A consensus emerged from the Senate Oversight Committee’s meeting Wednesday: Michigan’s financial disclosure bills, as written, lack teeth.

At the outer bounds, a disclosure with known inaccuracies will cost a candidate or officeholder a $1,000 fine. And people who don’t file at all would face a maximum fine of only $500.

That contrasts with the possibility of a $50,000 fine and five-year prison stay for members of Congress, or candidates for Congress, who lie in their disclosures.

At the oversight committee Wednesday, lawmakers, officials and experts revealed other shortcomings in Senate bills 613 and 614.

Read them for yourself: Senate Bill 613 and Senate Bill 614

Secretary of State Jocelyn Benson, testifying via Zoom, said that Michigan is “among the worst states in the nation” when it comes to ethics and transparency in government.

“I hope this is just the beginning,” Benson said of the bills as written. She said the bills lack the “real penalties” of campaign finance laws applying to Congress or in other states.

“Michigan should look at disclosure requirements in other states, including at the federal level, that create real penalties for noncompliance, including fines, candidate disqualification, and even prosecution,” Benson said.

In Michigan, candidates can be disqualified from the ballot for having problems with campaign finance paperwork. Senate bills 613 and 614 carry no such penalties. Only fines.

Sen. Sam Singh, D-East Lansing, chairs the oversight committee. He agreed with Benson that greater penalties are needed for non-filers.

“I know we've had some discussion in regards to — as we do with campaign finance reports — that we would not allow someone to be seated if they’ve not completed their forms,” Singh said.

“Yes, that’s exactly the direction we should be looking at,” Benson responded.

The hearing started with three senators testifying: Jeremy Moss, D-Southfield, Ed McBroom, R-Waucedah Township, and Mark Huizenga, R-Walker.

Moss, who introduced Senate Bill 613, asked critics to “shake off some of your pessimism,” noting that it took years — and a constitutional amendment approved by voters — lawmakers in Lansing to take financial disclosure seriously.

“This is objectively a huge step forward,” Moss testified.

“We have firm deadlines,” Moss added, referring to the Dec. 31 deadline for lawmakers to pass disclosure legislation, as required by Proposal 1 of 2022.

McBroom, one of the bill sponsors, lamented that it took so long for the bills to arrive.

“It’s October. We should have brought these bills in January,” McBroom said. “And now we are confronted with really a lack of time to mature these bills through a legislative process in the rigorous way.”

Afterward, McBroom told Michigan Capitol Confidential that the financial disclosure bills fell victim to priorities more “partisan and political” at the start of the year.

McBroom said he understands the appetite for a more aggressive bill, especially one that would disqualify people who didn’t file disclosures.

“I think there’s some good discussion on that,” McBroom said.

Former State Rep. David LaGrand, D-Grand Rapids, also testified. He warned lawmakers that the bills, as written, have too many holes and loopholes.

“We cannot pass inadequate legislation,” LaGrand testified. “Misleading voters (by passing a watered-down bill) is not a step in the right direction. ... Do not pass this and think you’ll fix it later.”

McBroom disagreed, telling CapCon that “it’s easier to amend” a law than to pass one, and the important thing is passing the law.

LaGrand echoed Benson’s belief that the spousal disclosure requirements in the legislation are too limited. LaGrand said lawmakers or candidates could easily transfer their assets to a spouse to avoid disclosure.

LaGrand called the asset loophole big enough “to drive a Titanic through.”

“The spousal disclosure provision in the bills includes minimal information as to make it relatively ineffective,” Benson testified. “We should include not just the occupation, but also the employer in financial disclosure for spouses. The current language creates too many loopholes. If you're going to include spouses in this additional language in the legislation, then you should do so in a meaningful way or not at all.”

Singh closed the meeting by saying the committee would vote on the bills next week.

Financial disclosure bills introduced in the Michigan Senate Tuesday would charge only a $1,000 maximum penalty to lawmakers whose financial disclosures are inaccurate. Elected officials who didn’t file a disclosure at all would only have to pay half that, a maximum of $500.

State lawmakers are oblilgated to pass a financial disclosure law by a Dec. 1 deadline set by the Michigan Constitution.

The $1,000 penalty would apply to “an individual who knowingly files an incomplete or inaccurate report.”

Mere mistakes are much cheaper. Failure to file a disclosure carries a $25 per day penalty (after a 10-day grace period), with a maximum of $500.

That contrasts with the penalty scale in Congress, where the maximum financial penalty is a $50,000 fine. Prison sentences of up to five years are also possible.

The Michigan bills offer no such deterrent.

Senate bills 613 and 614 are tie-barred. That means both must be enacted into law for either to take effect. The bills have sponsors from both parties.

Read them for yourself: Senate Bill 613 and Senate Bill 614

The proposed legislation arrives in Lansing with little time for lawmakers to meet the Dec. 31 deadline set by Proposal 1 of 2022.

Senate Bill 613 would require lawmakers, the governor, the lieutenant governor, the attorney general and the secretary of state to file disclosures. The Michigan Department of State would investigate alleged violations, except those involving the secretary of state. Then the Michigan attorney general would investigate.

Any income source above $1,000 must be disclosed. The names of spouses and their career field —though not employer —must also be disclosed.

Debts above $10,000 must be disclosed.

Senate Bill 614 concerns candidates for office.

If the bills pass, the first disclosures are due to the Department of State on April 15, 2024, and on May 15 of every year that follows.