Legislature(2003 - 2004)

04/22/2003 08:06 AM House STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 157-ELIMINATE APOC                                                                                                         
[Contains  discussion of  SB 119  and  brief mention  of HB  106,                                                               
original version, and SB 89.]                                                                                                   
Number 2140                                                                                                                     
CHAIR WEYHRAUCH  announced that  the last  order of  business was                                                               
HOUSE  BILL  NO.  157,  "An Act  eliminating  the  Alaska  Public                                                               
Offices Commission;  transferring campaign, public  official, and                                                               
lobbying  financial  disclosure   record-keeping  duties  to  the                                                               
division  of  elections;  relating  to  reports,  summaries,  and                                                               
documents  regarding  campaign,  public  official,  and  lobbying                                                               
financial   disclosure;   providing   for  enforcement   by   the                                                               
Department of  Law; making  conforming statutory  amendments; and                                                               
providing for an effective date."                                                                                               
[In committee  packets was a proposed  committee substitute (CS),                                                               
labeled revised.doc,  4/22/2003, originally prepared for  SB 119.                                                               
The fiscal note prepared by  the Alaska Public Offices Commission                                                               
(APOC) also apparently addressed this version.]                                                                                 
Number 0157                                                                                                                     
KEVIN   JARDELL,   Assistant    Commissioner,   Office   of   the                                                               
Commissioner, Department  of Administration (DOA), referred  to a                                                               
memorandum that outlines the changes  that are proposed in the CS                                                               
[included  in  the committee  packet],  which  he said  obviously                                                               
makes  the proposed  CS drastically  different from  the original                                                               
piece of legislation  introduced by the administration.   He said                                                               
[the  proposed  CS]   is  a  result  of   considerable  work  and                                                               
discussion between  APOC and  the administration.   He  said that                                                               
[the proposed CS] is one  that he believes the administration has                                                               
"come  to  believe deserves  a  chance  to  proceed on  it's  own                                                               
merits, to  see if it  will produce the  results that we  hope to                                                               
MR.  JARDELL revealed  that  the original  bill  produced by  the                                                               
administration  was the  result  of looking  at the  frustrations                                                               
involved in [political] campaigns,  particularly in regard to the                                                               
lack of disclosure on some  of the advertisements during the last                                                               
90 days  of campaigning.   The APOC,  he said, came  forward with                                                               
some legitimate concerns.  He continued as follows:                                                                             
     We disagree with them on some  of them.  We still think                                                                    
     that that  idea will work;  we still think it's  a good                                                                    
     idea.   But  after  reviewing the  APOC's comments  and                                                                    
     listening  to   them,  we  think  they   see  the  same                                                                    
     frustrations.  They have  some unique perspectives from                                                                    
     working with all  the campaigns, ... and  they had some                                                                    
     good ideas.  And the  administration sat down with them                                                                    
     and finally  decided that their ideas  deserve a chance                                                                    
     to  see  ...  if  they're going  to  work  and  produce                                                                    
Number 2300                                                                                                                     
BROOKE   MILES,  Executive   Director,   Alaska  Public   Offices                                                               
Commission (APOC), reviewed  the major points of  the proposed CS                                                               
as follows:                                                                                                                     
     The commission believes one of  the very most important                                                                    
     things  about  this legislation  is  that  it lays  the                                                                    
     foundation  for mandatory  electronic filing  under the                                                                    
     campaign disclosure  law, also  under the  lobbying law                                                                    
     and the  financial disclosure law.   The  foundation is                                                                    
     laid there  and would of  course depend on  the funding                                                                    
     of  the  capital project,  which  is  currently in  the                                                                    
     budget.  And  if we're successful in  receiving the ...                                                                    
     one-time funding  then that  project will  move forward                                                                    
     as  expeditiously as  possible.   The commission  would                                                                    
     hope that the new online  filing would be available for                                                                    
     the 2004 state election cycle.                                                                                             
     The second-most  important part of this  legislation is                                                                    
     that it  changes the way  the APOC  handles complaints.                                                                    
     The   statute   now   provides   some   timelines   for                                                                    
     respondents [and] some timelines  for the commission to                                                                    
     issue orders,  all in the  hopes that a  complaint will                                                                    
     move forward  much quicker  than they  have in  the ...                                                                    
     entire past history of the commission.                                                                                     
     In  addition  to that,  it  provides  for an  expedited                                                                    
     process to be used at  crucial points in an election or                                                                    
     other  activity  where  the  alleged  wrongdoing  could                                                                    
     effect the outcome of an  election or other event.  And                                                                    
     it gives  the commission  a sort of  a cease-and-desist                                                                    
     authority,  so, if  it was  in the  last minute  of the                                                                    
     campaign  and  there was  an  illegal  ad running,  the                                                                    
     commission  could actually  issue  a  "cease" order  on                                                                    
     It shortens  the time  for bringing  the administrative                                                                    
     complaints  to the  commission from  four years  to one                                                                    
     year, which  is also helpful in  processing complaints,                                                                    
     because  ... the  older  the activity  is  that is  the                                                                    
     subject of the  complaint, the more difficult  it is to                                                                    
     And  it authorizes  APOC to  request the  assistance of                                                                    
     the  attorney general  in ...  certain  cases where  we                                                                    
     have  jurisdictional  problems,  or where  someone  has                                                                    
     disobeyed an order of the commission.                                                                                      
Number 2460                                                                                                                     
MS. MILES continued:                                                                                                            
     This  legislation requires  full  disclosure.   And  by                                                                    
     that I  mean that where candidates  now completing your                                                                    
     campaign  disclosure reports  will  report  all of  the                                                                    
     people   who  gave   over   $100   by  name,   address,                                                                    
     occupation,  and  employer,   under  this  legislation,                                                                    
     [they'll] be reporting  the name and address  of all of                                                                    
     [their] contributors,  regardless of the amount.   When                                                                    
     a contributor  gives more than  $250 to  your campaign,                                                                    
     you  will  also  be   responsible  for  disclosing  the                                                                    
     occupation and employer information.                                                                                       
     This legislation  eliminates the requirement to  file a                                                                    
     report  10  days after  the  election  and expands  the                                                                    
     year-end report  so that it  covers all  the activities                                                                    
     of  a campaign.  ... For  example, in  2004, candidates                                                                    
     would not  be required to  file a report 10  days after                                                                    
     the  election,  but  the  report   that  they  file  on                                                                    
     February  15th  -   the  year-end  campaign  disclosure                                                                    
     report  - will  include  all  expenditures through  the                                                                    
     entire dispersement  period, up  to February 1st.   And                                                                    
     this requires  dispersement by  February 1st  for state                                                                    
     campaigns, as  opposed to 90  days after  the election,                                                                    
     which is the  language in current law.   The difference                                                                    
     ...  could   be  a  matter   of  four  days   less  for                                                                    
     The  legislation  incorporates, however,  the  language                                                                    
     that  the commission  currently administers  concerning                                                                    
     exempt  fundraising activities,  ... so  if you  have a                                                                    
     fundraising  activity  that  is ...  high-volume,  low-                                                                    
     cost,  ...  you'll  just count  the  number  of  people                                                                    
     participating  and the  proceeds  from the  fundraising                                                                    
     This  repeals  the  ban   on  a  candidate's  excepting                                                                    
     campaign contributions  after the primary  election, if                                                                    
     the candidate prevailed in the  primary election and is                                                                    
     still going  to appear on the  general election ballot.                                                                    
     That's been an area  that was identified as problematic                                                                    
     to us  from different  candidates.  Candidates  who are                                                                    
     appearing on  the general  ballot are  still candidates                                                                    
     and, as such, usually  like to purchase direct mailing,                                                                    
     radio,  newspaper, and  television advertisements,  and                                                                    
     when  they must  cease  fundraising 45  days after  the                                                                    
     primary  election, that  severely limits  their ability                                                                    
     to carry forth on those projects.                                                                                          
Number 2612                                                                                                                     
MS. MILES went on to say:                                                                                                       
     This   raises  campaign   contribution  limits.     For                                                                    
     individuals to  contribute to a  group or  a candidate,                                                                    
     the raise is from $500  to $1,000.  For individuals who                                                                    
     contribute  to  political  parties,  it's  raised  from                                                                    
     $5,000  to  $10,000.    For  groups  to  contribute  to                                                                    
     candidates, it's  raised from $1,000 to  $5,000.  Those                                                                    
     are groups that are not  political parties.  For groups                                                                    
     to contribute  to a political  party, it's  raised from                                                                    
     $1,000  to  $10,000,  and   for  non-group  entities  -                                                                    
     advocacy  non-profit  corporations   -  they  may  give                                                                    
     $1,000 to a candidate,  where currently they're limited                                                                    
     to $500.                                                                                                                   
     This    legislation   requires    reporting   of    [a]                                                                    
     contributor's occupation and  employer information only                                                                    
     when  it's more  than $250  - I  spoke to  that.   This                                                                    
     increases   the   amount   an  individual   may   spend                                                                    
     independently  on  signs,   billboards,  [and]  printed                                                                    
     materials  advocating  the  election  or  defeat  of  a                                                                    
     ballot question,  from $250 under current  law to $500.                                                                    
     This  is  an  activity  that arises  out  of  the  U.S.                                                                    
     Supreme Court  case called MacIntyre, and  $250 was the                                                                  
     lowest,  most narrow  limit.   Raising that's  probably                                                                    
     not a very controversial issue.                                                                                            
     This   does  remove   the   prohibition  on   lobbyists                                                                    
     contributing  to legislative  candidates outside  their                                                                    
     voting districts.  Under this  bill a lobbyist would be                                                                    
     able  to give  a  lawful campaign  contribution to  the                                                                    
     legislative candidate  of her  or his  choice; however,                                                                    
     lobbyists are  required to  file a  contribution report                                                                    
     upon giving a contribution  to a legislative candidate.                                                                    
     So, in addition to it  being reported by the candidate,                                                                    
     it  needs  to reported  by  the  lobbyist, which  is  a                                                                    
     requirement under current law,  ... [but] they can only                                                                    
     give  to  the  ...   legislators  who  are  running  to                                                                    
     represent  the  district  in   which  the  lobbyist  is                                                                    
     authorized to vote.                                                                                                        
Number 2730                                                                                                                     
MS. MILES added:                                                                                                                
     It removes  language that was held  unconstitutional in                                                                    
     the  Alaska  Supreme  Court case  on  campaign  finance                                                                    
     reform,   regarding   campaign   contributions   during                                                                    
     legislative   session.     This   legislation   changes                                                                    
     language in  AS 15.13; it  does not change  language in                                                                    
     [AS] 24.60, which  currently precludes legislators from                                                                    
     accepting    campaign    contributions    during    the                                                                    
     legislative  session.     It's  really  a  housekeeping                                                                    
     measure;  the   supreme  court   decision  specifically                                                                    
     removed it  in one  section of the  law, leaving  it in                                                                    
     another section of  the law, which caused  a great deal                                                                    
     of confusion to certain  individuals trying to read the                                                                    
     law   and  thinking   they  couldn't   accept  campaign                                                                    
     contributions - "challengers," in  other words - during                                                                    
     the legislative session.                                                                                                   
     It repeals the requirement  that candidates notify APOC                                                                    
     of the intent to seek  recoupment of a candidate's loan                                                                    
     to  the  campaign,  within five  days  of  making  that                                                                    
     contribution.     This   is  another   area  that   was                                                                    
     identified  to us  as  problematic  by the  candidates.                                                                    
     The amount  that a  candidate gives to  her or  his own                                                                    
     campaign  will still  be required  to  be reported,  of                                                                    
     course,  and  on  the  report   -  which  will  be  the                                                                    
     regularly  filed   campaign  disclosure   report;  that                                                                    
     candidate will  be required to indicate  whether or not                                                                    
     they wish  to recoup  those contributions  with surplus                                                                    
     campaign funds at the conclusion  of the campaign.  But                                                                    
     the five-day notice is repealed.                                                                                           
     This requires municipalities  to affirmatively opt into                                                                    
     coverage  under  the  campaign   disclosure  law.    It                                                                    
     changes  the  current  statute  -  ...  they  can  vote                                                                    
     themselves  out.    This  will  require  them  to  vote                                                                    
     themselves  in, and  the  state will  charge  a fee  to                                                                    
     oversee  reporting  by  municipalities.   That  fee  is                                                                    
     going to be designed by  the folks at the Department of                                                                    
     Administration,  as  opposed  to  the  commission  that                                                                    
     promulgates  all  the   other  regulations  under  this                                                                    
     chapter,  because the  Department of  Administration is                                                                    
     more familiar with  how to fairly assess that.   And it                                                                    
     will  go  through  the entire  regulatory  process,  of                                                                    
     Lastly, under AS 15.15 -  the campaign disclosure law -                                                                    
     this amends the  definition of a political  party to be                                                                    
     consistent with the definition of  a political party in                                                                    
     the  Division of  Election's law.    This is  important                                                                    
     legislation, and  it's kind of  "clean-up" too,  and it                                                                    
     will actually  make a  lawsuit go  away, saving  us all                                                                    
Number 2858                                                                                                                     
MS. MILES also said:                                                                                                            
     The lobbying law  would see the following  changes.  Of                                                                    
     course,  again,  electronic  filing  [being]  the  most                                                                    
     important.   It  increases the  amount of  time that  a                                                                    
     part-time   lobbyist   has   to  engage   in   lobbying                                                                    
     activities before she or he  is required to register as                                                                    
     a lobbyist.   The current APOC  regulation provides for                                                                    
     4  hours;  this  would  provide for  16  hours,  ...  I                                                                    
     believe in a 30-day period.                                                                                                
     It changes  the definition of administrative  action in                                                                    
     the  lobbying statute  ...  by  codifying a  regulation                                                                    
     that  the commission  has  had on  the  books for  many                                                                    
     years that  exempts certain agency  lobbying activities                                                                    
     from  the law,  particularly when  you're dealing  with                                                                    
     permitting and  licensing, when  a person  is appearing                                                                    
     before a quasi-judicial agency.   It's generally quasi-                                                                    
     legislative   or  quasi-judicial   agencies  that   are                                                                    
     exempted.   People who are  trying to sell  products to                                                                    
     the state have been  forever exempted from the lobbying                                                                    
     law, and these are just  moving the exemptions into ...                                                                    
     Legislators'  financial  disclosure  statements:    the                                                                    
     threshold for reporting the sources  of income would be                                                                    
     moved from $1,000  to $10,000.  That's  the only change                                                                    
     in the  legislator's financial  disclosure.   In public                                                                    
     official       financial      disclosure       reports:                                                                    
     [municipalities]   are   removed;  it   increases   the                                                                    
     reporting threshold  for sources of income  from $1,000                                                                    
     to  $10,000;  [it]  makes  an  exemption  for  publicly                                                                    
     traded companies  if the filer's interest  is less than                                                                    
     $10,000;  [it] increases  trust or  fiduciary reporting                                                                    
     from  $1,000   to  $10,000;  and  [it]   increases  the                                                                    
     reporting threshold for public  officials to report the                                                                    
     source of a gift from $250 to $500.                                                                                        
     The  commission's  thought  on raising  these  amounts:                                                                    
     for one thing [it is] that  the $1,000 has been a limit                                                                    
     on  the  books for  a  long  time, but  the  commission                                                                    
     didn't feel that  $1,000 of income was  really [a] very                                                                    
     significant  amount of  income.  ...  Under the  public                                                                    
     officials   financial  disclosure   you  have   elected                                                                    
     officials:    people  running for  the  legislature  or                                                                    
     statewide  office,  you have  commissioners,  assistant                                                                    
     and deputy commissioners,  directors, deputy directors,                                                                    
     and members  of ... [many state  boards and commissions                                                                    
     ,... the APOC ... being  one of them.]  [The previously                                                                    
     bracketed portion was  not on tape, but  was taken from                                                                    
     the Gavel to Gavel recording on the Internet.]                                                                             
TAPE 03-42, SIDE B                                                                                                            
Number 2983                                                                                                                     
MS. MILES continued:                                                                                                            
     [Not  on  tape,  but  taken from  the  Gavel  to  Gavel                                                                    
     recording on the Internet,  was the following bracketed                                                                    
     portion:    [As  you  may  be  aware,  many  boards  or                                                                    
     commissions require  professional people to be  part of                                                                    
     the  membership] -  attorneys,  accountants, doctors  -                                                                    
     and   in  disclosing   sources  of   income,  attorneys                                                                    
     therefore  are required  to list  their clients'  names                                                                    
     for clients  who ...  paid more than  $1,000.   Part of                                                                    
     the  idea of  moving  this to  $10,000  would be  those                                                                    
     client  lists   would  be  less  long   and  it  would,                                                                    
     hopefully,  make   it  easier  to  recruit   people  to                                                                    
     participate in  government as the board  and commission                                                                    
CHAIR  WEYHRAUCH announced  that  he will  hear public  testimony                                                               
before the committee begins to ask questions of Ms. Miles.                                                                      
Number 2903                                                                                                                     
PAMELA  LaBOLLE,  President,  Alaska State  Chamber  of  Commerce                                                               
(ASCC) told  the committee that ASCC  has been working on  HB 106                                                               
and SB 89,  both bills dealing with the  definition of lobbyists.                                                               
She offered her  understanding that those bills  have been rolled                                                               
into [HB  157].  She  noted that the  ASCC's concern is  that the                                                               
law states that  if a substantial portion of a  person's time for                                                               
which he/she is receiving compensation  is in "the influencing of                                                               
legislation"  or administrative  action,  then that  person is  a                                                               
lobbyist.  She  said that APOC defined [that time]  as four hours                                                               
in a 30-day period.                                                                                                             
MS. LaBOLLE said that ASCC  has maintained that approximately 2.3                                                               
percent  of a  person's time  "is not  substantial."   She added,                                                               
"This increases  that to 9  percent."   She said that  ASCC still                                                               
does  not  think  that  that's   substantial.    She  noted  that                                                               
professional  lobbyists  are still  covered  under  law and  must                                                               
register   before  doing   any  professional   lobbying,  whether                                                               
contracting or setting up a business as a lobbyist, for example.                                                                
MS. LaBOLLE offered the following example:                                                                                      
     Say you're a  human resource person for  a company, and                                                                    
     there   [are]  some   issues   that   are  before   the                                                                    
     legislature  or  before  the administration  that  will                                                                    
     impact your  business -  how much  you're going  to pay                                                                    
     your employees, what the work  rules are for employees,                                                                    
     [and]  what kind  of reporting  as  an employer  you're                                                                    
     going  to have  to do  - I  mean there's  just numerous                                                                    
     things  that ...  a [human  resources] person  would be                                                                    
     involved in.   And we  feel that  ... even 16  hours is                                                                    
     not sufficient for the time  that you may need to spend                                                                    
     to do  this, and that  you aren't a lobbyist,  you're a                                                                    
     human resources  person for an organization,  ... for a                                                                    
     If you're  an engineer and  there's work being  done on                                                                    
     some   rules  and   regulations   and  laws   regarding                                                                    
     engineering, it may  take more ... [of]  your time than                                                                    
     16 hours to convey the  concerns or to help ... provide                                                                    
     the  information that  you as  a professional  engineer                                                                    
     are   the  only   one  that   can   provide,  or   your                                                                    
     professional group  is the only one  that [can] provide                                                                    
     it.   So, ...  our position has  been that  by limiting                                                                    
     the  amount  of  time that  professional  and  business                                                                    
     people  can  provide  information  to  the  legislature                                                                    
     without requiring  them to  make themselves  a lobbyist                                                                    
     is  detrimental   to  the  legislative   process;  it's                                                                    
     detrimental  to  the   administrative  process.    That                                                                    
     people  should  be  able to  provide  this  information                                                                    
     freely, and we maintain ..., as  under SB 89 and ... HB
     106, that ... 25 percent of  a person's time is more in                                                                    
     the line of substantial amount of a person's time.                                                                         
Number 2698                                                                                                                     
MS. LaBOLLE  also expressed concern  that APOC has  recently more                                                               
broadly defined what it considers  a lobbying activity to include                                                               
time  spent   in  activities  in   which  legislators   are  also                                                               
participating.  She  offered an example of a person  playing in a                                                               
golf tournament where a legislator is  on the same team.  Since a                                                               
round of  golf often takes more  than four hours to  play, it can                                                               
become  a real  problem.   She stated  that the  ASCC feels  that                                                               
lobbying should  be "more  directly defined."   If the  amount of                                                               
time  is limited  to  the  16 hours  proposed  [in  HB 157],  she                                                               
emphasized that it's  even more important that there  be a better                                                               
definition of  what a lobbying activity  is and in what  things a                                                               
person can participate in "before the clock starts ticking."                                                                    
MS. LaBOLLE  told the committee  that the  ASCC is glad  that the                                                               
[proposed  CS would  reverse the  law  that] limits  professional                                                               
lobbyists from  giving to candidates outside  their own district.                                                               
She  said   she  knows  that   the  courts  did  not   rule  that                                                               
unconstitutional,  but personally,  as a  lobbyist, she  said she                                                               
felt  it  was  prohibitive  and  unfair.   She  said  she  cannot                                                               
recollect   anything  that   comes   before   the  Alaska   State                                                               
Legislature that  is so  parochial in nature  that it  would only                                                               
affect  an individual's  district.   She  emphasized  that it  is                                                               
important to  her as an  individual to  be able to  contribute to                                                               
the  candidates that  she thinks  support what  she believes  in,                                                               
including  in what  she  believes is  good for  the  state.   She                                                               
remarked  that the  actions and  decisions that  are made  by the                                                               
legislature have statewide impact.                                                                                              
REPRESENTATIVE BERKOWITZ stated that  he is concerned when people                                                               
say they  don't have access to  him.  He relayed  that he's never                                                               
had  a  problem in  the  seven  years  that  he's served  in  the                                                               
legislature with  someone in business  or in any  other community                                                               
saying that  he/she didn't  have access  to him.   He  noted that                                                               
[Ms. LaBolle] had  made references to instances  [where this kind                                                               
of thing  happened].  He  asked her to provide  concrete examples                                                               
of when people have been impeded  in their efforts to contact the                                                               
legislature because of the "hour limit."                                                                                        
MS. LaBOLLE responded  that there are people  who have registered                                                               
on the books at APOC because  they were afraid that they would go                                                               
over the four hours; and  therefore, they were forced to register                                                               
up  front.   She also  mentioned people  who limit  their contact                                                               
with legislators  within the  four hours,  rather than  having to                                                               
register,  and take  themselves  out of  some  of the  activities                                                               
allowed  in  the electoral  process  that  a registered  lobbyist                                                               
cannot participate in.                                                                                                          
Number 2470                                                                                                                     
REPRESENTATIVE  BERKOWITZ  said   that  he  sympathizes,  because                                                               
legislators are  prohibited from  doing certain  things; however,                                                               
they voluntarily  "join those  ranks."  He  stated that  he would                                                               
think that  lobbyists are willing  to make similar  sacrifices in                                                               
order to get the compensation that they do.                                                                                     
MS. LaBOLLE  agreed that  professional lobbyists  and legislators                                                               
do voluntarily  agree to play by  the rules when they  seek those                                                               
positions.   She clarified that  she is talking about  people who                                                               
are not  lobbyists and never want  to be lobbyists, and  they are                                                               
not voluntarily  "giving this  up."  She  said that  those people                                                               
are choosing  either to  limit their response  or their  input to                                                               
the legislative  process, or to  register as a lobbyist  and have                                                               
to "give up, unwillingly, some of these rights."                                                                                
REPRESENTATIVE  BERKOWITZ noted  that Ms.  LaBolle's concern  was                                                               
that  it was  unfair, and  he asked  how she  would feel  about a                                                               
complete ban  on professional  lobbyists making  contributions to                                                               
legislators, rather than "just on a district level."                                                                            
MS. LaBOLLE  said she  knows many lobbyists  who think  that that                                                               
would  be  okay; however,  personally,  she  reiterated that  she                                                               
thinks that  individuals who are  citizens of [Alaska]  should be                                                               
able to contribute  to any candidate they choose to  support.  In                                                               
response  to a  reference by  Representative Berkowitz  regarding                                                               
her  previously stated  example of  someone playing  golf with  a                                                               
legislator,  Ms. LaBolle  said that  she  has an  excerpt from  a                                                               
letter  that was  sent to  an  individual, which  says that  that                                                               
constitutes lobbying.                                                                                                           
Number 2351                                                                                                                     
MIKE FRANK, testifying  on behalf of himself,  told the committee                                                               
that he was  the chair of Campaign Finance Reform  Now! when that                                                               
group put an initiative on the  ballot in the mid-1990s to reform                                                               
the state's campaign  finance laws.  He stated,  "I am vigorously                                                               
opposed to  some of the  principle provisions in Senate  Bill 119                                                               
and, I guess, [in] what will  be a House substitute."  He offered                                                               
the following history:                                                                                                          
     After  statehood,  we  had   almost  no  regulation  of                                                                    
     campaign finance  in Alaska  until 1974,  when citizens                                                                    
     once again  put an initiative  on the ballot  to reform                                                                    
     the state's  current laws.   That initiative  was taken                                                                    
     off the  ballot when  the legislature  passed something                                                                    
     substantially  similar.   Unfortunately,  that ...  law                                                                    
     that was passed had  spending limits, which were struck                                                                    
     down in Buckley  v. Valeo in 1976.   And ... basically,                                                                  
     that  decision eviscerated  the intent  of Alaska  law.                                                                    
     And as a  consequence, between 1974 and  ... the 1990s,                                                                    
     campaigns  in Alaska  became more  and more  expensive,                                                                    
     and  candidates  -  particularly  incumbents  -  became                                                                    
     reliant  on  contributions   from  corporations,  union                                                                    
     political   action   committees,   lobbyists,   wealthy                                                                    
     individuals,  and  other  powerful  special  interests.                                                                    
     And unfortunately,  between 1974  and the  mid-90s, the                                                                    
     legislature refused to do anything  to amend the law to                                                                    
     accommodate the change required by Buckley v. Valeo.                                                                     
     In  the   mid  1990s,   I  got  together   with  former                                                                    
     Representative  David Finkelstein,  and we  decided the                                                                    
     only  way  to  reform  the  existing  law  was  through                                                                    
     another  initiative.   So we  created Campaign  Finance                                                                    
     Reform  Now!   The  goal  of  our organization  was  to                                                                    
     refocus the  financing of  campaigns on  the individual                                                                    
     voter, in  order to  serve the  democratic goal  of one                                                                    
     person, one vote.   We wanted to  reduce the corrupting                                                                    
     influence   that   money    from   lobbyists,   special                                                                    
     interests, and the wealthy have  on candidates - again,                                                                    
     particularly on incumbents who have  a much easier time                                                                    
     raising  money from  the regulated  interests -  and on                                                                    
     political   parties.      So,  we   wanted   to   lower                                                                    
     contribution limits.   We wanted  to make it  much more                                                                    
     likely that the average voter  who doesn't have $500 or                                                                    
     $1,000   to  contribute   could   participate  in   the                                                                    
     financing of our elections.                                                                                                
     The   initiative  significantly   reduced  contribution                                                                    
     limits; it  allowed only  individuals to  contribute to                                                                    
     candidates   and   to   political   groups,   including                                                                    
     political  parties; it  banned  the contributions  from                                                                    
     corporations  and   unions,  trade   associations;  and                                                                    
     imposed  the  lobbyist  restriction that's  in  current                                                                    
     law.  It banned soft  money entirely; there was no such                                                                    
     thing  as soft  money.   The slogan  of our  initiative                                                                    
     was,  "Big  Money Out  Of  Alaska  Politics."   It  was                                                                    
     endorsed  by four  ex-governors:   Governor[s] Hammond,                                                                    
     Hickel,  Cowper,  and  Sheffield.    In  a  very  well-                                                                    
     attended press  conference in  1995, each  told stories                                                                    
     of  witnessing the  corrosive  influence  of big  money                                                                    
     contributors during their political careers.                                                                               
Number 2217                                                                                                                     
MR. FRANK added:                                                                                                                
     ... We  needed 21,000 signatures.   We were overwhelmed                                                                    
     with  the  positive  response, [and]  easily  collected                                                                    
     well  over 30,000  signatures.   We  could have  easily                                                                    
     collected twice that in the  time we had, if we wanted.                                                                    
     In   fact,   Senator  Tim   Kelly,   who   was  ...   a                                                                    
     representative  at the  time, did  a poll  which showed                                                                    
     that  80 percent  of Alaskans  favored our  initiative.                                                                    
     Our initiative  was placed  on the  ballot and,  as you                                                                    
     know, the  legislature can knock ...  an initiative off                                                                    
     the  ballot   if  it  passes   something  substantially                                                                    
     similar  within  a  year.   And  we  decided  we  would                                                                    
     cooperate with  the legislature,  in an effort  to come                                                                    
     up with a broadly supported  bill.  We thought that was                                                                    
     important.     And  therefore,   we  worked   with  the                                                                    
     legislature  and we  compromised  significantly on  the                                                                    
     stringency   of   the   initiative;   we   raised   the                                                                    
     contribution limits; and  we did a lot  of other things                                                                    
     to accommodate  legislative interests.   Eventually the                                                                    
     bill  passed.   There were  only two  dissenting votes.                                                                    
     And I  should note  that in the  next election  both of                                                                    
     those people were thrown out of office.                                                                                    
     In  following the  passage of  the law,  the Republican                                                                    
     Party in  particular ran advertisements  declaring that                                                                    
     it had delivered  on campaign finance reform  ....  And                                                                    
     as  I  think  Brooke   Miles  mentioned,  the  law  was                                                                    
     challenged   by  the   Alaska  Civil   Liberties  Union                                                                    
     [AkCLU], but the supreme court  upheld the law in a 5:0                                                                    
     vote, except for  a provision that had not  been in the                                                                    
     initiative.    And  the U.S.  Supreme  Court  denied  a                                                                    
     petition    for    hearing   of    [AkCLU's]    appeal.                                                                    
     Unfortunately,  a portion  of the  law was  struck down                                                                    
     when  the Republican  Party  sued  in federal  district                                                                    
     court.    That concerned  the  soft  money ban.    And,                                                                    
     unfortunately again,  the legislature  quickly codified                                                                    
     that  ruling  in  state  law, and  passed  a  law  over                                                                    
     Governor [Tony] Knowles's veto.   That created the soft                                                                    
     money ban, which everybody is worried about today.                                                                         
Number 2147                                                                                                                     
MR. FRANK continued:                                                                                                            
     But what ...  Senate Bill 119, and what will  be in the                                                                    
     new House  bill, does  is make  the soft  money problem                                                                    
     much,  much worse.   It  basically eviscerates  much of                                                                    
     what  we  had  in  the  initiative,  and  many  of  the                                                                    
     provisions of  current law that we  compromised with in                                                                    
     the legislature in the 1990s:   It substantially raises                                                                    
     contribution limits; it  allows lobbyists to contribute                                                                    
     again; [and] it eliminates  the power of municipalities                                                                    
     to make stricter  laws in their own areas.   It just is                                                                    
     a bad,  bad bill.   The major  provisions of  it really                                                                    
     are  a breach  of faith  with those  31,000 people  who                                                                    
     signed  the initiative  in the  mid-90s and  who sought                                                                    
     In the  end, I would  simply like to know  what exactly                                                                    
     the problems  [are that] the  Senate bill is  trying to                                                                    
     solve.   How  do these  major changes  in the  1995 law                                                                    
     make our elections  more democratic?  How  do they make                                                                    
     the playing field level for  all candidates, as opposed                                                                    
     to making it  easier for incumbents to  raise money and                                                                    
     for lobbyists to  have influence.  It seems  to me that                                                                    
     these ... suggested  major changes in our  law not only                                                                    
     undercut the  compromises we  reached in  the mid-1990s                                                                    
     to pass  or are  broadly supported by  the legislature,                                                                    
     ... [but]  don't address  real problems.   I  think all                                                                    
     they do is make it  easier for incumbents to raise more                                                                    
     money,  [and]  it  makes  it  easier  for  the  special                                                                    
     interests to  have inordinate influence on  our elected                                                                    
     officials.   And so, I'm  opposed to those, and  I hope                                                                    
     the committee takes  a very, very hard look  at some of                                                                    
     the provisions  and rejects them, ...  keeps faith with                                                                    
     the people, makes sure our  campaign finance reform law                                                                    
     remains   in    place,   and    encourages   democratic                                                                    
     participation by our citizens.                                                                                             
Number 1922                                                                                                                     
REPRESENTATIVE  BERKOWITZ  asked  Mr.  Frank  if,  based  on  his                                                               
understanding of  the constitutionality of  the law, it  would be                                                               
permissible to  restrict the contributions  of a  political party                                                               
so that they were no greater than any other interest group.                                                                     
MR. FRANK responded  that that is a hard question  to answer.  He                                                               
said that  he thinks political  parties and groups  were designed                                                               
to  allow the  aggregation  of money  from  people who  otherwise                                                               
couldn't make  large contributions, in  order to enable  a larger                                                               
voice  for those  people.   He  stated that  he  thinks that  the                                                               
courts ordinarily have been more  solicitous of political parties                                                               
and the  amount of  contribution they  are allowed  to make.   He                                                               
said he thinks  the courts probably see the  political parties as                                                               
a filter  that prevents the  appearance of corruption  and actual                                                               
corruption;   it's   kind   of  a   filter   between   individual                                                               
contributors and political candidates.                                                                                          
MR.  FRANK restated  that he  thinks if  the contribution  limits                                                               
that individuals  have to give  to political parties  are raised,                                                               
then individuals  may be given  an inordinate voice  in political                                                               
party affairs, and, particularly,  wealthy individuals may direct                                                               
party affairs and  channel funds more indirectly,  and such would                                                               
be  harder to  discern, and  thereby  gain undue  influence.   He                                                               
concluded that he thinks that it  is important to keep the amount                                                               
of money that individuals are  allowed to contribute to political                                                               
parties  down to  a reasonable  level, as  well as  to put  "some                                                               
reasonable cap"  on the  amount of  money that  political parties                                                               
are allowed to contribute to any individual's campaign.                                                                         
REPRESENTATIVE BERKOWITZ  asked, "Is  there any  requirement that                                                               
we recognize  political parties  in this state?"   He  added, "We                                                               
don't at the municipal level."                                                                                                  
MR.  FRANK answered  that  he is  unaware of  any  case law  that                                                               
requires  the  recognition of  political  parties.   He  said  he                                                               
thinks it's more a matter  of traditional political practice than                                                               
a matter of first amendment law.                                                                                                
REPRESENTATIVE BERKOWITZ  asked whether,  if the bill  passes, is                                                               
Mr.  Frank aware  of any  discussion  of having  a referendum  to                                                               
repeal it.                                                                                                                      
MR. FRANK  said he was  not aware of  any, and suggested  that he                                                               
and  others  would be  likely  to  propose  one.   He  said  [the                                                               
proposed  legislation] is  distressing.   He said  he knows  that                                                               
most of the committee members were  not in the legislature in the                                                               
mid-1990s.    He  posited  that   most  of  the  legislators  who                                                               
participated in the discussion back  then realized that "this was                                                               
so popular that  it was a political  tar baby to oppose  it."  He                                                               
stated that that is why the  vote was so overwhelming in favor of                                                               
it,  and  why  people  were  so  cooperative  in  trying  to  get                                                               
something to the  legislature that made sense.   He mentioned the                                                               
proponents of raising contribution  limits and allowing lobbyists                                                               
to  contribute, and  said, "If  they  want to  run for  political                                                               
office,  they have  to  pause to  see how  that  will hurt  their                                                               
political future."                                                                                                              
Number 1709                                                                                                                     
CHAIR WEYHRAUCH  commented that candidates  get to meet a  lot of                                                               
lobbyist's [spouses].   He  asked how that  would be  effected by                                                               
the proposed legislation.                                                                                                       
MR.  FRANK answered  that  he doesn't  recollect  that there  are                                                               
currently   any   restrictions   regarding   contributions   from                                                               
lobbyists' family  members.   In response to  comments made  by a                                                               
previous  witness, he  noted that  one  of the  things about  the                                                               
lobbyists' restriction is that lobbyists  who support a candidate                                                               
outside their own district can  make independent expenditures and                                                               
contribute  to political  parties, and  can otherwise  completely                                                               
participate in political  affairs.  He explained,  "It's really a                                                               
minor  restriction  on  their  ability  to  participate  in  that                                                               
they're not  allowed to contribute  outside their  own district."                                                               
In  fact,  he  revealed, he  personally  collected  approximately                                                               
2,600 signatures for the initiative  drive.  During that time, he                                                               
said,  countless  lobbyists  thanked  him  and  thanked  campaign                                                               
finance  reform for  putting  on the  restriction.   He  related,                                                               
"Present company excepted, ... many  legislators, they said, were                                                               
... twisting their arm to  make contributions, and they loved the                                                               
idea  of using  the campaign  finance reform  bill as  insulating                                                               
them  from  this  constant  need  to  contribute  and  to  go  to                                                               
fundraisers, and so on."                                                                                                        
REPRESENTATIVE  SEATON  referred  to the  memorandum  from  APOC,                                                               
dated April 21 [2003] and asked Mr.  Frank if he could get a copy                                                               
of it  and label  which points in  it he does  and does  not have                                                               
contention with.                                                                                                                
MR. FRANK said he would be happy to do that.                                                                                    
Number 1531                                                                                                                     
LAURIE   CHURCHILL,   Founding   Board  Member,   Alaska   Voters                                                               
Organization,  told  the committee  that  her  organization is  a                                                               
statewide political  education group.   She referred to  a formal                                                               
resolution in  support of  APOC, which was  passed by  the Alaska                                                               
Voters  Organization  board  of  directors  on  March  18,  2003,                                                               
[included  in  committee  packets]  and  which  read  as  follows                                                               
[original punctuation provided]:                                                                                                
                   ALASKA VOTERS ORGANIZATION                                                                                   
                       RESOLUTION 2003-05                                                                                       
     A Resolution  to the 23rd  Alaska State  Legislature in                                                                  
     OPPOSITION  to significant  changes to,  or elimination                                                                
     of, the Alaska Public Offices Commission (APOC).                                                                           
     WHEREAS, the Alaska Public  Offices Commission began as                                                                  
     the  Alaska  Election  Campaign  Commission  (AECC)  in                                                                    
     1974; and                                                                                                                  
     WHEREAS,   the   incentive  for   campaign   disclosure                                                                  
     resulted from  the Watergate  scandal and  a successful                                                                    
     citizen  initiative effort,  which convinced  our State                                                                    
     Legislature  to  pass  the Alaska  Campaign  Disclosure                                                                    
     Law; and                                                                                                                   
     WHEREAS,  that  same  year, another  initiative  effort                                                                  
     succeeded   in   placing   Alaska's   Public   Official                                                                    
     Financial Disclosure  Law on  the ballot, where  it was                                                                    
     approved by  over 71% of  the voters and became  law in                                                                    
     January 1975; and                                                                                                          
     WHEREAS,  in   1976,  the  legislature   revised  state                                                                  
     lobbying  reporting by  passing Alaska's  Lobbying Law,                                                                    
     with  responsibility for  its  enforcement assigned  to                                                                    
     the AECC  [Alaska Election Campaign  Commission], which                                                                    
     was  renamed  the   Alaska  Public  Offices  Commission                                                                    
     (APOC), to reflect its newly expanded mission; and                                                                         
     WHEREAS,  in  1990,  the legislature  responded  to  an                                                                  
     increased demand  for ethics regulation  and disclosure                                                                    
     by expanding its  previous reporting requirements under                                                                    
     the Conflict of Interest Law in  the form of a new act,                                                                    
     Alaska's  Legislative  Ethics   Disclosure  Law,  which                                                                    
     created the  Select Committee on Legislative  Ethics to                                                                    
     hear ethics violations; and                                                                                                
     WHEREAS, the 1997 Alaska Campaign  Disclosure Law was a                                                                  
     response by  the legislature to a  citizens' initiative                                                                    
     effort  in 1996,  which  revised  Alaska's 20  year-old                                                                    
     campaign disclosure law  to include stricter limitation                                                                    
     and disclosure  measures, including the  prohibition of                                                                    
     corporate  and  out-of-state   group  contributions  to                                                                    
     state and local candidates; and                                                                                            
     WHEREAS,  in  2003,  legislation proposed  by  Governor                                                                  
     Murkowski and  members of  the State  Legislature, have                                                                    
     put party politics ahead of  good honest public policy;                                                                    
     WHEREAS,  attempts  to significantly  reduce  lobbyists                                                                  
     reporting  requirements   or  to  eliminate   the  non-                                                                    
     partisan  Alaska  Public   Offices  Commission  (APOC),                                                                    
     violates the will  of Alaskan voters, who  spoke out on                                                                    
     three separate occasions to create  the very agency and                                                                    
     regulations    currently    being    threatened    with                                                                    
     elimination; and                                                                                                           
     WHEREAS, the  unfettered access  to information  is the                                                                  
     foundation of a democratic society; and                                                                                    
     WHEREAS,  the public  has  a right  to  know the  truth                                                                  
     about   all   funds    paid   to   influence   Alaska's                                                                    
     legislature; and                                                                                                           
     WHEREAS,  Governor  Murkowski   and  the  legislature's                                                                  
     attempts  to  weaken  or eliminate  APOC,  promote  bad                                                                    
     public  policy that  will  further  erode the  public's                                                                    
     trust in our government; and                                                                                               
     WHEREAS, the  citizens of Alaska  have spoken  loud and                                                                  
     clear, "state  laws should  not be  relaxed to  make it                                                                    
     easier   for   lobbyist   to  influence   our   elected                                                                    
     NOW,  THEREFORE, BE  IT RESOLVED  by the  Alaska Voters                                                                  
     Organization,  Board  of  Directors,  that  we  support                                                                    
     existing Alaska statutes  governing campaign disclosure                                                                    
     and registration of lobbyists; and be it                                                                                   
     FURTHER RESOLVED, that we oppose  all efforts to reduce                                                                  
     the  effectiveness or  existence of  the Alaska  Public                                                                    
     Offices Commission (APOC).                                                                                                 
     ADOPTED BY THE ALASKA VOTERS ORGANIZATION                                                                                
     BOARD OF DIRECTORS, THIS 18th DAY OF MARCH 2003.                                                                         
Number 1210                                                                                                                     
CHAIR WEYHRAUCH announced that HB 157 was heard and held.                                                                       

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