Attorney General Mike Cox

1
Making Michigan a Leader in Government Ethics

• Attorney General Mike Cox
• Representative Paul Opsommer Senator Bruce
  Patterson

2
Michigan is struggling under the weight of a poor
national image on ethics

• Michigan needs a solid foundation of government
  ethics as part of its comeback.
• To attract a high-skilled work force and new
  jobs, we must instill confidence that Michigan
  government is transparent and ethical.

3
Where does Michigan Stand?

• DEAD LAST nationally on financial disclosure.1
• Michigan is one of only 3 states with no
  financial disclosure law.
• No reporting of lobbyist provided gifts received
  by public officials or their immediate family
  members.
• Law does not require legislators to abstain from
  voting when conflicts of interest appear.
• 1 - Per Center for Public Integrity

4
What Are Innovative States Doing?

• Louisiana had a poor national reputation on
  ethics.
• But, Gov. Bobby Jindal held a special legislative
  session in 2008 to improve transparency and
  ethics.2
• New disclosure requirements moved Louisiana from
  bottom of ethics rankings to the top this year.
• Jindal says that strengthening ethics laws will
  help Louisiana attract investment and jobs and
  hes right. 2

• 2 - Per Center for Public Integrity

5
What People Say About Michigans Need for Reform

• Personal financial disclosure allows citizens to
  have confidence that their elected
  representatives are serving the public interest,
  rather than their own financial well-being.
• Rich Robinson, Michigan Campaign Finance Network
• allow voters to come to their own conclusions
  about the interests lawmakers, statewide
  officials or local officials may serve once in
  office.
• Detroit News Editorial Board
• Well, there we are again. Dead last.
• Ron Dzwonkowski, Detroit Free Press

6
What Have We Done So Far?

• The Attorney Generals office was first in the
  state to place all spending, travel and contracts
  online in 2008 and settlements online in 2009.
• www.michigan.gov/trackyourtaxes
• www.michigan.gov/settlementcenter
• Traveled to all regions of the state advocating
  for transparency.
• Now it is time for the next step.

7
Make Michigan a Leader in Ethics

• Create first-ever financial disclosure law for
  public officials, their families and candidates.
• Report of gifts and travel from lobbyists.
• Report large loans, income, assets and
  transactions.
• Establish low thresholds to ensure transparency.
• Create serious penalties for not following the
  law.
• Require candidates for governor to release last
  three tax returns.
• Put legislative conflict of interest disclosure
  in statute.

8
Financial Disclosure Plan
REPORTING PROPOSAL ITEMS THRESHOLD CURRENT DISCLOSURE
Gifts from lobbyists (e.g., sporting tickets) 250 (aggregate) NONE
Reimbursements from lobbyists (e.g., travel) 250 (aggregate) Elected officials do not report Lobbyists report after 725
Income (e.g., wages, salary, dividends, rental income, grants, scholarships) 1,000 NONE
Assets (i.e., property, stocks, bonds) 2,500 NONE
Asset Transfers (purchased, sold or exchanged) 1,000 NONE
Liabilities (e.g., mortgages) 10,000 NONE
Positions with companies, non-profits, labor organizations and educational organizations. None
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Financial Disclosure Plan

• Who would be required to disclose?
• State officials Governor, Lt. Governor, Attorney
  General, Secretary of State, State Boards of
  Education, Department Directors, Legislators and
  Supreme Court Justices.
• Local elected officials who earn more than
  65,000. (i.e. mayors, county executives and
  commissioners)
• Candidates for any of the above.

10
Gift and Travel Reporting

• Gifts must be reported when annual aggregate
  value exceeds 250 per lobbyist.
• Closes the immediate family loophole.
• Current lobby law requires NO reporting below 56
  per month, per lobbyist and has NO limits for
  family gifting.
• Travel and other reimbursements reported when
  annual aggregate value exceeds 250 per lobbyist.
• Closes the immediate family loophole.
• Current lobby law requires reporting after 725.

11
Putting Teeth in the Process

• Secretary of State administers and maintains
  website.
• SOS investigates and has administrative subpoena
  power Attorney General prosecutes.
• Failure to file truthful and timely information
  could result in criminal charges
• 30 days past due or knowingly inaccurate 5,000
  late fee.
• Fail to file two reports misdemeanor, one year
  and/or 2,000.
• Fail to file three or more reports felony, four
  years and/or 10,000.

12
Clarifying Legislative Conflicts of Interest

• Prohibit legislators from voting when there is a
  conflict of interest.
• In the last six-and-a-half years, few have
  abstained
• House 33 times in 6,495 votes. 3 Senate Zero
  times in 5,382 votes. 4
• House and Senate Rules do not Match House rules
  are not as strong as the Senate.
• "If a member desires to abstain from voting
  because of a potential conflict of interest, the
  Member may rise"
• Requires disclosure prior to abstaining from
  voting.
• Definition expanded to include business
  associates, in addition to immediate family.
• Requires creation of enforcement rules.

3 Per House Journals, 2003-2009 4 Per Senate
Journals, 2003-2009
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Make Michigan a Leader in Ethics

• Report lobbyist gifts for officials, candidates
  and family.
• Disclosure of personal finances.
• Abstain from voting when conflicts of interest
  occur.