For many lawmakers, disclosures don’t provide estimate of holdings’ total value
Published: May 11, 2010 at 1:43 pm
The Tempe Democrat said he’d like Arizonans to have that level of detail about the holdings of all lawmakers. “Someone who is wealthy will vote differently than someone who is blue collar and knows the daily struggle of making ends meet,” he said.
Among other things, the forms require lawmakers to list assets such as stocks, bonds, mutual funds and real property to identify potential conflicts of interest. Lawmakers also have to assign broad ranges of value to each asset.
But estimating the maximum total value of a lawmaker’s holdings is impossible in many cases. The reason: The forms have an uppermost range of “more than $100,000,” and 49 of 90 lawmakers serving at the start of the 2010 session listed one or more assets in the highest range.
Bradley Smith, a professor at Capital University Law School in Columbus, Ohio, who has served on the Federal Election Commission, said ranges that allow estimates of lawmakers’ worth would allow the public to watch for sudden increases in wealth. Those can be indicators of kickbacks or deals with groups with an interest in government action, he said.
“Right now, if you have one category that says ‘over $100,000′ then you’re in the clear,” Smith said. “They’re so broad as to be meaningless.”
The forms have been required since 1975 and were amended in 1984 to make lawmakers assign values to certain assets as well debts owed to lawmakers by individuals and debts owed to lawmakers’ businesses. The ranges, which also include “$1,000 to $25,000″ and “more than $25,000 to $100,000,” haven’t been updated since 1984, when $100,000 bought what about $200,000 buys today.
Lawmakers aren’t required to list their residences or properties they use for recreation.
Because Senate President Robert “Bob” Burns lists five properties and an investment account valued at more than $100,000 each, his form shows a minimum value of between $603,000 and $675,000 but doesn’t point to a maximum possible value. House Speaker Kirk Adams’ form shows only that his assets have a minimum value of $225,000 because two accounts with mutual funds are valued at more than $100,000 each.
Assistant Secretary of State Jim Drake said the forms were never intended to show how much lawmakers are worth.
“I think the idea is to see where somebody’s loyalties might lie,” he said. “I don’t see that net worth is a critical part of a conflict-of-interest analysis.”
Government watchdog groups use congressional disclosure forms to estimate the net worth of U.S. senators and representatives. That’s possible in almost all cases because the forms use $50 million and up as the highest value range.
Congressional forms also have 12 value ranges and require lawmakers to assign values to liabilities, something that Arizona’s forms don’t do.
David Levinthal, spokesman for the nonpartisan Center for Responsive Politics, which reviews and disseminates information in congressional reports, said it’s essential for the public to know the worth of public officials.
“It is in the public’s interest to know where politicians invest their personal dollars,” Levinthal said in a telephone interview from the group’s Washington, D.C., headquarters. “This shines light on where there is unfortunate potential for corruption.”
Drake said the Secretary of State’s Office is evaluating ways to update the forms and last year held meetings on the topic with public officials. He said his office plans to ask lawmakers next session to pass legislation updating the three value categories to reflect the value of today’s dollar.
David R. Berman, professor emeritus of political science at Arizona State University and a research fellow at ASU’s Morrison Institute for Public Policy, recommends doing more than that. He said the public would be better served by creating more value ranges and increasing the top range to $500,000 and up.
“More detail and breakdowns on the amount invested would be useful,” Berman said. “On general principle the more we know about our legislators the better off we are.”
Steve Doig, Knight Chair in Journalism at ASU’s Walter Cronkite School of Journalism and Mass Communication, said providing more ranges would allow voters to at least have a sense of the scale of a lawmaker’s individual investments.
“The more we know about our legislators’ backgrounds, interests and financial situations the better,” he said.
The nine-page Financial Disclosure Statement has sections for lawmakers and members of their households covering:
_ Personal disclosure, including the source of any income over $1,000, the source of any gift over $500, personal debtors or creditors over $1,000 and any business licenses;
_ Reportable interests, including offices with businesses, nonprofit groups or trusts, bonds, real property other than primary residences and property used for personal recreation and ownership or financial interest in investment funds, trusts, stocks, joint ventures and more;
_ Business interests, including roles in businesses, goods or services provided by businesses, real property owned by businesses and businesses’ creditors and debtors.
State law makes it a Class One misdemeanor for lawmakers to knowingly omit information from or falsify information in disclosure forms.
A review of the forms found that most lawmakers’ reported investments are in 401(k) accounts, IRAs, mutual funds and trusts. In most of those cases, lawmakers listed a value for the overall investment rather than the specific holdings within it. For example, Rep. Bill Konopnicki, R-Safford, listed two trusts, each worth more than $100,000.
However, Sen. Barbara Leff, R-Paradise Valley, listed stocks within her family’s trust and gave each a value range. That yielded an estimate of the investments at between $3.3 million and $11.7 million.
Leff said legislators have different interpretations of the requirements.
“The Secretary of State’s Office should tell people exactly what’s expected,” Leff said. “The documents will be much more valuable when it’s clarified as to exactly what they want.”
Drake, the assistant secretary of state, said both Konopnicki and Leff are right about what they decided to disclose. When lawmakers are confused about what to include, he advises them list it.
“There isn’t that specificity in law,” he said.
Ableser said the system benefits wealthier lawmakers who don’t want the public to be fully informed about how much they own.
“A hundred thousand dollars compared to a couple million is night and day,” he said. “The forms should change to reflect higher-end occupations and the wealth of people who serve in the Legislature.”
But Fred Solop, a political science professor with Northern Arizona University, said while disclosing the sources of income is important, knowing the exact value isn’t as vital.
“You’re either pregnant or not pregnant,” he said. “There either is a conflict or there isn’t. We want to know what their sources of income are, and I wouldn’t judge sources to say one has a greater conflict of interest than another.”
The review of all 90 lawmakers’ disclosure forms also found that some lawmakers didn’t assign value ranges to at least one of their assets. Even though the forms instruct lawmakers to do that, no one at the Secretary of State’s Office reviews them, Drake said, because lawmakers’ political opponents can review the forms and report problems.
“They are self-regulating and self-policing,” he said. “We think the self-policing works.”
Rep. John McComish, R-Ahwatukee, said not listing a value for an account with John Hancock was simply an oversight, and he told a reporter it fell in the value category covering $25,000 to $100,000. He had listed values with all other assets.
Rep. Ray Barnes, R-Phoenix, said he decided against listing values for an IRA and an account with Capital One because he can’t dispose of or make money off those assets.
Rep. Andy Biggs, R-Gilbert, said he listed the value of his equity in three properties as “unknown” because he had no way of determining it.
“If you’re upside down on a property, how do you put that down?” he said. “They need to be clearer in the statute. It’s virtually impossible to see what they want.”
Rep. Frank Pratt, R-Casa Grande, who called not assigning values to a retirement account and his equity in two properties a function of trying to complete the form on a computer, said the disclosures accomplish their goal of showing possible conflicts of interest.
“They simply don’t want us making decisions where we might have a conflict of interest,” he said. “The goal is not to try to find out how much anybody is worth.”
David Cuillier, an assistant journalism professor at the University of Arizona who specializes in public access to government records, said with no one checking the forms it’s easy for legislators to fill them out incompletely.
“That’s why some of them can be vague and not take it seriously,” said Cuillier, the Society of Professional Journalists’ national freedom of information chairman. “If no one’s looking, then they can fudge the form.”