Bills would require financial disclosures for Michigan office holders

Lansing — A bipartisan package of bills approved 6-1 by a House panel Wednesday would require state officials and candidates for state offices to disclose their financial holdings and those of family members.

The financial disclosures would be required of state representatives and senators, candidates for those positions, university board members, State Board of Education members and candidates for executive branch offices.

The disclosures would include significant sources of income, stocks, real estate, business associations or family members registered as lobbyists.

“We absolutely have to restore voter confidence in elected officials,” said Rep. David LaGrand, D-Grand Rapids. “And this is going to be a huge part of doing that.”

The package referred out of the House Elections and Ethics Committee Wednesday will move on to the House Ways and Means Committee before a possible vote by the full House. Michigan is one of two states without financial disclosure requirements for elected officials.

"The current lack of disclosure fosters mistrust in government,” said Rep. Julie Calley, the Portland Republican who chairs the House Elections and Ethics committee. “This is a step we must take in order to assure the residents of Michigan that we’re focused on their best interests and not our own.” 

The disclosure package has 63 co-sponsors in the House but could meet headwinds in the upper chamber, where Senate Majority Leader Mike Shirkey, R-Clarklake, in June expressed concerns that such a requirement would discourage people from running for office.

Rep. Pamela Hornberger, R-Chesterfield Township, was the lone committee member Wednesday to vote against each of the eight disclosure bills, citing concerns about the effect they could have on people interested in running for office.

“In a lot of instances, it makes it more difficult for good people that don’t feel the need to disclose their income or their investments to run for office,” Hornberger said.

LaGrand said he hopes changes adopted Wednesday will make the package more “livable” for those running for office and more amenable to the Senate.

Similar legislation in 2017 ran into opposition from a key House Republican chairman even though then-Lt. Gov. Brian Calley and then-House Speaker Tom Leonard, R-DeWitt, said they were willing to review the Democratic-backed bills.

Leonard indicated it wasn't a top priority, while Rep. Aaron Miller, the Sturgis Republican who then headed the House Elections and Ethics Committee, called the legislation "trendy" but "unwise." Miller is now vice chairman of the House Appropriation Committee and doesn't sit on the elections panel.

Under the current legislation, the report filed with the Secretary of State's office would have to be filed 30 days after May 15 each year or the formation of a candidate committee. The report would include the source and type of any income over $5,000; the address of any property with a market value of more than $50,000; stocks, bonds, commodities, securities or businesses interests with a value of more than $10,000; and any family members registered as lobbyists.

The annual cost for the Secretary of State's office to implement and maintain the financial disclosure program would be about $375,000 plus startup information technology costs, according to a House Fiscal Agency analysis. The cost would be offset by late filing fees.

Changes to the bill would “grandfather” in sitting elected officials unless they ran again, drop blind trusts from the list of required disclosures, exempt candidates from listing the name of a child if that child made less than $5,000 a year and would penalize noncompliance with a fine rather than a criminal charge.

“The real penalty for not complying with this is like the real penalty for not complying with campaign finance law, which is you get a lot of nasty press coverage,” LaGrand told lawmakers Wednesday.

Changes also clarify that lawmakers would only be required to submit a “snapshot” of their stock holdings and list real estate holdings without detailing the value of each holding. Requirements for judicial candidates were narrowed to those running for the Michigan Supreme Court or the Michigan Court of Appeals.

Candidates for governor, lieutenant governor, secretary of state or attorney general would also be required to file federal tax returns for the three preceding calendar years. At the request of those offices, the bills would also require them to submit state income tax returns as well, LaGrand said.

eleblanc@detroitnews.com

(517) 371-3661