Legislature(1999 - 2000)

04/29/1999 08:07 AM House STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 179-APOC REPEAL: CAMPAIGN/DISCLOSURE/LOBBYIST                                                                                
Number 702                                                                                                                      
CHAIR JAMES announced the next order of business 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                                                                         
CHAIR JAMES mentioned Representative Coghill will explain the                                                                   
changes and that this will be more of a work session.                                                                           
Number 719                                                                                                                      
REPRESENTATIVE COGHILL said his main goal is to bring a clear open                                                              
disclosure to the Alaska voters and that his main aim is to make                                                                
sure that the voters are able to have immediate access to campaign                                                              
spending and open reporting which is available on the Internet and                                                              
that there is a clear candidate and that an affidavit is required                                                               
- an open file.  He further explained that the Division of                                                                      
Elections will have clear penalties for a candidate's failure to                                                                
disclose because he thinks (if you're going to have an open                                                                     
disclosure with limits taken off) their needs to be a clear and                                                                 
immediate action taken on failure to disclose.  Representative                                                                  
Coghill further believes the accountability is high if the limits                                                               
are removed.  In repealing the APOC (Alaska Public Offices                                                                      
Commission) he said his the basic premise was he is not convinced                                                               
that having a police agency within the Administration is really the                                                             
wise thing to do because there has to be a separation of powers                                                                 
where if we really are going to demand a civil or criminal activity                                                             
that should happen over in the legal system, in the court system.                                                               
He said the original bill brought the hammer down a little hard and                                                             
the Department of Law asked him if he really wanted to make people                                                              
criminals for smaller infractions.  He said it was a good point so                                                              
he went back and revisited it.                                                                                                  
Number 763                                                                                                                      
REPRESENTATIVE COGHILL directed the member's attention to page 34                                                               
of the working draft, Section 39.50.025 Filing, and asked them to                                                               
flag that because he wants them to know, if APOC is repealed, how                                                               
it would affect the conflict of interest report.                                                                                
REPRESENTATIVE COGHILL stated Title 24, Sections 30 and 31, page                                                                
24, deals with lobbying, the back two sections of this deal with                                                                
the lobbying conflict of interest statements and the first section                                                              
deals with Title 15 is the campaign disclosure reporting procedure                                                              
(mostly under APOC).                                                                                                            
REPRESENTATIVE COGHILL continued, beginning on page 16, Sections 22                                                             
and 23, addresses civil penalties, Section 6, page 4, refer to                                                                  
criminal penalties.                                                                                                             
REPRESENTATIVE COGHILL explained his main premise for HB 179, in                                                                
repealing APOC, is to take the police agency work out of it and                                                                 
turn that court judicial action over to the legal system.                                                                       
Number 803                                                                                                                      
REPRESENTATIVE COGHILL referred to the question, "should there be                                                               
limits as to who should give and how much should be given."  He                                                                 
said he addressed that in Section 4, Full Disclosure Reports, by                                                                
taking information from regulations and some from statutes he tried                                                             
to make what he thinks should come up on a screen (Internet) or                                                                 
stay in a file (spreadsheet) so it is very clear.                                                                               
REPRESENTATIVE COGHILL directed the members' attention to pages 1,                                                              
2, and 3 which address full disclosure.                                                                                         
     1.   all expenditures                                                                                                      
     2.   contributions                                                                                                         
     3.   loans                                                                                                                 
Number 821                                                                                                                      
REPRESENTATIVE COGHILL explained that HB 179 requires each                                                                      
expenditure and contribution, the date, how it was paid (with a                                                                 
check, credit card or cash) and the contributor's name.  He said he                                                             
omitted the contributor's address because he questioned whether he                                                              
wanted to put somebody's address on the screen.  He added, however,                                                             
if there's going to be full disclosure he guesses there's a need                                                                
for that and is open for discussion.                                                                                            
TAPE 99-32, SIDE B                                                                                                              
[Approximately four minutes of blank space on tape which is due to                                                              
flipping the tape over - no testimony was lost].                                                                                
Number 007                                                                                                                      
REPRESENTATIVE KERTTULA asked Representative Coghill if he means to                                                             
require reporting of, "all of this information for donations under                                                              
and over $100.00," for contributions.                                                                                           
REPRESENTATIVE COGHILL replied that it was brought up (at the last                                                              
meeting) that contributions under $100.00 would be a problem.                                                                   
REPRESENTATIVE KERTTULA noted it currently isn't required.                                                                      
CHAIR JAMES said, for example if someone gives you $25.00, the                                                                  
fifth time that person contributes $25.00 you would have to report                                                              
that, "valued at more than $100.00 a year."                                                                                     
REPRESENTATIVE COGHILL said his aim was to show an accumulation.                                                                
He indicated that he isn't sure if he has it correct on how it is                                                               
to be shown if someone wishes to only donate $25.00.                                                                            
CHAIR JAMES said that can be fixed by the legal drafter.                                                                        
REPRESENTATIVE COGHILL believes it will have to show that a                                                                     
candidate did receive the money.  He mentioned that this was pulled                                                             
from APOC regulations and that he is trying to show what reporting                                                              
needs to be in this one area.                                                                                                   
Number 053                                                                                                                      
REPRESENTATIVE HUDSON pointed out his concern with the original                                                                 
bill was that there was no limitation on the amount that could be                                                               
contributed to a candidate from either a corporation, union, or                                                                 
REPRESENTATIVE COGHILL read Section 11, page 7 (of the working                                                                  
draft), noting that he took Representative Hudson's suggestion:                                                                 
     Prohibited contributions.  (a) a person or group may not make                                                              
     a contribution if the making of the contribution would violate                                                             
     the chapter.                                                                                                               
     (b) a person or group many not make a contribution                                                                         
     anonymously, using a fictitious name, or using the name of                                                                 
     (c) a corporation, company, partnership, firm, association,                                                                
     organization, business trust or surety, labor union, or                                                                    
     publicly funded entity that does not satisfy the definition of                                                             
     group in as 15.13.400 may not make a contribution to a                                                                     
     candidate or group.                                                                                                        
REPRESENTATIVE COGHILL pointed out that (c) came from existing APOC                                                             
Number 079                                                                                                                      
REPRESENTATIVE COGHILL explained that a provision is provided for                                                               
folks who want to form a pack (similar to what they have now) with                                                              
a full recognition that corporations, public entities, were not                                                                 
formed for the specific purpose of promoting candidates or                                                                      
propositions.  They would have to have full-consent of the pack                                                                 
before making a contribution.  He said he remembered reading a                                                                  
court case that made him think that through.                                                                                    
REPRESENTATIVE HUDSON remarked, "They could make up to $1,000."                                                                 
CHAIR JAMES said she believes it is currently $500 that any one                                                                 
person can give and isn't it $1,000 for a group?                                                                                
REPRESENTATIVE COGHILL replied, "It couldn't come from this arena                                                               
but they still would be able to give under a pack or a group."  He                                                              
then referred to the "Definitions," (page 20, Section 24) and                                                                   
reiterated that the aim was to take the limits off, but the                                                                     
immediate disclosure (every 15 days) in his thinking is that the                                                                
people are going to be the judges of the matter rather than the                                                                 
state.  Therefore, he didn't put the limits on them.                                                                            
Number 157                                                                                                                      
CHAIR JAMES said it seems like HB 179 is going on a different                                                                   
philosophy than the legislature has been headed with campaign                                                                   
finance reform.  She indicated Representative Coghill's theory is                                                               
that only some people are not to be trusted.                                                                                    
REPRESENTATIVE COGHILL replied there is no doubt that this is                                                                   
viewed as a radical departure and it certainly is not meant as an                                                               
attack.  He noted that what has been done is we've limited campaign                                                             
spending up until the time they actually put their name on the                                                                  
list.  "That's the time you sign up is the time that you can begin                                                              
raising money, so that's the time that you begin disclosing."                                                                   
Number 223                                                                                                                      
REPRESENTATIVE COGHILL further explained that and the affidavit is                                                              
sworn testimony that a candidate has not spent money.  He referred                                                              
to Section 25, Declaration of candidacy, stating that this section                                                              
is pretty much what we're doing now, it's just that it all starts                                                               
at one point.                                                                                                                   
REPRESENTATIVE COGHILL pointed out that allowance is made for some                                                              
polling and personal travel so that a candidate can "test the                                                                   
waters," but that's not campaign spending under the current rules                                                               
and that it would be a constitutional problem if you tried to stop                                                              
them from asking people, "Should I run."                                                                                        
REPRESENTATIVE COGHILL summarized his previous testimony and                                                                    
emphasized the Department of Law made a good point about making                                                                 
somebody a criminal based on small infractions.  He said there had                                                              
to some leeway for the department to say that under certain                                                                     
conditions it was worthy of an administrative fine, then a civil                                                                
penalty, and a civil court action.  He said it was at that point                                                                
that he wanted to separate it from the department.                                                                              
REPRESENTATIVE COGHILL referred to the question, "Can this money be                                                             
taken for personal use," and directed the members' attention to                                                                 
page 11, Section 18, Uses of campaign contributions held by                                                                     
candidate or group, for an example some of these funds can be used                                                              
to pay civil penalties, used to attend functions that are political                                                             
in nature, and maybe used to co-sponsor an event.  He said, "The                                                                
idea of turning it over to another candidate for example, we left                                                               
that prohibition in there."                                                                                                     
REPRESENTATIVE COGHILL indicated there can be some discretion as to                                                             
penalties for late filing.  He said we can put those into statute                                                               
and a flag would come up on failure to disclose but that would                                                                  
begin the marking time for a penalty on late filing.                                                                            
Number 361                                                                                                                      
REPRESENTATIVE SMALLEY applauded Representative Coghill's efforts                                                               
to have clear and open disclosure.  He said, if the campaign were                                                               
nine-months long, there would be 18 reports to a month, and a final                                                             
report and asked what about reports for the 24-hour period prior to                                                             
primary election, prior to the general election, what about                                                                     
contributions over a certain amount.                                                                                            
REPRESENTATIVE COGHILL replied that a 24-hour report was added                                                                  
because they thought things should be reported and done clearly and                                                             
that there should be a reporting procedure (the closer you get to                                                               
an election) so somebody can't come in with $100,000 in the last                                                                
three days.  He said that's the high degree of accountability he is                                                             
REPRESENTATIVE SMALLEY asked if the 24-hour report is tied to a                                                                 
specific amount.                                                                                                                
REPRESENTATIVE COGHILL replied anything over $250.                                                                              
Number 389                                                                                                                      
REPRESENTATIVE SMALLEY asked if the Division of Elections would be                                                              
able to input all the information because it will require a great                                                               
amount of time if it's faxed.  He also mentioned someone in a                                                                   
candidate's office can input that information and can follow up                                                                 
with a hard-copy with the required signature.                                                                                   
REPRESENTATIVE COGHILL said he is open for suggestions on how to                                                                
give incentives to do that.                                                                                                     
CHAIR JAMES suggested that if they can't get it on the Internet,                                                                
they would have to send a check with it.                                                                                        
REPRESENTATIVE COGHILL added when you obtain anything from the                                                                  
Division of Elections, you pay for the hard-file copy.                                                                          
Number 405                                                                                                                      
REPRESENTATIVE SMALLEY emphasized that it would probably make it                                                                
easier for the Division of Elections (time-wise and perhaps                                                                     
cost-wise) however, there will be the cost in setting that program                                                              
up.  He said the candidates may also attach reports to forms that                                                               
are already on-line, however, a candidate might not have that                                                                   
expertise or might not have that availability.  Therefore, they'll                                                              
have to send the hard-copy with the required signature attached to                                                              
REPRESENTATIVE COGHILL said, "I understand that, and in pulling                                                                 
APOC their responsibility and put it into the Division of Elections                                                             
it was my understanding that we would have to have some of the                                                                  
staff people from the Division of APOC right now."  He noted his                                                                
reluctance to put it in the Division of Elections was because of                                                                
the workload, however, his emphasis is to make full open disclosure                                                             
get to the populace quickly.                                                                                                    
REPRESENTATIVE COGHILL mentioned another issue that was brought to                                                              
his attention is the integrity of the election process being tied                                                               
to the campaign process.  He said he believes there are five                                                                    
regional offices in the Division of Elections which would serve the                                                             
populace well as a reporting place and that he thought of having an                                                             
APOC center (Alaska Public Offices Center) within the Division of                                                               
Elections (in a separate office) because they're not going to be                                                                
the police action so much as the administrative action.  He further                                                             
noted that once they get to a certain civil penalty, they can fine                                                              
up to so many late days and may report it to the district attorney,                                                             
and then a court action happens whether it's civil or criminal.                                                                 
Number 463                                                                                                                      
REPRESENTATIVE OGAN doesn't think "John Q. Public" is going to care                                                             
months ahead of an election on how much money a candidate is                                                                    
raising every two weeks because that information more important                                                                 
closer to an election.  He suggested reporting would start every                                                                
two months, maybe narrow it down to every month, and then every two                                                             
weeks.  Another concern of his is that it's narrowed down the                                                                   
influence to the wealthy few, through companies and through higher                                                              
paid employees who have more influence than others.                                                                             
REPRESENTATIVE OGAN said he is also concerned with "no limits."                                                                 
For example, a business which is affected by a state decision can                                                               
contribute to up to $100,000 to a candidate who has a leadership                                                                
position or influential committee chairmanship, and they're going                                                               
to get their issues through.                                                                                                    
REPRESENTATIVE COGHILL replied, human nature being what it is (and                                                              
rich people being able to manipulate) they can do that now.  He                                                                 
added that the system also currently allows for the pooling of                                                                  
money and that just becomes a little more burdensome and as far as                                                              
taking the limits off, let the people be the judges.                                                                            
Number 573                                                                                                                      
REPRESENTATIVE WHITAKER said he didn't know if that's all that bad                                                              
because he has concerns with APOC.  His concern is that he doesn't                                                              
know if it's getting any simpler and confirmed that the proposed                                                                
notion is that the candidates will simply have full disclosure                                                                  
judged by the electorate and fewer regulations.  He asked if there                                                              
are additions to that.                                                                                                          
REPRESENTATIVE COGHILL replied the basic philosophy is that the                                                                 
state becomes the judge of the matter rather than a general                                                                     
electorate and that Alaska should have an open disclosure so the                                                                
people can see that rather than the government first.  He said he                                                               
also believes the electorate should regulate the candidate rather                                                               
than the government.                                                                                                            
REPRESENTATIVE WHITAKER said he will need time to go through the                                                                
working draft to understand it [49 pages].                                                                                      
Number 689                                                                                                                      
REPRESENTATIVE KERTTULA pointed out APOC had glitches with their                                                                
software last year.  And, as Representative Smalley mentioned, if                                                               
you could have on-line filing that might be a good idea.  She said                                                              
she believes it would helpful if all the information between APOC                                                               
and the Division of Elections can be coordinated into a guidebook                                                               
which goes 1, 2, 3, because there are cross references.  She also                                                               
emphasized that they will have to have increased staff because APOC                                                             
is so bare-boned that they can hardly keep up with their work.                                                                  
Representative Kerttula also suggested training be offered, or                                                                  
maybe even required before a candidate can run because it's a whole                                                             
new process.                                                                                                                    
REPRESENTATIVE KERTTULA is concerned about completely lifting the                                                               
amount and about all the reports that would be required.  She said                                                              
she thinks it would find to be too onerous because a candidate                                                                  
couldn't keep up with that if they're in an intense race - unless                                                               
you do something like the on-line filing.                                                                                       
Number 734                                                                                                                      
CHAIR JAMES said the reports last year didn't necessarily follow                                                                
accounting principals and they worked well.  The particular problem                                                             
was when you counted in non-cash and cash.  She indicated the final                                                             
page was the most difficult and being an accountant didn't help.                                                                
REPRESENTATIVE COGHILL agrees on-line filing is going to be an                                                                  
important part of this and if they had to keep double-records and                                                               
everything had to be handled 15 times it could become a burden.                                                                 
CHAIR JAMES asked if obligation liability is included in HB 179                                                                 
because it was brought to her attention that people committed to                                                                
television advertising near the end of the campaign and didn't pay                                                              
for that until after the election.  In other words, if the                                                                      
obligations aren't there, people could do things that people                                                                    
wouldn't be aware of.                                                                                                           
Number 783                                                                                                                      
REPRESENTATIVE COGHILL said he doesn't know if he addressed the                                                                 
obligation.  He further stated that he thinks if the model is based                                                             
on computer input the workload would go down some, there is going                                                               
to be a monitoring process and a degree of administration and each                                                              
region of the Division of Elections will have to make sure that it                                                              
is monitored.                                                                                                                   
REPRESENTATIVE SMALLEY said he echoes Representative Kerttula's                                                                 
comments and agrees with Representative Ogan's comments regarding                                                               
the frequency of reporting.                                                                                                     
TAPE 99-33, SIDE A                                                                                                              
Number 001                                                                                                                      
REPRESENTATIVE SMALLEY continued.  "Then during the 22 session                                                                  
we're basically in limbo do we continue filing because we have in                                                               
fact begun a campaign even though we have no activity, there's                                                                  
another 10."                                                                                                                    
REPRESENTATIVE COGHILL replied if you had no activity, then it                                                                  
wouldn't be much of a report.                                                                                                   
REPRESENTATIVE SMALLEY said it's still going into the Division of                                                               
Elections, it's still adding up.  The election-year swings in,                                                                  
seven more months, 14 more reports plus an end-of-the-year report,                                                              
24-hour filing, plus, plus, plus.  He further stated, "My thought                                                               
was perhaps during the off-election year, every two months - an                                                                 
end-of-the-year report, during the session and end of the session,                                                              
perhaps report that there was no activity, and then during the                                                                  
actual election year (June through November) monthly with the                                                                   
14-day filing prior to the primary, prior to the general and the                                                                
end-of-the-year report.  And again that's a lot fewer but it's                                                                  
still very very frequent as far as disclosure, the only people that                                                             
are really going to make much about the disclosure of information                                                               
are your opponent - that's where it's going to go to the public is                                                              
from your opponent and/or the press.  But it's still frequent, I                                                                
think enough that it's going to keep the public active and                                                                      
involved.  I wonder about myriad of 38 plus reports."                                                                           
Number 083                                                                                                                      
REPRESENTATIVE OGAN said it's just another burden and not to                                                                    
mention the significant cost associated with staff to make sure                                                                 
those reports are filed.  There are more things to get tripped up                                                               
on, and more chances of becoming criminals for not filing.  He                                                                  
reiterated that he doesn't see a need for that much reporting,                                                                  
especially early on.                                                                                                            
CHAIR JAMES said when the reports become available to the public,                                                               
if they don't like it, they can complain and have it audited.  She                                                              
further explained the reports aren't necessarily automatically                                                                  
audited and indicated that it isn't that much more work to do.                                                                  
REPRESENTATIVE COGHILL stated reporting is a matter of the burden                                                               
of responsibility and that burden needs to be placed on the                                                                     
candidate rather than the state, and disclosure is for the general                                                              
populace it's not for a government agency.  He reiterated that HB
179 is meant for open disclosure and a degree of freedom (in the                                                                
ability to receive contributions) and the tradeoff is a                                                                         
responsibility that goes with that accountability and that needs to                                                             
be more out in the open.                                                                                                        
Number 183                                                                                                                      
CHAIR JAMES said she personally has a problem with the Division of                                                              
Elections monitoring these things only because the APOC is supposed                                                             
to be more nonpartisan (or if it is bipartisan) and the Division of                                                             
Elections is not.  She mentioned the person who manages the                                                                     
division was once a political candidate.  So putting a lot of that                                                              
information in the hands of the Division of Elections is expanding                                                              
the division to an area that it probably shouldn't be involved in.                                                              
She said she agrees that we have given too much responsibility to                                                               
the APOC and that they have been overworked and it's not going to                                                               
get any better because the legislature never takes away rules, we                                                               
only add more by giving them huge challenges because we don't think                                                             
in the same terms as they have to work.                                                                                         
CHAIR JAMES said she can't believe that there won't be a group who                                                              
is sort of insulated from politics.  She further stated, "Now when                                                              
you start making limits on the money, even that, if there is a                                                                  
reporting of too much money spent, or money spent in a wrong way,                                                               
if the public would complain ... that they're not subject to review                                                             
this, but the public is and they only respond to whatever the                                                                   
direction is."  She said HB 179 would simplify it and every change                                                              
has to have a really good understanding and has to work.                                                                        
Number 277                                                                                                                      
REPRESENTATIVE COGHILL noted that he will talk to the effected                                                                  
[SSHB 179 was held for further consideration].                                                                                  

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