SB 105 LEGISLATIVE ETHICS CODE REFORM  BEN BROWN , staff to Senator Tim Kelly, chairman of the Senate Rules Committee, gave the following overview of SB 105. SB 105 was introduced by request of the Select Committee on Legislative Ethics and represents the purest consensus that could be arrived at by that committee. Since the Legislature enacted the Legislative Ethics Code four years ago, oversights in the Code have become apparent. A few subsequent changes, as well as a few housekeeping changes, are necessary to improve the law, and protect the public, legislature, and others involved in the political process from misuses and to ensure it is applied in a realistic, meaningful way. SENATOR DRUE PEARCE , a member of the Legislative Ethics Committee, gave a brief history of ethics legislation. The ethics committee began drafting legislation in 1994; a bill was introduced in both the House and Senate in 1995. The Senate State Affairs Committee, chaired by Senator Sharp, heard the bill once in 1995, and several times in 1996. Senator Donley recommended many of the amendments made to the bill in that committee. The Senate Rules Committee then substantially amended the bill to include the Executive Branch and the bill passed the Senate 17 to 3. House Finance heard the bill in the final week of session and adopted several amendments. A few members of that committee recommended rewriting the section dealing with the Executive Branch to eliminate any overlap and other identified problems. The bill was held over on the last night of the regular session and did not receive a hearing. Part of the controversy centered on the provision disallowing spouses of legislators from lobbying. SB 105 is the product of a subcommittee of the Legislative Ethics Committee that worked during the interim in 1996 to revise the measure. The Executive Branch section has been deleted because that is not within the purview of the Legislative Ethics Committee. In addition, the bill contains many housekeeping provisions. Number 130 CHAIRMAN GREEN asked Senator Pearce to provide an overview of the provisions in the bill. SENATOR PEARCE referred the committee to a memo from Susie Barnett, staff to the Select Committee on Legislative Ethics, dated February 28, 1997, and explained the sections of SB 105 as follows. Section 1 has been in the bill since 1994, and grants the ethics committee subpoena powers. It amends the statute that sets out general authority for subpoena power to the ethics committee, Legislative Council, and Legislative Budget and Audit Committee by removing the requirement that the Senate President or Speaker of the House concur with the ethics committee before it can issue a subpoena. The other two committees were exempted from that requirement and the ethics committee believes its exclusion from that exemption was an oversight. Section 2 allows legislators to store and maintain campaign records, such as APOC reports, in legislative offices, provided the records are not displayed publically. A strict reading of the current statute prohibits keeping any APOC records in legislative offices. The ethics committee has made a liberal reading of the current statute and has requested this change. Section 3 expands the prohibition against the use of state funds for printing or distributing mass mailings from, or about, a legislator who is a candidate for state office to legislators and legislative employees who are candidates for federal or municipal offices, and to candidates for telephone or electrical cooperatives. Senator Pearce explained if a legislator entered the Anchorage mayoral race, he/she would not be able to use state funds to send a mass mailing during the 90 days prior to the election. Number 199 Section 4 adds fundraising notices to the list of prohibitions on distributing or posting campaign literature in state facilities. Section 5 increases the disclosure period for appointment to a board from 30 to 60 days, and requires the ethics committee to publish the disclosures in the journal. Section 6 changes the prohibition on taking legislative, administrative, or political action to a disclosure requirement prior to taking action if one has any of the following interests listed in the amendment: equity or ownership interest, an employment interest, an interest in a contract, or an interest created by board membership. It also sets out that the disclosure is to be publically announced if the action taken is during a committee meeting or on the floor. SENATOR PEARCE said the discussion on this section focussed on the fact that if one can take action that could create a personal gain by disclosing a conflict of interest, the disclosure should be informative as to what the conflict is. Disclosures must reveal the nature of one's financial interest and a short description of how the action might affect that interest. She noted many legislators already disclose conflicts of interest at the committee level; Section 6 requires that disclosure. Section 7 adds a new subsection that requires the ethics committee, when determining whether an employee was performing a task on government time, to consider the employee's work schedule set by the employee's supervisor. It requires an employee to take leave time for periods he or she is engaged in campaign activities. Campaign activities are permissible on government time if those activities are part of the normal legislative duties, including answering phone calls and handling incoming correspondence. SENATOR PEARCE commented legislative members of the ethics committee pointed out to the committee there is no way to stop mail from coming, some of which is campaign related, nor can one stop all incoming phone calls on campaign related matters, especially during the campaign season. Section 8 clarifies restrictions on fundraising activities. Funds can not be raised while either house is in regular or special session. The proposed language removes the phrase "campaign purposes" to clarify this restriction is limited to state legislative political purposes. SENATOR PEARCE explained two years ago some legislators received campaign contributions before session began, but did not deposit those checks until after session started. The ethics committee advised those legislators to refund the contributions. Section 8 clarifies the cut-off time for receipt of contributions and was in last year's bill. Number 266 SENATOR MACKIE asked if the restriction is in effect from gavel to gavel of the 120 day session. MS. TERRY CRAMER , Division of Legal Services, Legislative Affairs Agency, answered the time period would begin on midnight of the day of the first gavel to midnight on the day of the last gavel of the 120 day session. SENATOR PEARCE clarified a legislator cannot hold a fundraising breakfast on the day session begins, nor on the day of adjournment. SENATOR MACKIE questioned whether removal of the phrase "campaign purposes or to raise money for" would allow a person running for a municipal race to raise money during the legislative session, whereas that activity is prohibited now. MS. CRAMER said the change allows for fundraising for elections other than state legislative races. SENATOR MACKIE confirmed a legislator, under current law, cannot do any fundraising for a municipal or legislative race right now. Number 300 SENATOR WARD asked whether a sitting legislator could sponsor a fundraiser in Juneau for a mayoral candidate. SUSIE BARNETT, professional assistant to the Select Committee on Legislative Ethics, explained Section 8 pertains to accepting money from an event held during the legislative session and advised a legislator could sponsor a fundraiser for a mayoral candidate. MR. CRAMER added soliciting is covered in Section 8(a)(1) and limits the prohibition to state legislative campaigns so a legislator may solicit funds for another, as long as the candidate is not running for a legislative seat. SENATOR MACKIE asked whether there is another section of the Ethics Act that prohibits a legislator from soliciting funds for another candidate. MS. CRAMER read AS 24.60.031 (a)(1) and interpreted existing language to mean a legislator cannot solicit or accept funds for any state legislative campaign, whether their own or not. SENATOR MACKIE affirmed that the absence of any reference to mayoral or gubernatorial races means funds could be raised for those races. MS. CRAMER thought that was correct. Number 334 SENATOR DUNCAN commented he was informed, through an informal advisory opinion from the Ethics Committee, that he, as a sitting legislator, could not hold a fundraiser for a non-legislator. The reasoning was that as a sitting legislator, he might influence who would attend and contribute. MS. BARNETT explained that issue was different because the contributions the Senator would have been soliciting would have been gifts, not campaign contributions. SENATOR DUNCAN clarified it would have been okay had Fred Zharoff filed to run for Mayor of Anchorage, but not for other reasons. SENATOR PEARCE said Senator Lincoln was able to hold fundraisers during last session when she was running for a congressional seat because of the federal preemption. Current language in the Ethics Code prohibits fundraising for campaign purposes, and although federal campaigns are preempted, the current prohibition still applies to mayoral and gubernatorial races. Number 360 SENATOR DUNCAN questioned why a Representative who ran for Lieutenant Governor was able to raise money during a session two or three years ago. MS. BARNETT replied that person was not allowed to accept money from events being held during sessions, but was allowed to accept money from political mailings. SENATOR MACKIE believed another section of the Ethics Code specifically pertains to statewide offices, and the change in SB 105 is specific to legislative seats. CHAIRMAN GREEN asked whether any of the provisions in the campaign finance reform law that passed last year overlay SB 105 and create greater prohibitions. SENATOR PEARCE said no legislator can raise money this year for a legislative race but those legislators who are up for re-election next year will be able to raise money during restricted time periods. Under the new campaign finance reform law, mayoral candidates can raise money for 90 or 120 days prior to the election. She thought, but was not sure, legislators can start raising money after session is over. SENATOR PEARCE said fixing some of the inequities and contradictions in the Ethics Code so that Alaskans feel complaints are dealt with fairly will hopefully keep the Legislature from finding itself faced with the same situation created by the initiative for campaign finance reform. She thought an initiative ethics bill would be much more difficult to live with than a bill drafted by the Legislature. She cautioned if legislative action is not taken, it is possible an initiative will be filed. SENATOR MACKIE commented he served on the ethics committee for the past four years, and the bill provisions can be interpreted in different ways by different people because it was put together in hastily. The bill dealt with a lot of necessary changes under the Ethics Code, but the actual application of some provisions became very confusing. The ethics committee spent a lot of time reviewing sections to come to a consensus about what those sections meant. He believed it is very important to clarify exactly what the sections mean for the committee's and public's benefit. Number 422 CHAIRMAN GREEN stated her goal is to complete the sectional analysis of SB 105 today, then allow a short amount of time for anyone interested to prepare and submit amendments, but not to spend a lot of time rehashing the same conversations. SENATOR PEARCE explained Section 9 gives the ethics committee the right to refer an employment discrimination complaint directly to the Human Rights Commission (HRC) and to defer any consideration until that proceeding is completed to prevent two proceedings from occurring simultaneously. CHAIRMAN GREEN asked if the complainant can file a lawsuit after those proceedings. MS. CRAMER said yes. SENATOR PEARCE explained if the HRC finds that a legislative employer has committed a violation, it would make recommendations to the ethics committee. The HRC does not have the power of enforcement against a legislator. She added the last employment discrimination case filed against a legislator was handled by the Legislative Council because both the legislator left office and the employee left the job. Number 458 SENATOR PEARCE continued with the sectional analysis. Section 10 broadens the contract and lease requirement beyond the current code. The new language allows participation in contracts or leases that are let under AS 36.30 (Procurement Code), including sole source awards, and applies to contracts with other agencies such as the Alaska Railroad Corporation and University of Alaska. The new language increases the reporting threshold from $1,000 to $5,000 and eases the family member disclosure requirement. SENATOR MACKIE questioned whether the family member disclosure requirement would apply to immediate family members only. SENATOR PEARCE said it only applies to immediate family members. Section 11 clarifies that a grant, contract, or lease, issued under AS 24.60.050, is not subject to the requirement in Section 10. Section 12 allows the ethics committee to protect an individual's right to privacy concerning participation in state loan or benefit programs regarding disclosure. Section 12 follows a 1994 advisory opinion issued by the ethics committee explaining why it chose not to publish the name of a person who received a benefit from the Violent Crimes Compensation Committee. The ethics committee did disclose that a person covered under the ethics code did receive a benefit, but did not disclose the name. Section 12 codifies previous activity. Section 13 allows the ethics committee to broaden discovery while still protecting any innocent or non-involved parties. Allegations have been made in which people who were not part of the actual complaint had to become involved. Section 13 would protect the privacy of those people. The subject of the complaint would have access to that information but could not release it if a protective order was issued. Section 14 establishes a February 15 disclosure deadline for existing close economic associations, and a 60 day disclosure requirement for new close economic associations. These disclosure deadlines are consistent with other disclosure requirements in SB 105. Section 15 requires legislators, or legislative employees, who are married to lobbyists, or to spousal equivalents who lobby, to disclose the name and address of each of the lobbyist's clients and the total monetary value received from the clients annually. Changes to the list would have to be reported within 48 hours. The nine-member ethics committee did not have the votes to recommend a ban on spousal lobbying but did agree on the disclosure requirements. Number 523 SENATOR WARD asked for the definition of a "spousal equivalent." MS. CRAMER answered the definition is included at the end of the bill. Section 16 increases the annual gift limit from $100 to $250 and clarifies that the gifts covered under subsection (c) are excepted from the general prohibition on accepting gifts. The gifts on behalf of charitable organizations is a new subsection. Charitable organizations would be exempted from prohibitions on both accepting and soliciting gifts. Senator Pearce explained that she, as a board member of the Alaska Special Olympics Committee, could solicit money for that organization. Other new language restricts legislators and legislative employees from accepting, from lobbyists during session, anything of monetary value, other than food or beverages for immediate consumption. CHAIR GREEN asked if legislators can accept any gifts during session. MS. CRAMER clarified no gifts can be accepted from lobbyists, but subsection (c) lists those gifts that are acceptable from others, with disclosure. SENATOR PEARCE explained Section 17 pertains to hospitality and allows legislators to accept incidental transportation or to stay at the residence of a person, but not at a vacation home outside of the state. She commented legislators would not be able to stay at a lobbyist's home in Palm Springs for two months. Also legislators and legislative employees would be allowed to accept discounts while on state business if the discount benefits the state. Number 557 SENATOR MACKIE asked whether the prohibition against hospitality at a vacation home pertains to lobbyists' homes only. MS. CRAMER explained it is not limited to lobbyists' homes only. SENATOR MACKIE asked if that would apply to the home of a friend. MS. CRAMER said subsection (6) would apply, and requires that the hospitality not be connected to the recipient's legislative status. SENATOR WARD asked if he could accept an invitation on Representative Cowdery's boat for a fishing trip, which might be valued at $2500 per day. SENATOR PEARCE said the committee discussed whether legislators can accept gifts from other legislators, and assumed those invitations are not for the purpose of getting something in return. She explained if BP invites a legislator to take a trip on one its tankers from Valdez to Long Beach, as opposed to a trip from Valdez to the Mediterranean, the trip could be considered acceptable because the legislator would be learning about state business. SENATOR DUNCAN questioned whether a legislator could accept an invitation from a lobbyist to go out fishing on a lobbyist's boat during session. He noted that is a common occurrence. SENATOR PEARCE replied page 9, line 9 pertains to social events. She explained the provision for incidental travel and hospitality within the state was included to cover situations where a legislator travels to rural areas of the state and stays with friends or associates because other accommodations are not available. She said legislators must use common sense and decide whether the invitation is only connected to one's legislative status. TAPE 97-10, SIDE B SENATOR DUNCAN asked Ms. Barnett how the fishing trip on a lobbyist's boat would be viewed. MS. BARNETT answered one could eliminate the invitation as a gift by contributing to the experience, meaning if the legislator contributes gas money, or food for the trip in an equal manner, it would not be considered a gift. SENATOR DUNCAN asked, if the lobbyist invited five legislators, whether they would all have to provide food or gas. MS. BARNETT said they would have to make some contribution otherwise it would considered a gift and would fall under the $250 limit under SB 105. SENATOR WARD asked if he could accept an invitation from a lobbyist to take a float plane trip to Petersburg to fish for the day. JOE DONAHUE commented it is difficult to make on-the-spot advisory opinions because all of the facts are not available, but he added legislators must view such a trip from the public's perspective. He added he cannot speak for the committee, but expressed concern about the fact that the trip would be with a lobbyist. SENATOR WARD repeated his question about accepting an invitation for a plane or boat trip from another legislator. MS. BARNETT replied those invitations would be viewed as gifts, and if the value is over $100, under current law, one must reduce the value of the gift, or not accept it. SENATOR PEARCE commented some legislators' friendships began long before they came to the legislature, and that invitations among those legislators are not related to legislative status. MS. BARNETT answered if Senator Ward and the other legislator could clarify that relationship is unrelated to their legislative status and disclose it under Section 17(c)(6), then the gift would be acceptable. SENATOR PEARCE noted some states have dealt with the problem of trying to define what constitutes a gift by prohibiting legislators from accepting anything, including a cup of coffee, from anyone. Section 17 is an effort to create a common sense approach to one's actions. SENATOR MACKIE felt the gift provision needs further clarification because legislators should not have to discard friendships or other relationships. He noted Alaska is a small state and many legislators have been long-time friends. He said under SB 105, a legislator could not go fishing on a lobbyist's boat because Section 16 only allows the legislator to accept food or beverages for immediate consumption. Senator Mackie believed the legislation should be specific so that a legislator does not have to wait until a complaint is filed and then have to justify the acceptance of a particular invitation. Number 460 SENATOR PEARCE suggested Senator Mackie head up a subcommittee on the issue. SENATOR MACKIE responded SB 105 goes a long way to correct some existing problems, but the opportunity to discuss actual scenarios has never occurred. He stated the original bill was very poorly crafted. SENATOR PEARCE explained Section 18 corresponds to changes made to the previous section and raises the gift limit to $250 and requires disclosure of the donor's name and a description of the gift. Section 19 makes a technical change in response to the new campaign finance reform law and allows certain contributions to small budget campaigns to fall within the contribution definition. In that law, small budget campaigns were exempted from the reporting requirement; Section 19 conforms to that provision. Section 20 allows acceptance of a gift from a foreign government, or the U.S. or a state government, for protocol purposes, but requires that those gifts be transferred to the legislative council. Section 21 defines who is considered an immediate family member, and includes spousal equivalents. Section 22 contains several provisions pertaining to gifts. It permits legislators to accept gifts on behalf of charitable organizations; and requires the reporting of an inheritance, but not its value, from a person other than a family member. It establishes that a gift of volunteer services may be accepted by a legislator as a gift to the state. It also requires volunteers and those involved in educational training to comply with the ethics code. A nepotism extension allows family members to volunteer their time. The proposed language in subsection (k) pertains to gifts to family members of legislators or legislative employees, so that if the gift was received because of the connection, it requires disclosure. The language "or reasonably should know" in subsection (k) is intended to relieve the burden on those covered from researching gifts to family members whom they have little or no contact with. Number 397 SENATOR MACKIE asked whether subsection (k) only refers to minor children, or children living at home, or those one has some semblance of control over. MS. CRAMER said they do not have to be dependent children but the gift does have to be received by a family member because of the relationship to the legislator. CAROL OLSON , representing herself, testified via teleconference from Anchorage and made the following comments. Section 8 needs greater clarification. She suggested retaining the words "during a legislative," "either," and "campaign purposes or to raise money for." She questioned why the phrase "through competitive sealed bidding" was removed from Section 10 and thought its removal to be unacceptable from the public's perspective. With regard to Section 16, she expressed concern about the large increase, from $100 to $250, for the value of gifts. Also, public employees are barred from accepting food or beverages for immediate consumption so there is no reason legislators should have that ability. She felt those who are more in need of discounts under section 17(c)(7) are prohibited from accepting them. Regarding the question about accepting a fishing trip on a lobbyist's boat, she felt that would be inappropriate, despite any contribution to the trip made by the legislator. CHAIR GREEN clarified that state employees are not prohibited from accepting food or beverages for immediate consumption, although federal employees may be. MS. OLSON noted she was referring to municipal employees who are unable to accept such gifts. Number 294 SENATOR PEARCE explained Section 23 allows legislators and legislative employees to accept compensation less than fees generally charged, to allow an attorney to do pro bono work, or an engineer to review plans, for a non-profit organization. SENATOR PEARCE stated current law does not set reporting deadlines for representation before a state agency. Section 24 corresponds to other deadline changes of February 15 and 60 days for new representation. Section 25 sets out a reporting deadline of February 15 for disclosures of interests in state contracts, board memberships, close economic associations, and representation of clients. Section 26 corrected a drafting oversight by formalizing entitlement of the public members of the ethics committee to receive per diem and travel compensation. The public members are not entitled to be paid for their time in service to the committee. Sections 27 and 28 prohibit an ethics committee member from participating in a complaint against one who is supervised by that member and establishes a procedure for appointment. Current law sets out that if a member is disqualified during the legislative session, the presiding officer must have two-thirds concurrence to appoint another member for that proceeding. If disqualification occurs during the interim, the presiding officer appoints a new member with the concurrence of the House subcommittee. Involving either body of the Legislature defeats confidentiality. Section 28 directs presiding officers to appoint alternates for two-year terms who would serve when appointed by the committee chair. Section 29 clarifies prohibitions of participation in political management or in a political campaign extend to ballot initiatives and to campaigns for federal, state and local offices, regardless of whether the campaign is partisan or nonpartisan. A public member, employee, or contractor of the committee may not attend a fundraiser or make a political contribution to a political party, legislative candidate, incumbent legislator, or legislative employee running for another public office, or to their opponents in legislative races. SENATOR MACKIE asked if a committee member's spouse could contribute or participate in a campaign. SENATOR PEARCE did not know how the federal law worked on that issue, but did not think the state has the authority to reach that far. SENATOR PEARCE stated Section 30 permits a contractor with the ethics committee to request the committee to exempt some members of the corporation or partnership from having to comply with some or all prohibitions against political activity. The committee has contracted for outside legal counsel with an attorney who is part of a large firm with branch offices outside of Alaska. A strict reading of current law might mandate all employees of that law firm to comply with Alaska's ethic code. Section 31 permits the committee to adopt guidelines to implement this chapter under a public process and provides that a person who acted within the guidelines could not be penalized for violating the ethics code. The current procedure of issuing advisory opinions allows interpretations based only on the facts presented to the requestor. Senator Pearce explained when someone asks for an advisory opinion, the ethics committee must give an opinion based only on the information provided. The committee feels if it had the ability to set guidelines, based on a broad set of circumstances, it could assist the requestor and others covered by the code, to avoid inadvertent violations. Number 190 SENATOR MACKIE questioned if the committee would provide those covered with a set of guidelines and have them apply their own circumstances, rather than issue advisory opinions. SENATOR PEARCE replied the committee would continue to give advisory opinions but could then adopt guidelines to apply to everyone. SENATOR PEARCE said she was responsible for the amendments last year which pertained to the Executive Ethics Act. She urged the committee to adopt a code of ethics, in SB 105, for the executive branch, that mirrors the standards in the legislative ethics law. The current Executive Ethics Act is extremely loose, and in some cases there is reason to believe that behavior that should be dealt with is never reviewed by anyone. She offered to work with the committee to provide language to amend the bill. Number 145 CHAIR GREEN requested anyone interested in submitting draft amendments or suggestions to provide those to committee staff. SENATOR MACKIE said he would be interested in using language regarding gifts, discussed in the past, from the Open Meetings Act, that allows for participation in events that are purely social and not connected with legislative business. He noted legislative basketball and bowling leagues exist, as well as other circumstances, that should be discussed. CHAIR GREEN announced SB 105 would be heard again on Thursday, March 13. There being no further business, the meeting was adjourned at 5:09 p.m.