HB 201-DEFENSE OF PUB. OFFICER: ETHICS COMPLAINT  2:15:49 PM CHAIR CLAMAN announced that the next order of business would be HOUSE BILL NO. 201, "An Act relating to legal representation of public officers in ethics complaints." 2:16:30 PM REPRESENTATIVE GABRIELLE LEDOUX, Alaska State Legislature, as prime sponsor introduced HB 201. She stated that HB 201 is a simple bill. She remarked that in the past, when an ethics complaint has been filed against the governor or the lieutenant governor, the defense of the complaint has not been represented by the attorney general. She remarked that there are some regulations in the works that will allow the attorney general, in his/her sole discretion, to determine whether to defend an ethics complaint against the governor or lieutenant governor. She expressed that she thinks returning to the regulations that previously existed is the proper way to go. She explained that in the system proposed under HB 201, the governor or lieutenant governor would pay his/her own fees up front, or the state would pay the fees up front when necessary, and he/she would be reimbursed after he/she was completely exonerated. She added that she does not think it is appropriate to spend state funds when the governor or lieutenant governor may have done something unethical and is not completely exonerated. She remarked that HB 201 "takes us back to the status quo and doesn't allow those regulations to supersede the status quo." REPRESENTATIVE LEDOUX remarked that she would like to make it perfectly clear that HB 201 is not a criticism of the current governor or lieutenant governor of Alaska; as a matter of course, she said that she thinks it is more appropriate for an individual who has been charged with an ethics violation to have his/her fees paid by the state only if he/she is exonerated. She added that she does not think the attorney general should be defending the governor or lieutenant governor. 2:19:51 PM REPRESENTATIVE STUTES asked whether HB 201 would be applicable to legislators overall, in addition to the executive branch. 2:19:59 PM REPRESENTATIVE LEDOUX answered that HB 201 would not apply to legislators. She offered her understanding that currently, a legislator pays his/her own fees and can then go to the Legislative Council for reimbursement, if he/she is completely exonerated. She added that she thinks it would be a good idea to put a reimbursement policy into statute, rather than having an anecdotal system which legislators may know about through its previous use by another legislator. REPRESENTATIVE STUTES asked Representative LeDoux whether she would propose that a legislator exonerated of an ethics violation complaint go to the Legislative Council and ask for reimbursement, or whether she proposes an established system that automatically reimburses an exonerated legislator. REPRESENTATIVE LEDOUX clarified that she is not suggesting a change to the current system. She opined that if the committee was concerned about this issue and wanted to amend HB 201 to include legislators, the system should work the same way it does currently. 2:22:58 PM REPRESENTATIVE EASTMAN remarked that the committee had discussed how HB 201 would affect the legislative and executive branches. He questioned how the proposed legislation would affect the judicial branch; for example, what would happen if a judge was involved in an ethics violation complaint? REPRESENTATIVE LEDOUX replied that she did not know the answer to that question, but Dan Wayne from Legislative Legal Services might be able to answer the question. 2:23:32 PM DAN WAYNE, Attorney, Legislative Legal Counsel, Legislative Legal Services, Legislative Affairs Agency, Alaska State Legislature, remarked that he helped to draft HB 201. He stated that the bill currently amends the executive branch ethics act only. Referencing page 1, lines 5-6, of HB 201, he pointed out some cited sections of the Alaska Executive Branch Ethics Act which could be potential hurdles to reimbursing public officers in the executive branch in an exoneration. 2:24:17 PM CHAIR CLAMAN clarified that Representative Eastman did not ask about the executive branch; he asked what would happen if a judicial officer was accused of an ethics violation. MR. WAYNE replied that he thinks judicial officers follow a code of ethics that they administer themselves through the Alaska Bar Association or the Alaska Supreme Court. CHAIR CLAMAN remarked that he thinks it is called the Judicial Conduct Commission, which consists of members appointed by the governor and approved by the legislature. MR. WAYNE replied that he thinks Chair Claman might be more knowledgeable on the topic than he is, and probably also knows that this is not in statute or regulated by the legislature. 2:25:22 PM CHAIR CLAMAN stated that he did not think that Mr. Wayne provided the answer the committee was looking for, and he suggested that someone from the court system or the Judicial Conduct Commission answer the question for the committee at a future time. He remarked that the question he thinks Representative Eastman is hoping to hear an answer to is whether the state ends up paying when there is a complaint against a judge. 2:26:03 PM REPRESENTATIVE EASTMAN confirmed that that is correct; he is hoping to find out who pays in that situation and the effects of extending HB 201 beyond just the executive branch. 2:26:39 PM REPRESENTATIVE LEDOUX reiterated that HB 201 only applies to the executive branch, but if the committee were to amend the bill to include the other branches, she is sure it would get answers to all those questions. 2:27:05 PM REPRESENTATIVE EASTMAN remarked that he noticed it was mentioned that HB 201 was introduced in response to a regulation change, and he wondered why HB 201 would be a better option than the legislature clarifying the regulation itself. REPRESENTATIVE LEDOUX replied that she had approached the Legislative Legal Counsel and asked to have something drafted that would address the new regulations, which she does not want to see go in to effect. 2:27:54 PM CHAIR CLAMAN asked whether the reimbursement structure would be a "pay to be paid clause," in which the executive would have to write a check to his/her attorney for representation on an ethics violation complaint and would then seek reimbursement, or the executive would be able to send the bills directly for payment and not have to pay out-of-pocket at all, unless he/she lost the ethics violation complaint, in which case he/she would have to pay the fees back. 2:28:29 PM REPRESENTATIVE LEDOUX replied that she thinks the idea is that an executive could either pay up front and be reimbursed by the state if he/she is exonerated, or the state could pay the fees and the individual would have to agree to pay the fees back if he/she were not totally exonerated. She suggested that Mr. Wayne might have more information on the subject. 2:29:02 PM MR. WAYNE remarked that HB 201 does not go into detail on who the payment would go to; it just specifies that there would be an authorization of reimbursement. He suggested that reimbursement could be interpreted differently by different people. As an example, he explained that money could go directly from the stated to a law firm and could be called reimbursement. He expressed that the bill was based on existing regulations, which is where the criteria for reimbursement was drawn. 2:30:04 PM REPRESENTATIVE EASTMAN, referencing page 1, lines 9-11, of HB 201, stated, "It would seem to me that somebody could accept reimbursement before the case is finally adjudicated, because otherwise why are we asking them to pay it back if it turns out they're not fully exonerated?" 2:30:24 PM CHAIR CLAMAN, referencing the eighth edition of Black's Law Dictionary, defined reimbursement as: "Repayment" and "Indemnification." He added that indemnification was defined as: "The action of compensating for loss or damage sustained" and "The compensation so made." REPRESENTATIVE EASTMAN asked Representative LeDoux whether she considers everything pertaining to the current regulations as excellent, considering that HB 201 would put the current regulations into statute, or whether there are some areas that work better than others. Referencing page 1, line 11, of HB 201, he remarked that it states, "exonerated of all violations". He expressed that he thinks there could be more than one allegation lodged against an executive official at a time. For example, if one is an egregious violation that he/she is exonerated of but the other is a minor violation akin to littering that he/she is found guilty of, then the executive official would be required to pay for the expenses of the egregious offense that he/she was exonerated of, even if those expenses comprised 99 percent of the total cost. 2:33:08 PM REPRESENTATIVE LEDOUX replied that Representative Eastman made an excellent point, and she had wondered if it might make sense to consider a system similar to that used in a court fee situation with attorney fees, where fees are reimbursed if the individual is exonerated on most of the charges. 2:34:03 PM CHAIR CLAMAN remarked that in a court fee system, the prevailing party is entitled to get back his/her attorney fees; however, the attorney fees are almost never 100 percent fees. He asked Representative LeDoux whether this factors in to how she would approach the situation. REPRESENTATIVE LEDOUX replied that she is not certain. She said that she thinks in public interest litigation it is 100 percent of the fees, and she thinks that if the individual prevailed on 99 percent of the claims, he/she would be reimbursed 99 percent of his/her fees. She remarked that HB 201 was written to parallel the existing regulations, but she is not sure herself of what the correct approach is. 2:35:50 PM REPRESENTATIVE STUTES asked whether she understood correctly that an official must be exonerated in order to receive reimbursement. REPRESENTATIVE LEDOUX replied that that is not the case. She Referenced language on page 1, lines 9-11, of HB 201, which read: "A public officer or former public officer who accepts the reimbursement under this section shall promptly repay all money received if the officer is not exonerated of all violations." She remarked that an official could accept payment to begin with, as not everyone has the funds to pay up front out-of-pocket. REPRESENTATIVE STUTES remarked that she thinks Representative LeDoux may have just made a point for her; if an official doesn't have the funds to pay up front, and the state covers the up front cost but the official is not exonerated, when the state looks for the official to pay back those fees he/she might not pay the fees back. 2:37:17 PM CHAIR CLAMAN remarked that "nothing of Representative Stutes' question is to suggest that any legislator, or the governor, is a deadbeat." REPRESENTATIVE STUTES remarked that that is certainly not the case. She asked whether there would be an adversity to having legislation requiring an official to be exonerated in order to apply for reimbursement. She added that she thinks most attorneys would be amenable to that idea. 2:37:49 PM REPRESENTATIVE LEDOUX replied that many attorneys might be amenable to that idea, if there were a standard in place which allowed for most prevailing counts - and not all counts - to be exonerated. She added that she thinks there would be political considerations; not only would the official be facing the stigma of having faced an ethics violation, he/she would have to face his/her next election with public knowledge that, "Representative so-and-so is a deadbeat; they owe the state 'X' number of dollars." 2:39:08 PM REPRESENTATIVE STUTES remarked that she appreciated what Representative LeDoux was saying; however, she recounted that many people in Juneau have commented to her that they will not rent to legislators, as they will not pay their rent. She added that she has heard this approximately four times from different people. REPRESENTATIVE LEDOUX commented that she finds that somewhat appalling. 2:39:40 PM CHAIR CLAMAN noted that there is potential for an attorney's fees bill to range from $25,000 to $50,000 in a complicated ethics violation case. He stated that the questions of the ability to repay and whether the state should be advancing these funds are significant. He added that these dollar amounts may not seem to be big items compared to some of the items discussed in the state budget; however, public suspicion may be raised if funds were being routinely advanced for fees relating to ethics complaints, where the essence of the complaint is that the official is acting outside of the law. 2:40:41 PM REPRESENTATIVE EASTMAN asked whether the executive branch has the same limitations on accepting legal help as the legislative branch. He clarified that in the legislative branch it would be considered unethical for a legislator to accept pro bono representation from an attorney, as it would be considered accepting a gift over $250. 2:41:32 PM REPRESENTATIVE LEDOUX replied that she did not know whether the executive branch has the same limitations as the legislative branch, but her understanding is that the legislative branch can set up a legal defense fund, which is not governed by the $250 gift rule. 2:42:37 PM CHAIR CLAMAN asked Mr. Wayne whether he could clarify Representative LeDoux's comment and question. 2:42:47 PM MR. WAYNE asked Representative LeDoux whether she could clarify her question. 2:43:09 PM REPRESENTATIVE LEDOUX clarified that the question was whether the executive branch has the same restrictions on receiving money as the legislative branch. In addition, she repeated her understanding that the legislative branch can set up a legal defense fund, which is not governed by the $250 gift rule. MR. WAYNE responded that he did not know whether this was correct. He remarked that it could raise a concern under AS 24.60.080 for a legislator accepting a gift of legal fees; however, he stated that he did not know if there has been an exception carved out for that. 2:44:35 PM REPRESENTATIVE EASTMAN asked whether anyone could clarify what the limitations are on the executive branch regarding gifts. He remarked that during his time on the Ethics Committee, it was explained to him that the committee's understanding was that an official charged with a violation could not receive legal help totaling over $250 in a calendar year. Replying to a follow-up question from Chair Claman, he clarified that an attorney could volunteer only $250 worth of his/her time and nothing more, regardless of whether it was offered as pro bono. 2:45:48 PM CHAIR CLAMAN asked Mr. Wayne whether he could provide insight into what the limitations are on the executive branch in terms of acquiring legal advice from outside counsel. He clarified that he thinks Representative Eastman's question was very specific: If the governor has an ethics complaint brought against him/her, and asks for advice from an attorney regarding the complaint, the governor is barred from getting advice that would equate to over $250 pro bono. 2:46:27 PM MR. WAYNE replied that this would fall under AS 39.52.130(a)(b), which read as follows: Sec. 39.52.130. Improper gifts. (a) A public officer may not solicit, accept, or receive, directly or indirectly, a gift, whether in the form of money, service, loan, travel, entertainment, hospitality, employment, promise, or in any other form, that is a benefit to the officer's personal or financial interests, under circumstances in which it could reasonably be inferred that the gift is intended to influence the performance of official duties, actions, or judgment. A gift from a person required to register as a lobbyist under AS 24.45.041 to a public officer or a public officer's immediate family member is presumed to be intended to influence the performance of official duties, actions, or judgment unless the giver is an immediate family member of the person receiving the gift. (b) Notice of the receipt by a public officer of a gift with a value in excess of $150, including the name of the giver and a description of the gift and its approximate value, must be provided to the designated supervisor within 30 days after the date of its receipt MR. WAYNE interpreted that if a gift is worth more than $150, it must be reported, but he was not sure if there is a defined upper limit to what could be accepted. 2:47:50 PM CHAIR CLAMAN asked Mr. Wayne whether his view was that an officer is not prohibited from receiving services greater than $250, just that the services must be declared after they have exceeded the $250 amount. MR. WAYNE answered that he does not see a limitation defined anywhere in statute, unlike AS 24.60.080, which applies to the legislature and has a defined yearly limit. He said that it is possible the attorney general has established a limit based on statute, but he does not know for sure. 2:49:04 PM The committee took a brief at-ease at 2:49 p.m. 2:49:24 PM CHAIR CLAMAN opened public testimony on HB 201. After ascertaining that there was no one who wished to testify, he closed public testimony. He announced that HB 201 would be held for further review.