Legislature(1993 - 1994)
03/16/1994 09:10 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 licenses. 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 prohibitions. 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 regulations. 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 Administration. 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 arbitrator? 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 act. 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.