The Malleable Conflicts of Interest in State Legislature Rules

In many states, laws and ethics rules allow representatives to advance bills that would benefit their own financial interests.
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Louisiana State House.

Louisiana State House.

It's a fundamental part of representative government: Politicians are elected to advocate for their constituents, and not their own interests.

But in many states, laws and ethics rules allow representatives to advance bills that would benefit their own financial interests as well.

Take Louisiana, where lawmakers only have to recuse themselves if a proposed bill benefits them specifically and no one else, as The Advocate and ProPublica have detailed this week. So, for example, if the owner of a group of nursing homes votes for a bill that would increase profits for his business, but not for other nursing home owners, that would be a conflict of interest. But if the bill increases profit for the entire industry, then it's acceptable.

Similar language exists in the majority of states, regardless of whether they have full-time, part-time, or citizen legislatures. In part-time and citizen legislatures, in which lawmakers are not paid a full salary and often rely on other employment, this means people connected to certain industries or fields are not automatically barred from voting on legislation that might affect them financially.

"The increasing complexity of public policy at all levels, with intervention into private affairs, makes conflicts of interest almost inevitable for every part-time public official and particularly for a member who must vote on measures affecting the life of every citizen or resident of the state," the Legislative Manual of North Dakota states.

This can mean situations that look like conflicts of interest often technically aren't, according to the letter of the law. In Alabama, State Senator William Beasley proposed legislation last year that would exempt prescription medicine from business license taxes, potentially saving pharmacies money. When he is not making laws, Beasley is president of the company that owns Clayton Drug Company and operates a chain of pharmacies.

Beasley stands to personally benefit from the legislation, but so do all the other pharmacy owners in Alabama. "I'm sponsoring the bill for all retail pharmacists in the state of Alabama," Beasley told AL.com, "I'm just one little person. I'm one little spoke in the wheel."

Louisiana's rules are less stringent than those in some other states. In California, for example, a lawmaker has a conflict of interest when a bill might benefit his or her immediate family, or any business or property where he or she has over a $2,000 investment. In such cases, California lawmakers must recuse themselves, meaning they cannot discuss or vote on the matter. Maryland's Ethics Guide specifies that a lawmaker cannot benefit from "a close economic association" with someone, like a lobbyist, who has an interest in a particular piece of legislation passing.

Even when a lawmaker doesn't have a conflict of interest according to ethics rules, some states try to prevent even the "appearance" of a conflict. For example, in Maryland, lawmakers are encouraged to file a "disclaimer of conflict" to the State Ethics Commission related to their particular occupation. The commission then decides whether the lawmaker should recuse himself or herself. In Colorado, lawmakers are asked to recuse themselves from voting on issues in which their "participation would create the appearance of impropriety."

In 2015, the Center for Public Integrity and the Post and Courier reported on how South Carolina's ethics laws allowed lawmakers to use campaign accounts, reimbursements from state governments and gifts from interested parties as a "personal ATM."

But even before the reforms passed, critics were saying they didn’t go far enough. The State newspaper reported that South Caroline state Representative Jim Merrill was earning money through his public relations company but did not have to disclose who was paying him. In December of 2016, a grand jury investigation into corruption in the statehouse indicted Merrill on 30 charges of ethics violations. Merrill was accused of using his company to accept more than $1 million from groups with interests in state legislation. In 2017, he agreed to cooperate with prosecutors as they continued their investigation, pleading guilty to one charge of misconduct in office. By May of 2017, four South Carolina lawmakers had been indicted as part of the probe.

This post originally appeared on ProPublica as "Legislators in Many States Can Push Bills They'd Profit From" and is republished here under a Creative Commons license.

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