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Do Conflicts of Interest Matter? In the Michigan Legislature, Not So Much.

New legislation would make voting with a conflict of interest a felony punishable by up to 4 years in prison

By Kristian Hernández, The Center for Public Integrity

Republican state Sen. Darwin Booher of Michigan initially abstained from voting on a 2015 bill that proposed a $12,000 raise for circuit court judges, writing that it “could be perceived as providing a benefit to an individual to whom I am personally related” — his daughter,  49th Circuit Judge Kimberly Booher. 

But a year later, the senator did vote on the raises when a House version came back to the Senate. The bill passed and became law, giving his daughter and her peers a salary boost.

Booher is not the only Michigan lawmaker who voted on bills that could potentially benefit them or their close relatives. A Center for Public Integrity analysis of more than 50,000 pages of official legislative journals logging each day’s actions found six other Michigan legislators who voted on bills even when they publicly noted their own conflicts of interest. 

Currently, the penalties for voting when a conflict of interest exists are modest — and seemingly unused. Michigan’s Senate bans members from voting on bills in which they have a private or professional interest. Violators may be expelled by a committee of fellow legislators, though any actions taken would not amount to criminal charges, according to the chamber’s rule book. And not a single senator has been reprimanded under the rule in at least a decade, according to the Senate majority leader’s spokeswoman Amber McCann. 

The House gives representatives the option of using a conflict as a reason to abstain yet does not prevent the officials from voting.

But a new state bill introduced this session would make voting on such conflicts of interest a felony punishable by a fine of up to $5,000 and as much as four years in prison, which would make Michigan stricter than some states.  

“Legislators should be held to the highest standard, and be fully transparent about financial matters and their motivations,” wrote Democratic Rep. Scott Dianda after introducing the measure in March. “Michiganders want to know that the legislators they send to be their voice at the state Capitol are not using their position to enrich themselves or their family members.” 

But Dianda’s bill — and another measure that seeks more disclosures of legislators’ personal financial ties — may not win enough support to pass. Dianda’s bill has been referred to the ethics committee. 

Some officials say conflicts of interest are not a concern to their constituents, and the efforts to regulate them are just a ploy used for political attacks. Other officials and watchdogs in Michigan say the measure falls short in fixing the transparency and accountability issues contaminating the Great Lake State’s Legislature. 

“Right now it’s on the lawmakers to police themselves,” said Craig Mauger, executive director of the Michigan Campaign Finance Network, a nonpartisan, nonprofit organization that chronicles the role of money in state politics.

“Currently we have no idea what sources of outside income lawmakers have or what major investments they have or what organization they may be affiliated with outside of their legislative duties,” he added.


Honor system

Michigan scored an F in the Center for Public Integrity’s 2015 State Integrity Investigation, done in partnership with Global Integrity, and ranked worst in the country in the comprehensive assessment of state government accountability and transparency. 

Part of the reason Michigan fared so poorly: It is one of just two states that doesn’t require lawmakers to file financial disclosures that detail the ties that could lead to conflicts of interest.

(In Idaho, the other state lacking disclosures, lawmakers shot down legislation in January to require them.)

Such reports are commonly required for elected officials from U.S. Congress down to local offices. In the case of state legislators, who frequently hold down other jobs when not in session, the forms typically require the annual filings to include a lawmaker’s employers, occupation or job title and additional income or business associations.

In Michigan, though, the only window the public has into conflicts of interest is when legislators raise their hands to disclose them.

From 2009 through 2017, the Michigan House voted on more than 10,000 bills, according to legislative journals that record formal actions and roll call votes. A total of 25 members disclosed their own potential conflicts of interest at least 38 times. But five of those representatives still voted on the bills in which they had noted a conflict, according to the Center’s analysis.

Democratic Rep. Jim Ananich abstained from voting on a bill that would impact teacher pensions in 2012, but then voted on the same bill two months later. Ananich, a former teacher and now the Senate minority leader, wrote in a statement that he abstained from voting on the bill out of an abundance of caution.

He later consulted with the caucus legal counsel who advised him this was not a conflict of interest, Ananich said.

"At the time, there were 80,000 teachers in Michigan, including thousands in my district, who needed their representative to speak up for them on this issue,” he said. “I have long supported increasing transparency in the Michigan Legislature. I have signed on to personal financial disclosure legislation and have offered up my own finances to the press in the past.”

Three other House members at the time also abstained from voting on the same bill the first time around and later voted, legislative journals show. The three, who are no longer in office, did not respond to requests for comment.  

It appears only three senators disclosed possible conflicts, doing so seven times amid more than 5,900 bills during the same period. Two of those senators voted anyway, according to the Center’s analysis of legislative journals, though neither has faced disciplinary action.

Booher, who ultimately voted on his daughter’s raise, did not return calls for comment, nor did his daughter.

The other senator, Republican Mike Nofs, accounted for five of the seven self-disclosures the Center for Public Integrity identified in the Senate. He voted on a 2011 bill he said could directly affect his retirement. 

But, Nofs said, the multiple times he voted on it were procedural votes that affected when the prospective law would take effect, not whether it would pass. “It has nothing to do with voting on the substance of the bill,” he told the Center.

The Michigan Constitution requires two-thirds of the members of each chamber to approve a bill for it to go into effect immediately after the governor signs it. If the vote fails to win that much support, the bill goes into effect 90 days after the end of the legislative session.

Over on the House side, Democratic Rep. David LaGrand led his chamber in self-disclosures. In 2017, his first year in office, the attorney and business owner from Grand Rapids abstained from voting on all four conflicts of interest that he disclosed. 

But he said if legislators don’t choose to come forward, there is no way for the public to know if any of the 110 members in the House or the 38 state senators in Michigan are voting on laws that would benefit them.

“I am voting on how the government spends its money and that gives me a massive opportunity for self enrichment all the time,” LaGrand said.


Conflicted Interests

Indeed not all Michigan legislators disclose their conflicts when they should. The Michigan Campaign Finance Network teamed up with Bridge Magazine in a 2016 investigation that found multiple examples of legislators who did not report their own conflicts. 

The investigation highlighted the owner of a septic system installation business who sponsored legislation to waive seasonal vehicle weight limits for those doing emergency septic work. A real estate management company president sponsored a bill that would make it harder to sue landlords about bed bug infestations.

And Republican Rep. Eric Leutheuser, co-owner of Leutheuser Buick Pontiac GMC,  introduced a bill in 2016 that would require the state to pay for some auto dealer training programs.

When Leutheuser discussed the bill before the House Committee on Regulatory Reform, the committee’s vice chair at the time, Republican Rep. Ken Yonker, asked why taxpayers should pay for such industry-specific training.

Leutheuser declined to comment for this story, but video from the May 18, 2016, hearing shows Leutheuser shrugging, unable to answer why taxpayers should pay to train his auto dealers. 

“Would you take my industry up so I don’t have to pay for mine, too?” Yonker said with a smile during the hearing.

But, as first reported by Bridge Magazine and the Michigan Campaign Finance Network, he had already done so. In 2013, Yonker, founder and then-owner of Yonker's Landscaping Inc., introduced a bill to eliminate certification requirements and fees for landscape architects.The bill died in committee. 

A later version of Leutheuser’s bill ultimately passed — stripped of the state-funded training for car dealers.

“Eric was trying to have the taxpayers give him a benefit, public money to pay for their licensing and training. I just thought that was ludicrous,” Yonker said in a recent phone interview. “What I was doing was repealing an unnecessary regulation that was being a burden on the industry.” 

Yonker, who today works as a drainage commissioner in the same district he represented in the House from 2010 to 2017, said Leutheuser was the only representative who attempted to benefit from his position as a lawmaker while Yonker was in office.   

“We have checks and balances in place. I don’t think it’s so hard to figure out what’s a conflict of interest and what’s not,” he said. “To go out there and start making felonies out of that is absolutely ridiculous.”

 And, he added, he’s never heard from constituents about such conflicts. 

“It is more of an internal concern than it is a public concern. People don’t even follow their representatives close enough to know if they would be doing anything like that,” he said, referring to members voting for self-enrichment. “It is more those that are politically involved that would pick up on that.”

Michigan isn’t the only state dealing with conflicts of interest among legislators. 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 nationwide and found numerous examples of state lawmakers around the country who have introduced and supported legislation that directly and indirectly helped their own businesses, their employers or their personal finances. 

In nearly every state, legislators can abstain or ask to be recused from voting on legislation if they have a conflict — and many states require them to step aside for votes, if not discussion, on the bills. But Oregon and Utah require lawmakers to vote if they are present, regardless of any potential conflicts of interest, out of concern that frequent abstentions would keep their chambers from working properly.

Michigan is considering adding disclosures that would make the information about possible conflicts more visible to the public. 

Democratic Sen. Steve Bieda introduced a bill in January 2017 that would require elected officials to file yearly financial disclosures but the bill has not gained much traction. 

LaGrand, who supports the concept of adding a disclosure requirement, explained that lawmakers often rely on staffers to identify conflicts and flag them for their bosses because of the sheer volume of bills. But if Michigan required lawmakers to file financial disclosures every year, these conflicts of interests would be more obvious.

“The more we can shed light on this, and the more we can get money out of politics, the better our democracy is going to be,” LaGrand said.“If I don’t want to be honest about my finances, I shouldn’t run for office.” 

Data reporter Pratheek Rebala contributed.

The Center for Public Integrity is a nonprofit investigative news organization based in Washington, D.C. 

Caroline Cournoyer is GOVERNING's senior web editor.
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