Legislature(2023 - 2024)BUTROVICH 205
04/03/2024 01:30 PM Senate JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| HB238 | |
| SB165 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 238 | TELECONFERENCED | |
| += | SB 165 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 165-DEFENSE OF PUB. OFFICER: ETHICS COMPLAINT
2:18:00 PM
CHAIR CLAMAN announced the consideration of SENATE BILL NO. 165
"An Act relating to legal representation of public officers in
ethics complaints."
CHAIR CLAMAN said this is the third hearing of SB 165 in the
Senate Judiciary Committee. He invited Ms. Kraly to put herself
on the record to answer questions regarding the Department of
Law's position on this legislation.
2:19:05 PM
STACIE KRALY, Director, Civil Division, Department of Law,
Juneau, Alaska, expressed appreciation for the opportunity to
appear before the committee to answer questions. She noted that
the Civil Division is preparing a written position statement,
which will be distributed to the committee.
2:19:30 PM
CHAIR CLAMAN asked if it is fair to say that the written
position statement is, to some extent, in response to the
testimony of Jahna Lindemuth, former attorney general (AG),
regarding SB 165 on March 22 in the Senate Judiciary Committee.
MS. KRALY replied that is part of it, but the statement also
provides a robust explanation of the ethics process from the
Department of Law's perspective. It explains why the regulations
that have been adopted do not create a conflict or raise
concerns identified by the former AG. It provides a broader
construct of the Ethics Act and how the Department operates
within that system.
2:20:19 PM
SENATOR KAUFMAN requested a summary of the Departments position
statement, which has not been distributed yet.
MS. KRALY reviewed the underlying premise of the recently
adopted regulations concerning representation of the governor,
lieutenant governor, and attorney general when ethics complaints
are filed against them. She said regulations are not only
consistent with the Ethics Act as drafted, but also reflect a
consistent application of how the Department of Law interprets
and applies the Act. This applies both to high-level state
officials and to other state employees subject to the Ethics
Act. She stated that the Department of Law serves three primary
roles under the Act: it advises on ethics, educates on ethics,
and prosecutes ethics violations. She said the Department is now
adding, in a very limited circumstance, the role of defending
certain ethics opinions it has issued.
2:21:34 PM
MS. KRALY explained that when an executive branch employee
requests an opinion from the Department of Law on whether an
activity violates the Ethics Act, the Department's role is to
provide legal advice. That service is available to all executive
branch employees, including the governor, lieutenant governor,
attorney general, commissioners, and others. She stated that
such advice becomes a "safe harbor." If the Attorney General's
Office opines that a specific activity does not constitute an
ethics violation, that opinion can shield the employee from
prosecution if a complaint is later filed. If a complaint is
received and the individual acted according to the Department's
advice, the violation is not prosecuted. If a complaint pertains
to conduct not previously reviewed, the Department will evaluate
and prosecute the issue consistent with its prior advice and
interpretation of the Ethics Act. She noted that the Department
also provides ethics advice to the state's highest officials,
who are treated differently under the current statute.
2:23:07 PM
CHAIR CLAMAN sought confirmation that the three individuals are
the governor, lieutenant governor, and attorney general.
2:23:11 PM
MS. KRALY answered in the affirmative, stating that the
governor, lieutenant governor, and attorney general frequently
make inquiries to the Department's designated ethics attorney.
They often pose hypothetical scenarios, asking whether a
particular situation would create a problem under the Ethics
Act, and the Department provides advice accordingly.
MS. KRALY explained the difference between these three high-
ranking individuals and a commissioner or other employee. The
Department does not prosecute ethics complaint cases against
those three, rather, those complaints are referred to the
Personnel Board. The Personnel Board then hires outside counsel
to prosecute the matter on behalf of the State. She explained
that the new regulation allows the Department to defend the
advice it previously provided or to defend the actions of the
governor, lieutenant governor, or attorney general if those
actions were based on the Departments advice. She noted that
the obligation to represent these high-level officials is not
absolute; it must serve the public interest. A determination
must be made that the activity in question was conducted in
reliance on the Department's advice or consistent with it. If it
was not, the Department would decline representation, and the
official would be required to hire private legal counsel to
address the complaint. She said this broadly explains the
Departments position and how it assesses and advises on ethics
matters.
2:24:57 PM
SENATOR KAUFMAN said the byproduct of your position seems to
incentivize legal consultation on ethics questions. He stated
that, provided the governor, lieutenant governor, or attorney
general followed the advice given, the subsequent defense would
rely on that advice rather than the incident itself.
MS. KRALY replied that is exactly right. She expressed her
belief that this framework encourages the governor, lieutenant
governor, and attorney general to seek legal advice from the
Department. She explained that if an ethics complaint is filed,
the Department does not have authority to screen out the
complaint because it does not prosecute those three officials.
Instead, the complaint is referred to the Personnel Board, which
has that screening role. If the complaint proceeds, the
Department may defend its advice, either the specific advice
given in that case or advice reflected in prior opinions issued
by the Department. She said it may be that the official was
engaged in activity that had already been reviewed and deemed
not to violate the Ethics Act, and that such prior advice could
be relied upon.
2:26:29 PM
CHAIR CLAMAN expressed his belief that the new regulation raises
concerns about public transparency. He stated that, for example,
if he were to ask how many ethics complaints had been received
against the governor, lieutenant governor, or attorney general
since the new regulation was adopted, his assumption is that the
Department's response would be that it is a confidential ethics
matter and that information could not be disclosed.
MS. KRALY replied that she believes that is correct and that
ethics complaints are confidential under state law. She
expressed her belief that, pursuant to statute, identifying how
many ethics complaints have been filed, screened in, or screened
out is not public information.
2:27:20 PM
CHAIR CLAMAN sought confirmation that this would also have been
true under what he referred to as the Sullivan-era structure for
handling ethics complaints against the governor, lieutenant
governor, or attorney general.
MS. KRALY expressed her belief that is correct.
CHAIR CLAMAN raised a challenge with the current structure. He
said suppose the governor asks the Attorney General's Office if
he may attend a dinner. The AG's Office responds with advice
indicating the governor may attend. If someone later files an
ethics complaint related to that dinner, the Attorney General's
Office would then defend its own advice by stating that the
governor acted in accordance with its guidance. As a result, the
attorney general is using state resources to defend advice it
issued.
CHAIR CLAMAN drew a comparison of this with the Sullivan-era
structure, under which an ethics complaint against the governor
would result in the hiring of independent counsel. In that
instance, the governor would inform the independent attorney
that he had relied on the attorney general's advice. The
independent attorney would then contact the Department and
confirm whether the advice had been issued. Upon confirmation,
the attorney would defend the governor on the basis of that
advice.
CHAIR CLAMAN pointed out that, under the new regulation, the
Attorney General's Office serves both an advisory and defensive
role, which may reduce transparency compared to a system where
independent counsel defends these three officials.
2:29:23 PM
MS. KRALY expressed uncertainty about the chair's concern that
the new regulation reduces transparency. She noted that all
ethics complaints against the governor, lieutenant governor, and
attorney general are referred to the Personnel Board regardless
of whether advice is defended by the AG's Office or outside
counsel. The AG's Office does not screen those complaints, but
it does defend its advice. She said the Personnel Board
adjudicates that decision.
2:30:05 PM
MS. KRALY explained the rationale behind the new regulation and
why it has been promulgated. She contended that in an era of
heightened scrutiny, there is the possibility of numerous ethics
complaint filings against these top officials. She emphasized
that under the prior construct, these officials had to pay for
private counsel, which is expensive, then seek reimbursement
later, assuming they were found not in violation. She stated
that the centralized handling of ethics issues in the Civil
Division makes the process more efficient. She emphasized that
having in-house, ethics counsel who understand all prior advice
and decisions, ensures a streamlined and cost-effective defense
before the Personnel Board. She acknowledged that the Personnel
Board may still find a violation, but the process is faster and
less burdensome on State resources. She said it is a disservice
and disincentive to serve if officials must hire private counsel
for every ethics complaint, especially frivolous ones, due to
lack of complaint screening. She reiterated two points: the
importance of defending the Department's advice and avoiding
personal financial burdens on elected or appointed officials to
defend ethics complaints that could be frivolous.
2:32:48 PM
CHAIR CLAMAN compared the Department of Law's request to
continue defending the governor with the lack of comparable
protections for legislators. He noted that members of the
legislature do not receive the same support the Department seeks
for the governor, lieutenant governor, and attorney general,
such as relief from the high cost of hiring independent counsel.
He stated that although the director articulated the rationale
clearly, it raises a question of priority: if a governor is
found not to have committed a violation and submits for
reimbursement, the state pays the cost, but no state staff time
or resources are spent on defense. However, under the current
system, the Department's staff and daytime resources are spent
defending the governor on complaints that could arguably be
referred to outside counsel.
CHAIR CLAMAN referenced a troubling discussion in the Finance
Committee, where members asked how murders in rural Alaska are
being addressed and what the public safety implications are. He
expressed concern that the Department is dedicating valuable
staff time to handling ethics complaints against the governor,
while core public safety responsibilities, such as court
processes, are sidetracked. He emphasized that although the
Department provides legal advice with the hope that the governor
follows it, the use of in-house staff to defend against ethics
complaints raises important questions.
2:34:52 PM
SENATOR KAUFMAN remarked that, in considering what is
appropriate for the governor versus a legislator, one
distinction is that the governor represents the entire state. He
is involved in every statewide issue, making the office a
broader and more prominent target. He noted that his observation
was offered as a general comment based on personal perspective.
2:35:35 PM
SENATOR KIEHL sought clarification about the existing
regulation. He asked whether the governor, lieutenant governor,
or attorney general must have specifically requested advice from
the Department in order to qualify for public representation if
an ethics complaint is later filed against them.
2:35:55 PM
MS. KRALY replied if they had sought advice, inquired about
prior opinions, or relied upon prior opinions, that would
indicate a public interest. If they were relying upon that
advice, the issue of whether or not they actually sought advice,
is not determinative of whether or not the Department would
defend them. Each situation would be evaluated on a case-
specific basis to determine whether the public interest standard
was satisfied. If it was, the Department would provide
representation; if not, the Department would decline.
MS. KRALY explained that these high-ranking officials, like many
others, ask for ethics advice all of the time. The Department
regularly provides ethics guidance to the governor, lieutenant
governor, attorney general, commissioners, and other state
employees. She stated that even she asks for ethics advice. She
described it as a standard and expected part of their roles.
2:37:08 PM
SENATOR KIEHL sought confirmation that if a high-level official
asked for advice, then yes, they would get a public defense. If
they did not ask for advice, then maybe they might qualify.
MS. KRALY replied, they may; it would depend on the
circumstances.
SENATOR KIEHL expressed concern that there may be insufficient
incentive for officials to seek ethics advice in advance if they
might still qualify for a public defense regardless.
SENATOR KIEHL stated that he was somewhat confused. He asked
whether the Personnel Board has acted capriciously and
questioned whether the Department's current approach suggests a
lack of confidence in the Board's review process. He further
asked if that perception is sufficient to justify dedicating
significant departmental resources to defend against what are
seen as weaponized ethics complaints.
2:38:08 PM
MS. KRALY replied that this is not an indictment of the
Personnel Board. It is recognition that every other executive
branch employee who seeks and gets ethics advice, receives safe
harbor from a complaint. In contrast, the governor, lieutenant
governor, and attorney general do not receive that same
protection. Even though complaints filed against them are
automatically referred, there is no screening process. She
emphasized that this is not a criticism of the Personnel Board's
decisions but an attempt to level the playing field by affording
the same protections to the state's highest officials that are
given to all other executive branch employees.
MS. KRALY addressed the chair's concerns about resource
allocation. She explained that the Department of Law comprises
two divisions: Civil and Criminal. The Civil Division handles
the Ethics Act, with a designated attorney advising on all
ethics matters, including accepting gifts or meals and
disclosure requirements. She clarified that the Civil Division
does not handle the public safety components of the entire
state. Ethics guidance is a duty of the Civil Division and does
not detract from its other responsibilities. She added that the
division also manages conflicts, screening, and due process
safeguards to prevent any appearance of partiality in
representing agencies or individuals.
MS. KRALY reiterated that the Departments position involves two
main points:
- creating a level playing field so that the governor,
lieutenant governor, and attorney general receive similar
protections under the Ethics Act as other executive branch
employees.
- reducing the cost burden caused by potential weaponization of
ethics complaints against these high-level officials.
2:41:06 PM
SENATOR KIEHL sought clarification about state employees who did
not seek prior ethics advice, asking whether the Attorney
General's Office would defend those employees against an ethics
complaint.
MS. KRALY replied that the Department would serve as the
prosecutor in that context. The Department would evaluate
whether the activity, as described in the complaint, was
consistent with prior advice or constituted a violation of the
Ethics Act. If an issue was identified, the Department would
prosecute the case, evaluate it, and issue an opinion. She
stated that employees benefit from prior opinions and advice
when they ask for it. The Department provides Ethics Act
training across the state and encourages all employees to ask
questions, regardless of how minor they may seem. The Civil
Division will provide an answer, and the employee may rely on
that guidance going forward.
2:42:17 PM
SENATOR KIEHL observed that this framework does not create
parity, but rather provides a deferential benefit to the
governor, lieutenant governor, and attorney general. He
expressed that he has not heard concern about the Personnel
Board itself, nor seen a great shortage of candidates. He
expressed his understanding that SB 165 proposes reimbursement
for legal costs if the ethics complaint brought before the
Personnel Board against a high-level official is dismissed,
meaning those officials would not bear the expense if cleared.
He emphasized that when the question centers on whether one of
these three officials acted in personal interest rather than
public interest, that distinction is crucial. A state employee
or commissioner accused of acting in personal interest may be
required to defend themselves at their own expense.
2:43:16 PM
CHAIR CLAMAN expressed his understanding that there is no
circumstance in which the Department would represent a State
employee in an ethics complaint. He described a scenario in
which the Department receives a complaint and makes a
prosecutorial decision whether to proceed. The Department may
choose not to prosecute if it determines the conduct falls
within the scope of its prior advice. In such a case, the
Department may conclude there is no violation and decline to
move forward. However, should the Department proceed, it would
not under any circumstance represent the State employee because
the Department is the prosecutor.
MS. KRALY affirmed that the Department could not simultaneously
represent and prosecute the State employee in the same
proceeding.
2:44:30 PM
CHAIR CLAMAN explained that the new regulation involves a
distinction: unlike ordinary State employees, who cannot be
represented by the Department in an ethics complaint, the three
high-ranking officials may receive such representation. Because
the Personnel Board, rather than the Department, prosecutes
these complaints, the regulation provides these officials a
benefit not available to other State employees.
MS. KRALY framed her position differently, reasoning that in
these cases, the Department would be defending its prior advice.
If the conduct at issue was in the public interest and
consistent with the Department's guidance, then the governor,
lieutenant governor, or attorney general may be represented by
the Department. She emphasized that this is the same benefit
State employees receive when they obtain advice and rely on a
safe harbor.
MS. Kraly further explained that for regular State employees, if
they have a safe harbor, the complaint is screened out, and no
proceeding occurs. They do not need an attorney as the matter
does not advance. By contrast, for the three high-ranking
officials, even if the complaint is frivolous and they have a
safe harbor, the Personnel Board must still process it. The
prosecutor may not accept the Department's prior advice.
Therefore, these officials do not receive the same benefit as
other State employees. She contended that it is not an apples-
to-apples comparison.
2:46:14 PM
CHAIR CLAMAN highlighted that though the governor is not
required to seek advice from the Department, the Department
might choose to defend the governor based on advice given years
earlier to someone else. He emphasized that State employees do
not receive that same benefit. Only the governor, lieutenant
governor, and attorney general receive a State-funded defense in
such cases.
2:46:57 PM
MS. KRALY disputed that State employees do not receive the same
benefit. She explained that if the Department previously opined
that the activity was not a violation, it would screen out the
complaint on that basis.
2:47:10 PM
CHAIR CLAMAN asserted the notion that the prosecutor provides
protection to the defendant is marginally credible. He noted
that while an employee is not required to retain counsel, from
his experience in private practice, he would advise it is
beneficial to do so. He said the attorney would advocate with
the prosecutor on behalf of the client. He asked whether a State
employee has the right to hire private counsel.
2:48:17 PM
MS. KRALY replied, absolutely.
2:48:23 PM
CHAIR CLAMAN asked whether the Civil Division receives calls
from private attorneys representing public employees and whether
these attorneys ask the division not to prosecute.
MS. KRALY responded, potentially yes, but emphasized complaints
are not filed against the individual directly. Instead, they are
submitted to the Department, which conducts an initial
screening. If the Department determines there is no violation
based on advice previously issued, it dismisses the complaint
without notifying the employee. If the Civil Division finds no
safe harbor exists and concludes there is an ethics issue, then
the employee is notified. At that point, the employee may choose
to hire private counsel. She reiterated that the process is
structured so that complaints are screened before reaching the
employee.
2:49:36 PM
CHAIR CLAMAN asked whether a public employee is notified if an
ethics complaint is filed and the Department concludes there is
no ethics violation.
MS. KRALY replied that she did not know the answer well enough
to provide it on the record and offered to follow up with the
committee.
2:50:20 PM
SENATOR TOBIN raised a question pertaining to individuals
appointed to State boards and commissions. She sought
confirmation that these individuals would not be eligible for
representation from the Department of Law if an ethics complaint
were prosecuted. Instead, those individuals would need to get
independent counsel.
2:51:04 PM
MS. KRALY replied, no, explaining the intent of the Ethics Act
is to promote the use of the safe harbor provision. The Act
encourages board members, employees, and others to contact the
Ethics Office with questions in order to receive guidance, such
as confirmation that a certain action is permissible.
MS. KRALY stated that if the Ethics Office advises someone not
to take a certain action and the person proceeds anyway, that
may result in a problem, and the individual would then need to
secure their own attorney. In such a case, the Department may
pursue the matter. Conversely, if the individual asks whether an
action is permissible and receives a Department safe harbor
response, the matter would be screened out and dismissed.
MS. KRALY emphasized that failure to seek advice carries risk.
While the action might still be found acceptable and screened
out, without the safe harbor, there is no guarantee. She
explained that the Department provides ethics training
throughout the State and uses its website to inform individuals
about how to submit inquiries. She stated that the purpose is to
continue encouraging and incentivizing the use of safe harbor
provisions, not only for employees and board members but also
for the governor, lieutenant governor, and attorney general.
2:52:37 PM
SENATOR TOBIN said her question had been answered, specifically,
individuals appointed to State boards and commissions would not
receive representation from the Department if an ethics
complaint were prosecuted. They would instead need to get
independent counsel.
2:52:46 PM
CHAIR CLAMAN agreed that one purpose of the Ethics Act is to
encourage individuals to seek advice and conform their conduct
to the requirements in ethics law.
CHAIR CLAMAN asked whether another feature of the Ethics Act is
that, when individuals do not comply, there are mechanisms to
determine noncompliance and impose consequences. He noted that
the Ethics Act is multipurpose in this way.
MS. KRALY replied, absolutely, yes.
CHAIR CLAMAN found no further questions and thanked the director
for testifying.
2:53:28 PM
[CHAIR CLAMAN held SB 165 in committee.]