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1 ethics rule ditched, 1 backed; state senators reject disclosure of less than $1,000 in income

by Michael R. Wickline | September 19, 2018 at 4:30 a.m.
In this file photo the chairman of the Senate Ethics Committee, Sen. Missy Irvin, holds up the draft of the committee’s work plan for others to see during their inaugural meeting at the state Capitol. Next to her is Sen. Jason Rapert.

The Arkansas Senate ethics committee on Tuesday called for eliminating a new rule that requires senators to disclose their sources of income below $1,000 a year, but the panel stopped short of recommending axing the requirement to disclose sources of income of at least $50,000 a year.

The committee also learned from the Senate's legal counsel that the new ethics rules require attorneys in that chamber who have retainers with businesses to disclose certain information, but not to disclose their retainers with individual clients.

In June, the Senate overhauled its code of ethics to create the committee, prohibit senators from certain activities that involve conflicts of interest, and require more disclosure of other conflicts and of personal finances.

Federal investigations in the past few years have led to convictions or guilty pleas of five former lawmakers -- Sen. Jake Files, R-Fort Smith; Sen. Jon Woods, R-Springdale; Rep. Micah Neal, R-Springdale; Rep. Hank Wilkins, D-Pine Bluff; and Eddie Cooper, D-Melbourne. They've also led to the indictment of former Senate Judiciary Committee Chairman Jeremy Hutchinson, R-Little Rock, on federal wire fraud and tax charges for which he pleaded innocent on Tuesday.

The Senate's rule changes require members to file financial disclosure statements with the secretary of the Senate for the preceding year by Jan. 31 with more detail than is required on the state's annual Statement of Financial Interest, which goes to the secretary of state's office.

Under the overhauled rules, the senators' statements must list sources of annual income in these categories: less than $1,000; from $1,000 to less than $12,500; from $12,500 to less than $50,000; and of at least $50,000.

The Statement of Financial Interest has two categories: above $1,000 and above $12,500.

The rule changes require "a listing of the total combined household income of the senator during the more recent reporting year as to income from salaries, fees, dividends, profits, commissions, retainers, consulting fees, and other compensation and listing the names of each business and income derived from such business."

The report must include "a statement identifying the source of the income and a brief description of the nature of the services or other reason for which the income was received."

Senate President Pro Tempore Jonathan Dismang, R-Searcy, said the committee needs to define income and profits to determine whether senators are required to report gross income or net income and gross profits or net profits.

The committee then voted to recommend the Senate eliminate requiring senators to disclose sources of income below $1,000 a year.

The action came after the committee chairman, Sen. Missy Irvin, R-Mountain View, said the new requirement is "weird."

Sen. Ricky Hill, R-Cabot, suggested, "Let's eliminate it."

Irvin said the rules "went a step above" by requiring senators to disclose income sources beyond $50,000 a year. Then she questioned whether the committee should call for eliminating that requirement.

For now, Dismang said he wants the committee not to recommend stripping that income category from the rules.

"The point was to have a greater level of disclosure" than the state's Statement of Financial Interest requires, Dismang said.

Sen. Will Bond, D-Little Rock, said, "I'm fine with the bigger disclosure."

"The point was if you are on retainer for X number of dollars and no one knows it, that needs to be disclosed somewhere," Dismang said. "If we revert back to [the Statement of Financial Interest] only, then we have done away with that.

"If we're just redisclosing the number to redisclose the number, let's change the threshold on [the Statement of Financial Interest] next year legislatively to $50,000 and not make an additional requirement here" in the Senate's rules, Dismang said.

"I agree with that," Irvin said.

Senate Legal Counsel Steve Cook said that "retainers to businesses are covered" and required to be disclosed under the overhauled rules.

"A retainer to Walmart, that's a business. You got to disclose that. If you have a retainer to an individual client, you don't have to disclose that. That's as written," Cook said.

Texas "does require their attorneys to list individual clients," and that information is open to public disclosure, Cook noted.

Dismang said, "To be able to be on retainer, you sign some kind of contract. You got something that is public. At what point would any lawyer not initially have to publicly represent their client?"

"I'm not on retainer by anyone," Bond said. "[But] where you get into the real problem is if I was in the Legislature at 28 and working at the Friday firm as an associate and having to list retainers for all 75 members."

Bond said it would be helpful at some point to retain an expert such as Howard Brill, a law professor at the University of Arkansas School of Law, to review the Senate's ethics rules prior to the 2019 regular session to make sure that "this makes sense." Brill was briefly a state Supreme Court chief justice.

The overhauled rules allow any senator who believed there was a violation of the code of ethics to file a complaint with the ethics committee, which will investigate. The complaint will list the name of the accused, the accuser, the provision violated and a description of the suspect activities. The committee could recommend that the Senate punish any violator with penalties ranging from a letter of caution to expulsion.

Bond said the Senate's rules should allow for anonymous complaints to be made against senators by legislative staff members and state representatives, but shield the initial complaints from public disclosure until the Senate committee decides to pursue the complaint.

The new rules require any senator under felony criminal indictment in any federal or state court to relinquish any leadership position, including committee chairmanships and party leadership positions. Under the rules, if the indictment is dropped or the senator is acquitted, the senator will resume the leadership posts.

A senator who is guilty or pleads guilty to felony charges and certain other offenses is prohibited from serving under the Arkansas Constitution.

Metro on 09/19/2018

Print Headline: 1 ethics rule ditched, 1 backed; state senators reject disclosure of less than $1,000 in income


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