                                               
that the  proposed legislation mentions items  that might benefit                                                               
a  legislator's  family  or  employer,  but  not  the  legislator                                                               
himself/herself.  He agreed with  previous testimony that not all                                                               
conflicts   of  interest   are   financial   and  mentioned   the                                                               
possibility   of  a   "romantic"  conflict   of  interest.     He                                                               
recommended that a conflict of  interest not be defined solely in                                                               
terms of money.  He concluded  by reiterating that for all public                                                               
servants, if  there is a  conflict of interest, then  they should                                                               
not take official action.                                                                                                       
5:52:44 PM                                                                                                                    
REPRESENTATIVE  BIRCH  asked  if  Mr.  Mertz  was  aware  of  any                                                               
instance on  the floor of  the House  or Senate in  which someone                                                               
declared a conflict  of interest, there was  no objection raised,                                                               
and the legislator was not permitted to vote.                                                                                   
MR. MERTZ responded that he is not aware of any such instance.                                                                  
REPRESENTATIVE  BIRCH  suggested  that,  in  theory,  if  someone                                                               
announced an  egregious and obvious  conflict of  interest, there                                                               
would  be no  objection.   He  offered  that each  representative                                                               
spends a  great deal  of time communicating  with the  public, is                                                               
"hired"  by  about  5,000-10,000  voters, and  submits  a  Public                                                               
Official  Financial Disclosure  (POFD).   He  suggested that  the                                                               
public has the  information and tools to make a  judgement on the                                                               
representative it elects and any  potential conflicts of interest                                                               
of that representative.                                                                                                         
MR.  MERTZ  agreed that  the  public  is  the final  arbiter  but                                                               
questioned  whether the  public gets  the necessary  information.                                                               
He  said  that he  doubts  whether  the  members of  the  Corrupt                                                               
Bastards  Club   reported  on  their  POFDs   the  payments  they                                                               
received.   He added that  an impropriety  may well be  under the                                                               
table  and  out  of  sight,  in which  case  the  voters  have  a                                                               
REPRESENTATIVE BIRCH suggested that people  who are going to lie,                                                               
cheat,  and   steal,  will   do  so   regardless  of   the  rules                                                               
established.    He   said  that  his  concern   is  regarding  40                                                               
legislators "getting tangled up"  during the floor session trying                                                               
to determine conflicts of interest.                                                                                             
5:56:45 PM                                                                                                                    
REPRESENTATIVE WOOL mentioned that a  judge who knows a defendant                                                               
in  a trial  will recuse  himself.   He  asked Mr.  Mertz if  his                                                               
testimony  took into  consideration  a  citizen legislature,  one                                                               
whose members have other jobs when not in session.                                                                              
MR. MERTZ  answered that legislators  should be meeting  with and                                                               
listening to  their constituents, as  long as they are  not doing                                                               
it  in  a  way  that   involves  money  or  some  other  improper                                                               
emolument.    He   said  he  believes  that  to   be  a  critical                                                               
distinction.   He  mentioned that  judges must  recuse themselves                                                               
not only if there  is a conflict of interest but  if there is the                                                               
appearance of a  conflict of interest.  He  reiterated that there                                                               
is  a  high  standard  for   the  other  branches  of  government                                                               
[regarding conflict of interest].                                                                                               
5:58:43 PM                                                                                                                    
REPRESENTATIVE WOOL  suggested that the Corrupt  Bastards Club is                                                               
a  low bar,  those people  were  punished, and  the "system"  has                                                               
changed  quite a  bit since  then.   He referred  to the  various                                                               
possible conflicts  of interest  and mentioned  a recent  vote on                                                               
the floor concerning one of the  boards and commissions.  He said                                                               
that  a  legislator  was  a   dues-paying  member  of  the  board                                                               
overseeing the industry  in which the legislator  was licensed to                                                               
practice.   He asserted  that questions  related to  conflicts of                                                               
interest arise often and are difficult to sort out.                                                                             
MR. MERTZ maintained that the  rules must be crafted with reason.                                                               
He added that no one would  say, "If you're an engineer, you must                                                               
never vote on a bill which affects engineers."                                                                                  
6:00:27 PM                                                                                                                    
GEORGE PIERCE testified  that CSSSHB 44(JUD) is a  good start but                                                               
needs  more work.   He  expressed  his belief  that a  legislator                                                               
should be  excused from  voting on legislation,  if he/she  has a                                                               
financial  conflict of  interest.   He added  that no  legislator                                                               
should  be  allowed  to override  another  legislator's  declared                                                               
conflict of  interest.  He  opined that a legislator  should, out                                                               
of  conscience, abstain  from voting,  and  he said  he does  not                                                               
recall that ever happening.                                                                                                     
MR. PIERCE  stated that he  supports Section 2 of  CSSSHB 44(JUD)                                                               
and  that too  many times  it  appears that  legislators vote  in                                                               
favor of their personal interests  instead of serving the public.                                                               
He gave as  an example [the passage of] Senate  Bill 21, in which                                                               
the deciding vote was cast by  a legislator who was a manager for                                                               
ConocoPhillips Alaska, Inc.  He  opined that the vote constituted                                                               
a definite  conflict of interest.   He said that he  supports the                                                               
administrative hearing  process mentioned in Section  3 of CSSSHB
44(JUD).  He paraphrased Section  5 of CSSSHB 44(JUD), which read                                                               
as follows:                                                                                                                     
     This  Act takes  effect  only if  the Thirtieth  Alaska                                                                    
     State Legislature passes a  resolution that amends Rule                                                                    
     34(b), Uniform  Rules of the Alaska  State Legislature,                                                                    
     to  require a  member  to request  to  be excused  from                                                                    
     voting on a question before  a house of the legislature                                                                    
     when  the member  has a  conflict of  interest that  is                                                                    
     reasonably  likely to  influence the  member's vote  on                                                                    
     the  question, and  allow a  member's abstention  to be                                                                    
     approved or disapproved by a majority vote.                                                                                
MR.  PIERCE  emphasized  that  Uniform Rule  34(b)  needs  to  be                                                               
changed.  He expressed his  disapproval of the current procedures                                                               
allowing a  vote regardless of  a declared conflict  of interest.                                                               
He maintained that  declared conflicts of interest  should be put                                                               
to  a  vote.    He  opined that  legislators  with  conflicts  of                                                               
interest being allowed to vote  constitutes a corrupt system.  He                                                               
added that the same standard  that applies to municipal governing                                                               
bodies should apply  to the legislature:  if there  is a conflict                                                               
of interest, the member may not vote.                                                                                           
6:04:33 PM                                                                                                                    
CARL  BERGER  testified that  he  believes  each legislator  must                                                               
determine his/her own appropriate course  of action if he/she has                                                               
a  potential conflict  of interest.   He  added that  the key  to                                                               
addressing  potential  conflicts  of interest  is  ensuring  that                                                               
no  conflicts of  interest are  involved  in any  decision-making                                                               
process, thus  maintaining transparency  and public trust  in all                                                               
activities of  both bodies of the  legislature at all times.   He                                                               
urged the  committee to support those  guiding principles through                                                               
the proposed legislation.                                                                                                       
MR.  BERGER suggested  that changes  to the  proposed legislation                                                               
would  strengthen legislative  integrity  and public  trust.   He                                                               
maintained that community and state  leaders lead by example when                                                               
financial  conditions,  such  as   the  current  budget  dilemma,                                                               
require  it.   He  said  that Governor  Bill  Walker reduced  his                                                               
salary by 40  percent to support cost savings;  all Alaskans have                                                               
given up 50 percent of  their permanent fund dividend (PFD); many                                                               
Alaskans  are willing  to  tax  themselves for  the  good of  the                                                               
state; and  many state employees  have taken pay cuts  or reduced                                                               
work  hours.   He  contended  that  the legislators  continue  to                                                               
collect an  exorbitant amount in  per diem, a $50,400  salary for                                                               
three  to  four months'  work,  an  office expense  allowance  of                                                               
between  $12,000 and  $20,000 for  minimal  office expenses,  per                                                               
diem  when living  at home,  lavish multiple  trips worldwide  at                                                               
state expense that  are junkets with no real  purpose or activity                                                               
reports,  and moving  allowances  that  include washers,  dryers,                                                               
pianos,  compressors, and  other questionable  goods.   He opined                                                               
that the "time for  all of you to clean house  is long past," and                                                               
he urged the committee to "do the right thing."                                                                                 
6:07:45 PM                                                                                                                    
CHAIR  KREISS-TOMKINS closed  testimony  on CSSSHB  44(JUD).   He                                                               
announced that CSSSHB 44(JUD) would be held over.                                                                               

Document Name Date/Time Subjects
HB44 Comments 3.6.17.pdf HSTA 3/7/2017 5:30:00 PM
HB 44
HB127 Supporting Document-Support Screenshot 3.17.17.pdf HSTA 3/7/2017 5:30:00 PM
HB 127
HB127 Supporting Document- Annual PFD Individual Payouts 3.16.17.pdf HSTA 3/7/2017 5:30:00 PM
HB 127
HB127 Sectional Analysis ver A 3.17.17.pdf HSTA 3/7/2017 5:30:00 PM
HB 127
HB127 Sponsor Statement 3.17.17.pdf HSTA 3/7/2017 5:30:00 PM
HB 127
HB 127 Supporting Documents- Supporting Letters.pdf HSTA 3/7/2017 5:30:00 PM
HB 127