Legislature(1999 - 2000)
04/22/1999 08:00 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE
April 22, 1999
8:00 a.m.
MEMBERS PRESENT
Representative Jeannette James, Chair
Representative John Coghill
Representative Scott Ogan
Representative Jim Whitaker
Representative Bill Hudson
Representative Beth Kerttula
Representative Harold Smalley
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL 199
"An Act relating to compensation for certain state employees; and
providing for an effective date."
- MOVED CSHB 199 (STA) OUT OF COMMITTEE
* HOUSE BILL 179
"An Act eliminating the Alaska Public Offices Commission and all
campaign contribution and expenditure limits; repealing lobbying
and conflict of interest statutes administered by the Alaska Public
Offices Commission; relating to the definition of 'lobby,'
'lobbying,' and 'lobbyist'; repealing the required annual financial
disclosures program administered by the Alaska Public Offices
Commission; repealing the conflict of interest statutes
administered by the Alaska Public Offices Commission; relating to
reporting of campaign contributions and expenditures; amending the
definition of 'contribution,' 'group,' and 'political party';
changing the residency requirements for candidates for public
offices; and providing for criminal penalties for violation of
these provisions."
- HEARD AND HELD
CS FOR SENATE BILL 33(FIN)
"An Act relating to contracts for the performance of certain state
functions previously performed by state employees and to the
Commission on Privatization and Delivery of Government Services;
and providing for an effective date."
- SCHEDULED BUT NOT HEARD
HOUSE BILL 132
"An Act relating to allowable absences from the state for purposes
of eligibility for permanent fund dividends; and providing for an
effective date."
- SCHEDULED BUT NOT HEARD
HOUSE BILL 159
"An Act granting certain employees in correctional facilities
status as peace officers under the public employees' retirement
system."
- SCHEDULED BUT NOT HEARD
HOUSE BILL 16
"An Act transferring to the Department of Health and Social
Services the authority to license all assisted living facilities;
eliminating the authority of the Department of Administration to
license assisted living facilities; and providing for an effective
date."
- SCHEDULED BUT NOT HEARD
* HOUSE BILL 192
"An Act relating to reciting the pledge of allegiance by public
school students."
- SCHEDULED BUT NOT HEARD
(* First public hearing)
PREVIOUS ACTION
BILL: HB 199
SHORT TITLE: STATE EMPLOYEE COMPENSATION
SPONSOR(S): FINANCE
Jrn-Date Jrn-Page Action
4/15/99 824 (H) READ THE FIRST TIME - REFERRAL(S)
4/15/99 824 (H) STA, FIN
4/20/99 (H) STA AT 8:00 AM CAPITOL 102
4/20/99 (H) HEARD AND HELD
4/20/99 (H) MINUTE(STA)
4/21/99 (H) FIN AT 8:30 AM HOUSE FINANCE 519
4/21/99 (H) <BILL POSTPONED TO 4/23 1:30 PM MTG>
4/22/99 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 179
SHORT TITLE: APOC REPEAL: CAMPAIGN/DISCLOSURE/LOBBYIST
SPONSOR(S): REPRESENTATIVES(S) COGHILL, Sanders
Jrn-Date Jrn-Page Action
4/07/99 671 (H) READ THE FIRST TIME - REFERRAL(S)
4/07/99 671 (H) STA, JUD, FIN
4/15/99 (H) STA AT 8:00 AM CAPITOL 102
4/15/99 (H) <BILL CANCELED>
4/19/99 866 (H) SPONSOR SUBSTITUTE INTRODUCED
4/19/99 866 (H) READ THE FIRST TIME - REFERRAL(S)
4/19/99 866 (H) STA, JUD, FIN
4/22/99 (H) STA AT 8:00 AM CAPITOL 102
4/22/99 (H) HEARD AND HELD
WITNESS REGISTER
BROOKE MILES, Regulation of Lobbying
Alaska Public Offices Commission
Department of Administration
PO Box 110222
Juneau, Alaska 99811-0222
Telephone: (907) 465-4864
POSITION STATEMENT: Presented concerns with SSHB 179.
GAIL FENUMIAI, Election Program Specialist
Division of Elections
Office of the Lieutenant Governor
PO Box 11017
Juneau, Alaska 99811-0017
Telephone: (907) 465-4611
POSITION STATEMENT: Presented concerns with SSHB 179.
MIKE FRANK, Chair
Campaign Finance Reform Now
2224 Turnagain Parkway
Anchorage, Alaska 99517
Telephone: (907) 248-5078
POSITION STATEMENT: Recommended the current law continue.
STEVE CONN
Alaska Public Interest Research Group
603 West 18th
Anchorage, Alaska 99503
Telephone: (907) 278-3661
POSITION STATEMENT: Recommended that Representative Coghill
withdraw SSHB 179.
JOYCE MICHAELSON, Volunteer Member
Alaska Public Offices Commission
Box 245014
Anchorage, Alaska 99524
Telephone: (907) 338-0469
POSITION STATEMENT: Discussed concerns with SSHB 179.
NANCY GORDON, Chief, Assistant Attorney General
Civil Division
Department of Law
1031 West 4th Avenue, Suite 200
Anchorage, Alaska 99501
Telephone: (907) 269-5135
POSITION STATEMENT: Discussed concerns with SSHB 179.
DEAN GUANELI, Chief Assistant Attorney General
Legal Services Section - Juneau
Criminal Division
Department of Law
PO Box 110300
Juneau, Alaska 99811-0300
Telephone: (907) 465-3428
POSITION STATEMENT: Discussed concerns with the criminal
proceedings in SSHB 179.
JAN DeYOUNG, Assistant Attorney General
Governmental Affairs Section
Civil Division
Department of Law
1031 West 4th Avenue, Suite 200
Anchorage, Alaska 99501
Telephone: (907) 269-5073
POSITION STATEMENT: Discussed recent court opinion regarding
fund-raising during legislative session.
SUSIE BARNETT, Professional Assistant
Select Committee on Legislative Ethics
PO Box 101468
Anchorage, Alaska 99510-1468
Telephone: (907) 269-0150
POSITION STATEMENT: Provided information.
ACTION NARRATIVE
TAPE 99-28, SIDE A
Number 0001
CHAIR JEANNETTE JAMES called the House State Affairs Standing
Committee meeting to order at 8:00 a.m. Members present at the
call to order were Representatives James, Coghill, Ogan, Whitaker,
Kerttula and Smalley. Representative Hudson arrived at 8:06 a.m.
HB 199-STATE EMPLOYEE COMPENSATION
CHAIR JAMES announced the first order of business before the
committee is HB 199, "An Act relating to compensation for certain
state employees; and providing for an effective date." She
reminded that members that public testimony was closed at the
previous hearing.
Number 016
CHAIR JAMES noted that a copy of the proposed committee substitute
(CS) had been distributed. She pointed out that the CS deletes
Section 15 and puts the Supplemental Benefits System (SBS)
participation back into its current status. The proposed CS also
deletes "until July 1, 2001," thus grandfathering in all existing
geographic differentials. In response to Representative Smalley,
Representative James noted that the cover sheet with the proposed
CS should cite the deletion of "until July 1, 2001" as occurring on
line 19, page 7 not page 20.
CHAIR JAMES asked for a motion to put the CS before the committee.
Number 066
REPRESENTATIVE COGHILL made a motion to adopt the proposed CS for
HB 199, version H, Cramer, 4/19/99, as a working document. There
being no objection, it was so ordered.
Number 082
CHAIR JAMES called a brief at-ease at 8:05 a.m. to give the members
a few moments to review the CS and for copies of the fiscal note to
be made.
[Members introduced guests that were present for "Take your
daughter to work day."]
Number 123
REPRESENTATIVE WHITAKER asked if there was a fiscal note attached
to the original version of HB 199.
CHAIR JAMES replied that she didn't believe there was.
Number 139
REPRESENTATIVE COGHILL moved to report CSHB 199, version H, Cramer,
4/19/99, out of committee with individual recommendations and
attached fiscal notes.
Number 145
REPRESENTATIVE HUDSON objected. He emphasized that the elements
within HB 199 fall under the purview of collective bargaining and
not the legislative process. Therefore, Representative Hudson
objected to the intentions of the legislation.
REPRESENTATIVE OGAN remarked, if this is subjected to collective
bargaining, the reductions will never be seen. Therefore,
Representative Ogan said that he would recommend reporting the
legislation from committee.
REPRESENTATIVE KERTTULA stated that she appreciated the effort to
return SBS participation back to its current status. However, the
bill still sets up various tiers of employees which she indicated
to be a demoralizing factor that really undermines the service of
people. She surmised from the letters and testimony on this issue
that people felt they weren't valued as employees. She emphasized
that it's sending the wrong message, especially at this time.
Therefore, Representative Kerttula said she would not be supporting
the legislation.
Number 204
Upon a roll call vote, Representatives Ogan, Coghill, Whitaker and
James voted in favor of moving CSHB 199(STA), version H, Cramer,
4/19/99, from committee and Representatives Hudson, Smalley, and
Kerttula voted against it. Therefore CSHB 199(STA) passed out of
committee.
HB 179-APOC REPEAL: CAMPAIGN/DISCLOSURE/LOBBYIST
Number 208
CHAIR JAMES announced that the next order of business before the
committee is SSHB 179, "An Act eliminating the Alaska Public
Offices Commission and all campaign contribution and expenditure
limits; transferring the administration of lobbying, conflict of
interest, and financial disclosure statutes from the Alaska Public
Offices Commission to the division of elections; relating to
reporting of campaign contributions and expenditures; defining
'full disclosure,' 'purposely,' 'recklessly,' and 'resident';
amending the definition of 'contribution,' 'group,' and 'political
party'; changing the residency requirements for candidates for
public offices; and providing for criminal penalties for violation
of these provisions."
REPRESENTATIVE COGHILL, sponsor of SSHB 179, said that this
legislation is a necessary move to ensure voters a quick and
judicious disclosure regarding how candidates collect and spend
funds. The legislation will eliminate the Alaska Public Offices
Commission (APOC) and place the reporting division under the
Division of Elections. He informed the committee that under this
legislation each candidate would be required to sign a residency
affidavit, contributions would be opened up by eliminating
contribution limits, full disclosure would occur, and speedy court
action would be ensured.
REPRESENTATIVE COGHILL utilized an overhead to discuss his plan.
The process begins with the candidate filing which includes a
conflict of interest statement, a financial disclosure which begins
the accounting procedure, and an affidavit of residency. From that
point on, the candidate provides the Division of Elections with a
semi-monthly campaign report due the 5th and 20th of each month.
He explained that the reasoning for this is to have immediate
access to the movement of money available to a campaigner. This
information would be placed on the Internet and there would be an
open file copy at the Division of Elections. The candidate would
file within the region of that candidate's district. He pointed
out that there would be a continuous reporting process through the
general election after which there is a final disclosure report.
Number 338
REPRESENTATIVE COGHILL pointed out that the Division of Elections
will give a notice if there is a failure to file and there will be
a notice posted on the candidate's Internet disclosure page and in
the hard file. If there are violations, there are the following
criteria: failure to disclose, recklessly fail to disclose, and
purposefully fail to disclose. The legislation specifies the
definitions and penalties of those. He noted that the Division of
Elections as well as an Alaskan voter can file a complaint with a
district attorney which he explained would provide a degree of
accountability in the court system. In order to avoid frivolous
actions, the time period of 31 days before an election to file
action was specified. The district attorney has 72 hours to file
a charge. If there is an action, an investigation occurs within a
short-time period and the district attorney files formal charges in
superior court. He emphasized that this legislation requests
specific and judicious action within a certain time. He believed
the action must occur within 10 working days. If a superior court
with an open calendar cannot be found within 10 days, rule 23 can
be utilized to take a judge out of retirement. If the verdict is
guilty, then there could be charges and sentencing which could
result in the candidate being removed from the ballot or
disqualification from holding office. Representative Coghill
emphasized that the legislation has a heavy penalty, a high degree
of accountability, and the public sees it all.
REPRESENTATIVE OGAN asked if there are ramifications for an Alaskan
voter who files an unfounded complaint in an attempt to harass or
discredit the reputation of a candidate.
REPRESENTATIVE COGHILL explained that the criteria was based on
whether a candidate filed or did not file his/her disclosure. He
stated that the proof that the candidate did not disclose would
have to be proven. If information is found that a candidate has
not disclosed, that person should be within his/her right to make
such a charge. However, that would not disqualify the candidate,
unless it was proven in a court of law that the candidate failed to
disclose. Therefore, there is a protection for the candidate as
well as the public.
Number 430
REPRESENTATIVE OGAN stated that he would be more comfortable if a
person could complain to the agency who would determine if there is
"a culpable mental state to defraud the public." He believed there
would be charges filed that may not be justified.
CHAIR JAMES commented that this legislation is a huge change
because it merely says that the law is only violated if a candidate
does not file. She posed a situation in which a person was given
$500 and was requested not to report receipt of that money. The
candidate would have to place the money in an account besides the
campaign account which must be reported. The candidate could then
report that he/she received 50 contributions under $100.
Therefore, there are ways that the system can be misused. She
pointed out that currently, there is a requirement that those
giving donations over $250 must file separately with the APOC
regarding that contribution.
REPRESENTATIVE COGHILL said that the aim of this legislation was to
provide the public with immediate information. The scenario
described by Chair James could happen under the current system and
there could still be no recourse. The goal is to reach a higher
degree of integrity, to hold people publicly accountable, and to
have a simple process. He noted that he did not want to go against
APOC who he believed has done a good job with the laws it has been
given. The process has become very complicated and the public has
become frustrated. Representative Coghill commented that as a
candidate he did not always understand the laws. This legislation
would place the burden of proof on the candidate regarding if the
candidate did or did not disclose. The intent is to help the voter
understand what is occurring. He said that the flow of money
probably does not bother the public as much, if there is knowledge
regarding where the money comes from and where it is going. This
legislation simply allows the Division of Elections to provide that
information regarding contributions of over $100. Representative
Coghill believed the legislation would create a better system. He
noted that he had some amendments to offer.
CHAIR JAMES inquired as to what would be the charge in the scenario
she posed earlier. What are the penalties for not reporting?
Number 546
REPRESENTATIVE COGHILL directed the committee to page 4, line 7
which provides for a class A misdemeanor. He informed the
committee that the fines specified in the bill for the class A
misdemeanor are incorrect and would require an amendment. He
explained that the following changes should be made on page 4, line
10, after "report", insert "or an affidavit required under AS
15.13.015" and on line 11 delete "$500" insert "$5,000" and delete
"$1,000" and insert "$10,000." In response to Chair James,
Representative Coghill indicated those charges relate to the intent
to fraud. Representative Coghill continued by directing the
committee to page 4, subsection (b) which addresses the removal of
a candidate's name from the ballot when a candidate is "convicted
of purposely failing to disclose a contribution or expenditure as
required in AS 15.13.025."
REPRESENTATIVE COGHILL noted that he also has an amendment
regarding subsection (c) on page 4. The amendment would delete the
current subsection (c) and insert entirely new language which is
more reflective of his intent. The new subsection (c) would read
as follows: "A candidate, group, political party, municipality, or
individual who recklessly fails to disclose a contribution or
expenditure as required in AS 15.13.025 or who provides a false
information on a full disclosure report is guilty of a class B
misdemeanor and upon conviction is punishable by a fine of not less
than $1,000 and not more than $5,000, or by imprisonment for not
more than one year, or by both." Therefore, there are different
standards for purposely and recklessly failing to disclose. He
commented that a judge has some discretion with regard to
individual circumstances. However, the high degree of
accountability remains and is based solely on whether the candidate
failed to report or not.
Number 616
REPRESENTATIVE SMALLEY commented that he liked the notion of
disclosure filings and would support that. He asked if
Representative Coghill had devised a method of "shoring up" the
Division of Elections to assume these responsibilities.
REPRESENTATIVE COGHILL stated that in SSHB 179 the primary focus is
shifting the need. When the legislation moves to the House Finance
Committee, that committee will have to determine if new personnel
are necessary. Currently, there are 11 people in APOC and this
legislation is structured such that the regions in the Division of
Elections would do the reporting which should require one more
employee per region. Representative Coghill reiterated that SSHB
179 does not address that and would therefore, have to be
forthcoming.
REPRESENTATIVE SMALLEY asked if the 72-hour response time for the
courts is realistic.
REPRESENTATIVE COGHILL stated that he was open to discussion on
that. Perhaps, three working days would be more appropriate. He
stressed that his intention is to have expedient action. The
public is served if there is a charge and that charge is known
immediately and action is taken immediately.
CHAIR JAMES clarified that the 72-hour response time was for the
courts to make a determination as to whether a candidate recklessly
or purposely did not disclose. She noted that after the court's
response, there is a 10-day time limit for the decision which is
arrived at by an expedited hearing. Chair James indicated that the
language is such that if this was determined to be fraud, the case
would move forward and the person may be entitled to a jury trial.
REPRESENTATIVE COGHILL pointed out that the legislation allows for
the judge-sitting to refer the case to jury trial. He did not
believe that right could be taken away. He noted that this also
provides the judge with the ability to levy the fine and there is
an appeal process.
Number 688
REPRESENTATIVE KERTTULA commented that she liked the intent, but
she noted that she had two concerns. Firstly, this process would
be criminalized and the time constraints are faster than those for
felonies. She suggested that the process should be kept as an
administrative review. Secondly, she expressed concern with
placing the reporting requirements in the Division of Elections.
That may appear to have conflicts. She asked if other states had
been reviewed on this matter.
REPRESENTATIVE COGHILL said that he had not reviewed other states
in that regard. He emphasized that this is merely a reporting
mechanism and if there is a charge, that is out of the division's
hands. He indicated agreement that a charge would go straight to
the district attorney. He pointed out that this was under the
Division of Elections before APOC took it over around 1971.
CHAIR JAMES asked if there are any provisions in this legislation
that would penalize those making false claims.
REPRESENTATIVE COGHILL replied no.
CHAIR JAMES indicated that may be appropriate to include.
REPRESENTATIVE HUDSON commented that, as a former candidate, the
current system is difficult and confusing. Disclosure is a good
target. He reiterated Representative Kerttula's concerns regarding
whether the Division of Elections is the appropriate agency to have
the responsibility of disclosure. Representative Hudson believed
that the public is currently served by the following: contribution
limits and the disposition of excess contributions. He requested
that Representative Coghill discuss the differences between failure
to report, failure to report recklessly, and failure to report
purposely.
REPRESENTATIVE COGHILL explained that after a campaign there would
be an annual disclosure of what is in the account. He said that
originally, that information was going to be between the candidate
and the Internal Revenue Service (IRS), however, he noted that he
would be open to discussion on that issue. With regard to
contribution limits, Representative Coghill felt that exceptions
regarding who can give would probably result in the current
situation. He indicated that to be best left up to the general
population. Personally, Representative Coghill believed that open
disclosure would result in self-discipline because knowledge of
where contributions are received is telling about the candidate.
REPRESENTATIVE HUDSON asked if this would also apply to initiatives
such as the wolf snaring initiative.
REPRESENTATIVE COGHILL replied yes. In further response to
Representative Hudson, Representative Coghill stated that there are
no contribution limitations, but there would be the need for full
disclosure. Currently, there would not be knowledge of
contributions until an investigation whereas with this legislation,
there would be open disclosure. Under this legislation, if someone
outside the state was fueling an initiative, it would be known
immediately.
REPRESENTATIVE HUDSON inquired as to who would be culpable in an
initiative situation.
REPRESENTATIVE COGHILL stated that those organizing the initiative
would be held accountable.
CHAIR JAMES interjected that if there is no contribution limit,
then there would be no problem with large out-of-state
contributions.
REPRESENTATIVE HUDSON clarified that his question was in regards to
the failure to disclose.
Number 814
REPRESENTATIVE COGHILL noted that the treasurer of any group,
political party, or candidacy has to register and would be held
accountable as well as the candidate.
REPRESENTATIVE HUDSON said, "The penalty is the same penalty
as--it's really failure to disclose, purposely fails to disclose,
or recklessly fails to disclose and the penalty for all three of
those would be the same for the larger problem I just indicated as
opposed to a candidate...."
REPRESENTATIVE COGHILL agreed with that assessment relating to
initiatives.
REPRESENTATIVE WHITAKER expressed concern that there was no
reporting from October 20th to election day during which much money
could be placed in a campaign with no disclosure until after the
election. He indicated the need to address that.
CHAIR JAMES agreed that was of concern and should be addressed.
REPRESENTATIVE COGHILL offered the option of having a weekly
disclosure before the election.
CHAIR JAMES interjected that perhaps, a daily disclosure of the
amount of money received over $250, as is the current practice with
the 24-hour rule, would be appropriate.
REPRESENTATIVE COGHILL said that the aim is to have immediate and
full disclosure. The 30-day limit was based on the 15-day filing
period, 5-day grace period and the 10-day shift. However, he
agreed with Chair James' suggestion.
REPRESENTATIVE OGAN inquired as to what is being repealed of the
numerous repealors listed in Section 61.
REPRESENTATIVE COGHILL pointed out that the committee packet should
contain a sectional analysis.
REPRESENTATIVE OGAN commented that there are no limits with regard
to the amount of a contribution.
TAPE 99-28, SIDE B
REPRESENTATIVE OGAN expressed concern with not having contribution
limits. There is potential for mischief. He asked if this
legislation addresses activities during session. He found the
latest court ruling ridiculous. That ruling would allow a
legislator to have a fund raiser down the street before voting on
an important bill during session.
Number 051
REPRESENTATIVE COGHILL said that he believed the public would be a
better judge of a legislator doing fund-raising during session, if
the legislator had to report that fund-raising. With regard to
bribery, he commented that almost any campaign contribution could
be thought of as bribery in some way. Representative Coghill
viewed campaign contributions as a way for those agreeing with a
candidate's ideas to help put them forward. After hearing the
comments on the personal use of funds, he believed that should be
addressed. The personal use of funds was not addressed because he
felt that the IRS would hold the candidate to a higher standard
than the state could. If there is an impropriety, Representative
Coghill interpreted that as a criminal activity. If this
legislation does address personal use of funds, then there is
concern because the state becomes the discerner of what is personal
use and personal income. For example, during Representative
Coghill's campaign he went on half-time pay in order to be
available for election activities. He said that some of the things
such as gas funds, could have been discerned as personal use. In
discerning what is personal use or personal income would result in
the judgement of intent which he suggested would be problematic.
Perhaps, addressing it as a prohibition of taking the funds as
personal income could be added.
REPRESENTATIVE OGAN noted that before campaign reform, anyone could
contribute up to $1,000. He commented that he did not know of any
legislator who could be bought for $1,000. With that amount, the
contributions seemed to be spread out and no one person could
achieve "a leg up" over others. Without contributions limits,
individuals could have lots of influence.
REPRESENTATIVE COGHILL stated that if the public knows immediately
that a candidate received $20,000, that could influence the
electorate's perception of that candidate. He explained that the
principle by which this legislation is based, was that the
candidate is not primarily a criminal and if held to a high degree
of accountability there would be appropriate action. If there is
inappropriate activity, the electorate would make the judgement
call. He did not believe it good policy to make law based on the
assumption that one is a criminal.
REPRESENTATIVE OGAN clarified that he did not assume people to be
criminals, but greed is a motivator for even honorable people.
Number 179
CHAIR JAMES agreed with Representative Ogan's concerns, that if a
candidate receives a large sum of money, the perception will be
that the candidate is dishonest. She expressed concern that there
is no way to limit how much a candidate can spend of their own
money. There should be a level playing field in order to avoid
people being able to buy an office. Chair James said that she
would like to see no limits, except on corporations which are
treated as people, although that is not really the case. There is
some rationale behind limiting the contributions to only
individuals. Furthermore, she did not have a problem with a
candidate's grandmother providing the candidate with money to run
for office as long as that contribution is fully disclosed. She
emphasized that once there is a law, it is difficult to return to
a freer situation.
REPRESENTATIVE OGAN discussed the apathy of voters with regard to
campaigns.
CHAIR JAMES stressed then if that is the case, all the laws
restricting campaigns have not worked. Perhaps, that should be
changed and the people should be the decision-makers.
REPRESENTATIVE HUDSON stated that if disclosure is going to be
utilized as a principal element of change in this legislation,
perhaps, some of the elements of disclosure should be published in
order for the public to read it in the newspaper. He compared this
to the bids, boundary changes, and such currently printed in the
newspaper. He agreed with Chair James that this would be published
anyway, but pointed out that often information is published
erroneously due to media interpretation. Therefore, disclosure
should be available to everyone not just the electronically
adapted.
Number 324
REPRESENTATIVE KERTTULA returned to the idea of controlling money
in campaigns. She said that she would like to see public funding
of campaigns in order to level the playing field. For instance, 30
minutes of free television time could be given to each candidate.
Such an environment would open up the process and encourage the
public debate. Representative Kerttula liked the idea of
disclosure and access, but had some concerns. The legislation does
not address contributions through another person. She commented
that she did not believe individuals could be stopped from giving
themselves funds due to the First Amendment.
CHAIR JAMES asked if there were any further questions or comments
from the committee. Hearing none, the public testimony began.
Number 365
BROOKE MILES, Regulation of Lobbying, Alaska Public Offices
Commission, Department of Administration, informed the committee
that the commission has not met to formally develop a position on
this legislation. However, several questions have been identified.
Since this legislation would not specify any beginning or end date
for a campaign, how would the reporting work. For example, if a
candidate began accepting contributions in 1999 for the 2002
election, would that candidate be required to file the 15-day
report for the entire three years.
MS. MILES referred to the definition of full disclosure in Section
4 of SSHB 179. This requires only that the candidate file the
amount of the contribution and the name of the contributor, not the
occupation, employer or address of the contributor nor the date or
form of the contribution is required under this bill. The same
type of information for expenditures is also not required under
this legislation. Furthermore, the cumulative amount that the
candidate raises is not required to be disclosed nor are the debts
of the campaign. Ms. Miles inquired as to how under this
legislation, would the public ascertain the amount of money that a
candidate receives from those residing outside of Alaska or whether
the candidate had a surplus or debt in the candidate's campaign
account. She also asked how would the Division of Elections
evaluate whether a report is complete and accurate. She pointed
out that current law includes exemptions for campaigns that raise
and spend less than $2,500 and for the $100 or less contributor.
That is not included in the legislation, so is the intent to
require full disclosure in those cases.
MS. MILES noted that reporting due dates are not contingent on the
date of election which could result in a substantial lapse in time
between the filing of the last report and the election. Currently,
the law requires a seven-day report which is followed by the
24-hour reporting requirement for contributions greater than $250.
She commented that timely information would be of importance to the
public. With regards to enforcement, the legislation places the
responsibility with the Director of the Division of Elections who
is appointed by the Lieutenant Governor. During a gubernatorial
election year, the director must ensure that all candidates,
including the governor and lieutenant governor, have complied with
reporting requirements. She pointed out that conceivably the
director would be required to refer the lieutenant governor or
competing candidate to the district attorney for criminal
prosecution. That would be a difficult situation.
Number 446
MS. MILES noted that under the current campaign disclosure law,
removal from the ballot has never been a penalty for any violation
of the campaign disclosure law. Current law only utilizes the
removal penalty for the conflict of interest and the financial
disclosure statements filed at the time of the declaration of
candidacy. She asked if the sponsor intended to expand the
enforcement mechanism to include removal from the ballot as a
penalty. Currently, candidates who file late campaign disclosure
reports are subject to civil penalties. There do not appear to be
any consequences for late reports under this legislation other than
notice being sent and published on the Internet.
MS. MILES emphasized that SSHB 179 appears to repeal all the
reforms enacted in 1996. She asked if the sponsor intended for
candidates, groups, and parties to be allowed to receive unlimited
amounts of money from any source at any time. Is it the sponsor's
intent to allow candidates to be free to use campaign contributions
for any purpose, including taking the contributions as personal
income. She pointed out that the current campaign disclosure law
prohibits the state, the university, and municipal money to be
utilized to influence elections except in limited circumstances.
Does the sponsor intend to allow those entities to contribute money
to candidate campaigns and issue campaigns? The legislation
repeals a provision which identifies who receives campaign
contributions on behalf of a candidate. Therefore, if anyone can
accept a campaign contribution on behalf of a candidate, how would
a candidate know that the contribution has been received within the
reporting period. Currently, the following contributions are
prohibited: anonymous contributions, contributions made in a
fictitious name, and contributions made in another person's name.
This legislation would repeal those prohibitions. Is it the intent
of the sponsor to permit such contributions? If so, how would the
division or the district attorney determine whether a filer has
provided false information on a campaign disclosure report. She
noted that this legislation also repeals the $100 cash contribution
limit. Therefore, an individual could not only contribute $20,000,
but could make that contribution in cash which could create
problems for the public that is reviewing the Internet.
MS. MILES commented that the passage of the Legislative Ethics Law
in 1993 established a higher standard for the legislature with
regard to the disclosure of income and loans over $1,000. That law
required that if the income was given by a source that had a
substantial interest in legislative administrative or political
action, the amount was included along with the name of the source.
Is there a reason why that information would no longer be pertinent
under this legislation?
CHAIR JAMES commented that in her seven years in the legislature
there have been many new requirements regarding reporting to the
Legislative Select Committee on Ethics and APOC. She said that to
continue to move in that direction would not be appropriate. She
surmised that Ms. Miles, as an APOC employee, would find these
overwhelming with respect to keeping people informed. She asked if
Ms. Miles would be willing to work on this legislation.
MS. MILES replied yes.
REPRESENTATIVE SMALLEY said that although he liked some of the
elements of SSHB 179, it flies in the face of what the campaign
reform of 1996 was about.
CHAIR JAMES pointed out that there was never a vote of the people
on this issue, although there was an initiative. There was
legislation passed similar to the initiative. She suggested that
it should be determined how to make this process less cumbersome.
If more people could come to the polls, pay attention, and run for
office, the political spectrum would be much improved.
Number 569
GAIL FENUMIAI, Election Program Specialist, Division of Elections,
Office of the Lieutenant Governor, clarified that she is not a
campaign finance expert. The division has determined some
questions as did Ms. Miles and some of the division's questions
were already presented by Ms. Miles. Therefore, Ms. Fenumiai
informed the committee that she would address only those questions
not already mentioned. She pointed out that currently, a candidate
who files the declaration of candidacy late in the year is allowed
to file letters of intent and begin fund-raising. She was not sure
how that would be handled under this legislation. Without a
declaration of candidacy or nominating petition, the division would
not really know if a candidate is campaigning and raising funds.
Therefore, the question of when the campaign actually begins is of
importance to the division.
MS. FENUMIAI expressed concern with regard to the amount of reports
expected to be filed. Furthermore, if the reports are not filed
electronically, the division would have to take time to rekey that
information. She was not sure of the definition of "immediate
posting on the Internet." Ms. Fenumiai informed the committee that
if this happens, the division would like there to be a mandate that
the reports be filed electronically. She eluded to the possibility
of electronic filing software. There are estimates that the number
of reports in a calendar year would increase from 2,400 to 10,000.
Currently, the division does not have the staff or resources to
monitor, audit, host, and review all those reports. Ms. Fenumiai
posed the question of how would the division know when there is the
need to challenge a report, if a report is incomplete.
MS. FENUMIAI noted that the legislation does not appear to mention
municipal candidates. Would it be left up to the municipality to
have its own campaign finance sections? She also commented that
the procedures the director would utilize to take someone off the
ballot appears unclear at this time. Ms. Fenumiai said that she
would echo the concerns discussed by Ms. Miles.
REPRESENTATIVE HUDSON asked if the legislation would alter the
filing deadline date for candidacy.
REPRESENTATIVE COGHILL informed Representative Hudson that would
not change.
REPRESENTATIVE COGHILL noted that electronic filing is already in
motion to some degree with APOC, but since many are not the
legislation includes provisions for hard copies. He also pointed
out that the legislation includes a provision that a candidate
cannot raise funds until the candidate files and the financial
disclosure begins, therefore that would begin the campaign process.
Representative Coghill agreed with Ms. Fenumiai that a candidate
could not raise funds until the declaration of candidacy or
nominating petition is filed.
CHAIR JAMES interjected that would also include the conflict of
interest statement.
Number 650
MIKE FRANK, Chair, Campaign Finance Reform Now, testified via
teleconference from Anchorage. He informed the committee that
Campaign Finance Reform Now is the association of over 400
volunteers which gathered over 30,000 signatures on the ballot in
1994 to reform Alaska's campaign finance laws. In response to that
petition, the 1995 campaign finance law was passed with only two
descending votes. Last Friday, the Alaska Supreme Court
unanimously upheld nearly all aspects of the new law, except a
one-year fund-raising limitation and a portion of the 1993 Ethics
Act. The Ethics Act was not a part of the 1995 campaign finance
law or part of the initiative. He thanked those who supported the
1995 campaign finance law, especially Chair James who introduced
the legislation which moved through the 1995 Legislature to become
law. He commented that the hearings on the 1995 legislation
resulted in clarification of parts of the initiative and a
moderation of portions of the initiative. The new law is
comprehensive, but has substantive provisions which are moderate
and within the bounds of the First Amendment jurisprudence. The
strength of the new law is found in its moderate nature.
MR. FRANK stated that HB 179 would completely undo the 1995 reforms
and return Alaska to the days before Watergate. The Watergate era
had no contribution limits, no APOC, and the potential for
political corruption of the political process was severe. He
emphasized that is not what Alaskans want. In fact, during the
1995 session Senator Kelly commissioned a statewide poll which
resulted in 80 percent support for the reforms the initiative
sought which was overwhelmingly supported by the legislature.
There were concerns that the new law would prevent candidates from
raising enough money to run effective campaigns. However, the
Department of Law submitted statistics in the recent court
proceedings which illustrated that both municipal and state
candidates raised as much and in many cases more money than under
the old law. That was achieved without candidates collecting money
from lobbyists, corporations, and union sources. Furthermore,
there did not seem to be any change in the visibility of
candidates. He noted that many had feared that the new law would
favor one party over another and dissuade third party candidates.
However, the last statewide legislative races produced almost no
change in the distribution of power in the legislature or in the
relative power of the two major parties. In fact the Green Party
and the Republican Moderate Party were added as potential third
party forces in the future. The new law leveled the playing field
to produce some closer election races which was good for the
development of issues in front of the voters.
MR. FRANK recognized that there were questions of interpretation
about the new campaign finance reform law. However, the APOC was
able to exercise its advisory opinion power quickly and
effectively. This legislation, HB 179, presents a laissez faire
approach to election financing which was rejected by the
legislature in response to reform initiatives in the early 1970s
and 1995 in Alaska. He said that Alaska is beyond the days of only
disclosure to ensure free and fair elections. Mr. Frank urged the
committee to allow the new reform law to continue. Now is the time
to provide APOC with the financial support necessary to make the
new law work even better, make automatic electronic filing
available for candidates, enable APOC to increase activity to new
candidates in order that mistakes are avoided, and provide APOC the
ability to confront and investigate those dishonest candidates.
Mr. Frank reiterated the need to let the new law continue and let
HB 179 die in committee.
Number 753
STEVE CONN testified via teleconference from Anchorage. He said
that he would like to speak through the Chair directly to
Representative Coghill. He hoped that everyone realized that when
the Coghill family speaks Alaskans listen. Representative
Coghill's father was a founding father of Alaska and a member of
the state constitutional convention. Representative Coghill's
father led the way in Alaska's constitutional drafting in the areas
of administration, education, suffrage, elections, and
apportionment. Therefore, any legislation written by a Coghill
would peak interest.
MR. CONN commented that in this case, this is one of the greatest
challenges since statehood. The challenge is the British Petroleum
merger which could transform the state into a company state. He
emphasized that never before has it been more important that
Alaska's campaign finance reform laws act as a guard and defense
against a major corporate entity which may or may not seek to
compromise Alaska's political process. Mr. Conn said that he was
in agreement with Mr. Frank. Mr. Conn requested that
Representative Coghill search his heart and think about what his
father would have done at this point in Alaska's history. Mr. Conn
urged Representative Coghill to withdraw this legislation and
rethink the matter for another session.
Number 787
JOYCE MICHAELSON, Volunteer Member, Alaska Public Offices
Commission, testified via teleconference from Anchorage. She
informed the committee that in every U.S. state and Canadian
provence there is an agency similar to APOC. There is a
professional organization for the agencies which is the Council on
Governmental Ethics. Alaska was recently voted number three in the
nation as having the best campaign disclosure laws under the 1996
laws. She believed that with HB 179, Alaska would have the weakest
and worst campaign disclosure laws. Although the 1996 law created
much change, confusion and frustration, that is settling down and
getting better. The commission made the effort to educate and
create compliance rather than criminalize and penalize. Under HB
179, there are no provisions for "slaps on the wrists" or fines.
Either people are a criminal or not which she felt was a big
extreme.
MS. MICHAELSON noted that the commission is structured to minimize
partisan decision-making. The commission is comprised of two
republicans, two democrats, and a public member at large. The
partisan members are selected through the parties to the governor
for appointment. Therefore, the commission is a bipartisan
decision-making body which holds all of its meetings in public with
a public administrative process. The only time the commission has
Executive Session is for personnel matters or a lawsuit scenario.
Ms. Michaelson stressed that it is good public policy to have a
public process. She asked if the true desire is to eliminate a
bipartisan public body and replace it with an appointed position.
That is the main issue that should be considered. She noted that
the 1974 campaign disclosure law placed the position in the
Lieutenant Governor's office, but in 1979 the legislature
recognized that was not an appropriate structure. Therefore, the
position was made independent under the Department of
Administration. The department does not exercise any authority
over the commissioners. She stressed the need to review whether
the desire is to provide all that power to a person in an appointed
position.
NANCY GORDON, Chief, Assistant Attorney General, Civil Division,
Department of Law, testified via teleconference from Anchorage.
She pointed out that Section 5 of the legislation provides that the
Director of the Division of Elections can refer suspected criminal
violations to the District Attorney's Office for criminal
prosecution. However, the legislation does not establish any
criteria for the director to make such a determination.
Furthermore, the legislation specifically prohibits the director
from developing any regulations to clarify how that provision would
be implemented. Currently, a filer has the ability to amend
his/her reports. This legislation does not allow amendments to a
report and eliminates the administrative due process that permits
a filer to explain an omission, mistake, or amendment to the
administrative body. Without such an administrative process or the
ability to amend, the filer is open to criminal sanctions or
forfeiture from the ballot.
TAPE 99-29, SIDE A
MS. GORDON pointed out that the public contacts APOC who serves as
an intermediary which protects the candidate from unfounded
allegations and also encourages the candidate to file amendments
when necessary. If there is a substantial problem, that would be
heard by the commissioners in a public proceeding. Under SSHB 179,
a member appears to have no recourse to question a candidate's
report. With regards to the previous concerns regarding reporting
in municipal races, she noted that Section 11 of SSHB 179 amends
the definition of a candidate to exclude municipal candidates.
Under the legislation, a municipal candidate does not appear to be
required to provide campaign finance disclosure reports. "However,
sections of the bill allow groups, parties, municipalities, and
individuals acting or participating in municipal campaigns to still
be required to file a campaign disclosure reports." She asked if
this was the sponsor's intent.
Number 043
MS. GORDON expressed concern with the procedure set out in Section
5 which permits a qualified Alaskan voter to bring criminal charges
under the chapter. The language seems to give a qualified Alaskan
voter the same authority to bring a criminal charge as the attorney
general. Ms. Gordon said that the Department of Law is unaware of
any Alaska statute that permits a citizen to directly bring forth
a criminal charge against another citizen. Without an
administrative process, Ms. Gordon felt such would be problematic.
The current administrative process provides a screening mechanism
and a place for people to voice their complaints. She said, "The
question ... is what's going to stop people for their political
advantage from commencing a criminal complaint against a candidate?
And what is the procedures by how those cases are going to be
prosecuted?"
MS. GORDON commented that there is a lack of clarity in SSHB 179.
She read the language from the second sentence of AS 15.13.035(g)
which states, "the charges will be dealt with in the same manner as
AS 15.13.035(d)." That language raises the question regarding
whether it is the sponsor's intent to have the charges limited to
violations of the affidavit reporting requirement.
MS. GORDON pointed out that the legislation prohibits the Division
of Elections from promulgating regulations to implement any of the
disclosure laws. Is the intention then that the commission's
existing regulations are no longer valid? If that is the case, how
will the division implement the conflict of interest and
legislative financial disclosure laws without the process currently
established in regulations. Currently, there are regulations which
speak to exemptions, amendments, grace periods, notices, advisory
opinion requests and appeals. If there is a prohibition on
regulations, it is unclear as to how the filer or public would
determine the process for those.
Number 125
DEAN GUANELI, Chief Assistant Attorney General, Legal Services
Section - Juneau, Criminal Division, Department of Law, informed
the committee that he wanted to address his comments to the
provisions in SSHB 179 which relate to the responsibilities of the
district attorney and the criminal penalties. Certainly, it is a
laudable goal to make the process quicker, especially during the
election season. However, the criminal justice process is not
quick. He said that it is unrealistic to think that a prosecutor
would be able to make a reasoned, sound, ethical decision within 72
hours. Therefore, the criminal justice process is not an effective
manner in which to get these issues litigated.
MR. GUANELI explained that when documents are filed, the questions
that arise often cannot be answered by simply reviewing the
document. In such cases, there must be an investigation. He
pointed out that the department does not have investigators on
staff, but rather the police or the state troopers are relied upon
to conduct the investigations. Furthermore, there are limits with
a criminal investigation. People are not required to speak with a
police officer. Therefore, Mr. Guaneli did not see an incentive
for candidates or campaign managers to take several hours to talk
to someone when the result may be the filing of criminal charges.
He acknowledged that a search warrant can be obtained to gather
more documents, but the individual still cannot be forced to talk.
He supposed that a grand jury could convene and people could be
subpoenaed and forced to talk; however, if the individual is the
potential target of a grand jury investigation, that individual has
the Fifth Amendment right not to testify. Mr. Guaneli stated that
the criminal justice system is not designed to deal with things
quickly. Perhaps, there are better ways to achieve quicker
decisions without going through the criminal justice process.
CHAIR JAMES noted that the recent court decision says it is
admissible for a legislator to raise funds during session. She did
not believe that any legislator agreed with that ruling. She
inquired as to the status of that issue and how that could be
fixed.
MR. GUANELI deferred to Ms. Gordon.
MS. GORDON deferred to Ms. DeYoung.
Number 247
JAN DeYOUNG, Assistant Attorney General, Governmental Affairs
Section, Civil Division, Department of Law, testified via
teleconference from Anchorage. She understood the question to be
regarding legislators' ability to give during the legislative
session. She explained that the law which was considered by the
court was the extension of that to legislative challengers. In
striking that bill, the court found that there was no sound reason
to prohibit a challenger from accepting a contribution during the
legislative session. The appearance of a bias or corruption would
not be true for a challenger. The court determined that the intent
of the legislature seemed to be to have a balanced prohibition.
"Since they wanted to prohibit their own contributions, they
extended that to challengers." Since that intent seemed so
important, the court found that the legislative ban should also
follow. However, that was not challenged by the plaintiff in that
case.
CHAIR JAMES posed the situation in which a Juneau legislator was
challenged during session and the challenger was rasing money
during session while the legislator cannot. That does not seem
ethical.
MS. DeYOUNG understood that the 1996 reform was to level the
playing field in order to include challengers for legislative
offices. However, the prohibition for legislators accepting
contributions is found in the Legislative Ethics Act. She deferred
to Ms. Barnett.
Number 312
SUSIE BARNETT, Professional Assistant, Select Committee on
Legislative Ethics, testified via teleconference from Anchorage.
She informed the committee that a legal opinion has been requested
from Legislative Legal Services to analyze the difference between
the court opinion on contributors' ability to give and the
legislature's own rules. She noted that she would provide that
analysis as soon as she receives it.
CHAIR JAMES asked if there was anyone else who wished to testify on
SSHB 179. She announced that she would not close public testimony
on SSHB 179 because there may be a point when more public testimony
would be appropriate.
ADJOURNMENT
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at 9:55.
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