HB 127-OMBUDSMAN  1:57:15 PM CHAIR COGHILL reconvened the meeting and announced the consideration of HB 127. "An Act relating to compensation of the ombudsman and to employment of staff by the ombudsman under personal service contracts; relating to disclosure by an agency to the ombudsman of communications subject to attorney-client and attorney work-product privileges; relating to the privilege of the ombudsman not to testify and creating a privilege under which the ombudsman is not required to disclose certain documents; relating to procedures for procurement by the ombudsman; and amending Rules 501 and 503, Alaska Rules of Evidence." He noted that this was the second hearing. [CSHB 127(JUD) was before the committee.] He asked Senator Wielechowski if his questions were answered. 1:57:47 PM SENATOR WIELECHOWSKI moved Amendment 1, labeled 28-LS0088\B.2 CHAIR COGHILL objected. AMENDMENT 1 OFFERED IN THE SENATE BY SENATOR WIELECHOWSKI TO: CSSB 127(JUD) Page 2, line 19, following "subsection": Insert "unless the communication is evidence of illegal activity" SENATOR WIELECHOWSKI explained that his concern was that illegal activity that an ombudsman finds in the course of an investigation should not be shielded. CHAIR COGHILL asked Ms. Lord-Jenkins to clarify how the proposed amendment to Subsection 4 would affect the ombudsman's investigative procedures under AS 24.55.160. 2:00:19 PM LINDA LORD-JENKINS, Ombudsman, Office of the Ombudsman, Alaska State Legislature, Anchorage, Alaska, read the statutes governing the ombudsman's duty to publish recommendations under AS 24.55.200 and the procedure under AS 24.55.220 if the ombudsman believes there is misconduct by agency personnel. CHAIR COGHILL asked how the new subsection (c) for AS 24.55.160 differs from the ombudsman's current responsibility. 2:03:25 PM BETH LEIBOWITZ, Assistant Ombudsman, Office of the Ombudsman, Alaska State Legislature, Juneau, Alaska, explained that, under AS 24.55.220, the ombudsman is required to refer a finding of misconduct or blatant illegality to the appropriate entity. However, that does not give the ombudsman the ability to disclose a record that is otherwise confidential. The proposed amendment to Section 4 says that if the ombudsman receives a privileged communication from an agency, the ombudsman would hand that over as part of the referral. Without the amendment, the ombudsman would continue to be able to refer the matter to the appropriate authority, but would not be able to deliver a copy of a privileged communication that the ombudsman may have received. SENATOR DYSON said he assumes that much of what the person who requests an investigation says is privileged. MS. LEIBOWITZ replied the ombudsman has an obligation of confidentiality to the person who comes forward with a complaint. There is also testimonial privilege which says the ombudsman may only disclosure as necessary to carry out the duties of the Ombudsman Act. SENATOR DYSON observed that the discussion is that the ombudsman can refer a client's disclosure of illegal activities to the appropriate agency. MS. LEIBOWITZ replied the statute doesn't talk about what the ombudsman is to do if a complainant discloses criminal activity, whereas AS 24.55.160 gives the clear duty to refer the misconduct to the head of the agency, law enforcement, or both. SENATOR DYSON asked if the ombudsman can under present law disclose information from one person alleging illegal activity by another person or group. MS. LEIBOWITZ said she believes so. SENATOR DYSON asked if it's correct to infer that the amendment would restrict the ombudsman in a way that it is not presently restricted. MS. LEIBOWITZ clarified that it would undermine the specific provision that would allow an agency to share attorney-client privileged material with the ombudsman who would respect the privilege. Responding to a further question from Senator Dyson, she explained that Section 4 deals specifically with attorney- client privileged material that is given to the ombudsman in the course of an investigation. 2:09:12 PM SENATOR WIELECHOWSKI provided an example. During the course of an agency investigation the ombudsman uncovers attorney-client privileged documents in which an executive admits to having broken the law. The statute requires the ombudsman to report the admission, but Section 4 makes it clear that the accompanying document may not be provided. He maintained that creating that shield does not benefit the public and was a bad policy. SENATOR MCGUIRE discussed the balance between getting agencies to cooperate in an investigation versus the public's right to get reconciliation and understand what's going on. She said she was torn. MS. LEIBOWITZ said she believes that if an agency director admits to illegal conduct in a privileged communication with the Department of Law, it probably will lead to plenty of non- privileged evidence that can be disclosed. SENATOR MCGUIRE said she could support that. MS. LORD-JENKINS again pointed out that under AS 24.55.200 the ombudsman not only reports the activity to the agency but also has the option of presenting it to "the governor, the legislature, a grand jury, the public or any of these." The ombudsman could tell a complainant their allegations are substantiated, but the complainant could not be told why because it's based on confidential information that the complainant is not otherwise entitled to have. MS. LORD-JENKINS said that in the name of transparency she agrees that citizens have the right to know, but under the law there are certain things that citizens are not entitled to know. 2:15:37 PM SENATOR WIELECHOWSKI maintained that it's good state policy to require departments in Alaska to cooperate with the ombudsmen. That means turning over privileged documents and if they show illegal activity it will be reported. MS. LORD-JENKINS, responding to a question from Senator Dyson, explained that when the ombudsman office was created in 1976, it had access to privileged attorney-client information. The legislature amended the statute in the early 1990s at the request of the Public Defender Agency and the Office of Public Advocacy defense section. The unintended consequence was that the ombudsman lost access to attorney-client privileged material. An agency can waive the attorney-client privilege, but based on case law if an agency and the DOL waives privilege as to one entity then all other entities have that access. The provision in Section 4 would allow an agency to waive privilege without having it be public information for everybody. SENATOR DYSON asked if Senator Wielechowski's amendment would give the ombudsman's office the same access to privileged attorney-client information that it had in 1976. MS. LEIBOWITZ said the amendment may approach the original access, but it may create problems if agencies realize that the waiver allows other entities to have access to the privileged material. SENATOR WIELECHOWSKI addressed Senator Dyson's question. The bill says that the ombudsman may not disclose a privileged communication under subsection (c). The amendment adds that this doesn't apply if the information pertains to illegal activity. CHAIR COGHILL asked if the agencies are shielded without this amendment. MS. LEIBOWITZ stated that under current law they are completely shielded. CHAIR COGHILL offered his understanding that under current law the ombudsman's ability to receive any privileged information is negotiated. MS. LEIBOWITZ responded that agencies have an active disincentive to waive privilege to the ombudsman because case law indicates that it would evaporate the privilege for all parties. SENATOR WIELECHOWSKI said he wants a strong ombudsman and doesn't believe that agencies should be coddled. In light of this discussion, he suggested adding a provision requiring agencies to disclose attorney-client privileged or attorney work product to the ombudsman upon request. SENATOR DYSON said he supports the ombudsman and he technically agrees with the amendment, but he did not want to jeopardize the bill. 2:27:40 PM SENATOR MCGUIRE asked if the ombudsman had the power to compel attorney-client privileged documents before the legislature changed the statute in the 1990s. She also asked if they would object to reinserting that language. MS. LEIBOWITZ clarified that the original statute gave the ombudsman broad power but it was not express. The 1990 amendments were designed to make the ombudsman's authority to access agency records absolutely express, and one of the compromises to get that amendment through was to exclude attorney-client privileged material and attorney work product. CHAIR COGHILL offered his understanding that [Section 4] is the first attempt to get back to attorney-client privileged information. MS. LEIBOWITZ said that's correct. SENATOR MCGUIRE said her concern is that the net effect will be that an agency will disclose attorney-client privileged information that supports their position, but not if the information supports the other side or reveals some misconduct. 2:30:24 PM MS. LORD-JENKINS agreed there is always that concern and it might be a good idea to think about this in small steps. She suggested that her office could track their requests to agencies to waiver attorney-client privilege and the rate of cooperation. She opined that it would be a very telling fact if an agency agreed to waive the privilege as long as they didn't have to worry about the waiver going to all parties. 2:32:41 PM CHAIR COGHILL maintained his objection to Amendment 1. SENATOR WIELECHOWSKI responded that he believes in the attorney- client privilege for private parties, but it's a little different with government. Taxpayers pay the salaries of government employees and would essentially be paying an attorney to potentially cover up some illegal activity. He said that's fundamentally wrong and he continues to believe that there should be another provision that requires agencies to disclose attorney-client privileged information. He offered to continue to work on the amendment between now and when the bill reaches the floor if there wasn't support for it in the committee. SENATOR MCGUIRE suggested the amendment say that the waiver does not apply to any other person and that illegal activity can be disclosed. She said she would vote for the amendment because it's right and she had no compelling reason not to. CHAIR COGHILL asked Senator Wielechowski to withdraw the amendment, do more homework, and address it tomorrow. 2:35:55 PM SENATOR WIELECHOWSKI withdrew Amendment 1. SENATOR DYSON requested the bill sponsor be included in the discussion. CHAIR COGHILL agreed. MS. LEIBOWITZ said she believes the ombudsman is unlikely to obtain privileged information that would fit the amendment. SENATOR MCGUIRE restated her proposal to compel agencies to provide the information in all cases. SENATOR WIELECHOWSKI stated his intention to work cooperatively with the interested parties. SENATOR WIELECHOWSKI distributed another amendment for the committee to review. 2:39:49 PM CHAIR COGHILL held HB 127 for further consideration.