Sunday, July 1, 2012

Financial Disclosure: Local Law or State Law?

The Haines Borough Assembly has scheduled the second hearing of an ordinance to place the question of adopting local Haines Borough Financial Disclosure laws and penalties and exempting candidates and municipal officers from state financial disclosure laws before the voters on October 2, 2012. The public hearing will be on the July 10 Assembly agenda.

When the Assembly met in February to do some strategic planning, the list of initiatives to undertake included re-visiting the Alaska Public Offices Commission's (APOC) financial disclosure requirements for municipal candidates and officials. Assembly members had learned that the state requirement to report sources and total income more than $1000.00 might be a deterrent to filing for elected positions, contributing perhaps to the fact that last year no one at all filed for one of the vacant seats on the School Board.

The question of exemption from AS 39.50 has been before the Haines voters twice before, and failed both times.  Seeking success this time around, the Government Affairs and Services committee has reworded the question to emphasize that local requirements and penalties for failing to comply will be established and enforced concomitant with the exemption of local officials and officers from the state requirements. 

If the ordinance is passed on July 10, the question on the ballot will read:
Shall the Haines Borough adopt Haines Borough financial disclosure laws requiring disclosure of financial and business interests; establish penalties for failure to comply with local financial disclosure laws; and exempt municipal officials and election candidates from the requirement of the Alaska Financial Disclosure law (AS 39.50)?
Voter consent will no doubt depend on voter confidence in the local requirements and penalties spelled out in the local law.  That law is still in draft form.  It may come before the Assembly at the July 10th meeting.  The draft that has been reviewed by the GAS committee raises the level of income to report from $1000.00 to $5000.00.  This is the major change from the state law. If you are interested in taking a look at the draft law, please email me and I will send you a copy.

According to the Alaska Municipal League, there are 140 cities, boroughs, and unified municipalities in Alaska.  According to the Alaska Public Offices Commission (APOC), 102 or 73% have voted to exempt themselves from the Public Official Financial Disclosure Requirements under AS 39.50. You just have to ask why.  Maybe those communities also had trouble raising a slate of candidates for their local offices.


I have been examining the municipal codes for communities that have voted to exempt themselves from the state financial disclosure regulations.  I looked at the codes for the most recently exempted municipalities:
  • Aleutians East Borough, 2011;
  • Seldovia, 2010;
  • City of Fairbanks, 2009;
  • Delta Junction, 2008;
  • City of Kenai, 2008;
  • City of Ketchikan, 2008;
  • City and Borough of Sitka, 2008;
and for a couple of municipalities somewhat similar to Haines in size and culture:
  • Cordova, 1975;
  • Craig, 1976.
Of this group, the City of Kenai and the City of Ketchikan seem to be the only two municipalities that require candidates and officials to file an actual financial disclosure form. Their requirements are similar to those proposed in the law under consideration for Haines.  If the Haines law is adopted, Haines candidates and municipal officials will also still have to file a disclosure form. Neither the local nor the state form are confidential. Both can be viewed by the public, though not on line. This condition has been established by the state, and mirrored by the municipality, to deter identity theft.

The balance of the municipalities I studied have codes of ethics and provisions for disclosure of a conflict of interest in the case of substantial financial interest in a matter. These provisions are very similar to those in the Haines Borough Code and Charter (HBC 2.06 Code of Ethics; HB Charter Article XVIII, Section 18.01.). If the local law is adopted by the voters, the public's interest in the impartiality of its municipal officers and elected officials will be doubly insured: by our sturdy conflict of interest and ethics requirements as well as the requirement to file a disclosure statement annually with the Borough Clerk.

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