Conflicted Interests

Published — January 8, 2018 Updated — May 1, 2018 at 10:00 am ET

These are the only two states that don’t require lawmakers to disclose finances

Both Idaho and Michigan have potential bills this upcoming session that would help prevent conflicts of interest and increase transparency

This story was co-published with Salon.


It’s an enduring rite of January — the convening of many state legislatures nationwide. From Albany to Honolulu to Santa Fe, many of the rituals, customs and rules that dominate state capitals are the same. But not everywhere. Legislative sessions kick off this week in Idaho and Michigan, but with a difference.

Despite ongoing efforts to bring about reform, the Great Lakes State and the Gem State are the last remaining holdouts that don’t require lawmakers to disclose anything about their personal finances.

And while government watchdogs say this sort of personal financial disclosure is a crucial tool for holding lawmakers accountable to the public, the prospects for change under the capitol domes in Boise and Lansing are uncertain at best.

In Michigan, Democratic Sen. Steven Bieda has introduced seven bills since 2003 seeking such disclosures, including one bill that remains pending. “I’ve been pushing this bill ever since I was in the House of Representatives,” Bieda said. “But, who knows, maybe it’s this article or the article that says we are the last in the country to require financial disclosures that will make us take this up and vote on it?”

Such disclosures are commonly required for elected officials from U.S. Congress down to local offices. In the case of state legislators, the forms typically require annual filings to include a lawmaker’s primary employer, occupation, or job title and additional income or business associations.

In December, the Center for Public Integrity and The Associated Press published “Conflicted Interests,” an investigation that analyzed the disclosure reports from 6,933 lawmakers across the 47 states that required such reports. The probe found numerous examples across the country of lawmakers who have introduced and supported legislation that directly and indirectly helped their own businesses, their employers or their personal finances.

The project also revealed that at least 76 percent of state lawmakers holding office in 2015 reported outside income or employment, a necessity for many legislators given the part-time structure and pay of many of the elected positions.

Disclosure reports from Michigan, Idaho and Vermont were not included in the investigation because they did not require them at the time. Last year, in direct response to the Center for Public Integrity’s 2015 State Integrity Investigation, Vermont legislators created its first-ever ethics commission, which kicked off Jan. 1, two days before their session started. Vermont will begin requiring disclosures starting this year.

As of last week, Michigan and Idaho remain the final holdouts on disclosures.

Idaho’s session starts Monday, and a bipartisan group of state lawmakers have agreed on draft legislation that would force elected officials to disclose financial interests worth at least $5,000, according to Republican Rep. Thomas Loertscher.

He said he decided to work on the proposal because he wanted to make sure it was done in the least intrusive way possible, while reducing the number of complaints by members of the House who report others’ conflicts of interest.

“By us doing this, it should eliminate quite a bit of the need for that,” said Loertscher who is also a farmer and a rancher. “People will be able to automatically see that there is a potential conflict with almost every bill that comes through the Legislature because we are a citizen legislature.”

Loertscher said he expects some debate on whether the bill goes too far or not far enough but is optimistic it will pass the House by the end of the session.

In Michigan, Bieda introduced a similar bill last January that would require state or local elected officials to file annual reports, including outside income over $1,000, assets over $10,000, liabilities over $10,000, property transactions and any positions on the boards of nonprofits or corporations.

Michigan holds two-year sessions, so Bieda’s bill will still be alive when the Legislature reconvenes Wednesday. But his latest bill has received little support in the Senate, which has been controlled by Republicans since 1992.

Craig Mauger, executive director of the nonpartisan watchdog group Michigan Campaign Finance Network, said the legislation is unlikely to move forward because many of the key power players are fundamentally opposed to this type of proposal.

“In Michigan, we currently have no idea what sources of income lawmakers have, what major investments, or what organizations they might be affiliated with,” Mauger said. “Having these disclosures gives the public the power to decide whether someone is voting on something in which they are trying to benefit themselves.”

In both Michigan chambers, it is still up to lawmakers to disclose if they have a conflict of interest, but only Senate members are banned from voting after they’ve come forward. In the House, lawmakers still have the option to vote.

Mauger used the example of former Michigan Republican Rep. Patrick Somerville to illustrate the flaw in the self-disclosure policy. Somerville worked as an Uber driver, and sponsored an amendment that prohibited airports from outlawing rideshare providers, like Uber and Lyft, from picking up and dropping off passengers.

The House adopted the amendment in the summer of 2015, but when the bill moved to the Senate, the language was changed, Mauger said.

Somerville, who was forced out of office by term limits in 2016, told the network he mostly drove on the weekends and on University of Michigan game days during his last two years in office. “I didn’t think I was doing it enough to make it a conflict,” said Sommerville after an Uber rider recognized him and made it known to the network.

This lack of disclosure is partly why Michigan scored an F in The Center’s 2015 State Integrity Investigation and ranked worst in the country in the comprehensive assessment of state government accountability and transparency done in partnership with Global Integrity. Michigan received an F in 10 of the 13 categories of government operations that were examined, including public access to information, political financing and judicial accountability.

The lack of effective disclosure rules for officials in nearly all facets of state government opens the doors to potential conflicts of interest, but also to potential public corruption, according to Daniel Krassner, political director at Represent.Us, a nonpartisan group aimed at passing anti-corruption laws at the state and local level.

“Across the country, there are legislators doing business with their state government and benefiting privately from budgets they’ve built,” Krassner said. He added that Michigan especially is at a high risk for corruption by not putting in place commonplace transparency and accountability safeguards.

“Michigan should join the rest of the states in requiring financial disclosure,” Krassner said. “Disclosure is key to holding politicians accountable.”


State lawmakers often blur the line between public’s business and their own

Find your state legislators’ financial interests

The unexpected jobs your state lawmakers have outside the office

Q&A: What we learned from digging into state legislators’ disclosure forms

Conflicted Interests: Stories from the states

Idaho lawmakers kill bill requiring personal financial disclosures

Michigan lawmakers voted on bills even after admitting conflicts of interest

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