Legislature(2005 - 2006)CAPITOL 106

01/31/2006 08:00 AM STATE AFFAIRS

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Heard & Held
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SB 186-EXECUTIVE BRANCH ETHICS                                                                                                
[Contains brief mention of SB 187.]                                                                                             
8:05:28 AM                                                                                                                    
CHAIR SEATON  announced that the  first order of business  was CS                                                               
FOR  SENATE BILL  NO. 186(JUD),  "An Act  relating to  the Alaska                                                               
Executive  Branch  Ethics Act;  and  providing  for an  effective                                                               
8:05:31 AM                                                                                                                    
SENATOR RALPH  SEEKINS, Alaska State  Legislature, as  sponsor of                                                               
SB 186, said  there are two bills addressing the  Ethics Act:  SB
186  and SB  187.    The former  addresses  the executive  branch                                                               
Ethics Act [while the latter  addresses ethics issues surrounding                                                               
legislators  and all  legislative  employees].   Senator  Seekins                                                               
presented a  committee substitute  (CS) for  SB 186,  Version 24-                                                               
LS0874\X, Wayne, 1/30/06.                                                                                                       
8:07:03 AM                                                                                                                    
CHAIR SEATON noted  that the committee had  just received Version                                                               
X and asked Senator Seekins to compare it to Version S.                                                                         
8:07:15 AM                                                                                                                    
SENATOR SEEKINS reviewed that last  year the matter [that brought                                                               
this  issue to  light] was  in regard  to State  Attorney General                                                               
Greg Renkes.  The Senate  reviewed current statutes and concluded                                                               
that there was  not a measurable violation level  or clear bright                                                               
line  beyond which  someone  in the  administration  would be  in                                                               
violation of certain  portions of the Ethics Act.   He said there                                                               
were other  areas of the Ethics  Act that were unclear,  as well,                                                               
and he  was charged with  looking at both the  administrative and                                                               
legislative  Ethics Acts  and  to  "go through  them  so that  we                                                               
didn't have to go through them again."                                                                                          
SENATOR SEEKINS noted  that when a complaint is  filed, there are                                                               
confidentiality  requirements; however,  he indicated  that there                                                               
are no clear lines as to  those requirements.  He stated that one                                                               
consideration  was   if  there   was  to  be   a  confidentiality                                                               
requirement,  it would  be  reasonable to  pattern  it after  the                                                               
grand   jury  process,   which   is  that   the  matter   remains                                                               
confidential until there is a finding  of probable cause.  At the                                                               
point of  probable cause, where  it's clear to  the investigating                                                               
body that  there has been  a violation and further  formal action                                                               
should be taken, then everything becomes public.                                                                                
8:10:32 AM                                                                                                                    
SENATOR SEEKINS said  other states' systems were  observed to see                                                               
what they  do if  there is  a violation  of confidentiality.   He                                                               
said,  "If we're  going to  have  a confidentiality  requirement,                                                               
then there  should be a penalty  for someone who breaks  it."  He                                                               
noted  that   in  some   states,  breaking   the  confidentiality                                                               
requirement results in a felony,  in others a misdemeanor, and in                                                               
still others, a civil fine.   The proposed legislation would make                                                               
breaking the  confidentiality a civil  fine, "regardless  of what                                                               
you may read in various  publications," he said.  Senator Seekins                                                               
said  the  desire  was  to  make this  intent  more  clear.    He                                                               
highlighted  the new  language  [beginning on  page  7, line  12,                                                               
through page 8, line 15, which read as follows:                                                                                 
     The  attorney  general,  complainant,  subject  of  the                                                                
     complaint, and all persons  contacted during the course                                                                
     of  an  investigation  shall  maintain  confidentiality                                                                    
     regarding  the   existence  of  the   investigation  or                                                                
     proceeding.   In  a proceeding  conducted or  an action                                                                
     taken under this chapter,                                                                                              
               (1) a person may not disclose the filing of                                                                  
     a  complaint, its  contents, or  related matters  until                                                                
     after the  personnel board makes a  finding of probable                                                                
     cause  or  unless  the disclosure  is  made  while  the                                                                
     person is                                                                                                              
                    (A) communicating with personnel board                                                                  
     members or staff;                                                                                                      
            (B) seeking advice from an attorney; or                                                                         
                    (C) lawfully representing the person or                                                                 
     the person's client in defense  of a complaint that has                                                                
     been filed and the disclosure is necessary;                                                                            
               (2) personnel board proceedings related to a                                                                 
     complaint  that  has  been  filed  are  closed  to  all                                                                
     persons except board members and  staff until after the                                                                
     board makes a finding of probable cause unless                                                                         
                    (A) the board permits otherwise after                                                                   
     finding that  fairness to the subject  of the complaint                                                                
     may be advanced by the permission; or                                                                                  
               (B) the subject of the complaint waives                                                                      
               (3) the complaint document and each related                                                                  
     record  are  confidential  and are  not  available  for                                                                
     public inspection unless                                                                                               
                    (A) the personnel board makes a finding                                                                 
     of probable cause; or                                                                                                  
                    (B) the subject of the complaint waives                                                                 
               (4) under this section, if the subject of a                                                                  
     complaint waives  confidentiality of a proceeding  or a                                                                
     document, the entire proceeding  is open to the public,                                                                
     and  the  entire  document   is  available  for  public                                                                
               (5)   the   personnel    board   shall   make                                                                
     appropriate   efforts   to   provide  notice   of   the                                                                
     confidentiality requirements of this section;                                                                          
               (6) this section governs confidentiality                                                                     
     only for  complaints filed under this  chapter and does                                                                
     not alter  confidentiality or the rights  of any person                                                                
     for matters not connected with this chapter;                                                                           
               (7) this subsection does not prevent a                                                                       
     person from  obtaining directly from  a state  agency a                                                                
     public record  of that agency  that has also  been made                                                                
     available  in connection  with  an  investigation or  a                                                                
     formal proceeding under AS 39.52.310-39.52.390.                                                                        
SENATOR SEEKINS said  the new language clarifies that  there is a                                                               
timeframe of  confidentiality that  must be  observed.   He said,                                                               
"This is exactly the same  requirement of confidentiality that is                                                               
required of  the personnel  board and  of the  investigators that                                                               
are hired  by the  personnel board."   The  bill would  bring the                                                               
person  bringing  the complaint  into  the  same requirements  of                                                               
confidentiality required  of those  doing the investigation.   If                                                               
there is a finding of probable  cause, that person is relieved of                                                               
the "burden of  confidentiality."  Senator Seekins  said it's not                                                               
uncommon  for  someone  to  bring  an  ethics  complaint  against                                                               
another person  "simply to get  at them."   For example,  he said                                                               
two people  may be competing for  the same job and,  by filing an                                                               
ethics complaint,  the one  person can put  a black  mark against                                                               
the other  "for the period  of time that it  takes to be  able to                                                               
consider who  gets the  promotion."   He offered  other examples.                                                               
He asked  the committee to  consider what the impression  is upon                                                               
people  when they  read a  charge against  someone, even  if that                                                               
charge ends up being dismissed.   He offered an example involving                                                               
Commissioner  Joel  Gilbertson  that  he  said  could  have  been                                                               
avoided had a period of confidentiality been observed.                                                                          
8:17:40 AM                                                                                                                    
SENATOR SEEKINS noted that a  "wrongful use of complaint" section                                                               
was added beginning on page 8, [line 26], which read as follows:                                                                
          Sec.39.52.352. Wrongful use of complaint. (a) The                                                                   
     board  shall find  there has  been wrongful  use of  an                                                                    
     executive  branch ethics  complaint  if it  determines,                                                                    
     after   compliance  with   due  process   requirements,                                                                    
     including  a  hearing and  a  majority  vote, that  the                                                                    
               (1) shall order the employee to stop                                                                             
     engaging  in   any  official  action  related   to  the                                                                    
               (2) may order divestiture, establishment of                                                                      
     a blind trust for a  period of time or under conditions                                                                
     determined  appropriate,  placement  of  the  financial                                                                
     interest  into an  investment where  the employee  does                                                                
     not   have  management   control  over   the  financial                                                                
     interest, restitution, or forfeiture; and                                                                              
               (3) may recommend that the employee's agency                                                                     
     take disciplinary action, including dismissal.                                                                             
SENATOR SEEKINS stated the intent of  the bill is not to penalize                                                               
someone who  has a complaint.   He said he  has read some  of the                                                               
most outrageous statements predicting  the bill intent, including                                                               
that a person bringing a complaint  will get fined.  He said that                                                               
is "absolute  poppycock."  He  clarified that what the  bill says                                                               
is that  if someone were to  misuse the statute, he/she  would be                                                               
in violation  of the law.   He stated,  "All we're asking  in the                                                               
bill is that  the person bringing in the  complaint [forgoes] the                                                               
24-hour  news cycle  until after  there's a  finding of  probable                                                               
cause."   He said there must  be some kind of  meaningful penalty                                                               
when the law is abused.                                                                                                         
8:20:51 AM                                                                                                                    
SENATOR SEEKINS pointed to the penalty  on page 9, line 16:  "may                                                               
impose a  civil fine of $5,000  or less for complainants  who are                                                               
not  state employees,  current public  officers or  former public                                                               
officers."  He concluded:                                                                                                       
     This  person can  go home  and talk  to their  wife, or                                                                    
     their  husband, or  their best  friend, but  they can't                                                                    
     run  to  the  press;   they  can't  knowingly  disclose                                                                    
     publicly  or cause  to  be made  public  the fact  that                                                                    
     there's  a complaint  or the  facts  of the  complaint.                                                                    
     They can still  go down on the corner and  waive a sign                                                                    
     and   say  the   governor,  lieutenant   governor,  the                                                                    
     attorney  general,  or  whoever,  is a  crook  and  has                                                                    
     violated all  kinds of ethics laws;  [they] just cannot                                                                    
     talk about the specifics of  the complaint, or that the                                                                    
     complaint has been filed until  after there's a finding                                                                    
     of probable cause.                                                                                                         
8:22:37 AM                                                                                                                    
SENATOR SEEKINS,  in response  to a  question from  Chair Seaton,                                                               
reviewed the areas in Version X where new language was added.                                                                   
8:26:09 AM                                                                                                                    
REPRESENTATIVE GARDNER noted  that, on page 7,  beginning on line                                                               
[17] of  Version S,  a provision  for intent to  file a  claim is                                                               
included that  is not included  in Version  X.  The  provision in                                                               
Version S read as follows:                                                                                                      
     A  person may  not  disclose to  any  other person  the                                                                
     filing of  or intention  to file  a complaint  under AS                                                                
     39.52.310 except  to a person  assisting in  the filing                                                                
     of the complaint.                                                                                                      
8:26:43 AM                                                                                                                    
SENATOR SEEKINS  responded that  the intent  to file  a complaint                                                               
comes  right from  Oklahoma  law.   The  original  intent of  the                                                               
language  was to  prevent a  person from  notifying the  press on                                                               
his/her way to  file the complaint so that the  press could get a                                                               
good story.   He said the  new language in Version  X would start                                                               
the  confidentiality  requirement  at  the point  of  filing  the                                                               
complaint, which he said is a better starting point.                                                                            
8:28:36 AM                                                                                                                    
CHAIR  SEATON stated  his understanding  that Version  X "removes                                                               
the  prohibition   on  the  disclosure   of  intent  to   file  a                                                               
8:28:45 AM                                                                                                                    
SENATOR SEEKINS  clarified that the  new language was on  page 7,                                                               
[beginning on] line 12, and read as follows:                                                                                    
     The  attorney  general,  complainant,  subject  of  the                                                                
     complaint, and all persons  contacted during the course                                                                
     of  an  investigation  shall  maintain  confidentiality                                                                    
     regarding  the   existence  of  the   investigation  or                                                                
8:29:36 AM                                                                                                                    
REPRESENTATIVE GARDNER offered  an example in which  she may have                                                               
concerns about  the improper  conduct of  someone and  express an                                                               
opinion  that a  complaint should  be filed.   She  asked if  she                                                               
would be in violation of the bill's provisions.                                                                                 
8:29:56 AM                                                                                                                    
SENATOR  SEEKINS answered  no, and  he added  that she  "wouldn't                                                               
have been under the old either."                                                                                                
8:30:09 AM                                                                                                                    
REPRESENTATIVE GATTO  offered an  example in which  someone talks                                                               
about  someone  else  who  may  be heading  downtown  to  file  a                                                               
complaint, and he asked if that would be a violation.                                                                           
8:30:44 AM                                                                                                                    
SENATOR SEEKINS said no.   He reiterated that the confidentiality                                                               
requirement  begins at  the  point  of filing  a  complaint.   In                                                               
response  to a  question from  Chair Seaton,  he said  that means                                                               
that if someone says they are  going to file and then they don't,                                                               
that person would not have violated the provision.                                                                              
REPRESENTATIVE  GRUENBERG  questioned  that   there  might  be  a                                                               
circumstance where  a person would  want to announce  that he/she                                                               
has been  exonerated, but could not  do so because the  board had                                                               
not made a finding of probable cause.                                                                                           
SENATOR SEEKINS  explained that the  minute that person  wants to                                                               
make the complaint public, the entire record becomes public.                                                                    
8:32:56 AM                                                                                                                    
REPRESENTATIVE  GRUENBERG  suggested  that a  complainant,  after                                                               
hearing that there was no finding  of probable cause, may want to                                                               
make  that  public,  but  could   not.    He  questioned  if  the                                                               
complainant could do so with the permission of the board.                                                                       
8:33:51 AM                                                                                                                    
SENATOR SEEKINS responded that that is  a good point.  He said he                                                               
had  not thought  about that  particular  scenario.   He said  he                                                               
would take  a look  at that to  see if that  issue is  covered in                                                               
other statutes.                                                                                                                 
8:35:47 AM                                                                                                                    
REPRESENTATIVE LYNN moved to adopt  the committee substitute (CS)                                                               
for  SB  186, Version  24-LS0874\X,  Wayne,  1/30/06, as  a  work                                                               
8:36:15 AM                                                                                                                    
REPRESENTATIVE GATTO  objected.  He said  he has not had  time to                                                               
see if the  changes are instrumental.  He said  he trusts Senator                                                               
Seekins to let the committee know  if there have been any changes                                                               
of substance.                                                                                                                   
8:37:27 AM                                                                                                                    
CHAIR SEATON explained that the  committee has been talking about                                                               
Version X  and he wants  to make sure  it is  on the table  as an                                                               
item  for   discussion  before   too  much   longer.     He  told                                                               
Representative Gatto that it would  be possible to revert back to                                                               
Version S at a later date.                                                                                                      
8:37:37 AM                                                                                                                    
REPRESENTATIVE  GATTO  said,  "With  that in  mind  I  remove  my                                                               
CHAIR  SEATON announced  that there  being no  further objection,                                                               
Version X was before the committee.                                                                                             
8:37:48 AM                                                                                                                    
REPRESENTATIVE GRUENBERG  directed attention  to page 2,  line 4,                                                               
and  asked the  sponsor if  he would  be amenable  to adding  "or                                                               
stock options" after the word "stock".                                                                                          
SENATOR SEEKINS said  he would have no problem  with the addition                                                               
of that language.                                                                                                               
8:39:28 AM                                                                                                                    
REPRESENTATIVE  GRUENBERG  noted  that the  judiciary  branch  of                                                               
government  has  its  own  Special  Ethics  for  the  Council  on                                                               
Judicial Conduct and the Legislature  has the Select Committee on                                                               
Legislative Ethics;  however, the executive branch  does not have                                                               
a specific ethics board.  He  asked Senator Seekins what he would                                                               
think about  establishing an  independent executive  ethics board                                                               
that  is set  up similarly  to the  legislative ethics  board and                                                               
with similar functions.                                                                                                         
8:39:49 AM                                                                                                                    
SENATOR SEEKINS said  he has no objection to  that idea; however,                                                               
he said he  would have to give it  careful consideration, because                                                               
it would take time to work out.                                                                                                 
8:41:10 AM                                                                                                                    
REPRESENTATIVE GRUENBERG  directed attention  to page 9,  line 3,                                                               
which read as follows:                                                                                                          
             (3) knowingly and intentionally made a                                                                             
     disclosure prohibited by AS 39.52.340.                                                                                     
REPRESENTATIVE GRUENBERG stated  his belief that in  Title 11, as                                                               
a  matter of  law,  the term  "intentionally" requires  knowledge                                                               
8:41:58 AM                                                                                                                    
SENATOR  SEEKINS  said  he  thinks  Representative  Gruenberg  is                                                               
right,  but the  language  was drafted  that  way by  Legislative                                                               
Legal and Research Services to make it clear for the novice.                                                                    
8:42:58 AM                                                                                                                    
REPRESENTATIVE  GARDNER offered  an example  in which  one person                                                               
faced  the up  to  $5,000  fine to  disclose  the other  person's                                                               
egregiousness.   The  other person  turns  out to  be guilty  and                                                               
although  he/she  could  end  up  with any  of  the  following  -                                                               
reprimand,  demotion,   suspension,  and  a   possible  financial                                                               
penalty - only ends up  with a reprimand.  Representative Gardner                                                               
asked, "Does that seem like a reasonable balance?"                                                                              
8:43:46 AM                                                                                                                    
SENATOR  SEEKINS opined  that if  a person  intentionally misuses                                                               
the law, then there should be a penalty.                                                                                        
8:44:11 AM                                                                                                                    
CHAIR  SEATON interpreted  that what  Representative Gardner  was                                                               
saying was  that the  person who  correctly identified  an ethics                                                               
violation could  be in greater  jeopardy by revealing  that there                                                               
was a conflict, even though it was proven correct in the end.                                                                   
8:45:13 AM                                                                                                                    
SENATOR SEEKINS said  the court would have the  discretion of how                                                               
much of a penalty, if any, to impose.   He said there should be a                                                               
penalty for someone who misuses the law "if they don't care."                                                                   
8:46:19 AM                                                                                                                    
CHAIR SEATON  said he  thinks the  question is  whether it  was a                                                               
misuse of the law if someone was found guilty.                                                                                  
8:46:32 AM                                                                                                                    
SENATOR  SEEKINS answered  that  it  is a  misuse  if the  person                                                               
violated the procedure of the law.                                                                                              
8:46:43 AM                                                                                                                    
REPRESENTATIVE   RAMRAS,   regarding   Representative   Gardner's                                                               
previous example, said, "It doesn't  feel like the rights of that                                                               
member  of the  executive branch  would be  protected even  if it                                                               
were  discovered ...  later that  this executive  branch employee                                                               
did  violate  the  law."    He said  he  is  more  interested  in                                                               
protecting the rights of that individual.                                                                                       
8:48:14 AM                                                                                                                    
SENATOR SEEKINS  said there  are 15,000  state employees,  all of                                                               
whom are  subject to  this Ethics  Act.   He stated,  "We're just                                                               
trying   to  protect   that  period   of  time,   to  allow   the                                                               
investigators to  find out whether  there's any basis in  fact to                                                               
the charge.   ...  And then  once ...  there's probable  cause we                                                               
want  them prosecuted;  we don't  want anybody  skating by."   He                                                               
said  Representative  Ramras  is   correct  about  the  issue  of                                                               
8:49:49 AM                                                                                                                    
CHAIR SEATON  asked, "If  you had  $40,000 of  ... stock  in your                                                               
company and  you put that in  a blind trust, would  you know that                                                               
that stock was in there?"                                                                                                       
8:50:50 AM                                                                                                                    
SENATOR SEEKINS answered that he absolutely would.                                                                              
8:50:57 AM                                                                                                                    
CHAIR  SEATON [referred  to language  beginning on  page 1,  line                                                               
12], regarding  blind trusts.   He said,  "It would no  longer be                                                               
... considered a conflict of interest  if you rule on things that                                                               
would  affect  the  value  that's  in  that  blind  trust."    He                                                               
suggested that  if the function  of the  blind trust is  that the                                                               
trustee  does not  know  what  is in  it,  then perhaps  language                                                               
should be  added requiring a trustor  of a blind trust  to divest                                                               
and reinvest the money.                                                                                                         
8:52:17 AM                                                                                                                    
SENATOR SEEKINS responded that that  might subject the person who                                                               
owns  the stock  to huge  income tax  penalties.   He offered  an                                                               
example.  He continued:                                                                                                         
     I think what we've done is  we've said, "You can put it                                                                    
     in a  mechanism where  you have  no control;  where the                                                                    
     trustee, in effect, can sell  it whenever they want to,                                                                    
     can reinvest  it however  they want  to, with  just the                                                                    
     reasonable man requirement."   Then I think  what we do                                                                    
     is  we  put  that  person   out  of  control  of  those                                                                    
     holdings.   Now, that's an option,  but it has to  be a                                                                    
     public option  - I  mean, everyone  now knows  that ...                                                                    
     that investment is  there, that it is  being managed by                                                                    
     someone  other than  the state  employee, and  it gives                                                                    
     them  an opportunity  to still  have ...  an investment                                                                    
     portfolio, but one over which they have no control.                                                                        
SENATOR SEEKINS  said if  he owned  that type  of stock  he would                                                               
simply not get  involved with something that  could have anything                                                               
to  do with  his stock.   He  stated his  understanding that  the                                                               
person with the blind trust  receives a quarterly report and that                                                               
would be the extent of his/her involvement.                                                                                     
8:54:32 AM                                                                                                                    
CHAIR SEATON indicated  that the trustee knows the  amount of the                                                               
deposit and,  because of the  quarterly reports,  the investments                                                               
in  the trust  are really  not blind  at all,  especially if  the                                                               
account  is  a managed  one.    He  stated,  "It seems  like  the                                                               
structure of  what we've done is  we've said that no  matter what                                                               
you  have in  there, it's  now  regarded as  a nonconflict,  even                                                               
though you know  what's there, ... simply because  you can't sell                                                               
it or buy it.  But it could affect the worth of it."                                                                            
8:55:30 AM                                                                                                                    
SENATOR  SEEKINS  answered,  "It  could, and  it  could  be  gone                                                               
tomorrow."   He  explained, "This  is  a common  option to  avoid                                                               
conflicts of interest in many states."  He continued:                                                                           
     If the  governor were  to assign  you, as  the attorney                                                                    
     general,  to  handle  a particular  project,  and  your                                                                    
     holdings  were in  an investment  mechanism over  which                                                                    
     you had no control, then  I think it would be incumbent                                                                    
     upon  you to  go to  your  advisor on  ethics and  say,                                                                    
     "Does this accomplish  -- keep me out  of conflict with                                                                    
     the  law?"   And there'll  be a  determination made  at                                                                    
     that point  ....  There  is the small  possibility that                                                                    
     you could  still have  a conflict  that you  might know                                                                    
     about ....                                                                                                                 
8:56:52 AM                                                                                                                    
CHAIR  SEATON  indicated  that he  finds  the  proposed  language                                                               
regarding blind  trusts to be at  odds with the language  on page                                                               
2, lines 3-4, restricting a  public officer from owning more than                                                               
one percent of business-related stock,  with a value of less than                                                               
$10,000.   He said the  public officer  could have $100,000  in a                                                               
blind trust  as long as  someone else  has "the sales  ability on                                                               
8:57:26 AM                                                                                                                    
SENATOR  SEEKINS  said  that  the person  with  the  blind  trust                                                               
doesn't know  until he/she gets  the quarterly report what  is or                                                               
isn't in the trust.                                                                                                             
CHAIR SEATON pointed  out that in a managed account  a person can                                                               
check his/her account by looking online.                                                                                        
SENATOR SEEKINS said he is trying to find "bookends."                                                                           
8:58:10 AM                                                                                                                    
CHAIR SEATON  responded that  he is trying  to find  "whether the                                                               
bookends have one end off."                                                                                                     
8:58:22 AM                                                                                                                    
SENATOR SEEKINS reiterated that  the language regarding the blind                                                               
trust is common.                                                                                                                
8:58:38 AM                                                                                                                    
REPRESENTATIVE GARDNER observed:                                                                                                
     Section  18  actually  addresses post  investigation  -                                                                    
     it's after  a violation has  been determined.   So, if,                                                                    
     as a body,  we wanted to eliminate blind  trusts as one                                                                    
     way of  reducing potential  conflict of  interest, this                                                                    
     isn't the place to do it.  This is a remedy.                                                                               
8:59:10 AM                                                                                                                    
SENATOR SEEKINS replied, "Yeah, as  part of the remedy they could                                                               
force you to put it in ... a nonmanaged account."                                                                               
8:59:14 AM                                                                                                                    
CHAIR SEATON asked what the  requirement is related to timing and                                                               
publishing a finding of probable cause.                                                                                         
8:59:32 AM                                                                                                                    
SENATOR  SEEKINS said  there is  a time  frame for  the personnel                                                               
board,  and he  could find  out what  it is.   In  response to  a                                                               
follow-up question from  Chair Seaton, he said  he doesn't recall                                                               
whether  a  finding  of  probable cause  has  to  be  immediately                                                               
published, but he  offered his understanding that  "it's in close                                                               
proximity to that timeframe that it ... becomes public."                                                                        
9:00:02 AM                                                                                                                    
CHAIR SEATON  said the committee needs  that information, because                                                               
if  there   is  a  situation  wherein   the  complainant  doesn't                                                               
immediately know that  the probable cause has  been found, he/she                                                               
is still having to remain confidential.                                                                                         
SENATOR  SEEKINS,  in response  to  another  question from  Chair                                                               
Seaton, said in  both Ethics Acts a person  cannot knowingly file                                                               
a false statement,  but "it's to the best of  your knowledge," he                                                               
recalled.   A  complaint on  the Ethics  Act has  to lay  out the                                                               
particulars of the  complaint, he said, and has to  be signed and                                                               
9:02:25 AM                                                                                                                    
SENATOR SEEKINS, in response to  Chair Seaton, confirmed that the                                                               
fine that is up  to $5,000 is a civil one.   He reemphasized that                                                               
the fine could be zero or any  amount up to $5,000, a point which                                                               
he indicated that  the press continues to ignore.   He added, "It                                                               
is not  a $5,000 fine for  going home and telling  your wife that                                                               
you filed a complaint."                                                                                                         
9:03:08 AM                                                                                                                    
REPRESENTATIVE   GARDNER  recalled   that  Senator   Seekins  had                                                               
previously  stated that  a person  can disclose  to friends,  but                                                               
cannot disclose publicly.   She said she is unclear  as to when a                                                               
private disclosure becomes  public.  For example, if  she were to                                                               
have a  group of neighbors over  for a barbeque and  talk about a                                                               
disclosure, would that be public?                                                                                               
9:04:24 AM                                                                                                                    
CHAIR  SEATON  suggested  that  the  sponsor  could  answer  that                                                               
question when he returns to testify on another day.                                                                             
9:04:35 AM                                                                                                                    
REPRESENTATIVE  GRUENBERG said  Senator Seekins  tried to  draw a                                                               
distinction  between  a  public  and nonpublic  disclosure.    He                                                               
directed  attention to  page  8,  line 21,  which  states that  a                                                               
person  who discloses  confidential information  is subject  to a                                                               
fine.  He said, "It doesn't draw the distinction that you did."                                                                 
SENATOR SEEKINS  said the intent  is "public disclosure  or cause                                                               
to  be made  public," thus  he  said he  would talk  to the  bill                                                               
REPRESENTATIVE GRUENBERG stated that he  is not aware of anything                                                               
in law  that draws a  distinction like Senator Seekins  is making                                                               
between something that's  "public" and something that's  not.  He                                                               
said generally "a disclosure is a disclosure."                                                                                  
SENATOR SEEKINS  proffered, "I  would not say  that the  judge is                                                               
going to fine  you for telling your wife ...,  but I would advise                                                               
you not to have everybody over for a barbeque and tell them."                                                                   
9:05:56 AM                                                                                                                    
REPRESENTATIVE GRUENBERG  directed attention  to Section 16.   He                                                               
mentioned  an Alaska  Supreme Court  case, Baker  v. the  City of                                                             
Fairbanks, which ruled that a person  is entitled to a jury trial                                                             
if  he/she  is  charged  with  a crime  that  either  results  in                                                               
imprisonment, substantial  fine, or  the loss of  a license.   He                                                               
said he  realizes "this is not  a criminal case," but  the person                                                               
would be  subject to  a substantial  fine.   He said  the supreme                                                               
court case  was grounded  on the  Alaska State  Constitution "and                                                               
I'm not  sure that  it would draw  the distinction  between civil                                                               
and criminal in this matter."   He offered his understanding that                                                               
the  House Judiciary  Standing Committee  is considering  certain                                                               
amendments  to the  Human Rights  Act.   He mentioned  a case  in                                                               
Hawaii.  He said:                                                                                                               
     The  question  is  here whether  the  person  would  be                                                                    
     entitled to a  jury trial on these  issues for wrongful                                                                    
     disclosure.   Secondly,  the question  is whether  they                                                                    
     would be  entitled to  go before a  judge, not  just as                                                                    
     you  state  on page  9,  lines  18-19, to  enforce  the                                                                    
     determination  of   the  board,  but  for   the  actual                                                                    
     determination  itself.   ...   And third,  what is  the                                                                    
     standard of proof?  Because  it's not set here what the                                                                    
     standard  of  proof  is.   And  it's  a  constitutional                                                                    
     question,  as well  as a  policy question  I'm raising,                                                                    
     whether  - if  you're talking  about a  ... substantial                                                                    
     civil  fine -  there is  a  right to  approve beyond  a                                                                    
     preponderance  of  the evidence.    I  don't know  that                                                                    
     there  is,  but I  certainly  think  it's an  important                                                                    
9:09:08 AM                                                                                                                    
SENATOR  SEEKINS said  a $5,000  fine would  still be  within the                                                               
confines of small  claims court.  He referred to  the language on                                                               
[page 9], lines 18-19, which read as follows:                                                                                   
               (d) The attorney general may enforce (c)(3)                                                                      
     of this  section by filing an  appropriate civil action                                                                    
     on the request of the board.                                                                                               
SENATOR  SEEKINS said  the personnel  board is  the initiator  by                                                               
saying  [to the  Office of  the Attorney  General], "This  person                                                               
broke the confidentiality requirements, and  we would like you to                                                               
enforce the  confidentiality penalty against  them."  He  said at                                                               
that  point it  is not  a frivolous  action; the  personnel board                                                               
would have had to see the egregiousness of the case.                                                                            
9:09:59 AM                                                                                                                    
REPRESENTATIVE GRUENBERG  said the  question then  arises whether                                                               
the person who would be found  to have violated the Ethics Act by                                                               
wrongful  disclosure  would  have  a  similar  right  to  seek  a                                                               
judicial review of that decision.   Representative Gruenberg said                                                               
he assumes that would happen.                                                                                                   
9:10:29 AM                                                                                                                    
SENATOR SEEKINS concurred.                                                                                                      
9:10:34 AM                                                                                                                    
REPRESENTATIVE  GRUENBERG directed  attention to  the use  of the                                                               
word "shall"  on page 8,  line 26.   He suggested using  the word                                                               
"may"  instead.   He  said  he doesn't  think  the  board can  be                                                               
directed to  make a determination;  it has the discretion  not to                                                               
do so.                                                                                                                          
9:11:45 AM                                                                                                                    
MYRL  THOMPSON,  testifying  on   behalf  of  himself,  told  the                                                               
committee that he  sat through all the Senate's  hearings on both                                                               
[SB 186 and SB 187] last  year.  He remarked that Senator Seekins                                                               
was blaming the press, but the  press was writing about "what was                                                               
actually said at the time."   Mr. Thompson said when he testified                                                               
last year  he opined that the  bill was not addressing  "the true                                                               
problems," was against the First  Amendment, and was an insult to                                                               
Alaskans.   He stated, "Pretty  much those things are  still true                                                               
today."   He revealed  that there  was a  recent poll  taken this                                                               
week in  his area of the  state that asked, "Should  there be any                                                               
penalty whatsoever on a person  that puts out a complaint against                                                               
an official in  the government?"  He reported that  96 percent of                                                               
those polled  answered no.   He  said [SB  186] does  not address                                                               
that; it seems to be protecting  the person who has the complaint                                                               
filed against  him/her, more than  it does the  public's interest                                                               
and  the  public's   good.    In  response  to   a  request  from                                                               
Representative Gruenberg,  Mr. Thompson  said he would  produce a                                                               
copy  of  the poll.    [The  copy has  since  been  added to  the                                                               
committee packet.]                                                                                                              
9:15:11 AM                                                                                                                    
REPRESENTATIVE LES  GARA, Alaska  State Legislature, said  he has                                                               
been  researching  the  issue  of   blind  trusts.    He  offered                                                               
information he obtained from a stockbroker as follows:                                                                          
     Normally  in a  blind  trust,  the stockbroker  accepts                                                                    
     your stocks  - the stocks  that you transfer to  him or                                                                    
     her  -  and  keeps  them.     ...  So,  if  ...  you're                                                                    
     negotiating a deal with the  Pebble Mine, and you own a                                                                    
     ton of  stock in the  company that is going  to benefit                                                                    
     from the  Pebble Mine if  that project goes  ahead, you                                                                    
     transfer let's say ... your  $200,000-worth of stock in                                                                    
     the  Pebble Mine  to the  stock broker.   You  probably                                                                    
     tell  him,  "Hey,  I'm  working on  this  deal."    The                                                                    
     stockbroker holds  the stock,  because [in]  the normal                                                                    
     cases they  hold the stock  that you transfer  to them.                                                                    
     They may  make some  trades over  time, but  they won't                                                                    
     just sell  the stock  that they own.   And  then you're                                                                    
     going to  sit there knowing  I'm negotiating a  deal on                                                                    
     the Pebble  Mine and I'm  making money.  So,  the blind                                                                    
     trust  provision completely  guts  the  ethics law;  it                                                                    
     lets you  work on a matter  that you intend to  use for                                                                    
     financial benefit and says it's ethical.                                                                                   
REPRESENTATIVE GARA  said he  would attempt  to get  something in                                                               
writing from  someone in the  stockbroker industry.  He  said the                                                               
committee's questions have been right on point.                                                                                 
9:16:52 AM                                                                                                                    
REPRESENTATIVE GATTO  asked Representative Gara if  he believes a                                                               
person who  has those stocks  perhaps should  divest him/herself,                                                               
take the profit, pay  the tax, and just say, "If  I'm going to be                                                               
involved like this, maybe that's the only resolution to it."                                                                    
9:17:08 AM                                                                                                                    
REPRESENTATIVE GARA answered, "Not really."   He clarified that a                                                               
person  doesn't  violate  the   ethics  law  unless  that  person                                                               
intended  to pad  his/her pocket.   He  said, "I  think you  just                                                               
don't work on  the issue."  Using the example  of the Pebble Mine                                                               
again,  he said  the other  option  would be  to get  rid of  the                                                               
stock.  He  concluded, "You can't have it both  ways; you have to                                                               
do one  or the other.   The preference really is  just don't work                                                               
on the  deal, which is  what should  have happened on  the Renkes                                                               
case, in my opinion."                                                                                                           
CHAIR SEATON  suggested that in  that case, if Mr.  Renkes hadn't                                                               
been negotiating the  deal, there wouldn't have  been any problem                                                               
with him owning and having that amount of stock anyway."                                                                        
REPRESENTATIVE GARA replied, "Sure."                                                                                            
9:18:23 AM                                                                                                                    
REPRESENTATIVE   GARA,   in   response   to   a   question   from                                                               
Representative Gruenberg, said, "There  is currently no exemption                                                               
in the executive  ethics law that allows you to  work on a matter                                                               
to benefit  yourself as  long as  you put your  money in  a blind                                                               
trust.  That's just in the bill."                                                                                               
9:18:40 AM                                                                                                                    
CHAIR SEATON closed  public testimony.  He announced  that SB 186                                                               
was heard and held.                                                                                                             

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