Legislature(1993 - 1994)

03/16/1994 09:10 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 CHAIRMAN LEMAN brings up SB 333 (DISCLOSURE OF EXEC.BR. CLOSE                 
 ASSOCIATIONS) as the next item of business before the committee and           
 calls Senator Phillips to testify.                                            
 Number 370                                                                    
 SENATOR RANDY PHILLIPS, Chairman, Legislative Budget & Audit                  
 Committee (LB&A) states SB 333 is the result of an audit by LB&A.             
 SB 333 would apply the same rules for disclosure the legislature              
 conforms to on the executive branch of government.  Randy Welker,             
 the Legislative Auditor, can fill in the details of the bill.                 
 Number 365                                                                    
 RANDY WELKER, Legislative Auditor states an audit of the Division             
 of Fish & Wildlife Protection within the Department of Public                 
 Safety (DPS) was performed last year.  One of the primary concerns            
 contained in that audit was the absence of any requirement in the             
 executive branch ethics act for people who have the ability to                
 exersize significant discretion in taking or withholding action,              
 that there is no requirement that they notify anyone of the                   
 economic association they may have with people under their                    
 infuence.  This became a particularly keen concern when looking at            
 the Division of Fish & Wildlife Protection Officers.                          
 Coincidentally, by the use of public information, we were able to             
 find out that there were Fish & Wildlife Protection Officers whose            
 spouses had commercial fishing licenses, and who were owners of               
 commercial fishing vessels.  LB&A was able to determine that there            
 were enough property transactions occurring between the regulated             
 profession and the Fish & Wildlife Troopers to cause concern.                 
 MR. WELKER states it is not just Fish & Wildlife Protection                   
 Officers LB&A is concerned with.  There is nothing now to require             
 an Oil & Gas Auditor in the Department of Revenue (DOR) to disclose           
 to their supervisors that they hold significant stock in an oil               
 company.  There is no requirement that a Banking Examiner in the              
 Department of Commerce & Economic Development (DCED) disclose                 
 significant holdings of stock in a bank.  There is no requirement             
 that an investigator in Occupational Licensing disclose a                     
 relationship with a doctor or a lawyer.  What SB 333 does is                  
 require that economic disclosure.  It does not attempt to prohibit            
 it, just require disclosure of that association and reporting to              
 that employees immediate supervisor.                                          
 Number 336                                                                    
 SENATOR TAYLOR asks why one would not want to prohibit close                  
 economic relationships such as those mentioned above.                         
 MR. WELKER responds it might be good to prohibit some close                   
 economic associations, and the legislature has in certain                     
 instances.  But those relationships can be varied, and a blanket              
 prohibition might not be good.                                                
 SENATOR TAYLOR says he will give another example.  A full time                
 Alcoholic Beverage Control Board Inspector owns two liquor                    
 SENATOR RANDY PHILLIPS says that should be disclosed.                         
 SENATOR TAYLOR questions if the inspector should even hold that               
 position, not simply disclose that fact.                                      
 MR. WELKER says SB 333 tries to address that situation, not through           
 prohibition, but through disclosure.  That disclosure would give              
 that person's supervisor the responsibility to ensure that person             
 is not in a position where they could take or withhold action that            
 would have an effect on that association.  The bill also provides             
 for the supervisor to direct the divestiture or removal by the                
 officer of that financial interest.  There are options available.             
 To what extent a person can be told what they can and cannot do,              
 concerns Mr. Welker.  At the least, SB 333 would be a first attempt           
 at making public awareness of that association.  Disclosure is the            
 first step.  If, after disclosure, there are significant additional           
 concerns, perhaps we should revisit the subject and legislate some            
 SENATOR TAYLOR states his frustration relates to being alerted last           
 year to the fact that a Department of Fish & Game Biologist in                
 Ketchikan owned a piece of property on the Unik River.  Someone               
 noticed helicopters flying in large quantities of wood to that                
 property.  Apparently, it was being paid for through the Department           
 of Fish & Game.  The Ombudsman's Office reported to Senator Taylor            
 that there was nothing that could be done about the situation,                
 because apparently it does not violate any rules, laws, or                    
 SENATOR TAYLOR claims that, during the administration of Governor             
 Sheffield, one had to pay people off to get an Electrical                     
 Administrator's License in Alaska.  There was taped evidence                  
 brought into court showing if a person was not the right friend of            
 Ike and the IBEW (International Brotherhood of Electrical Workers),           
 you did not get a license.  He believes the executive branch has              
 much greater opportunity for graft and corruption, than ever would            
 occur in the legislative halls.                                               
 Number 258                                                                    
 SENATOR RANDY PHILLIPS states he would not have a problem with an             
 amendment if Senator Taylor cares to amend SB 333.  He does not               
 have a problem with having disclosure and prohibition.                      
 Number 252                                                                    
 CHAIRMAN LEMAN says SB 333 goes next to the Senate Judiciary                  
 Committee, and perhaps that committee can handle a possible                   
 amendment.  Recalling the ethics law and the new conflict of                  
 interest statement, the chairman thinks this subject has a tendency           
 to develop a life of its own.  He does not want to make it too                
 tough for people who do have other legitimate business interests to           
 participate in state government.                                              
 Number 220                                                                    
 SENATOR RANDY PHILLIPS says Senator Taylor does have a good point.            
 There is far more opportunity for persons in the executive branch             
 than for persons in the legislative branch to abuse the public                
 trust.  The main thing Senator Phillips would like to see is public           
 disclosure of close economic associations.                                    
 CHAIRMAN LEMAN asks if anyone in the public wishes to testify on SB
 333.  The chairman calls Mr. McMullen from the Department of                  
 Number 205                                                                    
 MIKE MCMULLEN, Manager, System Services, Division of Personnel,               
 Department of Administration states the department has no problem             
 with the general concept of SB 333.  The department would like to             
 defend the fiscl note.  SB 333 would give the department additional           
 work, so the department is asking for funds to cover that                     
 additional work.                                                              
 MR. MCMULLEN says all eleven of the state's employees' bargaining             
 units will find grievance with the nepotism portion of SB 333.                
 There will be arbitration costs involved with that grievance, and             
 those are included in the fiscal note.                                        
 Number 171                                                                    
 CHAIRMAN LEMAN says he does have several questions regarding the              
 fiscal note, and agrees the Finance Committee would be a better               
 place to get into details.  Is 3,120$ per day the cost for just an            
 MR. MCMULLEN says 3,120$ is the average cost per hearing day, not             
 for just the arbitrator.                                                      
 Number 145                                                                    
 SENATOR TAYLOR ask if Senator Phillips would also like to have the            
 executive branch of government participate in the open meetings               
 SENATOR RANDY PHILLIPS says he likes that idea.                               
 SENATOR TAYLOR makes a motion to discharge SB 333 from the Senate             
 State Affairs Committee with individual recommendations.                      
 CHAIRMAN LEMAN, hearing no objection, orders SB 333 released from             
 committee with individual recommendations.                                    

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