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This editorial appeared in the Anchorage Daily News:
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Alaska's financial disclosure laws have a big loophole. During their last year in office, legislators and other public officials can make secret financial arrangements with anyone they want and never have to report them.
The hole isn't new, but it's worth looking at as the FBI investigates legislators' ties to Veco Corp.
Veco in past years has hired several lawmakers as consultants, without ever having to tell the public exactly what the lawmakers did for the money. For example, Veco in 2003 paid Rep. Tom Anderson $10,000 in part to attend community council meetings in his own district. It paid Sen. Ben Stevens $252,000 over five years, with no public accounting of what he did for the company.
Both lawmakers are leaving the Legislature this year.
So the question naturally arises: Does Veco, or anyone else, hand out extra-sweet or even semi-sweet consulting contracts to departing legislators? The answer is, we'll never know. When they leave office, lawmakers and other public officials don't have to file a disclosure report for their last year of service.
That loophole stems from a strangely literal interpretation of state disclosure laws.
State law says, "A legislator ... shall file a disclosure statement." That statement, covering the previous calendar year, is due March 15.
So why don't departing legislators have to file? Because they're out of office on March 15. On that day, the Alaska Public Offices Commission says, they are no longer "legislators" and do not have to file any more financial disclosures.
"It's how it's always been," says Brooke Miles, director of the offices commission. "I inherited the interpretation of the law." Since she's been around, nobody has raised legal questions about how the commission applies the disclosure requirement. The same rule applies to people leaving executive branch jobs, such as commissioners and deputies.
Admittedly the law is ambiguous, and the commission's practice is probably defensible. The ambiguity, however, could be interpreted the other way: The law says a legislator is required to file a disclosure covering the previous calendar year. Period, no exceptions. The report is due by March 15. The fact that the person is no longer a legislator on March 15 is irrelevant. The person was a legislator in the previous year, so the obligation to disclose finances remains intact. An aggressive disclosure watchdog agency might decide on its own to enforce a stronger disclosure standard.
Requiring a disclosure for the last year in office makes sense. All the reasons for public disclosure still apply.
According to state law, disclosure is meant to "assure the trust, respect, and confidence of the people of this state." But that trust is compromised when officials can make secret financial deals as they head out the door.
Disclosure is how the ethics law aims to ensure a legislator "avoids conflicts of interest or even appearances of conflicts of interest." Without disclosure covering the last year in office, those conflicts are impossible to detect.
Legislators could close this loophole. They could make clear that departing lawmakers and other officials have to report their finances for their last year of service. But the Republican Legislature has spurned repeated calls to toughen other parts of state ethics laws. This is a case where the remedy will probably have to come from the Public Offices Commission or, failing that, from a voter initiative.