REVISED THE SELECT COMMITTEE ON LEGISLATIVE ETHICS April 15, 1993 1:15 p.m. MEMBERS PRESENT Joseph Donahue Ed Granger Margie MacNeille Shirley McCoy Edith Vorderstrasse Senator Jay Kerttula Senator Drue Pearce Representative Jerry Mackie Representative Brian Porter ALSO PRESENT Terry Cramer, Legislative Legal Counsel Legal Services Division Legislative Affairs Agency Eric Musser, Legislative Assistant to Representative Brian Porter Pam Stoops, Director, Administrative Services Legislative Affairs Agency CALL TO ORDER The meeting of the Select Committee on Legislative Ethics was called to order at 1:15 p.m. by Terry Cramer, Legal Counsel, Legislative Affairs Agency. Ms. Cramer states she was present at the request of the members of the committee to serve as a temporary chair until a temporary chair was selected from the public members. The roll was taken and Ms. Cramer stated there was full attendance. MEMBERS' TERMS Mr. Granger asked that the committee consider the election of a permanent chair immediately in light of the other demands on members of the committee. Ms. MacNeille stated that the public members' terms needed to be established first since one person would have a one-year term and the chair's term was a two-year seat. Ms. Cramer noted that by statute it was the subcommittee chairs who act as the full committee chairs, and until the subcommittees met, there couldn't be a full committee chair under the statute. Representative Porter suggested that the same person be the chair from both subcommittees. The committee drew lots and the following terms were set: Joseph Donahue and Edith Vorderstrasse, 3 year terms; Ed Granger and Margie MacNeille, 2 year terms; and Shirley McCoy, 1 year term. ELECTION OF THE CHAIR AND VICE CHAIRS Mr. Granger moved that the Senate subcommittee chair be Mr. Donahue and asked unanimous consent. There was no objection and Mr. Donahue was elected as the Senate subcommittee chair. Ms. Cramer stated that the Senate chairs the committee in odd years. Mr. Donahue then began to chair the meeting. Representative Porter moved and asked unanimous consent that Mr. Donahue be nominated for the chair of the House subcommittee. There was no objection and Mr. Donahue was elected chair of the House subcommittee. The nominations were opened for the vice chair of the Senate subcommittee. Senator Kerttula moved and asked unanimous consent that Mr. Granger be nominated. There was no objection and Mr. Granger was elected vice chair of the Senate subcommittee. Representative Mackie moved that Ms. MacNeille be nominated as vice chair of the House subcommittee and asked unanimous consent. There was no objection and Ms. MacNeille was elected vice chair of the House subcommittee. ADOPTION OF THE AGENDA Senator Kerttula asked that the item of administrative procedures be added to the agenda. It was added as item No. 11. Mr. Granger asked that an item be added to the agenda for public comment. This was added as item No. 12. Representative Porter indicated that he would be absent from the meeting for a period of time and asked that the item of staffing not be considered until he was present. Item 7 was moved to some time later in the meeting, at the chair's discretion, when all were present. Ms. MacNeille moved and asked unanimous consent that the agenda be adopted as modified. There was no objection and the agenda as modified was adopted. APPROVAL OF MINUTES OF MEETING OF MARCH 25, 1993 Ms. MacNeille moved the approval of the minutes. There was no objection and the motion was approved. COMMITTEE BUDGET Eric Musser, Legislative Aide to Representative Brian Porter, explained the two draft budgets. The two versions of the budgets were based on different levels of staff services and office locations, and the number of meetings and their locations. Draft 1 was based on all meetings being in Juneau and staff being in Juneau. Draft 2 was based on an Anchorage location. Senator Kerttula noted that during session it would be necessary to hold the meetings in Juneau. Representative Mackie suggested that the budget be reviewed component by component rather than adopting one or the other. The first component to be considered was personal services. After some discussion, Representative Mackie moved that the committee hire a permanent part-time employee at a range 19 to be located in Anchorage during the interim and in Juneau during the session. He later amended his motion to move that the committee budget for a range 19 permanent part-time employee and asked unanimous consent. There was no objection and the motion was adopted. The next budget item to be considered was office location and meeting locations. Senator Kerttula moved that the office be established in Anchorage, and to the maximum extent possible, the meetings of the committee be held in Juneau during the legislative session and asked for unanimous consent. There was objection. Ms. McCoy was concerned that the best qualified person may not be in Anchorage. The motion passed with the 6-2 vote as follows: Mackie, Porter, Pearce, MacNeille, Donahue and Granger voting in favor and McCoy and Vorderstrasse voting against. Senator Pearce asked where the meetings had been held during the interim in the past. Ms. MacNeille indicated that if there were not confidential matters the meetings were, for the most part, held by teleconference. Senator Pearce then moved that for planning purposes the committee plan to hold the interim meetings in Anchorage. There was no objection and the motion was adopted. Representative Mackie moved that the committee budget for 8 meetings, 4 meetings in Juneau at a cost of $39,534.08 and 4 meetings in Anchorage at a cost of $17,634.08, for a total of $57,168.16 for committee travel. There was no objection and the motion was adopted. Senators Kerttula and Pearce returned to the Senate Floor. The next budget item to be addressed was staff travel. Ms. McCoy suggested that since some of the meetings were to be conducted by teleconference there may be sufficient money already budgeted for the staff travel. Representative Mackie moved that the committee budget $1,776 for staff travel and $880 for per diem for 4 trips to Juneau for a total of $2,656. There was no objection and the motion was adopted. Eric Musser asked that the committee allow LAA to double check the accuracy of the numbers since the per diem rates change depending on the time of year and length of travel. Representative Mackie indicated that was his reason for including the number of days or number of trips, then the dollar amount could be adjusted based on the committee's intent. Representative Mackie noted that in the motion on public members' travel, public members' per diem had not been addressed. Representative Mackie moved that the committee approve per diem for non-Juneau members for 4 meetings, 2 days per meeting, which was 8 days of per diem for 4 members at a cost of $14,096. There was no objection and the motion passed. Representative Mackie moved that the committee approve per diem for the 3 non-Anchorage members for 4 meetings, 2 days per meeting, for a cost of $10,572. There was no objection and the motion was approved. The chair noted that in order for the committee to take action it was necessary to have two legislative members present and there were not two present for the previous motions regarding the travel and per diem budget items. Pam Stoops, Director of Administrative Services for Legislative Affairs Agency, suggested that a total figure for personal services and travel and per diem would be all that was necessary for budgeting purposes. Ms. MacNeille suggested that the committee take a recess and have LAA prepare a budget along the lines discussed. Representative Mackie summarized the committee's wishes for travel and per diem for 4 meetings in Juneau and 4 meetings in Anchorage and intent to hire one range 19 permanent part-time person to be located in Anchorage on a year-round basis. The committee then took a recess. When the meeting reconvened Representative Porter had rejoined the committee. The chair noted that the previous motions for the travel and per diem were to be disregarded. Representative Mackie moved that the personal services budget line item be $48,000 for one permanent part-time range 19 employee. This would be for a person to be employed for 3/4 time. Representative Porter indicated that he had a preference for not hiring staff at all. The motion was approved with a qualified non- objection by Representative Porter. Representative Mackie moved that the committee approve a figure of $33,000 for travel and per diem. This was for 4 meetings in Juneau during the session and 4 meetings in Anchorage for the committee members. There were no objections and the motion passed with unanimous consent. Representative Mackie then moved that the committee budget for a 500 square foot office to be located in Anchorage at a cost of $10,000. Representative Porter noted that Appendix A, page 10, of the Standards of Conduct Handbook, indicated that Legislative Council was responsible for providing office space, equipment and additional staff support and wanted to support the idea of using already existing space and staff. Mr. Granger concurred. Representative Porter indicated that he would support putting the budget together with the understanding that it did not mean he supported expending the funds for any of the items within the budget. The motion passed by a vote of 6 to 1 with Mackie, Porter, MacNeille, McCoy, Donahue and Vorderstrasse voting for the motion and Mr. Granger voting against the motion. Representative Mackie moved that the committee budget $1,000 for supplies. There was no objection and the motion was approved. Ms. MacNeille moved that under professional services contractual funds, the committee budget $60,000 for legal/investigative services. Mr. Granger inquired about the $68,000 currently in the committee's budget. Pam Stoops indicated that money was for this year's expenses; however, what was left, after whatever cost the committee incurs through June 30 of this year, would be carried forward into the next fiscal year and would be available to the committee. Mr. Granger indicated he hoped that the committee would consider contracting its legal services with the Department of Law. There was no objection and the motion was approved. Ms. McCoy moved that the committee approve $5,000 for phone and postage. There was no objection and the motion was adopted. Representative Mackie summarized the budget as follows: personal services, $48,000; travel and per diem, $33,000; office supplies, $1,000; and $5,000 for phones and postage; contractual, $10,000 for office space and $60,000 for legal and investigative; for a total budget of $157,000. Pam Stoops indicated that there was an encumbrance called the House Ethics Equipment Encumbrance, in the amount of $9,936, which will lapse on July 3 unless the committee directs her to request this encumbrance to be re- established. This money can only be spent on equipment. She also noted that there was no excess furniture in Anchorage; however, there may be some equipment available in Juneau. Representative Mackie moved that the committee request Legislative Council to get the equipment for the committee's office and not budget for it. There was no objection and the motion was adopted. REVIEW AND/OR APPROVAL OF ADVISORY OPINIONS Ms. MacNeille asked to be excused during the discussion of the advisory opinion concerning her. The chair asked for clarification of whether advisory opinions should be considered in public. Terry Cramer, Legal Counsel for Legislative Affairs Legal Services, said that in the usual circumstance, the committee's discussion of advisory opinions would be a confidential discussion. In the three advisory opinions before the committee at this meeting, the requesters had asked that the discussion be public. She also noted that Ms. MacNeille was disqualified from participation in the discussion of the advisory opinion concerning her. Representative Mackie asked if Ms. Cramer would review the requests and advise the committee on the opinions. At this time, Ms. MacNeille excused herself from the meeting for the discussion of the opinion concerning her. ADVISORY OPINION 93-1 Ms. Cramer stated that the first advisory opinion concern a possible conflict for Ms. MacNeille. There were two draft opinions. In both cases the statement of the facts were the same, but because there were differing decisions that had been made in the past on the question of state contracts and leases, she had prepared two different responses. She noted that it is the facts that committee gets in a request that are acted on and there were three different questions asked by this request. Ms. Cramer summarized the factual part of the request submitted by Ms. MacNeille. The question arises because Ms. MacNeille's husband is a lawyer in a law firm that does work for the state. There are three kinds of circumstances under which the law firm does work. The first is for contracts with the University of Alaska, entered into under the University's separate procurement code, which are competitive bids. In the second set of contracts, on two occasions, her husband has been retained under a process that did not have a competitive bid. In the third set, her husband's law firm has a contract with a second law firm, and the second law firm has a contract with the state to do legal work litigating with certain oil producers and the contract entered into by the second law firm was not done on a competitive bid basis. Ms. MacNeille's husband's law firm is not a party in any way to that contract. The part of the ethics code that applies is the state contracts and leases, which states that a legislator or legislative employee may not be a party to a state contract unless it meets one of three criteria. Ms. MacNeille's husband is considered an immediate family member and is covered under this section. Ms. Cramer stated that past advisory opinions issued in previous years are useful to this committee to the extent that the provisions of the law have carried through. Ms. Cramer discussed the three kinds of contracts covered: (1) contract let through competitive sealed bidding; (2) the total annual amount of the contract or lease is $1,000; or (3) is a standardized contract or lease that is developed under publicly established guidelines and is generally available to the public at large, members of a profession, occupation or group. In the competitive let contracts, Ms. MacNeille's husband's contracts did not meet the criterion for competitively sealed bids. It is not the second type since the amount is over $1,000. In the third type, standardized contracts, the type of contracts Ms. MacNeille's husband's law firm entered into would satisfy the requirements of being a standardized contract developed under publicly established guidelines generally available to the public at large, members of a profession, occupation or group. Version B of the opinion finds that the language does not extend to this kind of contract, and that the 1984 opinion from the committee which suggests that it did, overturns the opinion. Ms. Cramer stated that her reason for two directions on that question is that in 1991 there was a comment in an opinion about how to interpret the third kind of exception. Representative Mackie asked if Version A of the draft advisory opinion says that it was not a violation of section 3 because of the standardized contract which is available to members of that occupation, so that wouldn't prohibit her from serving on the Ethics Committee; and if Version B states that the contract does not qualify as a standardized contract and therefore the ethics law would be violated if her husband had an interest in that kind of contract. Ms. Cramer indicated that was correct. Representative Porter asked Ms. Cramer to summarize the justification for both versions. Ms. Cramer stated that Version A would allow legislators and legislative employees to enter into request for proposal style contracts under the state procurement code or like the state procurement code. There could be a serious financial drain on family members of people associated with legislators or legislative employees and by limiting it to procurement code processes you are maintaining public control so that the process does not go awry based on legislative influence. Ms. Cramer noted that legally the committee did not have to be consistent, but could base their decisions on the facts of each situation. Representative Porter expressed his concern about the ability to be inconsistent. Representative Mackie stated that he felt it wasn't as much a case of being inconsistent as evaluating each case individually. Mr. Donahue asked if the time these contracts were entered into had a bearing on the situation. Ms. Cramer indicated the statute said that a member of the legislature or legislative employee may not have an interest in state contracts or leases, and that there was no delay in any of the provisions of the ethics code. The recent change to this section was to add that it now applies to immediate family members. Representative Porter asked if past ethics committees had adopted a policy of stating that they will look at these kinds of requests or allegations on an individual basis as opposed to one policy that should be a blanket policy to cover every consideration. Ms. Cramer indicated that often they had been answering a specific inquiry; however, that policy could be adopted by this committee whether it was done in the past or not. Mr. Granger asked if the committee had the letter at the time of the confirmation hearings. Ms. Cramer stated that they had not. Ms. McCoy stated that the mail had been held sealed until there was an ethics committee. Ms. Cramer stated that the committee could adopt conceptual amendments and state the general direction of something the committee wants to see added or deleted. She indicated that she could circulate the revised draft and have the committee adopt it on that basis or be held over for another meeting, although by statute the committee has 30 days from the day of a request to respond. Mr. Donahue asked if the three types of contracts were being treated the same. Ms. Cramer indicated they were not. The second contract she didn't feel she had enough information to reach a conclusion. The response to the second and third types of contracts was the same in both versions of the draft opinion. Mr. Granger indicated that he had problems with the January 12th letter. His concern was that the members of this committee had the highest requirement possible to ensure there were no conflicts. He also felt that Ms. MacNeille had a duty to bring this matter before the Judiciary confirmation hearings and because of those things could not support Version A. Representative Porter stated that his recollection was that during the confirmation hearings Ms. MacNeille did mention the potential conflict. Representative Porter stated that he had asked for the committee minutes to confirm whether this information had been presented at the confirmation hearings. Mr. Granger stated that there should be no taint of conflict with the members of the Ethics Committee and he felt there was a conflict in this case. The committee took a brief at-ease to obtain the minutes of the Joint Judiciary confirmation hearings regarding Ms. MacNeille's testimony at those hearings. Representative Porter read from the minutes of the Joint Judiciary hearings on February 4, 1993, which indicated that Ms. MacNeille did inform the committee that she had filed a nonconfidential advisory opinion about that contractual relationship, and she had proceeded to outline the facts of the situation. Representative Mackie moved that Version A draft advisory opinion 93-1 dated April 9, 1993, be approved by the committee. Ms. McCoy asked that the draft include some of the reasoning regarding the limited precedent being set. Representative Mackie accepted that as a friendly amendment. Mr. Donahue asked if the question regarding the second contract where there wasn't enough information was still subject to an advisory opinion. Representative Mackie stated that his intent was to inform Ms. MacNeille that the ethics committee did not find a conflict in her sitting on the committee due to the circumstances involving her husband. Mr. Donahue asked that the roll be called on this motion. Mackie, Porter, McCoy, Donahue and Vorderstrasse voted in favor; Granger voted against. Ms. Cramer asked for clarification of the changes, which were that the committee finds both the first and second type of contract are permitted because there is relatively little ability for a person in this situation to use legislative influence and to narrow the interpretation of this advisory opinion so that this is not to be used as a precedent for other cases. Ms. MacNeille rejoined the committee and was informed that the committee did not consider her to have a conflict of interest. ADVISORY OPINION 93-2 The next advisory opinion concerned an employee of the ombudsman who sold real estate in her off time. Her question was that, as a real estate agent who represents the seller, did she have a close economic association that she needed to disclose when the person who bought the property was a legislator. The draft opinion determines that she does not have to disclose a close economic association because her economic association was with the seller. Representative Porter moved acceptance of draft advisory opinion 93-2. This would mean that the employee did not have a conflict of interest. There was no objection and the motion was adopted. ADVISORY OPINION 93-3 The next advisory opinion concerned a legislator who had won a prize as a result of a raffle held by Perseverance Theater. The legislator wondered if she had an obligation under the ethics law because of this. The draft advisory opinion did not find that she had any obligation to disclose under the legislative ethics code. Mr. Granger asked that the committee approve draft advisory opinion 93-3. There was no objection and the motion was adopted. DRAFT POLICY ON JURISDICTION AND CONFIDENTIALITY Ms. MacNeille had drafted the policy which says if the subject of the complaint is a member of the legislature at the time the complaint is filed, then the complaint is handled by the house in which the subject serves, even if the act complained of happened while that person was serving in the other house; if the subject of the complaint is a former legislator, then the house in which the person served at the time of the act is responsible; and if it refers to a former legislator about acts that happened in both houses, it is referred to the one in which he most recently served; if it is an employee, it is referred to the house in which the person is presently employed, regardless of where the conduct might have occurred; referral is automatic so that the complaint goes to the house with responsibility for its handling. Representative Porter moved the adoption of the policy as drafted on shared jurisdiction. There was no objection and the policy for shared jurisdiction was adopted. DRAFT POLICY ON HANDLING OF CONFIDENTIAL DOCUMENTS The next item was the draft policy dealing with the handling of confidential documents and had been developed in the last ethics committee. Several members expressed concern about faxing confidential information and supported the proposed policy. Ms. McCoy moved that the committee approve the proposed policy for handling confidential documents. There were no objections and the motion was adopted. ROSTER OF MEMBERS Corrections were made to the roster of members of the committee. ADMINISTRATIVE MATTERS Mr. Granger asked how the committee was going to handle long distance phone calls. Mr. Donahue expressed concern that the members were a public body and should not be discussing the issues except in meetings. Ms. Stoops explained that the chair could authorize credit cards for all members, reimbursement of calls to members could be made, or while traveling reimbursement could be made of calls on the hotel bills. Ms. Cramer stated that out of meeting discussions should be limited to administrative issues. Ms. Cramer indicated that she was reviewing the handbook and would have a memo ready in the future. Representative Mackie moved that the committee adopt the third edition dated January 1993, prepared by the former Select Committee on Legislative Ethics as an "interim reference guide" for legislators and legislative employees with the understanding that a new guide will be forthcoming. Representative Porter asked for unanimous consent. There was no objection and the motion was adopted. Eric Musser asked that the committee consider two items: approval of payment of the advertising bill for the RFPs and noted that in the code of conduct book, page A-7, April 15 is the day that the disclosure of gifts for the prior year were due to the committee. Ms. McCoy moved that the committee approve the payment of the bill to the Juneau Empire for the advertising of the RFP at a cost of $213.14. Representative Mackie asked that the motion include the forthcoming bills from the other two newspapers in which the RFP was advertised. Ms. McCoy noted that the motion was not necessary as the chairman has authority to approve bills up to $5,000. Ms. Stoops stated that the chair would have the authority to approve TRs, travel, etc., up to $5,000. Senator Kerttula rejoined the committee to inform them that he and Senator Pearce would not be able to attend the rest of the meeting. RFPs FOR LEGAL/INVESTIGATIVE SERVICES Ms. MacNeille asked that the committee go into executive session for the purpose of discussing the RFPs for reasons that may prejudice the persons, businesses or companies involved. The committee went into executive session. When the committee returned from executive session, Mr. Donahue appointed an ad hoc committee composed of Ms. MacNeille, Ms. McCoy and Mr. Granger (chair) to review the RFPs against the proposed criteria, to contact references, and to report back to the committee. It was suggested that a personal interview be conducted with the candidates by the subcommittee. Mr. Donahue asked the subcommitttee to consider in their evaluation how some of the advisory opinions could be done in house and thus less would have to be handled by the outside consultants. COMMITTEE BUDGET Mr. Donahue delegated to Representative Porter the introduction of the committee's budget to the conference committee. NEXT MEETING Mr. Donahue announced that the next meeting of the whole would be on Thursday at 1 p.m., April 22, followed by a meeting of the Senate ethics subcommittee. Possible items for the next agenda included complaints, gifts, disclosure, and the commendation of Judge Stewart. The meeting was adjourned at 5:25 p.m.