Legislature(1995 - 1996)
01/25/1996 03:30 PM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SSTA - 1/25/96 SB 191 ELECTION CAMPAIGN FINANCE REFORM Number 001 CHAIRMAN SHARP called the Senate State Affairs Committee to order at 3:30 p.m. and introduced SB 191 as the first order of business before the committee. Chairman Sharp informed everyone that this was a listen-only teleconference in order to receive an overview of the initiative and a comparison to SB 191 from the sponsor of the initiative. There will be full public participation at future meetings. The chairman called the first witness. Number 050 MIKE FRANK, Campaign Finance Reform Now (CFRN) testifying from Anchorage, informed the committee that SB 191 basically duplicated the initiative. There are a few stylistic and technical differences which are of no great significance. He noted that Representative James has a bill in the House which is practically the same as the initiative. Representative Finkelstein's version is a little different in that his version incorporates some changes suggested during an Alaskan Public Offices Commission(APOC) meeting this Fall. Mr. Frank recounted the history of the campaign finance reform initiative. In the 1980s, Governor Cooper introduced legislation which would have restricted contributions to only individuals. Over the years, other legislators have introduced campaign finance reform measures. He noted that there has been litigation regarding across district contributions. In 1993, an initiative banning across district contributions was unsuccessful. He mentioned the continued controversy surrounding the issue of charitable gaming monies being used to finance political activity. Number 090 Mr. Frank said that CFRN began in 1993 by researching this issue. The group discovered that Representative Finkelstein had some bills pending regarding campaign finance reform. The group contacted Representative Finkelstein who allowed them to utilize a mailing list of persons interested in this issue. The initial initiative was filled in 1994. During the period between the filing of the initiative and its certification for circulation, the group received comments from the APOC staff. The group then tinkered with their initial draft in order to respond to the questions and concerns of APOC. In 1995, CFRN refiled the initiative and they received circulation certification in April of that year. The book was published in May of 1995. The group had over 400 volunteer sponsors from a wide range of backgrounds with petition booklets. CFRN began with a goal of 25,000 signatures which was raised to 28,000 signatures due to the incredible response. They received over 32,000 signatures of which 31,500 were submitted in December of 1995; petition booklets continued to come in after that time. Lieutenant Governor Ulmer certified the initiative on January 17, 1996. The initiative is scheduled for the ballot in November of 1996. Mr. Frank acknowledged that the legislature has a constitutionally-designated role and CFRN intends to cooperate. Number 150 Mr. Frank believed that CFRN's volunteers as well as others supporting campaign finance reform are bound by the following beliefs: the electoral process is a captive of the undue influence of the money interest and that elected officials should be regarded as the village elders of the state and local governments, however the case is quite the opposite. Campaign finance supporters realize that corruption is a direct consequence of an electoral system which places incumbents and challengers on an expensive, time-consuming fund raising treadmill. Mr. Frank explained that the initiative attempts to refocus the electoral system back to the Alaska voter and increase the public's faith in the system and the elected officials. The initiative attempts to change the current system of election financing by eliminating large contributions of private money, creating a level playing field, and breaking the hold of powerful money interests over the electoral and legislative processes of government. Mr. Frank stated that only these changes would restore the faith of Alaskans in their government. Number 192 SENATOR RANDY PHILLIPS supported SB 191 and felt that this would resolve the public's concern. He expressed concern with Section 15.13.116, the "DISBURSEMENT OF CAMPAIGN ASSETS AFTER ELECTION" on page 14, line 18. Senator Randy Phillips recounted an experience in which one of his constituents gave him $40 and a couple of blocks later he met a single mother with three children whom he gave that $40. However, under SB 191 Senator Randy Phillips would not have been able to give this excess money for charitable causes unless provided for under 26 U.S.C. 501(c)(3) which is a nonprofit organization. He asked if there had been any discussion regarding placing excess funds in the expense allowances in the legislature. Senator Randy Phillips stated that almost all the legislators spend more on their constituents or community for public purpose than the $6,000 allowance. MIKE FRANK explained that the initiative is designed to level the playing field between incumbents and challengers. The excess funds provision are intended to prevent the carry over of unnecessary surpluses while giving incumbents with surpluses options to spend the money. SENATOR RANDY PHILLIPS felt that legislation could be crafted with specific criteria for the spending of excess funds for legislative purposes, not campaign purposes. MIKE FRANK explained that the initiative provides for excess funds to be donated without condition to Alaska's General Fund. The legislature could reappropriate that money to the office account which would be considered state funds. Mr. Frank indicated that this problem may not be resolved under the campaign finance reform; office holders are not given comparable expense accounts. That may be subject to majority rule such that the minority is given less money to run their office. Mr. Frank stated that excess campaign contributions should not be a manner in which to adjust such inequities, they should be a matter of tax and revenue policy. Number 255 SENATOR RANDY PHILLIPS pointed out that if office expenses were raised from $6,000 to $8,000 there would be public outcry that legislators are increasing their pay which is not really the case. MIKE FRANK reiterated that the initiative is intended to level the playing field and to place restrictions on how surpluses can be dispersed. This all is an attempt to eliminate the potential of campaign contributions being used as a quid pro quo for anything after an election. Mr. Frank expressed willingness to review adjustments making it easier for legislators to deal with surplus funds if those adjustments are reasonable from a public policy and fair election standpoint. Mr. Frank said that he understood the problem, but was unsure if it could have been addressed in this initiative. SENATOR RANDY PHILLIPS suggested that this could be addressed by placing another restriction under Section 15.13.116 and there could even be a dollar limit stated. He informed everyone of the questionnaires that he sends to his constituents which cost more than $6,000. Senator Randy Phillips identified the political problem as being that an increase in the expense allowance would create uproar in the media; the media would portray it as a pay increase rather than an office allowance increase. How could the previously mentioned incident regarding the $40 be handled? MIKE FRANK stated that a private contribution of campaign funds to a constituent in need would not be allowed under the initiative. Number 304 CHAIRMAN SHARP noted that there is much reference in the initiative about to whom and how much lobbyists can contribute, when inquiring about restrictions on contributions from a lobbyist's spouse. MIKE FRANK said that there are no express restrictions on spouses of lobbyists. The restriction is narrowly tailored to refer to lobbyists making a living lobbying; the restriction does not apply to representational lobbyists. There are no restrictions on lobbyists to make independent expenditures or to give money to political action committees or political parties. Spouses of lobbyists would be allowed to contribute just as any other individual. CHAIRMAN SHARP communicated that representational lobbyists are governmental, bureaucratic lobbyists for departments and nonprofits or employees lobbying for their company or organization for which they are not paid. Chairman Sharp indicated that the level playing field may not be as such because some districts have large numbers of registered lobbyists. He did not have a problem with restrictions on lobbyists, but it did seem to slant it to a certain direction. SENATOR RANDY PHILLIPS said that a lobbyist's spouse contributing money is a trap door. MIKE FRANK pointed out that the trap door is caused by the First Amendment. The trap door is utilized in many other contexts as well. It is difficult to regulate this. CHAIRMAN SHARP reiterated that the teleconference was listen only, no testimony would be taken today. KAREN BOORMAN, Director of Alaska Public Offices Commission, informed the committee that the commission was preparing written comments and an approved fiscal note which should be ready next week. She mentioned that Burke Miles from the Juneau office would be attending the hearing. She also offered to be available to provide information or assistance. Number 370 CHAIRMAN SHARP announced that his objective was to avoid as many legal challenges to the initiative or the statute as possible. He indicated that he did not want an effective date during a campaign or a municipal election. SENATOR KELLY, Prime Sponsor of SB 191, thanked Jack Chenowith who had drafted the initiative petition into legislation. He asked Mr. Frank if SB 191 was an accurate portrayal of the initiative petition. MIKE FRANK thanked Senator Kelly and Senator Randy Phillips for the introduction of the bill. Mr. Frank reiterated that SB 191 and the bill by Representative James are functionally identical to the initiative. Mr. Frank praised Jack Chenowith's work on this legislation. SENATOR KELLY asked when the effective date would be if the legislature did not pass similar legislation and the initiative passed at the November vote. JACK CHENOWITH said that it would become effective around March 1st; the initiative provision of the constitution states that initiatives become effective 90 days after certification. Mr. Chenowith expected certification of the initiative about 30 days after the November election which would be early December. SENATOR KELLY summarized that the earliest that the initiative petition would be in effect would be March 1, 1996. Number 411 SENATOR LEMAN suggested that a substantial change as encompassed in this initiative would be more appropriate to go into effect after the campaign cycle rather than in the middle. JAMES BALDWIN, Assistant Attorney General, offered his assistance to the committee. CHAIRMAN SHARP asked if anyone from the Division of Elections was present. He noted that the committee would be working with the division and he encouraged them to offer suggestions. He pointed out that Ms. Boorman had referred to a change in the fiscal note; the current fiscal note indicates that SB 191 would be referred to the Finance Committee. He informed everyone that this would be scheduled again and public testimony would be taken. With the amendments offered, a committee substitute would be created in order to keep this moving to the Judiciary Committee. SENATOR LEMAN suggested that when APOC reviews the fiscal note, they should review how that would change the effective date in the fiscal year 1997. CHAIRMAN SHARP agreed to inquire with APOC on this matter as well as with the Division of Elections. There being no further business before the committee, the meeting was adjourned at 4:05 p.m.