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Citizen legislators

Financial disclosures don't always add up

Legislators have to file a report detailing net worth. But some fail to fill out forms to a point that a true number can be determined.

By LUCY MORGAN
Published February 21, 2005

Click here for part one

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TALLAHASSEE - The instructions seem simple enough: Florida legislators must file a financial disclosure report each year detailing their net worth, assets, liabilities and sources of income.

Yet some 40 lawmakers do it incorrectly.

Take Sen. Jim Sebesta, R-St. Petersburg. On his most recent report, he lists assets of $242,000 and liabilities of $136,596. His net worth, he reports, is $590,182 - a figure that includes stocks, bonds and savings accounts he does not report.

Rep. Frank Farkas, R-St. Petersburg, ticks off his assets one by one: office building, home, stocks, bonds, IRA. But he does not give details on any of them, as required.

Rep. Matt Meadows, D-Lauderhill, is one of 10 lawmakers who omits his legislative salary, just as he omits the value of his home and other assets that gave him a net worth of $590,182 in 2004. On his disclosure forms since 1992, he has left the space for assets blank, yet put his mortgage in his list of liabilities. Property records in Broward County indicate he bought his house in 1986.

Meadows, Farkas, Sebesta and the other legislators who file incomplete or erroneous reports don't have much to worry about, however.

The Florida Ethics Commission, which maintains the disclosure reports submitted each year by the 160 lawmakers, can fine officials who don't file on time.

But the commission has no power to investigate the accuracy of a report unless somebody files a complaint.

Only a handful of complaints against legislators have been filed in the past decade. And only four of those resulted in a decision to fine or censure the lawmaker.

Why is the Ethics Commission essentially powerless to act against offenders?

Because the Legislature has never given it that power.

No surprise there. Nearly 30 years ago, then-Gov. Reubin Askew had to go over the heads of balky legislators to get financial disclosure rules put into the state Constitution in the first place.

A different path

The early 1970s were a time of political corruption from the county courthouse to the White House.

Watergate was making headlines around the country, and scandal drove two Florida Supreme Court justices and three members of the state Cabinet from office.

In April 1973, Gov. Askew called on state lawmakers to demonstrate a commitment to good government by passing laws to restrict conflicts of interest among public officials.

"I urge you to require all elected officials, all candidates for public office and all major appointed officials in Florida to disclose all of their financial interests," Askew said. "This would include copies of income tax returns."

Legislators refused.

Askew tried again in 1974 and 1975, urging the Legislature to help restore confidence in government and approve new ethics laws that would include disclosure of potential conflicts of interest and prohibit lawmakers from leaving office one day and going to work as lobbyists the next.

Again, the Legislature refused. Detailed disclosure of personal financial information, opponents said, would violate their right to privacy and stop good people from seeking public office.

So Askew took a different path. He proposed what he called the "Sunshine Amendment" to the state Constitution. He and his supporters collected more than 230,000 signatures from Floridians to get the issue on the November 1976 ballot - the first time the initiative process had been used to get a proposed amendment approved by state voters.

Nearly 80 percent of the voters approved Askew's amendment.

"We really had a lot of problems in state government," Askew, 76, recalled recently. "I recognized this was in a sense an invasion of privacy, but I thought we had extraordinary circumstances and should assure Floridians that public officials are working for them. I think it has accomplished most of what I wanted it to do.

"I just gave up on the Legislature," said Askew, who now teaches government at Florida State University. "And I put everything I thought we would need in the amendment."

That turned out to be a good move. Lawmakers have never passed a comprehensive bill implementing his amendment.

In addition to requiring financial disclosure for elected officials and candidates for office, the Sunshine Amendment:

--Closed a revolving door that allowed legislators to lobby their former colleagues as soon as they left office. Now, they must wait at least two years.

--Prohibited lawmakers from representing clients before state agencies.

--Required public officials convicted of felonies involving public trust to forfeit their pensions.

--Required full disclosure of campaign finances.

Shortly after the 1976 election, a group of legislators including outgoing Senate President Dempsey Barron and Sens. Phil Lewis and Ken Plante filed suit in federal court alleging that the amendment was an unconstitutional invasion of privacy.

The court ruled against the lawmakers, however, and the amendment took effect on Aug. 1, 1977. Plante did not seek re-election and later became a lobbyist. The others remained in the Legislature and began filing disclosure forms.

Five years later, the Legislature waited until the very end of the session and approved a proposed constitutional amendment that would have abolished the two-year ban on lobbying by former legislators. The proposal was never heard in committee, and its wording implied that it would strengthen, not weaken, ethics laws.

Askew, Common Cause and the League of Women Voters filed a lawsuit alleging that the amendment contained deceptive language. The state Supreme Court agreed, striking the proposal from the ballot.

The Sunshine Amendment has remained in the Constitution as Askew proposed it.

Today more than 35,000 lawmakers and other public officials and candidates file disclosure reports every year.

Widespread errors, omissions

File the right disclosure form by the deadline and the odds are pretty high that no questions will be asked unless a reporter or political opponent takes a look.

The Ethics Commission maintains financial disclosure records for all state officials and elected constitutional officers, such as sheriffs, county commissioners and school board members. Candidates for those offices file their reports with the Division of Elections.

The forms are due on July 1 each year, but officials have until Sept.1 to file without facing a fine. The Ethics Commission imposes a fine of $25 a day up to a maximum of $1,500 for reports filed after that. But if somebody files a complaint about a tardy report, the commission has the authority to impose a fine of up to $10,000 and recommend removal from office. That has never happened to a legislator.

Since the commission has no authority to investigate the accuracy of reports unless a formal complaint is filed, it rarely takes disciplinary action.

A St. Petersburg Times review of disclosure forms filed by lawmakers, the governor and Cabinet since 1978 found widespread errors and omissions.

Some failed to disclose debts that are recorded in their hometown courthouses. Others listed erroneous figures for their net worth, sometimes overstating their wealth and sometimes understating it.

Officeholders and candidates are supposed to describe all property they own, including its location, and identify the stocks and bonds they own and each source of income that exceeds $1,000 a year.

Despite the seemingly straightforward instructions distributed with the forms, however, dozens of legislators reported owning a "home," without the required details. Some failed to list other holdings at all. A few did not even list their principal residence or their legislative salary of $29,916 a year.

Sebesta, the senator from St. Petersburg, has been a legislator for seven years and, earlier, was the supervisor of elections in Hillsborough County for four years. Yet the political veteran is among the legislators who failed to list most of their assets each year.

Sebesta reports a "home" (without the details), $30,000 in household goods and liabilities of $13,596. He also filed a partial copy of his federal income tax form. But he does not list sources of income or offer an explanation for a net worth that he says totaled $590,182 in 2004.

"This is the first time I've ever noticed there is no place to write down stocks and bonds," Sebesta said when asked why he did not itemize assets, as required. "No one has ever questioned it before. I will do something about it."

Some chose the option of filing a copy of their federal income tax return instead of disclosing sources of income. But at least a dozen of them, including Sebesta, failed to attach copies of wage and earnings statements or any other document that identifies the sources of the income.

Rep. Carl Domino, R-Jupiter, was among a handful of legislators who failed to list the $29,916 salary he makes as a legislator in the otherwise painstakingly detailed reports he filed in 2003 and 2004.

Domino, an investment banker with a net worth of more than $35-million, reports other income totaling more than $1.5-million for 2004. His accountant, Mike Dixon, took the blame for omitting his legislative salary.

"I'm shocked it's not in there," Domino said. "I pay someone a lot of money to do it."

Lawmakers frequently do a better job of complying with the law when first elected.

Farkas, the St. Petersburg House member, is an example. When he was elected to the House in 1998, he dutifully reported the location of his real estate holdings and attached a list of stock he owns. In 2004, however, he listed his real estate as "office building, home" without any detail and identified his other assets as "Stocks, bonds, IRA" without detail.

Rep. Marco Rubio, R-Miami, reports $220,000 in assets, $292,000 in liabilities and a net worth of zero. But since his liabilities exceed his assets by $72,000, his net worth is really minus-$72,000.

Sen. Larcenia Bullard, D-Miami, has been in the Legislature since 1992. Her husband, Rep. Ed Bullard, D-Miami, was elected to replace her in the House in 2000 when she was elected to the Senate. When they filed reports last year, neither of them disclosed ownership of the house they bought in 1983.

Some lawmakers hire accountants to do their reports and are unable to explain the contents even though they signed an oath swearing to the contents.

Rep. Greg Evers, R-Milton, listed a net worth of $589,495 when he filed his 2004 report. But his list of assets totals $1,524,977, with liabilities he puts at zero.

When asked about the discrepancy, Evers could not explain. His accountant, Pam Faulkner, called the Times to say some of the figures given for assets were "net." But she could not explain the discrepancy, either.

Only a handful of complaints have been filed against legislators in the past decade, and only four of those resulted in a decision to fine or censure the lawmaker. Complaints generally surface in the midst of a re-election campaign.

Rep. Gus Barreiro, R-Miami Beach, was the target of a complaint filed by an opponent in 1998 after a newspaper reported he had failed to pay or disclose a debt for $22,000 in child support.

Barreiro, who won the election, later admitted violating the ethics law. His punishment was left to legislators because the commission must refer cases involving lawmakers to the House or Senate for final action.

A special House committee recommended a letter of admonishment, one of the mildest forms of punishment available. Then-Speaker John Thrasher wrote the letter, which was published in the House Journal .

Barreiro said the omission was not intentional. He wrote a letter of apology to the House.

--Researchers Kitty Bennett and Deirdre Morrow contributed to this report.

[Last modified February 22, 2005, 22:31:00]