A new proposal in the Michigan House would compel lawmakers and state officers to disclose their personal financial interests for the first time — but that information wouldn’t be public until after they leave office, an arrangement that if signed into law, would diverge significantly from the 48 other states that currently require financial disclosure.
Michigan has long been an outlier when it comes to identifying and regulating potential financial conflicts of interest for elected officials. It’s one of two states – and the only one with a full-time legislature – with no requirement for state public officials to disclose basic financial information, including income sources, business investments, gifts and travel compensation.
Without any legal requirement on financial disclosures, Michigan residents only know about potential conflicts of interest if their lawmakers choose to reveal them.
Related: 50 states of financial disclosure: How Michigan stacks up
Under legislation supported by House Speaker Jason Wentworth, R-Clare, and House Democratic Leader Donna Lasinski, D-Scio Township, lawmakers would be required to submit financial information for themselves and immediate family members — including income sources over $5,000, properties valued over $50,000 excluding their primary residence, and stocks, bonds and annuities valued at $10,000 or more — to a permanent legislative ethics committee in their chamber.
The House and Senate ethics committees would be an equal party split and feature alternating co-chairs under the proposal. Members selected by legislative leadership could enforce ethics and conflict of interest laws, issue advisory opinions and investigate complaints of lawmaker misconduct. As proposed, the committees would be exempt from the state’s public records laws.
Similarly, high-ranking state officers would have to disclose their financial information to the state Board of Ethics. But any information disclosed to the legislative committees or state board would remain secret until an elected official leaves office, unless either body determined an official violated state conflict of interest rules.
The specifics of the bills, first reported by Bridge Michigan, were described by supporters as a step forward in a state where meaningful changes to government transparency and ethics have long been debated, but never enacted. Others questioned how a financial disclosure policy without immediate disclosure would make any difference, and expressed concern the bills would give too much authority to an appointed committee whose operations would be shielded from public scrutiny.
“If your hope is to preserve a culture of secrecy, this is a thoroughly elegant way to do it,” said Rep. David LaGrand, a Grand Rapids Democrat who has long pushed for public financial disclosure.
A 2019 analysis by MLive of financial disclosure policies in all 50 states found that of the 48 states that currently require some form of asset disclosure, all but 15 post lawmakers’ responses in a searchable online database. Even in those states, members of the public seeking disclosure reports can obtain the documents via a public records request.
No state with an existing financial disclosure policy prevents members of the public from viewing sitting lawmakers’ disclosure filings.
Financial disclosure forms aren’t typically where egregious conflicts of interests are caught, but having them does set a tone of transparency, said John Wihbey, an assistant professor of journalism and media innovation at Northeastern University who has extensively studied financial disclosure laws in the U.S. That’s assuming they’re available in a timely manner for public consumption, he said.
The structure as proposed “has the appearance of a smoke-filled back room, which is precisely the opposite image that you want to create in the imagination of the public,” Wihbey said. He suggested partnering the legislative committees with an independent body or public official that could audit submissions might make it a more effective system.
Financial disclosure “is a signal to the public that you are transparent…therefore the citizenry can have some trust that you’ll be making decisions in the public interest,” he said. “This kind of structure, I don’t even know if it’s worth doing, because it doesn’t send that signal. And I think that signal is actually more important than the material disclosure.”
One big factor in whether any financial disclosure legislation gets to the governor’s desk is Senate Majority Leader Mike Shirkey, R-Clarklake, who has long expressed concerns about making lawmakers’ finances available to the public.
Initially, he’s expressed openness to the plan backed by Wentworth and Lasinski, telling the political newsletter MIRS on Wednesday he believes the current transparency proposals on the table are “moving in the right direction” and could see action later this year.
Shirkey spokesperson Abby Walls said he’s happy to entertain the legislation in the Senate if it comes over from the House, calling it “a good start.”
Gideon D’Assandro, Wentworth’s spokesperson, said opening disclosures up to public purview once a legislator leaves office is a compromise that will help keep politicians honest in office and let the public hold the committee accountable “with the benefit of hindsight.”
“Michigan has an honor system right now, and this proposal will create actual oversight with checks and balances on both the legislators and the watchdogs,” he said.
The permanent legislative ethics committees that would be created under the plan are modeled after Congressional ethics panels and would help police member misconduct and promote high ethical standards in Legislature, said Zach Crim, Lasinski’s spokesperson.
While Lasinski supports public financial disclosure for public officials, she and the Democratic Caucus are “also pragmatists focused on getting meaningful results for the people of Michigan today,” Crim said.
“The unfortunate reality is that our Republican colleagues don’t support public financial disclosure,” he said. “Faced with that reality, we’ve crafted a bipartisan compromise that ensures we can get meaningful, incremental reform through the Legislature and signed into law now, while continuing to fight for public disclosure now and in the future.”
The latest financial disclosure proposal came as a surprise to LaGrand, who earlier this year reintroduced a bipartisan package with 63 cosponsors that would make financial disclosures public in line with practices currently employed by other states.
He criticized the plan supported by leadership as “fake financial disclosure,” likening it to a Trojan horse that cuts the press and public out of a process meant to bring greater transparency to Michigan politics. He also expressed concern that members of the legislative committee would serve at the pleasure of leadership and have a large amount of power over colleagues who have an incentive not to have conflicts of interest investigations go public.
“I think that the arguments for doing real disclosure have gotten massively more compelling,” LaGrand said. “And so that’s why it’s a shame to be in this position instead of working towards building a stronger democracy.”
Related: Elected officials in Michigan would disclose financial records in new House bill
Without any specified rules about what’s allowed, what’s not and the extent of the proposed legislative committees’ power, it’s hard to say how effective the policy would be or what it would look like on the ground, said Simon Schuster, executive director of the Michigan Campaign Finance Network.
“The legislation itself, while it’s better than the current state of financial disclosure, is essentially the lawmakers offering financial disclosure to one another, but not the public,” he said. “And beyond that, the legislation itself is somewhat of a black box.”
Independent groups that have advocated for government transparency and ethics reforms are split on the House plan. It has buy-in from Voters Not Politicians, the group behind Michigan’s redistricting changes that has since refocused on government transparency issues.
In a statement, Voters Not Politicians Executive Director Nancy Wang said the package “is a strong foundation to build from to get our state back on track so we can ensure that our lawmakers are working for us.”
Lonnie Scott, executive director of the progressive group Progress Michigan, in a statement slammed the legislation as flawed financial disclosure with no teeth.
“For years, we’ve heard the same thing from Lansing that they’d pass reforms, but this stuff doesn’t pass the smell test,” he said, calling for “full financial disclosures with no black boxes, no carve-outs, and no treats for GOP leadership who just want to check a box so they can pretend they did something good.”
Related: Michigan House leaders propose wide-ranging changes to government ethics laws
The legislation is part of a wide-ranging package aimed at modifying the state’s government transparency laws. Other efforts by the House include a plan to subject lawmakers, the governor and lieutenant governor to open records laws, add additional prohibitions on lawmakers voting on conflicts of interest and prevent exiting lawmakers from stepping through the “revolving door” into lobbying for two years.
Many of the proposed changes, such as the two-year prohibition on lawmakers becoming lobbyists, have been proposed but have never seen broad support in a legislative chamber.
In March, the House unanimously passed bills that would subject the Legislature and governor to public records laws. Similar Senate bills have cleared the Senate Oversight Committee but have not yet been taken up for a floor vote.
Wentworth also proposed and passed out of the House a joint resolution that would require a two-thirds vote on any bill taken up after November general elections in even years. Known as “lame duck,” this period often results in long session days and dozens of bills flying through the House and Senate with little time for review. That resolution is currently before the Senate Government Operations Committee.