Michigan Senate OKs disclosure rules blasted as 'snow job’ to ‘deceive voters’

• Senate approves plan to require personal financial disclosure by elected officials, candidates; House delays vote
• Bills would require disclosure of income sources and assets worth more than $1,000
• Supporters say the plan is a good start. One senator says it has ‘loopholes the size of Texas’

LANSING — The Michigan Senate on Wednesday overwhelmingly approved bills to require elected officials and candidates to disclose information about their personal finances beginning next year, ending the state’s dubious reign as one of only two without any such mandate.

Supporters say the legislation would shed new light on potential conflicts of interest, as required by a ballot proposal approved last year by 66 percent of Michigan voters who approved Proposal 1.

"These bills objectively are a huge step forward compared to the current system of self-policing that does not hold our elected officials accountable," said sponsoring Sen. Jeremy Moss, D-Southfield, who called the 36-2 bipartisan votes an “institution changing” moment.

"This is the beginning of our work on these issues, not the end," Moss promised, vowing to continue work on other transparency measures next year. “Anything less than further progress betrays the trust that voters placed within us.”

The legislation faces a tougher sell in the House, where Democratic leadership on Wednesday night delayed a planned vote amid calls for tougher regulations, including full disclosure of paid travel and spousal assets

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Transparency advocates argue the plan would allow politicians to evade full disclosure. The package includes limited disclosure requirements for spouses, proposes significantly smaller fines for lying than a similar congressional law and does not require any disclosure for travel “junkets” paid for by nonprofits, among other things.  

"We intentionally left loopholes the size of Texas for current and future legislators and state officials to exploit," said Sen. Ruth Johnson, R-Holly, who nonetheless voted for the bills. 

The legislation is a “snow job” designed to "deceive the voters of Michigan that they are actually going to get some real accountability from their state government,” Johnson argued.

Under the Senate plan, state lawmakers, the governor, attorney general, secretary of state and candidates for those offices would be required to disclose the source of any income or asset worth at least $1,000. 

Filers would also be required to disclose their spouses' occupation and employers, but not separately held assets. 

That makes Michigan's plan weaker than other states that require spousal disclosure, including several that also require officials to disclose financial information about any dependent children, Nicholas Pigeon, executive director of the Michigan Campaign Finance Network, said earlier this week. 

The shortcoming is significant because "it’s very easy to move those assets under someone else's name in our immediate family," Rep. Jamie Greene, R-Richmond, said earlier Wednesday in a committee hearing. 

“I would never want to disclose a spouse's specific salary” because it could be used against them in pay negotiations, she said, “but when we have assets that can directly impact the decisions that we make here in Lansing — significant financial impacts— don't you think that the public should know that?"

Gov. Gretchen Whitmer, a second-term Democrat, has spoken out against stronger spousal disclosure rules, saying they could be disproportionately “held against” female candidates.

The Senate plan would impose a civil fine of up to $1,000 for officials or candidates who fail to file an annual disclosure report — and up to $2,000 for those who knowingly lie on the form. That’s far shy of the potential $50,000 penalty for lying on a congressional disclosure report.

Under the legislation, officials would only be required to disclose gifts they receive from lobbyists, which adds no real transparency because those lobbyists are already required to report the same. 

Officials would not have to disclose free travel paid for by political nonprofits which are not required to disclose donors, an arrangement used frequently by Former House Speaker Lee Chatfield, R-Levering, who is now under criminal investigation for alleged financial impropriety. 

Lawmakers in the Senate on Wednesday rejected an amendment proposed by Johnson that would have required lawmakers to disclose any political nonprofits run by themselves or a spouse. 

“If you sincerely believe that the financial disclosure bills passed today reduce corruption risk in Michigan state government in any meaningful way…I respectfully and vehemently disagree,” said Johnson, who previously served as Secretary of State. 

“We must do better.”

In the House, Democratic state Rep. Carrie Rheingans of Ann Arbor said she plans to propose an amendment that would require lawmakers to report all gifts and travel worth $1,000 or more.

Without amendments, “I will not vote for this,” Rheingans told reporters late Wednesday, saying the lack of travel disclosure in the Senate package is “a huge loophole right now.”

House Speaker Joe Tate, D-Detroit, has made clear he is seeking support for the Senate-approved legislation. He “remains hopeful” for passage at a later date, said spokesperson Jessica Travers.

Sen. Ed McBroom, R-Vulcan, said the package is a good state but agreed the state has “a long way to go” on other transparency reforms, including travel disclosure, campaign finance and public record requests, among other things.

"This is hopefully a fundamental shift in our way of thinking and in our desire to be honest with the people that we serve,” said McBroom, who co-sponsored the legislation. The plan will give voters “tools they need to determine how our decisions are reached,” he added.