A Closer Look at Exemptions to Disclosure Requirements

Senator Schneiderman's bill S. 6794, introduced February 8, is a vast improvement over previous attempts to craft an ethics bill.

Yesterday we described its innovations, including the creation of designating panels and greatly increased financial disclosure requirements, especially the requirement that legislator-attorneys disclose important information about their law practices.

It is fair and correct to also provide a system by which officials can request exemptions from detailed financial disclosure under extraordinary circumstances, such as an official’s part-time work on behalf of a minor concerning a sensitive subject, or the work of a physician required by law to protect patient privacy. S. 6794 provides a mechanism by which an official can request an exemption if she believes that her work “is protected by a legally recognized privilege or unreasonable hardship."

After reviewing this part of the bill, including the proposed process for granting exemptions, we are concerned that the test for granting exemptions may be too broad and should be more carefully drawn.

For example, Washington State’s rules provide: "The [Public Disclosure] Commission is authorized to allow modifications or suspensions of these reporting requirements in a particular case when it finds that "literal application" of the chapter "works a manifestly unreasonable hardship" and that the suspension or modification of the reporting requirements "will not frustrate the purposes of the chapter."

Washington also requires that any modification or suspension be narrowly tailored "only to the extent necessary to substantially relieve such hardship, and only upon clear and convincing proof of such claim." (also WA language). (PDC Interpretation 02-03)

The “deciders” of whether to grant the exemption under the S. 6794 proposal are the members of the relevant ethics oversight commission (the bill left in place the bifurcated system of ethics oversight). In a step towards independent oversight, the bill provides that the legislative leaders and executive branch officials appoint members of designating panels, who in turn appoint members of the actual commissions with jurisdiction over their branch of government. These commissions, arguably not wholly independent, should be given more direction on how to implement these decisions.