HB 368-ETHICS: LEGISLATIVE & GOV/LT GOV  CHAIR MCGUIRE announced consideration of HB 368. [Before the committee was CSHB 368(FIN)am.] 9:33:53 AM REPRESENTATIVE BOB LYNN, Alaska State Legislature, said HB 386 makes it legal for a lobbyist to give a gift to a legislator or legislative employee as long as the recipient is an immediate family member and the gift has no connection with the recipient's legislative status. It is common sense and matches ethics codes around the country, and it is based on recommendations from the legislative ethics committee. The bill also includes an exemption for compassionate gifts, and it has some cleanup language. It also establishes a maximum fine of $2,500 for willful late disclosure. That is in line with other states. A case in Alaska illustrates that the existing fine is too low to have any affect whatsoever on the most egregious late filing. It is not practical for the Attorney General to pursue a few hundred dollars. The bill also expands the sections on campaign fundraising during sessions. The prohibition expands to any place where the session is convened. 9:36:11 AM SENATOR FRENCH asked about raising money 90 days before an election. MIKE SICA, Staff to Representative Lynn, said there is a prohibition currently about raising money in the capital when a special session occurs 90 days preceding an election. That has not changed. The bill simply extends that to any municipality where a special session is held. SENATOR FRENCH said that was done in a bill yesterday. 9:37:48 AM CHAIR MCGUIRE said that bill is also before the committee today, and she asked the difference between the two. MR. SICA said he hasn't seen the final version, but he believes the fundraising prohibition extends to local and federal offices, unlike HB 386. CHAIR MCGUIRE said the core parts of the bills are similar, and HB 386 goes beyond, addressing gifts that are given under the legislative ethics act. "It now says that you are allowed to buy your spouse a gift if the gift is unconnected with the recipient's legislative status and is from a member of the legislative or legislative's employee's immediate family and they happen to be a lobbyist." MR. SICA said that is correct. 9:39:06 AM CHAIR MCGUIRE said the old language used to have a blanket caveat regarding gifts unconnected to legislative status, like from a longtime friend. Did you look at that? MR. SICA said he didn't. CHAIR MCGUIRE said this is a big family and people go in and out of lobbying jobs and legislative jobs. There was a recent wedding of two legislative staffers and no gifts were allowed from many of their friends who were lobbyists, yet they had been lifelong friends. JOYCE ANDERSON, Administer, Select Committee on Legislative Ethics, said the ethics committee did not look at that issue and felt it was up to the legislature to decide the extent of allowable gifts from lobbyists. There are two definitions of the immediate family in the ethics statute. One includes the spouse, domestic partner, parents, children and siblings who are financially dependent. The other definition extends it to aunts, uncles, and grandparents. No definition has included lifelong friends. The ethics committee wants to let the legislature make that decision. CHAIR MCGUIRE said when she arrived at the legislature it was about giving a gift to influence a legislator. The test was the nature of the gift, a baby shower or birthday, and if it was given in order to influence the legislator or out of friendship. 9:42:19 AM MS. ANDERSON said previous statute limited gifts from lobbyists during the session. During the interim the advisory opinion was about whether a gift was from a lifelong friend or someone known outside of the legislative arena. So there have been advisory opinions based on previous statutes on that issue. CHAIR MCGUIRE said she wants to hold the bill to address concerns and to avoid absurd results. SENATOR STEVENS asked if HB 386 will allow fundraising during a special session within 90 days of an election in a city where the session occurs. What is theory or principle behind not allowing money to be raised or spent during a special session? MS. ANDERSON clarified that in the 90 days before an election there is an exemption that campaigning can occur, but the three legislators in Juneau are not allowed to do any fundraising during a special session. This bill is extending it to wherever the special session is held. Last year there was a special session for one day in Anchorage, and if it had been an election year, under HB 386, those legislators in Anchorage would not have been able to campaign on that one day. 9:45:48 AM SENATOR FRENCH said Section 2 seems to be contrary to what Ms. Anderson is saying. MS. ANDERSON said she forgot. "That is not a recommendation by the ethics committee, but it was added in -- in another committee." She continued. "Section 2 does not prohibit the legislator from soliciting or accepting a campaign contribution during a special session in the 90 days immediately preceding an election. So it would allow those Juneau legislators and those Anchorage legislators, if it was held there, to campaign, but not during the session, but, in the building that the session is being held, but outside of that building." SENATOR FRENCH said, "We can't have fundraisers here in the capital." MS. ANDERSON said, "Right." SENATOR FRENCH said that is good - "but you can go across the street and have a fundraiser." How did this come about? There are funny lines being drawn. 9:47:16 AM MS. ANDERSON said the prohibition against campaigning where a session is held started in the 1980s. There was an exemption for Juneau members, but that was changed and she doesn't know why. Now Juneau legislators can't campaign even in the 90 days before an election when everyone else is exempt. It was to prevent an appearance of impropriety. "You are making decisions in your legislative body, and then you're walking across the street and technically you could have a sign saying I'm soliciting contributions for my office." There was the chance for violations. The ethics committee has not looked at this issue, and the others sections in HB 386 are recommendations by the committee. She has been the administrator since 2001 and knows that the ethics committee doesn't like exceptions to the rules. 9:49:31 AM SENATOR FRENCH asked if constant electronic disclosures might be the solution. The old rules allow a person to have a big fundraiser one night and hop on a plane to a special session the very next morning. Many would not do that because of the appearance of impropriety, but the law allows it. There will be more special sessions because of the 90-day session. Why not require a legislator to disclose every campaign contribution within 24 hours in a searchable database? Bloggers, reporters, and the opposite party will know, within 24 hours, what the candidate got right before voting. It would collapse these weird lines about where a person can raise money. "It is as if we want to put a little buffer around the capitol and say no money changing hands around the capitol because that's bad." It looks bad to walk across the street and have a fundraiser. But it is legal. Constant electronic disclosure will let the public know what a legislator is doing. 9:51:42 AM MS. ANDERSON said a disclosure allows the public to know what is going on, and it may be a very good alternative. She doesn't know what kind of burden it would be on a campaign treasurer. "But I think disclosure is what the public is interested in." Individuals call and check the website all the time. She explained that this section will allow the Anchorage legislators to campaign if a special session were held there, and it would not allow any other legislators to campaign in that area. A legislator from the Kenai couldn't hold a fundraiser, but Senator French and Representative Lynn could. That is important, and she doesn't think people realize that. 9:53:12 AM CHAIR MCGUIRE said everyone understands the principle of removing the appearance of impropriety. She is sponsoring the Clean Elections bill because there is a perception, real or not, that if a person gives money to an election, there will be a trade off. The current system allows contributions to help get a candidate's message out. So the idea is to remove it far away from the deliberations so it doesn't feel like a vote was influenced by money. Kevin Meyer's bill goes one step further by not allowing fundraising for a friend. The absurdity is a speaker, president, or governor thinking about where to hold a special session to influence where some members can't raise money and others can. She reflects on the loopholes and absurdities. Political speech is the heart of the first amendment and maybe disclosure is a way to balance it. She wants to spend time discussing the gift language on page 3. 9:56:02 AM SENATOR FRENCH noted contributions to charities on page 3 and whether someone strongholds a person into giving to a favorite charity. Subsection (d) is intriguing and he wants a list of the recognized non-political organizations. He asked about the American Civil Liberties Union, Defenders of Wildlife, Planned Parenthood, Big Brothers Big Sisters, and the Outdoor Council. CHAIR MCGUIRE asked Representative Lynn to explain that [Page 3, Line 5]. SENATOR STEVENS said these things are important because they can make a violator "out of all of us so easily." He is his own campaign treasurer and wouldn't like to immediately report every check he gets. There is a difference between campaigning in rural Alaska and Anchorage. He doesn't like anyone fundraising or spending funds during a special session. "I would be more likely to say no one, either the incumbent or the opponent, can do anything if there's a special session going on in the community." The repercussions can be enormous. He urged caution. 9:58:25 AM MS. ANDERSON said the sections added into the bill are already in statute. It would be nice if all of the exemptions dealing with lobbyists were listed under this section instead of other parts of the statute. Line 5 refers to language that is in AS24.60.030 and 080. The language was put in for the Fahrenkamp classic. A gift that is unconnected with the recipient's legislative status is being added. Allowing legislators to be a go-between for a charitable donation has also been in statute for some time. Those have been in statute and she just wanted to put them together. The compassionate gift language references the statute. The drafter didn't reference the others. 10:01:00 AM CHAIR MCGUIRE said Line 5 is the procedure and there is no big problem with it. But "the things that come up on the fly, and I wonder why we say you have to go through leg council; I wonder why we don't just say you can receive these tickets to a charity event from any person at any time, and then we go through and describe" what a charity is. She noted that a Red Cross dinner that comes up the last minute, for example, may not get approved and officially sanctioned, but things like the skits are. The public would find that absurd that a legislator couldn't go to a Red Cross dinner for people in need. MS. ANDERSON said a legislator can receive a ticket from anyone to go to a Red Cross dinner, except a lobbyist. There are a lot of events that aren't 501(c)(3), and it would go through legislative counsel to be approved. The chair can approve it as long as there is 501(c)(3) status. 10:03:04 AM CHAIR MCGUIRE asked if a lobbyist gave her a ticket to a charitable event, could she walk down the hall to the Chair and say "501(c)(3)" and go. MS. ANDERSON said yes. SENATOR STEVENS said there will be a special session in June and July in Juneau. If this were to pass, will Juneau legislators be able to have fundraisers? MS. ANDERSON said yes. SENATOR STEVENS said Senator French will be in Juneau and can't raise funds. Can he expend funds in Anchorage during a special session in Juneau? MS. ANDERSON said yes, but he can't hold a fundraiser in Juneau. 10:04:45 AM CHAIR MCGUIRE gave a hypothetical situation: Senator French has raised money in Anchorage, and in Juneau he works on a placard to be mailed in his district; he works on a campaign computer in a campaign office in downtown Juneau; he mails the check from Juneau to pay for it. MS. ANDERSON said, "Senator French would be allowed to go out of the state building and work on a campaign flier, contact your treasurer … and email back and forth, and so forth. And then have the flyer mailed from the Anchorage area because you can't solicit here, so technically what we've said in the past is you really shouldn't be sending anything out from here." SENATOR FRENCH said the solicitation rule is clear, but what about the expenditures? If a check is mailed from Juneau and sent to a delivery service in Anchorage to stamp a flyer and mail it out, where is the expenditure being made? MS. ANDERSON suggested it would be Anchorage. SENATOR FRENCH asked if he could use an Anchorage mail house but not one in Juneau. MS. ANDERSON said yes. "You are not allowed to solicit funds. You're not allowed to expend funds during a special session here in the capital." Senator French could send out his flyer from Anchorage soliciting funds from his constituents. "I don't see a problem with you writing a check, sending it to the individual in Anchorage who's going to be printing the flyer to pay for that. Because you're not having somebody here do that. You're sending it to Anchorage to have somebody to do that." 10:07:29 AM SENATOR STEVENS surmised that he would be precluded from using a Juneau printing company. MS. ANDERSON said, "Exactly, because you're not allowed to do anything here." SENATOR FRENCH asked about using his cell phone to communicate with a campaign worker. Where are the long distance charges on his phone? That is why he wants the disclosure rule. These questions will come up sooner or later. CHAIR MCGUIRE asked about Senator French asking for a donation in that same phone conversation. 10:08:53 AM MS. ANDERSON said she would do some research, but the way the statute reads: you shall not solicit in the capital city during a special session. So you should not be soliciting. She doesn't see a problem with sending a check, having something printed in Anchorage, or calling a treasurer and working on a flyer. That is different from making a phone call to ask for a contribution. CHAIR MCGUIRE said the nuances can trip people up. During these sessions everyone is hard at work, and there is pressure on a member to make those decisions. It creates some challenges. MS. ANDERSON said the distinction is if someone is setting up a fundraiser or designing a flyer versus calling a person and asking for money. 10:10:45 AM SENATOR STEVENS said it is anti incumbency because challengers don't need to go through this. What's the principle I'm missing? MS. ANDERSON said a legislator is under a different microscope. Legislators have certain restrictions based on their position and the work they do on bills and issues. The restrictions are the nature of the job. The Alaska vs. ACLU case stated a compelling state interest to restrict legislators. CHAIR MCGUIRE said there is a similar bill and both don't need to go forward. HB 386 gets into the gift act, but it takes out other provisions that are important to the other bill's sponsor. MR. SICA said the law used to prohibit all candidates from fundraising during special sessions. It was challenged and the court determined that there was not a compelling state interest to restrict a non-incumbent. But for legislators and staff, who are acting on legislation, there is concern for improper influence. 10:14:10 AM SENATOR FRENCH recalled that it also includes regular sessions. MR. SICA said there are disadvantages and advantages to incumbency. CHAIR MCGUIRE held CSHB 368(FIN) am in committee.