Lansing (September 7th, 2023) - In the 2022 midterm elections, with a 2-to-1 ratio, Michigan voters advanced Proposal (Prop) 1 to require annual public financial disclosure reports from public officials and amend term limits to a total of 12 years in the legislature. Passage of legislation is required to make annual financial disclosure a law; otherwise, any Michigan voter can sue the legislature starting December 31st, 2023.

This marks a historic change that aligns Michigan with standards that all but one other state has already adopted. Michigan and Idaho are the only two states that do not already have laws on the books that require public officials to file such reports, commonly called Statements of Economic Interest.

The push began with a move by Voters For Transparency and Term Limits to circulate a ballot petition that would put the proposed constitutional amendment on the 2022 ballot for voters to approve. This effort would require that 425,059 valid signatures be submitted to the Secretary of State, which is 10% of the votes cast for the governor.

However, the ballot initiative was not put on the ballot via petition—Representative Wentworth introduced a similar version of the initiative through the House. The House and Senate passed the resolution by a two-thirds vote. Both versions share language and structure, but the enrolled resolution removes or modifies many requirements listed in Sec. 10 (2) which list the disclosures that must be within the legislation.

There are substantial differences between what Voters For Transparency and Term Limits began to circulate and what ended up in House Joint Resolution 41. For example, the original requirements would force public officials to disclose “purchases, sales, or exchanges of a security or a real property.” This whole subsection was eliminated from Rep Wentworth’s proposal.

The most notable revision occurs in (G), (H), and (L), modifying the requirement that gifts, travel payments, and gifts to charity in lieu of honoraria are only to be reported if they come from a lobbyist or lobbyist agent as prescribed by state law. This means that nothing new would have to be disclosed, including the majority of paid-for travel in Lansing directly paid out by 501(c)(4) accounts.

Witwer controversy renews focus on disclosure law

On Monday, The Detroit News revealed that Rep. Witwer, who chairs the powerful House Appropriations Committee, maintains a close relationship with consulting firm Edge Partnerships, exposing several potential conflicts of interest. The report describes a continued relationship between Witwer and the firm throughout her tenure in the House, giving Edge’s leadership access to elected officials while maintaining contracts with state agencies.

If the requirements of Proposal 1 were in effect for this legislative session, Witwer would have likely had to disclose her continued relationship with Edge. Witwer neither confirmed nor denied cutting financial ties with the firm, but if any payments were made by the firm to Rep Witwer she would need to disclose them depending on the reporting threshold that is yet to be determined. The Proposal requires a description of sources of earned and unearned income.

Even if Witwer did not receive any payments from Edge she would still have to describe any position she maintains as an officer, director, trustee, partner, proprietor, representative, employee, or consultant within the firm. In Edge Partnership’s Annual Statement in February of last year Witwer signed as a registered agent and titled herself as a “member.”

115 days and counting

Some progress has been made in crafting the financial disclosure law, but not very much. On March 14^th of this year, Rep. Harris introduced HB 4269 which drafts the form legislators must file and closely follows the language of Proposal 1, including the disclosure of gifts and travel payments only by lobbyists registered under Michigan Law. Rep. Erin Byrnes who chairs the House Ethics and Oversight Committee which the bill was referred to says there is “room for expansion” regarding the lobbyist disclosure requirement. The sponsor of the bill, Rep. Harris stated that “that is something to look at” regarding the expansion of this requirement.

Rep. Byrnes stated that implementing Prop 1 is “something I am working on currently, along with a few other colleagues in the House.” However, Rep. Harris stated that the Republican side of the committee “has yet to hear a single bill.”

HB 4269 lacks any disclosure requirements for spouses or immediate household members which many other laws require. Byrnes said she is “supportive” of adding in household and spousal disclosure requirements. No action on the bill has been taken since its introduction back in March.

On the Senate side, Sen. Runestad introduced SB 381 in June which details the information the form must require. The bill similarly follows the language of Proposal 1 like its companion in the House but with one key difference—it requires the disclosure of gifts and travel and lodging expenses that are required and are not required to be reported by a lobbyist or lobbyist agent under state law, significantly expanding the requirement. However, there is no language requiring the disclosure of assets and unearned income, only the name, mailing address, and brief description of any “current employer of the state official.” There is a requirement for filers to disclose their spouse’s employer.

Both bills have sat since they were referred to committee.