State lawmakers blur line between public, personal interests

A recent change in Iowa's tax code spared Mark Chelgren's machine shop, welding company and wheelchair-parts plant from paying sales tax when buying certain supplies such as saws and cutting fluid.

The change passed by the state Legislature last year wasn't just good for Chelgren's businesses. It was brought about in part by Chelgren himself. The Iowa state senator championed the tax break for manufacturing purchases as part of his work at the statehouse in Des Moines.

Chelgren isn't the only state lawmaker doing his outside interests a favor. State lawmakers around the country have introduced and supported policies that directly and indirectly help their own businesses, their employers and sometimes their personal finances, according to an analysis of disclosure forms and legislative votes by the Center for Public Integrity and The Associated Press.

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The news organizations found numerous examples in which lawmakers' votes had the effect of promoting their private interests. Even then, the votes did not necessarily represent a conflict of interest as defined by the state.

That's because legislatures set their own rules for when lawmakers should recuse themselves.

Many lawmakers defend votes that benefit their businesses or industries, saying they bring important expertise to the debate.

Chelgren said the Iowa tax changes were good policy and that his background running a manufacturing business was a valuable perspective in the statehouse.

"We have way too many people who have been in government their whole lives and don't know how to make sure that a payroll is met," the Republican said.

Iowa Senate rules say lawmakers should consider stepping aside if their participation would erode public confidence in the Legislature. That's what Chelgren should have done, said one local official, especially since the tax change costs the state tens of millions a year in revenue.

"We have to keep the public's trust," said Jerry Parker, the Democratic chairman of the Wapello County Board of Supervisors in Chelgren's district. "If they see us benefiting financially from votes that we make, the perception is bad for all elected officials."

There's no shortage of support for the "citizen legislature" concept that operates in most statehouses — that lawmakers should not be professional politicians, but instead ordinary citizens with day jobs who can better relate to the concerns of their constituents.

Forty states have governing bodies that the National Conference of State Legislatures considers less than full-time. Those lawmakers convene for only part of the year and rely on other work to make a living.

To assess lawmakers' outside employment, the Center for Public Integrityanalyzed disclosure reports from 6,933 lawmakers holding office in 2015 from the 47 states that required them. The Center found that at least 76 percent of state lawmakers nationwide reported outside income or employment. Many of those sources are directly affected by the actions of the legislatures. By comparison, Congress has sharply restricted its members from moonlighting since 1978.

States differ widely on what financial information they require lawmakers to disclose. Idaho, Michigan and Vermont require none, although Vermont passed a law this year to do so starting in 2018.

Some states also are working to strengthen measures that would prevent conflicts of interest. Ballot initiatives for 2018 are underway in Alaska and South Dakota.

Ethics rules often allow lawmakers to debate or vote — or in some cases even require them to vote — when they have a potential conflict. Recusal is frequently up to the lawmaker.

In Nevada, Republican Sen. Ben Kieckhefer voted at least six times this year to advance measures benefiting clients of the law firm, McDonald Carano, where he works as director of client relations. In one case, he voted for a bill in committee that would have hastened a sales tax break for medical equipment, a measure backed by his firm's client. He asked questions of the lobbyist, a partner at his firm, with no mention of their association. The bill later died.

And last year, while his firm was lobbying on behalf of the Oakland Raiders, Kieckhefer voted to approve $750 million in taxes to help build a new stadium for the team in Las Vegas.

Nevada law says that if legislators feel they have conflicts of interest, they must disclose them before voting. But for the Raiders stadium decision, Kieckhefer had no need to speak up: The Senate, in a historically unprecedented move, waived the normal conflict-of-interest provisions for the vote. The bill passed.

Kieckhefer, a former Associated Press reporter, said a firewall divides his firm's lobbying from its legal work, the division where he works. He defended Nevada's citizen legislature, which meets every other year and pays lawmakers $288.29 for every day of the session.

"I'm not reliant on support from lobbyists or special interests to keep the job I have to support my family," he said.

Not all lawmakers have cast votes that end up benefiting their private interests. West Virginia Senate President Mitch Carmichael, a Republican, voted for a bill this year to expand broadband internet competition that his company, Frontier Communications, lobbied against.

Within days, Frontier fired him. Spokesman Andy Malinoski said in an email that "market and economic conditions" led the company to eliminate several positions, including Carmichael's.

Carmichael said legislators frequently feel pressure from outside income sources but usually do the right thing.

"We often feel the influences of employment," he said. "In my case, the net result is that I lost my job."

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Contributors include David Jordan and Joe Yerardi of the Center for Public Integrity; and Associated Press reporters James MacPherson in Bismarck, North Dakota, Audrey McAvoy in Honolulu, John O'Connor in Springfield, Illinois, Mark Scolforo in Harrisburg, Pennsylvania, Scott Sonner in Reno, Nevada, and Brian Witte in Annapolis, Maryland.