Monday, February 24, 2014
Every year, state legislators and other public officials in Washington must file paperwork revealing details of their personal finances, including income, debts, investments and meals or trips paid for by lobbyists.
It’s a system that’s supposed to promote government transparency, especially for lawmakers who hold second jobs or have other entanglements that could pose conflicts of interest.
But the public rarely sees the information.
Unlike most data collected by the state Public Disclosure Commission — such as information on who’s donating to political campaigns — the personal financial-affairs statements are not posted online.
Although Washington frequently gets high marks from national open-government groups, this is one area where the state is lagging, some experts say.
There are other flaws in Washington’s financial-disclosure system that leave holes in the public’s understanding of the financial affairs of their elected officials.
The PDC — a small agency that has had a quarter of its budget and staff cut since 2009 — does not regularly scrutinize the accuracy of the financial information submitted by elected officials.
As a result, some lawmakers file erroneous or confusing reports that go uncorrected unless spotted by political opponents, journalists or citizen activists. One state senator didn’t properly report his business clients for years. Another failed to report farm-subsidy payments. Others have misreported their legislative salaries.
And because lawmakers report their assets and incomes only in broad ranges, it is impossible to get a complete picture of their finances — especially for wealthier legislators. In fact, it is easier to identify the poorest state lawmakers than the richest.
Such shortcomings are acknowledged by some key lawmakers and even the PDC itself, which is considering changes to the system.
Some local and national open-government experts say the idea of posting personal financial-affairs statements online is a no-brainer in 2014.
At least 29 states make personal financial-affairs statements of lawmakers available that way, according to a 2013 report by the National Conference of State Legislatures. (In Washington, copies of the forms are available if requested by email or at the Olympia offices of the PDC.)
The Sunlight Foundation, a Washington, D.C.-based nonprofit, recommends lawmaker-financial disclosures be made available in searchable online databases so the public can easily sift through the information.
“If there is a bill that is influencing the interests of a particular company, you want to see how many lawmakers have stock in that company. The only way to do that is to have accurate, quick access to information about their financial interests,” said Bill Allison, editorial director for the foundation.
Toby Nixon, president of the Washington Coalition for Open Government, agreed.
“I don’t think it would be a problem for the PDC to simply make them all available online,” said Nixon, who has had to file the forms himself as a Kirkland city council member and former state legislator.
Lori Anderson, a spokeswoman for the PDC, said there is no law prohibiting the agency from posting the forms, also known as F1s, on the Internet.
Still, the commission “has chosen not to post the F1s online because of the sensitive information they contain,” Anderson said. In addition to details about property and finances, the forms frequently include names of children and spouses, she said.
The PDC recently appointed an eight-member advisory committee to look at whether the F1s should be put online and whether the income codes should be updated. The PDC is expected to consider the group’s recommendations this spring.
“I do think it’s worth exploring. There are some legitimate privacy concerns as well. We want to be careful about balancing those concerns with the public benefit of the information that is posted,” said PDC Chair Amit Ranade.
The idea is drawing support from the lawmakers who chair legislative committees overseeing the PDC.
“I just think it’s something that most people would expect,” said Rep. Sam Hunt, D-Olympia, chairman of the House Government Operations and Elections Committee.
Sen. Pam Roach, R-Auburn, who chairs the Senate Governmental Operations Committee, said she favors the idea, too. “It’s public information,” she said.
However, Roach said the PDC should be careful about how much detail is put online, such as the home addresses of elected officials.
The requirement that lawmakers and other officials reveal details of their personal finances dates back to 1972, when voters approved Initiative 276, a landmark measure that demanded open government records and disclosure of campaign donations and lobbyist activities. It also created the PDC to enforce those rules.
About 6,000 public officials and candidates now file F1 reports each year, including state legislators and other state elected officials, county and city elected officials, public university presidents and trustees, and some top staffers to the Legislature and governor. Candidates for state and local public office must also file the reports.
Given that volume, the PDC does not have the staff to check the financial disclosures to see whether officials are accurately reporting their finances. (The agency does regularly fine candidates for public office who fail to file the reports on time.)
Staff at the PDC did sample 650 F1 reports in 2009, and found about 90 percent of filers appeared to submitting the required information — though the report did not examine the accuracy of the submissions.
A limited review by The Seattle Times found errors or gaps in some recent reports filed by state lawmakers.
For example, three legislators failed to report their legislative salaries in their reports filed in 2013. Another 19 reported legislative income that is lower than what the state pays.
Rep. Cindy Ryu, D-Shoreline, did not report who paid for $10,000 in travel for her in 2010.
Asked about the omission, Ryu said it may have been a payment she used to get from Allstate every year when she owned an insurance agency. But she said she couldn’t recall for sure.
Rep. Joe Schmick, R-Colfax, failed to report federal subsidies received by his Eastern Washington farm, where he grows wheat, barley and garbanzo beans.
Schmick has received about $16,000 a year in subsidies in recent years, according to a national database of farm-subsidy recipients maintained by Environmental Working Group (EWG). (He’s received a total of $412,000 since 1995, according to EWG.)
Schmick sounded chagrined when a reporter pointed out the error. He said he thought he could lump in the subsidy payments with his general farm income, which he disclosed.
After calling the PDC, Schmick said he’d file amended forms to properly disclose the payments. “Shoot, I thought I was doing it right,” he said, adding that the forms can be confusing. “There is not a lot of guidance really given,” he said.
Even when lawmakers fail to properly disclose finances, they are sometimes granted reprieves by the PDC.
Sen. Don Benton, R-Vancouver, failed for years to report major clients (those who paid more than $10,000) of his consulting business, National Advertising Consultants, as required by the law. Benton is a sales consultant who advertises himself as “the master closer.”
Instead, Benton merely wrote on his F1 that the business had “hundreds of customers nationwide” but did not say who they were.
The omission was noticed by The Columbian, which looked into Benton’s business background after he was appointed to a high-paying Clark County job despite questions about his qualifications.
Benton then appealed to the PDC for an exception from the reporting requirement, saying it would be a hardship to disclose all of his customers.
“I, too, am big on transparency, as you know, but at the same time I want to make sure quality individuals are not scared away from public service because of an onerous reporting requirement,” Benton told the PDC during a hearing on his case.
After quizzing Benton, the PDC ruled he had to disclose only customers in Washington state or those he’d cited in advertising.
Benton filed an amended report saying he’d had just two customers who fit that description: a Vancouver political-action committee and an Indianapolis law firm.
Even when lawmakers correctly fill out their financial disclosures, the information often gives only a hazy picture of their finances.
That’s because they only have to report the values of income and assets in broad ranges.
The smallest category goes from $1 to $2,999. The highest tops out at “$100,000 or more” — a range that reveals very little when it comes to real-estate interests or big investments held by wealthier officials.
“That’d be fine for the 1950s. There’s been a little bit of inflation since then,” said Allison, with the Sunlight Foundation.
Members of Congress have to report more detailed breakdowns of their assets. The highest range on federal forms is “over $50 million.”
Washington’s income reporting ranges have not been updated since 2008, and the PDC is now considering changes as part of its task-force review, Anderson said.