Lawmakers' ethics bills aim at state employees

Democrats' version halves employees' maximum stock ownership

Posted: Sunday, April 24, 2005

Two more bills aimed at ethics regulations for state employees surfaced Friday, hinting that the Alaska Legislature may set guidelines before the session runs out in May.

The pressure was on to put something more detailed on the books after former Attorney General Gregg Renkes was investigated on a complaint of having a conflict of interest with a company included in a coal trade deal in February.

Senate Judiciary Co-chairman Ralph Seekins, R-Fairbanks, said he and his staff reviewed nearly every state policy on public employee holdings and ethical breaches before writing Senate Bill 186 and 187.

But most of the language in the new policy is similar to recommendations made by former U.S. Attorney Robert Bundy, who was a governor-appointed investigator in the Renkes case.

"We have to make sure we protect the public but also protect the public employee," Seekins said. "Thousands of public employees can be affected by this bill."

The legislation finds employees in violation if they hold $10,000 in stocks or 1 percent ownership of a single company involved with state contracts.

But it excuses employees with mutual funds and other accounts that are often invested in companies indirectly, or without the knowledge of the employee.

Democrats have a similar bill that caps the stock levels at $5,000. Sen. Hollis French, sponsor of SB 127, said the amount is a lot of money to many low-income earning Alaskans.

Seekins, the sponsor of the bill, expects a lot of debate once the bills filter through the committee.

"When you get into it this is not an easy subject," Seekins said.

For instance, someone working on the proposed natural gas pipeline may be a key negotiator and suddenly his mutual fund purchases stock in energy company BP, Seekins said.

"Do we want that person to resign from the job, or do we want some kind of disclosure or some ability to continue working for the state?"

A return on a $10,000 investment would hardly be worth the cost of breaking the law, but the bill has to start somewhere, Seekins said.

Renkes had $100,000 invested in KFx, a Denver company included in an agreement between Alaska and Taiwan to market Cook Inlet coal for export.

The bills - one for the executive branch and the other for the legislative branch - also protect the accused by making complaints confidential until the Alaska Personnel Board investigates the case and rules against the employee.

Before elections, filing ethics complaints can be used as a "political hammer" to smear campaigns days before voters go to the polls, giving little time to gather evidence for investigations, said Seekins.

French said this confidentiality clause makes the bill more complicated. And at some point after the complaint is filed, the public has a right to know.

"I think it's a bad idea. We live in an open society," he said.

• Andrew Petty can be reached at andrew.petty@juneauempire.com



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