Prop. 1 Financial Disclosure Bills Shipped Off to Whitmer’s Desk
November 14, 2023
The revamped financial disclosure legislation – requiring legislators, statewide executives and candidates for those offices to annually list off their assets and non-state revenue sources – is officially off to the Governor’s desk.
Around 11 hours ago, the House approved an altered version of the Senate leadership’s Proposal 1 implementation legislation, SB 613, SB 614, SB 615 and SB 16. Through their changes, a filer must disclose if they or their spouse is a registered vendor with the state or has a majority interest in a company that is a registered vendor to Michigan.
Sen. Jeremy Moss (D-Southfield)’ SB 374 – which first only increased the size of an election precinct to no more than 2,999 active registered voters to now up to 4,999 – was also modified in the House to serve as a trailer bill for the financial disclosure package, prohibiting an elected candidate from assuming office if they have not filed the aforementioned disclosure.
SB 615 and SB 616 were automatically enrolled and shipped off to Gov. Gretchen Whitmer’s desk, while the updated SB 613 and SB 614 were approved 36-2 before becoming en route to the Governor’s desk. Sens. Jim Runestad (R-White Lake) and Jonathan Lindsey (R-Brooklyn) opposed the bills.
Meanwhile, before leaving the Legislature for Whitmer’s office, SB 374 passed by 30-8, with Sens. Joseph Bellino Jr. (R-Monroe), Kevin Daley (R-Lum), John Damoose (R-Harbor Springs), Roger Hauck (R-Union Twp.), Michele Hoitenga (R-Manton), Jonathan Lindsey (R-Brooklyn), Jim Runestad (R-White Lake) and Lana Theis (R-Brighton) opposing it.
Sen. Ruth Johnson (R-Holly), who served as Secretary of State from 2011 through 2018, offered an unsuccessful amendment to the package, instructing filers to provide the name, mailing address and employer identification number of any 501(c)4 political or social welfare organization they or their spouse is a director or officer of.
Transparency advocates and various watchdogs have criticized 501(c)4 nonprofit organizations as secretive backdoors where politicians can raise money from anonymous donors. Under Johnson’s failed amendment, the same filing mandates would apply to 527 Political Action Committees (PACs), which have received similar criticisms.
Johnson referenced a January 2022 report by The Detroit News finding that “Road to Michigan’s Future,” a pro-Whitmer nonprofit, raised $6.5 million from undisclosed donors in a single year, with one contributor – without specification of it being a person, company or organization – giving $875,000 individually.
“This is commonly called dark money. The people of Michigan deserve to know about these accounts and the potential influence they place on their elected officials,” Johnson said. “My amendment is common-sense transparency. It’s a measure that will provide additional and sorely needed sunshine on the ownership of these accounts, which are often used by officials and candidates outside the view of traditional campaign finance reporting, and without the most basic transparency.”
Runestad described the bills as hastily crafted styrofoam tablets, run down from the mountaintop just before the end of this year’s session.
Proposal 1 of 2022 was backed by more than 2.8 million voters in the last general election, and required the Legislature to develop a premier financial disclosure law revealing the assets, debts and income sources of lawmakers, the Secretary of State, the Attorney General, the Lieutenant Governor and the Governor.
Failure to have a new law developed by legislators signed by the Governor and enacted by Dec. 31 of this year could likely result in a lawsuit being filed in the Michigan Supreme Court.
Thursday was expected to be both the House and Senate’s regular session day before adjourning for the year on Nov. 14.
“I must vote no on this mostly toothless bill here today,” Runestad said. “They produced this sham, and we had this one shot – this one opportunity – that will now be gone with the passage of this bill. If the Legislature will not do the right thing now, under the gun, is anyone deluded enough to think that they will fix what needs to be rectified when the pressure is all gone?”
He said it was as if “a sick, blind, deaf three-legged kitten just got tossed in among the Lansing wolves.”
Closely monitoring all this legislative action on disclosure is Michigan Common Cause. Last week, the program director was making noises about a legal challenge if the lawmakers did not go far enough on spousal disclosure.
Quinton Turner last Friday put it this way, “I think that is absolutely a possibility. The voters want to see transparency and see financial disclosure in Michigan.”
MIRS caught up with Turner just moments before the Senate adopted the house amendments and he is now suggesting, “We are not prepared to take legal action at this point.”
What he and others are prepared to do is take a deep dive into what changes were made, including the provision that spouses report any contact with state vendors and disclose whether they are employees of the same or earn money from those vendors.
Turner conceded that is something, but “state vendors is a narrow universe” and there are other business ties that spouses might have. He says the House changes “did not go as far as they could.”
He also notes that the 15 progressive Democrats who voted no for that same reason were holding out for more sunlight on the disclosure form from relatives.
“I’m not sure what we do at this point,” he explains adding, “it’s a little difficult to say.”
Article courtesy MIRS News for SBAM’s Lansing Watchdog newsletter