Executive
By Leah Rush
WASHINGTON, July 19, 2007 — Twenty-one states failed to make basic information about the private financial interests of their governors available to the public, according to a six-month survey of state disclosure laws by the Center for Public Integrity. Four of those — Idaho, Michigan, Utah and Vermont — did not require governors to file financial disclosure reports at all.
Washington was the only state to receive an "A" grade in the Center's analysis because it provided the most information to the public on its governor's personal income and investments. Eight states scored in the "B" range, while 20 states received "Cs" or "Ds."
As the top elected officials in each state, governors sign legislation into law, recommend and approve state budgets, and have wide-ranging powers to appoint department and agency heads and fill board and commission positions. Requiring them to disclose their private financial ties could reveal possible conflicts of interest.
For governors, "the environment [for potential conflicts of interest] is a lot greater because they are making so many more decisions" than other public officials, said Robert Stern, president of the Center for Governmental Studies, a nonpartisan research and reform-advocacy group based in California. "They are making executive decisions and legislative decisions."
In the states that failed to make the governors' financial ties public, "citizens are missing potential conflicts of interests," said Stern, who helped write California's 1974 political reform law and served as general counsel of the state's Fair Political Practices Commission for nine years.
The Center evaluated each state's financial disclosure law for governors with a 43-question survey totaling 100 points. The survey assessed what basic information was made available, including outside employment or income, officer or director positions, investments, clients, real property ownership, family income and interests, public access to disclosure records and whether the state imposed penalties for violations of these laws.
Many states required reporting of other details not included in the Center's survey, including gifts and government contracts.
Gubernatorial Gift Gaffes and
Other Disclosure Woes |
Besides former Ohio Gov. Bob Taft (R), who was convicted and fined for accepting thousands of dollars in golf outings and failing to report them as gifts on his personal financial disclosures, at least six sitting governors have in the last two years run into trouble with reporting — or not reporting — details about their personal finances. These governors, among others, have come under scrutiny:
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Hawaii Gov. Linda Lingle (R) failed to report a real estate transaction on her Web-posted annual financial disclosure, but reported it on her candidate filing, which was not available on the state's ethics commission Web site, according to the Associated Press. Her $595,000 sale of a condo last year came under criticism in March because her 43 percent profit would have been heavily taxed under a bill currently wending its way through the legislature that would discourage speculative real estate deals. |
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The Chicago Daily Herald found Illinois Gov. Rod Blagojevich (D) reported on his 2007 disclosure receiving gifts worth more than $500 in 2006 from Anita and Amrish Mahajan. Anita Mahajan is under felony indictment on charges that she billed the state of Illinois $2 million for drug tests that were never done. In 2006, the FBI looked into a $1,500 check that Blagojevich reported, in an amended filing, as a birthday gift to his 7-year-old daughter from Michael Ascaridis, whose wife, Beverly, started a state job less than two weeks before the date on the check. |
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Nevada Gov. Jim Gibbons (R), according to news reports, amended his financial disclosure filing earlier this year to include as "gifts" previously undisclosed donations to a legal defense fund, which was set up to pay expenses related to an FBI inquiry into his association with a federal contractor while Gibbons was in Congress. |
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The Atlanta Journal Constitution reported in the run-up to his reelection last year that Georgia Gov. Sonny Perdue (R) failed to disclose land transactions and holdings, among them a tract next to his home, whose value was affected when the state opted not to buy some adjacent property for conservation. |
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California Gov. Arnold Schwarzenegger (R) had two complaints filed against him in late 2005 with the state's Fair Political Practices Commission (FPPC) when a $1 million contract with fitness magazine publisher, American Media Inc., came to light through the company's annual report to the Securities and Exchange Commission instead of through his personal financial disclosure statement, according to the Associated Press. He terminated the contract, while the FPPC dropped the complaints, claiming it was not allowed to sanction a statewide elected official. |
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In Rhode Island, Gov. Donald Carcieri (R) was ordered to pay a $750 fine in May 2005 for two violations of the state ethics code — exceeding the gift limits and filing his disclosure form late, according to news reports. He accepted three luxury seat tickets valued at $573 each to a New England Patriots football game from Fleet Bank, which violated the state's $150-per-gift and $450-per-year limits on gifts from "interested persons" who have a financial interest in decisions an official can make. He later reimbursed Fleet for the tickets. |
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Importance of disclosure
Filings by many governors show they have money and personal influence beyond the power they derive from public office. A few are independently wealthy. According to a recent Stateline.org report on a Council of State Governments' review of governors' public pay, three do not accept their salaries. California Gov. Arnold Schwarzenegger (R) and Tennessee Gov. Phil Bredesen (D) give their paychecks back to their states, while Gov. Jon Corzine (D) of New Jersey accepts a salary of $1 a year.
A look at their financial disclosures reveals how these powerful men can afford to work for free. Schwarzenegger's filing contains pages of outside interests worth more than $100,000 each and about a dozen investments worth more than $1,000,000 each. Corzine has a passel of mutual funds and investments from his days as a top New York investment banker.
Governors "are scrutinized much more carefully than any other state official," Stern said. "Most potential conflicts will be revealed if they've disclosed it, but the real question is: do they disclose it?"
At least six sitting governors have in the last two years run into trouble with reporting — or failing to report — details on their personal finances (see box). While a sitting governor in 2005, former Ohio Gov. Bob Taft (R) was convicted and fined for accepting and failing to disclose gifts totaling almost $6,000 over four years.
Rankings details
In 1999, 2004 and 2006, the Center evaluated the state laws that require financial disclosures from the country's 7,400 state legislators. As with the legislative results, the Center found that most of the 46 states requiring disclosure from their governors struggle with the specifics:
Thirty-three states do not require governors to report the value of outside income, either as a precise number or a dollar range, while 31 do not have value or income amounts for investments. In New York, governors are required to report value amounts, but that information is not available to the public.
- Twenty-eight states do not require descriptions of the services provided by the companies from which they receive outside income, while 37 states do not require descriptions of organizations for which governors serve as advisers and directors.
- The survey found that in six states authorities do not have the power to audit financial disclosure statements for completeness and accuracy. These are Arizona, Colorado, Delaware, Maine, Nevada and Wyoming. Ten states do not conduct even informal reviews to ensure that disclosure statements are complete.
Only two states — Mississippi and Virginia — make no provisions for penalizing governors who fail to file disclosure statements on time; the rest have filing fines or other penalties in place. Nine states name late filers in a list made public on the Web or in print.
The Center study also found that the public's access to these filings varies widely across states.
Maryland is the only state that requires copies of forms be picked up in person. Until 2007 New York would not provide copies of the filings; anyone wanting a New York disclosure filing had to appear at the ethics commission in person and copy the information on the disclosure reports by hand. The state will now mail requested copies.
Massachusetts and Wisconsin send governors the name and address of anyone who has inspected their financial disclosures. However, 22 states make disclosure statements available to anyone electronically via e-mail or the Web.
The study found that 12 states allow governors to file reports electronically.
Governor vs. legislator filings
Most states use disclosure laws that apply to both governors and state lawmakers, although the disclosure form might not look exactly the same or the oversight agency that collects the filings might be different. In these cases, what the states ask the elected officials to disclose is basically identical.
The Center gave 11 states the same score in both the governors and legislators disclosure rankings, while another 27 states lost or gained one or two points in the governors ranking.
Some states, however, ask their governors to disclose much more information about their personal finances than they ask of their legislators.
Louisiana is one of those states. While the state ranked 44th in the legislator study with 43 points, it came in third in the governors study with 88 points and a "B" grade. The governor there files under a different law that requires the reporting of entire categories of information not mentioned in the legislative disclosure law including officer/director positions, real property holdings and professional clients.
The governor of Indiana also must disclose more than its senators and representatives. These stricter requirements resulted in a much higher ranking that its legislator score, which was an "F." The governor's disclosure score was 78 — a jump of 18.5 points over the lawmaker's ranking — and earned the state a "C."
The state gained points on three accounts: the governor reports real property holdings, professional clients and all non-state employers; the agency exacts penalties for forms filed late or with intentionally incorrect information; and, finally, unlike the state Senate, the agency makes its governor filings accessible online.
In Rhode Island, the governor's disclosure score was 10 points higher, which boosted the state to a "B," with 82 points, mostly as a result of a new 2006 requirement for statewide officials to provide information on the value, within certain ranges, of their income and investments.
In addition to the questions about governors' disclosure, the survey asked about (but did not grade) personal financial disclosure requirements for other executive branch officials. For elected positions other than the governor, five states do not require filings: Louisiana, along with Idaho, Michigan, Utah and Vermont (the four states that don't require governor filings). For non-elected executive branch positions, four additional states don't require filings — Arizona, Colorado, New Mexico, and Wyoming — bringing that total to nine.
Research interns Colin Burke, Christina Ginardi, David Jimenez, Sarah Laskow and Sophie Rutenbar contributed to this report.
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