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June 2021

Michigan House and Senate members are finally wrestling with the issue of financial disclosure by state officials but don't get your hopes up that anything of value will come from this effort.

Our state is one of only two that do not require financial disclosure by elected legislators, something other states have done in varying degrees going back decades. Our state also ranks at the bottom of the list when it comes to transparency by the state government, despite a number of attempts by House members for nearly a decade to enact bipartisan laws to remedy the situation.

Although I would guess half of our readership is too young to remember the national political nightmare that prompted the push for transparency and financial disclosure across the nation, the effort was a direct result of the Watergate scandal of 1972 which ultimately was responsible for the resignation of President Richard Nixon.

For the uninitiated, here's the skinny: In June of 1972 five men, paid by the Republican Committee to Re-Elect the President, were arrested after breaking into the offices of the Democratic National Committee at the Watergate Hotel complex. That was less than a year after the Nixon White House “plumbers” unit broke into the office of the psychiatrist for Daniel Ellsberg several months after he released to The New York Times and The Washington Post the classified Pentagon Papers, which documented the lies from national leaders over several administrations about the state of the war in Vietnam.

The ensuing media coverage, congressional hearings, criminal charges and jail sentences for some Nixon cohorts helped drive the level of trust in the national government from a high of 75 percent in 1964 to a low of 36 percent in 1974. It also sent officials in Congress and most states scurrying to enact election spending reform and in the most proactive legislative bodies, financial disclosure requirements in an effort to reestablish citizen trust in government.

Michigan did enact legislation that created the Michigan Ethics Board but its purview was only the conduct of executive branch state employees and public officers appointed by the governor or other executive officers. The panel has no jurisdiction over legislative or judicial officials, nor local officials and government employees. On the plus side, the board does have power to compel testimony, meetings are open to the public, as are any documents that are produced by investigations of ethics complaints they receive.

But when it came to financial disclosure, lawmakers' efforts in the 1970s turned out to be a cluster of bungled attempts to force personal disclosure information on all state and local officials. So the opposing forces then had two emboldened camps – lawmakers who saw their ox potentially being gored and local officials who feared that having to disclose sources of income and land holdings by officials and their immediate family members would discourage most local residents from seeking out the low or no-pay positions in cities and townships. In other words, a guarantee it would be dead on arrival.

Former Governor Rick Snyder had a number of proposals he favored, including establishing an independent, nonpartisan commission to investigate ethics violations, campaign finance and lobbying and one that would be empowered to impose fines and penalties. Once again, good thoughts that went nowhere during his 2011-2019 years in office.

So here we are in 2021, nearly 50 years since Watergate, the Michigan House and Senate say they are trying to restore citizen trust (now polling at 40 percent) by requiring financial disclosure for state lawmakers and members of the administration. The problem, as it has been for several legislative terms, is that well-intentioned House members talked about what at first was legitimate legislation only to be forced to neuter it to appease the Senate Majority Leader, in this session Mike Shirkey (R-Clarklake), who wants to appear part of the good guys club without having to let the public see anyone's sources of income, essentially preventing anyone from double-checking any possible self-serving votes in Lansing.

As it stands now, here's what financial “disclosure” in Michigan could look like, proposed in a series of bills.

Both the House and Senate would have bipartisan committees appointed by the majority and minority leaders of each chamber, with a charge to field and investigate complaints about lawmaker ethical violations. The legislation would expand the role now handled by what is essentially an advisory committee created by 1968 legislation to issue advisory opinions on conflicts of interest. The downside – the majority leader of each chamber would have the power to remove a member of the committee, for any reason.

Further the committees would appear to lack subpoena and sanction power, so they would essentially have no teeth to enforce anything, instead issuing advisory opinions when requested and investigating violations of ethics law and House and Senate rules and only make recommendations for disciplinary action.

One of the bills in the package would require, among other things, that lawmakers file an annual financial disclosure report which would include, for themselves and members of their immediate family, employers from which they received $5,000 or more; any other source of money over $5,000 in the previous year; the address of all parcels of real property (except primary residence) valued at over $50,000; investment vehicles with a fair market value of $10,000 or more; and interests in businesses operating in Michigan if book value is over $10,000.

All well and good, on the surface. But these annual reports would be filed with the committee in the applicable legislative chamber and would not be accessible by anyone except members of the committee, essentially denying to the public (and media) the information necessary to possibly file a complaint about a possible ethics violation. Further, records of a committee would not be subject to the Freedom of Information Act and meetings would not be subject to the Open Meetings Act, so all deliberations would be conducted in secret. If a lawmaker is found guilty of an ethics violation, then the committee would have to make available the findings, evidence and committee recommendations.

There is also a proposal to extend the same requirements to cover the elected and key appointed members of the administration and university board members, which would be subject to the state Ethics Board where records and meetings would also be closed to the public.

Equally frustrating in recent weeks is the surprising lip service paid to the disclosure concept by some so-called progressive groups who are touting the proposed legislation as a “good incremental step” or “better than what we have now' – which is dishonest at best.

We need financial disclosure at the state level, governed by an independent commission with full power to demand testimony and impose penalties, hold public meetings, with records of financial information accessible to the public.

Anything short of that misses the mark.

David Hohendorf



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