What financial disclosure forms don’t require reveal as much as what they do

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Rep. Candy Spence Ezzell is a race horse owner, as she points out on her Twitter biography and her financial disclosure document.

As a Republican lawmaker from Roswell, Ezzell often proposes and advocates for legislation that impacts the racing industry.

At least seven of the 13 members of the House Education Committee are current or former educators, and one is a former school board member. At every meeting they take action on legislation that could impact their current or former livelihoods.

Then there’s House Speaker Brian Egolf, the Santa Fe Democrat criticized by Republicans for failing to disclose his client – a medical cannabis provider – before the Department of Health.

Those three are only a few of the dozen or so lawmakers who might be perceived as having conflicts of interest based on their financial disclosure forms.

New Mexico In Depth created a database of the information in financial disclosures filed by lawmakers with the Secretary of State this year.

The disclosures don’t just reveal potential conflicts for lawmakers. In fact, sometimes the disclosure forms don’t reveal much at all.

“It’s basically all loopholes,” said Douglas Carver, a former Legislative Council Service attorney who is now executive director of Ethics Watch.

In January, Ethics Watch pointed out in its initial report that reporting requirements are unclear and lawmakers interpret the requirements in a variety of ways.

“The real problem is the law,” Carver said. “The forms pretty accurately reflect what is in the law.”

The Legislature considered a few bills that would have made adjustments to financial disclosure reporting in the recently ended 60-day legislative session. House Bill 291 would have made minor changes in the disclosure law. That bill died without a vote on the Senate floor; other measures didn’t pass their initial committees.

“It’s all little stuff, it’s all good, but it doesn’t get at the real problems with the law,” Carver said.

The Ethics Watch report noted that in the past, the Secretary of State didn’t appear to review the forms, even when they’re clearly incomplete.

This year, the office is reviewing the forms, said John Blair, deputy Secretary of State.

“In the next week or two, we will notify any filers that we believe either omitted information or need additional information or corrections that they need to provide more information allowing them an opportunity to file an amendment,” Blair wrote in an email. “… our office is required to seek voluntary compliance first. We anticipate that these filers will voluntarily comply with our request for more information and that no penalty will be assessed.  If any filer refuses to provide the updated information, our office could choose to assess a penalty at that time.”

For instance, lawmakers are asked to disclose sources of income of $5,000 or more, but the form doesn’t require specific amounts. Still, four lawmakers listed specific amounts. And five didn’t list any sources of income, even though they listed occupations for themselves or their spouses.

Sometimes portions of the form are left blank, such as the nature of a lawmaker or spouse’s business. In others, handwriting can’t be read.

Conflicts of interest?

But perhaps the biggest unanswered questions surround conflicts of interest.

“That’s one of the hurdles we have in a citizen legislature,” said Heather Ferguson, legislative director for Common Cause New Mexico. “Some of these conflicts of interest are inherent by design.”

That’s because New Mexico is the only state in the nation that doesn’t pay lawmakers. So they typically have other jobs.

“They carry the bills they care about or their constituents care about,” Ferguson said. “You have to take a real specific look. Is there an individual benefit?”

That’s often unclear.

Eleven lawmakers list that they or their spouses did $5,000 in business with state agencies in 2016, although some are vague.

Rep. Ricky Little, R-Chaparral, for instance, lists “school district – bids.” Sen. George Munoz, D-Gallup, lists “only as a shareholder less than 10%.”

And 11 lawmakers say they or their spouses represented or assisted clients before state agencies. The law doesn’t require that the clients be disclosed, and none of them are.

In some instances, it’s difficult to discern what the agencies are.

Rep. Bill Rehm, a retired police officer and Albuquerque Republican, now works as a consultant doing training for law enforcement officers, private investigations and serving as an expert witness.

He lists receiving more than $5,000 from state agencies and also representing clients before state agencies simply as “State, county, universities or cities in New Mexico.”

Ezzell’s husband, Calder Ezzell, is a partner with Hinkle Law Firm in Roswell. While she doesn’t list a speciality for her husband’s practice on her disclosure form, she said he practices primarily in the area of oil and gas.

Rep. Ezzell lists the law firm’s representation before New Mexico OSE, ED, PRC and OCD, which are apparently the Office of the State Engineer, the Environment Department, Public Regulation Commission and Oil Conservation District, respectively.

Like Egolf, Albuquerque Democratic Sen. Cisco McSorley lists the Department of Health as an agency he’s represented clients before. McSorley sponsors legislation to legalize hemp production and to liberalize medical marijuana regulations.

McSorley said while he gives clients advice about Department of Health regulations and medical marijuana law, he doesn’t appear before the department. He said he doesn’t disclose his clients, many of whom are in the medical marijuana industry, for specific reasons.

“I give people advice about issues they’re going to have in front of DOH,” he said. “I have quit disclosing (clients) because I’m afraid of retaliation. At the request of my clients, I don’t disclose that information anymore.”

Even if lawmakers’ clients were disclosed, it’s unclear what other action might be taken to prevent potential conflicts.

House and Senate rules both say that “The members shall not use their offices for private gain and shall at all times maintain the integrity and discharge ethically the high responsibilities of their legislative positions. Full disclosure of real or potential conflicts of interest shall be a guiding principle for determining appropriate conduct of the members.”

The rules also note that each lawmaker “shall attempt to ensure that his private employment does not impair his impartiality and independence of judgment in the exercise of official duties.”

And the rules require a vote of the House or Senate to allow a lawmaker to recuse themselves from a vote.

Ezzell said her experience as a rancher and racehorse owner gives her valuable expertise in areas such as agriculture and racing regulation.

“I’ve raised horses all my life, I’ve grown up in the agricultural sector, I know about agriculture,” Ezzell said. “It’s in the interests of all the people of the state to have somebody who has some expertise.”

The same might be said of the educators sitting on legislative education committees, she said.

The case of former Democratic Sen. Phil Griego spotlighted the issue of conflicts of interest. In 2015, Griego was forced to resign his Senate seat after allegations that he profited from a 2014 bill to sell state property for which he served as a real estate broker.

Now he faces an October trial on corruption charges in connection with that real estate deal.

The Griego situation was pretty clear, Ferguson said.

“For some of these others, it’s very indirect,” she said. “The problems would all be solved if we had a paid legislature but with all our budget problems, that’s a pipe dream.”

Still, she said she believes lawmakers do try to do the right thing.

“Overall, if there’s a public perception that they could be conflicted, they’ve been pretty good about trying to recuse themselves.”

McSorley also said the appearance of conflict for lawmakers could be solved by paying lawmakers and strengthening conflict of interest laws at the same time.

“As long as the people of the state of New Mexico will not pay their legislators to make them an independent body, we don’t have conflicts of interest,” McSorley said. “We have areas of expertise.”

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