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Last week, Senate Bill 2682, which requires members of 15 major boards and commissions to file annual public financial disclosures, became law without Governor Abercrombie’s signature. More than two dozen members of those boards have now resigned in order to avoid having to comply with the new law.
This was unexpected, and it’s unfortunate. I’m afraid it reflects, at least in part, the mistaken, unnecessary, and inflammatory assertions made about the threat to personal privacy, and even to personal safety, that disclosure could supposedly pose to volunteer board members and their families.
If I listened to those wild predictions and didn’t know better, I would be worried too.
Some of those mistaken statements unfortunately have come from the governor himself. In a June 30, 2014 letter to legislators, the governor bemoaned the potential for family financial information, along with medical records and credit histories, “becoming cannon fodder in political battles,” weapons in the hands of “those who have a political agenda.”
Never mind that financial disclosures required by the State Ethics Code have nothing whatsoever to do with medical records, and even “credit history” goes far beyond the routine disclosures required by law.
Although Gov. Abercrombie backed away from his threat to veto the measure, he repeated his warnings of gloom and doom in his official message notifying the legislature that SB2682 had become law as Act 230 on July 8.
It seems to me that the reaction to the new disclosure requirements is far out of proportion to the measure’s actual impact, and flies in the face of the facts accumulated in decades of actual experience.
After all, state officials, both elected and appointed, have for decades been required to file financial disclosures that are open to public inspection. In recent years, these public disclosures have been available online. The counties have required similar financial disclosures since the State Constitution was amended in 1978 to include a section on ethics.
Over these years, a wide range of elected and appointed officials have been required to file public financial disclosures. These have included all elected officials, including the governor and lieutenant governor, and legislators, as well as candidates for public office, even if they are not elected. State law requires disclosures to be filed by appointed state department heads and their deputies, members of the Board of Education, the state librarian and deputy librarian, along with the president of the University of Hawaii, vice presidents, assistant vice presidents, and the chancellors or provosts of individual campuses in the UH system.
And that’s not the end of it. Counties apply similar disclosure requirements to their top elected and appointed officials. Even state judges must disclose their personal finances, and those disclosures are also available online, although they governed by judicial rules and not by the State Ethics Code.
The point here is that each year, hundreds of people—elected and appointed, some paid, others unpaid—have complied with the basic disclosure requirements, for the most part without whining or complaining. And, most important, without the kind of adverse consequences suggested by the governor.
It isn’t necessary to speculate about what might happen now that the disclosures filed by the additional board and commission members will be open to public inspection. We know what impact financial disclosure has had on the safety and security of public officials and board members as a result of the past several decades of actual practice. In a word: none.
There’s simply no evidence to indicate that the governor’s fears point to any actual problems. Even judges, who were reluctant to see their disclosures opened to the public, don’t appear to have experienced any adverse consequences despite the obvious sensitivity of their positions.
And will the prospect of filing a personal and family financial disclosure deter “the most qualified individuals” from serving on volunteer boards and commissions? In a handful of unusual cases, perhaps. But it certainly hasn’t resulted in a shortage of qualified individuals willing and eager to run for office or accept appointments to top administrative positions.
Positions on the key boards and commissions now subject to the financial disclosure requirements will remain coveted because of the opportunities they offer to shape state policy in key areas, and incidentally to burnish personal and professional resumes. It is extremely doubtful that these positions will lack qualified applicants, disclosure requirements notwithstanding.
I have no doubt that some officials will take a deep breath and perhaps feel a bit uncomfortable when they file their first annual financial disclosures. Some may have to admit having more income or other financial resources than they appeared to have. Others may have to disclose that they aren’t as financially comfortable as friends or colleagues had assumed.
But most disclosures are simply routine. I’ve examined thousands of them over the years as a reporter and, before that, a public interest advocate. They rarely reveal any secrets. They obviously confirm that some people have more money and assets than others. Exactly what you expect. Overall, though, financial disclosures are simply boring.
And this is a key point. Financial disclosures aren’t really designed to produce “gotcha” moments. More typically, they provide an annual occasion, a prompt, for elected and appointed officials to inventory their financial interests and consider how these will look to others.
State law prohibits any public officer or employee from taking action affecting a situation in which they have a significant financial interest. The annual financial disclosure process is an opportunity to stay out of trouble. Do any of the financial interests and business ties have the potential to affect their official actions? Are there any potential conflicts lurking there? If so, identifying them early allows plenty of time to seek advice from ethics officials on how to avoid or mitigate any potential conflicts.
And disclosures also bolster public confidence by providing information about the financial interests of key decision-makers. They allow the public, and ethics officials, to monitor areas of potential conflict. Usually this results in reassuring the public that elected and appointed officials don’t have a private or personal stake in the outcomes of their decisions.
As the State Ethics Commission has previously explained: “The financial disclosure law allows the Commission, as well as the public, the opportunity to assess matters which might bring about conflicts of interests between public employment and private financial interests. A review of the financial disclosure statement allows the Commission to take action on possible conflicts of interests before problems arise.”
Ethics laws, including financial disclosure requirements, change over time. At one time, even legislators filed only confidential disclosure statements that were never seen by the public. The latest extension of financial disclosures to these major boards and commissions is a recognition of the independent power they wield over key areas of public policy. And this won’t be the last time that ethics laws change to adapt to our new, ever more complex world.
I’ll make a prediction, and I doubt that I’m going out on a limb by doing so. By the time board and commission members have been through the financial disclosure process once or twice, it will no longer be a source of concern. More people will get that annual reminder to pay attention to possible conflicts. Their resulting financial disclosure statements will still be boring. And we’ll all be the better for it.