United States: State-By-State: Maryland's Legislature Will Continue To Police Itself – State Adopts Limited Ethics Reform Bill

Andrew H. "Andy" Emerson is an Associate in Holland Knight's Washington, D.C. office .

On April 11, 2017, Maryland Gov. Larry Hogan signed a substantially pared-back version of his Public Integrity Act of 2017, which was passed by the Maryland House and Senate after extensive amendment during the prior week. This new legislation follows a year of seemingly never-ending ethics and criminal investigations in the state, but the new law's impact on day-to-day log rolling in Annapolis is likely to be far less invasive than if Governor Hogan's original proposal had been adopted.

As this blog originally discussed in January, this legislation was intended impose a one-year lobbying ban on both executive and legislative branch officials and staff to prohibit current lobbyists from serving on state boards and commissions. It also aimed to subject legislators to independent oversight by the Maryland State Ethics Commission, rather than the current Joint Committee on Legislative Ethics (JCLE).

In its final iteration, the legislation will be less invasive than anticipated. The state legislature will continue to police itself via the JCLE, and legislative and executive branch staff can continue to move directly into lobbying work after leaving government.

However, the new law does adopt a variety of new, stricter ethics provisions applicable to legislative and executive branch officials and lobbyists. These include:

  1. The definition of "close economic association" between a legislator and a company has been expanded to include any company with which a legislator is "negotiating employment" or "arranging for prospective employment."1
  2. Former Members of the General Assembly and key Executive Branch Officials - the Governor, Lieutenant Governor, Comptroller, Attorney General, and State Treasurer - may not assist or represent another party for compensation in a matter that is the subject of legislative action for one calendar year after the member or official leaves office.2
  3. Public officials and employees may not use the prestige of their office to influence the award of a state or local contract to a specific person.
  4. Public officials and employees may not directly or indirectly influence the hiring (for compensation) of a particular lobbyist or lobbying firm.
  5. Legislators must report, in writing to JCLE, the name of their primary employer and the primary employer of their spouse, as well as any business from which the legislator or the legislator's spouse receives earned income as a result of an ownership interest.
  6. If a legislator's spouse is a lobbyist, the legislator must now report the name of each entity that has engaged the legislator's spouse for lobbying purposes.
  7. Financial Disclosure Statements filed by State officials and employees must now be filed electronically and, as of January 1, 2019, those disclosures will be made available online on the State Ethics Commission's website.
  8. Lobbyists who serve on any State Board or Commission who are disqualified from participating in a specific matter because of a conflict of interest must file a statement of recusal with the Board or Commission upon which they sit, which will be recorded in the minutes of the meeting at which the conflict arises.

In addition to these new provisions, the Public Integrity Act also established a new Citizens Advisory Board for Legislative Ethics (CABLE), which is charged with "regularly" making recommendations to the Legislative Policy Committee regarding changes to Maryland's Public Ethics Laws.

The CABLE will consist of five individuals, including two appointed by the President of the Senate, two appointed by the Speaker of the House, and a Chair appointed jointly by both officials. The members of the CABLE will be chosen so that each political party is represented in "approximately the same proportion as is represented in the General Assembly" and no more than two members of the CABLE may be former members of the General Assembly. It is unclear how extensive the CABLE's work will be because no budget for its operations was established and the final Fiscal and Policy Note for the Public Integrity Act did not anticipate any spending in support of the CABLE's operations in 2017, or any future year.

Footnotes

1Notably, however, the bill increases the stockownership threshold from $25,000 in value to $35,000 and exempted exchange-traded funds, ie. public companies, which will allow legislators to own more of a company before being considered closely associated under applicable recusal rules.

2 The limitation on assistance and representation for these officials does not apply to representation of a municipal corporation, county, or State governmental entity.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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