Legislature(2007 - 2008)BELTZ 211

01/22/2007 01:30 PM Senate JUDICIARY


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 19 EXEC. BRANCH ETHICS:INTERESTS & ACTIONS TELECONFERENCED
Heard & Held
*+ SB 20 LEGISLATIVE DISCLOSURES TELECONFERENCED
Heard & Held
*+ SB 13 BAN CONSULTING CONTRACTS WITH LEGISLATORS TELECONFERENCED
Heard & Held
        SB  13-BAN CONSULTING CONTRACTS WITH LEGISLATORS                                                                    
                                                                                                                                
2:16:55 PM                                                                                                                    
CHAIR HOLLIS FRENCH announced SB 13 to be up for consideration.                                                                 
                                                                                                                                
SENATOR  GARY  STEVENS, Sponsor,  described  SB  13 as  a  simple                                                               
straightforward  bill. It  prohibits  legislators from  providing                                                               
consulting services to anyone in  the private sector or accepting                                                               
consulting fees from anyone in the private sector.                                                                              
                                                                                                                                
Noting the  newspaper accounts of  legislators who may  have been                                                               
consultants and may  discredit the Legislature, he  said his goal                                                               
is to  protect the  image of an  institution that  is approaching                                                               
      th                                                                                                                        
its 50   year. To accomplish that  there must be a  bond of trust                                                               
with the public.                                                                                                                
                                                                                                                                
SENATOR STEVENS related  that it has been  difficult to establish                                                               
a  definition for  "consultant" and  although he  was very  clear                                                               
about  what he  wanted to  accomplish when  he began  writing the                                                               
bill,  he   was  unsure  whether   he  had  achieved   his  goal.                                                               
Nonetheless,  the conversation  is worthwhile  and hopefully  the                                                               
committee  will  flesh  the  idea  out in  either  this  bill  or                                                               
another. Now is the time to  confront the issue of ethics and get                                                               
some meaningful legislation on the books.                                                                                       
                                                                                                                                
SENATOR STEVENS said he took  no particular ownership in the bill                                                               
and the  suggestion for an omnibus  bill may or may  not work. In                                                               
conclusion  he said  the bill  is simply:  "An Act  prohibiting a                                                               
legislator from providing consulting services  to a person in the                                                               
private  sector or  agreeing  to accept  consulting  fees from  a                                                               
person in the private sector." That's all it does, he said.                                                                     
                                                                                                                                
2:20:21 PM                                                                                                                    
CHAIR  FRENCH noted  his earlier  conversation  with the  sponsor                                                               
regarding a definition for consultant  and said two synonyms that                                                               
come to  mind are "advisor" and  "analyst". If this bill  were to                                                               
pass, he could  imagine that APOC filings would  begin to reflect                                                               
those services. Parenthetically he agreed  with the thrust of the                                                               
bill  because  legislators  should  not trade  on  their  office.                                                               
Expertise,  special   knowledge,  or   business  acumen   may  be                                                               
exercised outside the capitol building,  but how would you handle                                                               
those synonyms, he questioned.                                                                                                  
                                                                                                                                
SENATOR  STEVENS responded  he worked  with the  bill drafter  to                                                               
come up  with a definition of  what is and isn't  included and he                                                               
has  been  unable   to  find  a  workable   definition  in  state                                                               
regulation. Nonetheless, he  asked the committee not  to water it                                                               
down or create loopholes by saying  an analyst or advisor is okay                                                               
because  that would  weaken the  bill.  The reality  is that  the                                                               
activity  is  either  allowed  or  it isn't.  When  a  person  is                                                               
considering whether or not to  run for a legislative office, then                                                               
they  ought to  decide whether  they want  to so  one job  or the                                                               
other.                                                                                                                          
                                                                                                                                
As long as  the state has citizen law makers  there will be fewer                                                               
people  who  are available  to  serve  because of  the  financial                                                               
struggle. It's not  his goal to change the system,  but the rules                                                               
about crossing the line to become an advisor must be very clear.                                                                
                                                                                                                                
2:23:22 PM                                                                                                                    
SENATOR  GENE   THERRIAULT  asked   if  he  had   discussed  with                                                               
legislative  legal the  notion of  prohibiting any  business that                                                               
would  entail providing  services that  are outside  the person's                                                               
specific training  or professional expertise. He  suggested there                                                               
ought to be  a way to cast  the net broadly and  still let people                                                               
conduct private business.                                                                                                       
                                                                                                                                
2:25:10 PM                                                                                                                    
SENATOR STEVENS said  he had no objection to  expanding the bill,                                                               
but the  test question ought  to be whether the  legislator would                                                               
have  gotten the  job  if he  or  she  was not  a  member of  the                                                               
Legislature. The problem is how to write that into the law.                                                                     
                                                                                                                                
SENATOR  THERRIAULT   responded  an  economist  who   is  also  a                                                               
legislator is required to disclose  to APOC payments in excess of                                                               
$1,000 and the time spent  for that remuneration. The public will                                                               
be able  to determine  whether the pay  is commensurate  with the                                                               
profession. It's  the terms "consultant"  and "advisor"  that are                                                               
murky. The  remuneration for  that work  can be  astronomical and                                                               
cause the general public concern.                                                                                               
                                                                                                                                
2:27:07 PM                                                                                                                    
SENATOR STEVENS said  he couldn't agree more, but  the problem is                                                               
in  the details.  He questioned  how you  tell when  an economist                                                               
legislator is  hired for  his or  her professional  expertise and                                                               
not for their legislative experience.                                                                                           
                                                                                                                                
2:27:25 PM                                                                                                                    
SENATOR CHARLIE  HUGGINS asked what  a legislator's  status would                                                               
be if he or she was  a consultant before becoming a legislator if                                                               
SB 13 were to pass.                                                                                                             
                                                                                                                                
SENATOR  STEVENS replied  the  individual would  need  to make  a                                                               
choice between being a legislator and being a consultant.                                                                       
                                                                                                                                
SENATOR  HUGGINS remarked  that  the  committee would  ultimately                                                               
need to determine  whether or not it's legal to  ban someone from                                                               
pursuing his or her profession while serving as a legislator.                                                                   
                                                                                                                                
SENATOR STEVENS  replied he, as  a retired  university professor,                                                               
cannot  teach  for   remuneration  while  he  is   serving  as  a                                                               
legislator.                                                                                                                     
                                                                                                                                
SENATOR  HUGGINS commented  on  a conversation  he had  regarding                                                               
professional  licensing  and  business  conduct.  It's  what  the                                                               
person does with the license  and the compensation that makes the                                                               
difference.                                                                                                                     
                                                                                                                                
2:30:26 PM                                                                                                                    
SENATOR BILL  WIELECHOWSKI said he  can see two  issues regarding                                                               
consulting   services.  The   first   is  legislators   receiving                                                               
exorbitant fees for  providing services that they may  or may not                                                               
be  qualified to  do. The  second is  legislators helping  others                                                               
with  the legislative  process. He  questioned what  other states                                                               
are doing.                                                                                                                      
                                                                                                                                
2:31:28 PM                                                                                                                    
SENATOR  STEVENS questioned  whether it  makes any  difference if                                                               
the fees  received are  exorbitant if the  activity is  wrong. As                                                               
far as  legislators helping others with  the legislative process,                                                               
they already do that as part of the job.                                                                                        
                                                                                                                                
2:32:21 PM                                                                                                                    
SENATOR  LESIL McGUIRE  advised that  California decided  to have                                                               
professional  law  makers  address  these  same  ethical  issues.                                                               
Although the tradeoff is huge  for some individuals, the decision                                                               
is that  if you want to  be a public servant  then other economic                                                               
opportunities are on hold.                                                                                                      
                                                                                                                                
Two hypothetical examples come to  mind, she said. First, suppose                                                               
a legislator  has a professional  license as a real  estate agent                                                               
and  he or  she  works  for a  politically  active company.  Even                                                               
though the  licensee isn't performing  the day  to day work  as a                                                               
realtor, she questioned what might  happen or what the perception                                                               
might be  if a  piece of legislation  were introduced  that would                                                               
have a tremendous financial impact on that realty company.                                                                      
                                                                                                                                
The second example involves a  company vice-president, which is a                                                               
position  that  can  be  a  catchall  and  include  many  or  few                                                               
different  duties  and  titles.   There  certainly  could  be  an                                                               
instance where  someone is promoted to  vice-president of Company                                                               
A with full knowledge  that he or she will be  in Juneau for most                                                               
of the  year. That  might be very  acceptable from  the company's                                                               
standpoint and the business might  function very well without the                                                               
vice-president doing any day to day work.                                                                                       
                                                                                                                                
She assured members she isn't  casting aspersions and she doesn't                                                               
disagree with the thrust of the  bill, but the deeper question is                                                               
whether or not you want citizen  law makers. If the answer is yes                                                               
then  how do  you handle  the real  conflicts that  aren't always                                                               
apparent.                                                                                                                       
                                                                                                                                
There's always  a tradeoff and  the public understands  that, but                                                               
whatever your title there's always someone  who can do the job as                                                               
well or better  simply because they're at work and  doing the job                                                               
rather  than also  serving as  a  legislator. We  have to  decide                                                               
where to  draw the  line, but it's  bigger than  just consulting,                                                               
she said.                                                                                                                       
                                                                                                                                
2:37:09 PM                                                                                                                    
SENATOR  STEVENS agreed  that many  people  consult, advise,  and                                                               
analyze in their  daily job so it's difficult to  parse what they                                                               
may be doing as  part of the job and what they may  be doing as a                                                               
legislator. Although it seemed simple  at the onset, there really                                                               
is no  simple solution. Adding  exceptions creates  loopholes and                                                               
the law  would lose its  teeth. But changing to  professional law                                                               
makers  as California  has done,  wouldn't necessarily  guarantee                                                               
ethical behavior either.                                                                                                        
                                                                                                                                
2:38:14 PM                                                                                                                    
SENATOR   THERRIAULT   remarked   those  concerns   support   the                                                               
suggestion  that  this  issue  could   be  dealt  with  under  an                                                               
umbrella. The language in SB 20  would address the example of the                                                               
real  estate agent.  If  the person  really did  the  work of  an                                                               
active realtor, then  the time spent and the  monetary gain would                                                               
be disclosed under the language proposed in SB 20.                                                                              
                                                                                                                                
SENATOR  McGUIRE pointed  out that  she used  the example  of the                                                               
real  estate agent  because there  is an  exception for  state or                                                               
federal professional licenses.                                                                                                  
                                                                                                                                
SENATOR THERRIAULT said  perhaps that language ought  to be added                                                               
to the statute.                                                                                                                 
                                                                                                                                
CHAIR FRENCH  advised that the  committee would revisit SB  20 on                                                               
Wednesday.                                                                                                                      
                                                                                                                                
SENATOR   STEVENS  commented   that  adding   to  the   reporting                                                               
requirements is an option and it  ought to be very clear what the                                                               
requirements are,  but something is  very wrong if we  get caught                                                               
up in nit-picking and we miss the big picture.                                                                                  
                                                                                                                                
2:41:00 PM                                                                                                                    
CHAIR FRENCH found  no further questions or  testimony and closed                                                               
public testimony.                                                                                                               
                                                                                                                                
SENATOR THERRIAULT  noted that he  had an email to  distribute to                                                               
the committee.  It was from Mr.  Metcalfe and was related  to the                                                               
topic of ethics.                                                                                                                
                                                                                                                                
2:42:06 PM                                                                                                                    
CHAIR FRENCH announced he would hold SB 13 in committee.                                                                        

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