Leaders eye new legal line for ethics

Murkowski proposes limits on workers' holdings in companies that may pose conflicts

Posted: Wednesday, March 02, 2005

Gov. Frank Murkowski has forwarded to the Legislature a proposal to limit state employees' personal holdings in companies they deal with on official business.

The plan, written by former U.S. Attorney Robert Bundy, was sent to lawmakers in the weeks following Gregg Renkes' resignation as state attorney general.

Renkes stepped down Feb. 11 amid conflict of interest allegations for owning stock in a company that was involved in an international coal deal he helped put together.

Bundy's proposal, sent to the governor on Feb. 17, would establish clear conflict of interest thresholds he has said do not exist in state law.

Bundy was out of the country Tuesday and could not be reached for comment, but in his letter to Murkowski, he said he reviewed laws from a number of states.

"Although no language from any one state's statutory scheme addresses completely the issues we see, we started with language and ideas from several different statutes as the basis for our proposed revisions," Bundy wrote.

He draws the legal line if a company stands to gain as a result of the action of the official, and if that official meets any of these criteria:

• Owns 1 percent of voting or equity interest in the company;

• Owns more than 1 percent of the voting or equity interest in the company;

• Owns more than $10,000 of the fair market value of the company;

• Is a member of the board of directors, is an employee or is an elected officer the company.

In a letter outlining the proposal, Bundy said a company would have to have a "material interest" in a state matter for an ethics question to come up.

But he doesn't define what a material interest would be, saying it "is a well-recognized legal concept that allows for the myriad of situations encountered in the real world."

His proposal also says that there is no wrongdoing if the employee's interest in a company is "of a type that is possessed generally by the public or a large class of persons to which the public officer belongs as a member of a profession, occupation, industry or region."

The governor won't file a bill himself, as he said he planned to do following Bundy's investigation into Renkes.

Instead, Murkowski on Feb. 22 forwarded to House Speaker John Harris, R-Valdez, and Senate President Ben Stevens, R-Anchorage, copies of Bundy's proposed legislation.

Murkowski spokeswoman Becky Hultberg said Tuesday the governor did not submit his own legislation because it would have taken a long time to review it in the Department of Law, and the Legislature may be able to act more quickly.

"We want to see this as quickly as possible," she said. "It's a flaw in our system that we need to be fixed."

Stevens said the proposal was sent to Senate Judiciary Chairman Ralph Seekins, R-Fairbanks, whose committee is reviewing all of the state's ethics laws.

Stevens said he has not studied Bundy's plan, but he considered important the question of how changes to the law will affect current employees or the ability to attract new ones.

"The circumstances surrounding one individual have driven the perceived need for a drastic change," Stevens said. "I don't think it's something that needs to be done rapidly. It needs to be done diligently."

Seekins on Tuesday said he has seen the proposal but has not evaluated it. It will be considered in the committee's overall review of the state's ethics laws, where changes will be made where the need arises.

"Maybe there are more sores open somewhere that need to be closed," Seekins said.

The review may not be completed this session, he said. The ethics question is a priority, he said, but "priority doesn't mean I'm in a hurry."

House Minority Leader Ethan Berkowitz, D-Anchorage, who last week failed in an attempt to attach his own limits to financial holdings, said it's important to have an unambiguous rule defining ethics boundaries.

Now the onus is on the Republican majority to move on a bill, he said.

"They need to prove they can act ethically and not just talk about it," he said.

Renkes owned more than $100,000 in stock in KFx Inc., a Denver company with a patented coal-drying process that was involved in an agreement to export coal to Taiwan.

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