Michigan Has a Conflict of Interest Problem. A New Bill Would Begin Fixing It

The state's legislators have previously passed laws that benefited their family businesses, but a new ethics bill would bar voting where personal financial interests are involved.

Michigan Has a Conflict of Interest Problem. A New Bill Would Begin Fixing It
The Michigan State Capitol building in Lansing, Michigan.

Michigan is the only state with a full-time legislature that doesn’t require state elected officials to disclose personal financial information, like outside income earned and business investments held. Without that information, it’s nearly impossible for journalists or watchdogs to identify when lawmakers have conflicts of interests that may influence their actions as public officials.  

The lack of basic financial transparency for lawmakers contributed to Michigan grading 50th in a 2015 survey of states’ government accountability practices conducted by the nonprofit Center for Public Integrity. Michigan lawmakers could vote on legislation that affected their privately-held businesses or investments without publicly disclosing their holdings, the report found.

Currently, Michigan House rules state that lawmakers may recuse themselves from voting in a potential conflict of interest, with an option to have their explanation printed in the House journal. The state Senate rules are slightly stronger in barring members from voting on bills in which they have a “personal, private, or professional interest,” but there exists no enforcement mechanism, and without disclosure for the public to have knowledge of potential conflicts, state house watchers told the Center for Public Integrity that the rules are skirted.

In May 2019, a bipartisan group of Michigan House and Senate lawmakers introduced a package of eight bills that would have brought the state in line with 48 others in requiring elected officials to disclose their household income sources, board positions, family members who are lobbyists, and other information. A previous attempt at reforms in 2017 ran into opposition from a House Republican chair, even though it had leadership’s tacit support.

The 2019 push for financial transparency gathered wide support in the Republican-majority House, but it stalled in the Republican-majority Senate, and the House version died in the Ways and Means Committee without receiving a full House vote. The legislation as it was approved by the House Elections and Ethics Committee required disclosure of the source of income above $5,000 and investments valued over $10,000, among other things, but after amendments, it did not require the details of each holding to be itemized. In a significant loophole, current elected officials would not be required to file disclosures, only needing to do so if they ran for re-election.

A spokesperson for Senate Majority Leader Mike Shirkey said in 2019, “He hasn’t looked at [the bill] in great detail. He’s generally supportive of some discussion about it. But he’s just not totally sold on the concept.” Shirkey had earlier claimed that such disclosure laws would be a “deterrent” to run for office. 

Mandating financial disclosure by legislators is favored by Gov. Gretchen Whitmer and Secretary of State Jocelyn Benson, both Democrats. 

This year, the new Republican House leadership says that making the state government in Lansing more publicly accountable is again a priority. In a press conference on the first day of the legislative session last month, Michigan House Speaker Jason Wentworh and House Speaker Pro Tempore Pamela Hornberger announced the first bill in what they said would be a new ethics reform package, not fully unveiled. That bill, House Bill 4001, would bar House members from voting on bills where they, a family member, or any entity they are financially tied to would substantially benefit. The bill is only a few lines long, a proposed addition to statutory law on standards of conduct for public officials.

Simon D. Schuster, executive director of the nonprofit and nonpartisan Michigan Campaign Finance Network (MCFN), tells Sludge that the House proposal’s effectiveness in preventing conflicts of interest will need to be evaluated in the context of the full ethics package, which has not yet been released. “There was a big statement of intent, a push towards building virtues of transparency and accountability in government, and this was the down payment to make good on that pledge. Where we’re standing now is ‘wait and see,’ Schuster said. “This would not be the first time the House got on board with reforms, only to have them flounder before reaching the governor’s desk.” Schuster mentioned reforms to the state Freedom of Information Act as a recent example of a bill that passed the Michigan House in the previous session, only to move nowhere in the Senate.

The enforcement mechanism and proposed penalties for violating the prohibition in the bill aren’t yet delineated. “The open and pressing question is whether the bill will have teeth,” Schuster said. House leaders Wentworth and Hornberger also unveiled a joint resolution that would reduce the crush of legislation that is often passed during “lame duck” legislative sessions by requiring a two-thirds vote on bills taken up after elections.

Idaho, with a part-time legislature, is the only other state that has no statutory requirement for disclosing legislators’ occupations and income. 

In an effort to boost transparency, Michigan news site MLive sent a voluntary financial disclosure form in 2019 to every state elected official. Only a handful of Democratic elected officials responded to their request. MCFN has found cases of lawmakers voting on bills that pad their pockets without informing the public. During the 2015 and 2016 session, former state Rep. Pat Somerville sponsored an amendment that prevented airports from blocking for-hire vehicle apps like Uber while he was working as an Uber driver on weekends and on college football game days. On why he didn’t disclose his work for Uber, Somerville said, “I didn’t think I was doing it enough to make it a conflict.” A main section of his amendment, that airports “shall not impose requirements that have the effect of unreasonably impeding services,” was included in an Uber and Lyft-related package of bills signed by Republican Gov. Rick Synder in December 2016.

Schuster said that Michigan’s strict lifetime term limits on legislators—eight years in the Senate, six years in the House—contributes to the practice of legislators like Somerville keeping side income or outside positions while in office. Former legislators often move to staff positions, he said, where lobbying disclosures remain murky. In September of 2020, an MCFN analysis for that year found that less than a quarter of spending on food and beverages for state elected officials was disclosed as being tied to a specific legislator, meaning watchdogs had little information to track influence.

In 2016, MCFN and the nonprofit, nonpartisan Bridge Magazine identified 15 lawmakers whose votes presented potential conflicts of interest with their personal financial interests. Their findings included former Rep. Brandt Iden, the president of a real estate company, who sponsored a bill decreasing the liability of landlords over bedbugs. Former Sen. Tom Casperson, who died in November 2020 of lung cancer, was the owner of a log trucking business who sponsored two bills benefiting the timber transport industry, one of which passed into law. 

If the Michigan House’s ethics reform package is to advance to the governor for her signature, it will need to make it through the Senate, whose leaders resisted past ethics measures. Shirkey, the Senate Majority Leader who said in 2019 the disclosure law would not be valuable because it would give the media information to “research and ask questions about,” is the founder and owner of Orbitform, a company that builds assembly machines for manufacturers.

Nancy Wang is the executive director of Voters Not Politicians, a nonprofit organization that advocates for democracy reforms and government accountability in Michigan. Last month the group issued a statement supporting the House’s renewed move toward reforms.

Wang told Sludge she thinks the bill was a good step. “We’re glad to hear that ethics is a priority of the new legislators,” Wang said. “For conflict of interest laws to have effect, you need enforcement and accountability, and that’s where robust financial disclosure requirements and an independent ethics body really should be part of the same package.” 

“Since the emergence of COVID, there’s been an understandable shift to public health, but now with the attacks we’ve seen on our democracy, the public needs to see a broad, bipartisan effort so people can gain confidence that lawmakers in both parties are working to make sure government works for the people,” Wang said. She noted that Sen. Jeremy Moss, a Democrat, and Sen. Ed McBroom, a Republican, have been supporters of open records laws and could lend bipartisan support to ethics reforms in the Senate.

“It’s high time that Michigan tackles this absence of ethics laws, and we’re hoping their statements are representative of both parties’ priorities,” Wang said. “There is bipartisan support and a good likelihood that we can get movement, but it’s going to take more than what we’ve seen so far.”

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