Why mandatory financial disclosures for Vermont politicians won’t be a campaign issue anytime soon

Editor’s note: Nat Rudarakanchana contributed to this story.

Vermont is one of three states that doesn’t require personal financial reporting for statewide political candidates. The other outliers are Idaho and Michigan, according to the Center for Public Integrity, a nonpartisan advocacy group that promotes sunshine laws.

But don’t expect Vermont to adopt financial disclosure rules any time soon, given the coziness of the go-along, get-along political zeitgeist in Montpelier and the oft-proffered argument from lawmakers and others: “Vermont is a small place … we really know each other.” (That quote is from a statement made by former gubernatorial candidate and Secretary of State Deb Markowitz to the Center for Public Integrity in 2009.)

Though lawmakers have pushed a bill supporting a constitutional amendment to ban corporate money from campaigns, when it comes to policing themselves, legislators have evinced less enthusiasm.

Not a single candidate for statewide or legislative office has made financial disclosure a campaign issue this election season. (The last statewide candidate to do so was Matt Dunne in the 2010 Democratic primary.) But then, what incentive do pols have? After all, who wants to be forced to give up information about where his or her money comes from?

But maybe the more important question is this: Why should Vermonters care?

Disclosure laws exist to prevent personal financial interests and potential conflicts of interest from having an impact on the way legislation is shaped and the way government operates.

Because Vermont has no financial disclosure requirements, we don’t know the extent of candidates’ connections to business interests and whether politicians have used the power of political office for personal gain.

In other states, corruption scandals have rocked local governments. The Massachusetts House Speaker Salvatore F. DiMasi went to jail for pushing state officials to grant a contract to a software company in exchange for $65,000. Though Massachusetts has had disclosure laws in place for 30 years, a recent Boston Globe story revealed that DiMasi’s financial difficulties — and the corruption deal — might have come to light sooner had the statutes been updated to include credit card debt.

In Georgia, every political candidate must disclose employment, family members information, filer’s investment interests, all ownership interests in businesses and real property, spouse’s ownership in real property, known business or investment interests of spouse and dependent children, all fiduciary positions, and annual payments received by a public officer or business entity from the State of Georgia.

Shumlin prefers the tradition of candidates voluntarily disclosing personal information, particularly in the gubernatorial race.

Vermont has no disclosure rules. Though lawmakers have pushed a bill supporting a constitutional amendment to ban corporate money from campaigns, when it comes to policing themselves, legislators have evinced less enthusiasm. A bill banning corporate donations to lawmakers died on the Senate floor last session.

Draft financial disclosure legislation hasn’t seen the light of day, i.e. made it to the floor of the Vermont Senate or House since 1994 (the bill was recommitted to the Government Operations Committee).

When the Vermont chapter of the ACLU lobbied in 2011 for a bill requiring disclosures from statewide candidates, including items like property, stock investments, and business ownerships, the bill died in committee, partly due to a lack of interest from lawmakers.

Gov. Peter Shumlin, a Democrat, who frequently talks about his commitment to transparency, says the voluntary disclosure system works well for statewide candidates, and it wouldn’t be “fair” to require lawmakers to disclose financial information.

Shumlin said requiring legislators to disclose information like personal income and real estate would be asking too much. “These are folks that give up part of their lives five months of year to come to Montpelier,” Shumlin told VTDigger.

Shumlin characterizes the question of annual disclosures for lawmakers as “a solution in search of a problem.” The governor said he’d never seen corruption in the Statehouse from either party over the course of his political career.

As for statewide races, Shumlin prefers the tradition of candidates voluntarily disclosing personal information, particularly in the gubernatorial race. “The system works in Vermont,” he said. “In gubernatorial races, we voluntarily release them … What problem are we trying to solve?”

ACLU Vermont Executive Director Allen Gilbert. VTD/Josh Larkin
ACLU Vermont Executive Director Allen Gilbert. VTD/Josh Larkin

ACLU Vermont executive director Allen Gilbert says Vermont should at least require disclosures from statewide elected officials. Eventually lawmakers should be included, he continued, but that could be a second step.

 To hold state officials accountable, said Gilbert, people need information on how they make decisions. “One key piece of making a decision can be financial aspects,” he reasoned. “So it’s important for citizens to know if there are any either possible conflicts of interest, or real conflicts of interest.”

Peggy Kerns, the director of the ethics for the National Conference of State Legislatures, says 48 out of 50 states have disclosure requirements for lawmakers. Vermont and Michigan are the only two that don’t.

“The overall reason for financial disclosure laws is to provide information for the public so the public can know where a lawmaker gets his or her income and if that presents a conflict of interest,” Kerns said. “That’s the overall goal. How states do that is very different.”

Vermont House Speaker Shap Smith didn’t return a call for comment on whether he’d support mandatory disclosures for lawmakers.

Gubernatorial disclosures

Though Shumlin has released his tax documents for 2009 and 2011, and information about his assets in 2010, including a list of 18 properties worth $4.5 million and dozens of stock market investments worth an additional $6 million, he has not provided an update since.

Shumlin’s challenger, Republican state Sen. Randy Brock released his net assets shortly after he announced his run for office and later gave the press copies of his tax forms for 2011. Brock’s net worth is $8 million.

Gov. Peter Shumlin, Feb. 22, 2012. VTD/Alan Panebaker
Gov. Peter Shumlin, Feb. 22, 2012. VTD/Alan Panebaker

Alex MacLean, Shumlin’s campaign manager, has said the governor will not provide the public with a more recent disclosure of his investments. “We answered that question a while ago, he did release his tax returns and his assets have not changed in any significant way,” she said.

What do the disclosures we have tell us? Brock has invested in a number of Fidelity stocks (his former employer) and across a broad array of corporations, including Apple, Exxon Mobil, IBM, Union Pacific, the Canadian National Railway and Verizon.

Shumlin has put his money into a variety of stocks and investments, including Conoco Phillips, an oil company, as well as oil and natural gas exploration firms, such as Apache Energy, EQT Corp., Devon Energy and Pioneer Natural Resources, which has been fined for repeated environmental violations. (Meanwhile, the governor is fond of reiterating the refrain “we must get off our addiction to oil” on the campaign trail.)

If the state required political candidates to disclose their finances, details about the governor’s recent real estate investment in East Montpelier automatically would have been made public, according to Gilbert.

Gilbert said the reports revealing Shumlin’s personal real estate purchases would have been accepted as routine in other states.

When stories about his house emerged, Shumlin initially dodged questions from reporters about the land deal, which involved a campaign donor. At a heated press conference, in which reporters peppered him with questions about the deal, he became visibly angry and left abruptly. The reaction afterward was swift. Shumlin’s staff called reporters and chastised them for delving into his personal life. Commenters called for the dismissal of a VTDigger reporter.

Gilbert said the reports revealing Shumlin’s personal real estate purchases would have been accepted as routine in other states where reporting on this information would be considered “a normal event,” especially in election season.

“What reporters, and the public, do with information provided in disclosure reports could cause discomfort for candidates,” Gilbert wrote in a comment on VTDigger. “But Vermont news reporters themselves shouldn’t be excoriated for doing something that generally is seen as an important public service.”

Although Gilbert acknowledged that most Vermonters believe their public officials are honest, he pointed to a rash of recent embezzlements as one reason to push transparency reform.

As for voluntary disclosures, Gilbert said: “It’s good enough when people do it, but the question is: What happens when people don’t? I think it’s rather unusual for people in statewide offices other than governor to provide financial disclosure statements.”

Vermont gets low marks for transparency

Gilbert says the lack of financial disclosure requirements is one of the reasons Vermont consistently earns low marks from national organizations grading government accountability and integrity.

“One of the most important campaign finance reforms Vermont could pass in the next legislative session would be to establish financial disclosure rules,” Gilbert wrote. “If there are no conflicts and no undue influence exerted on candidates and office-holders, this shouldn’t be an objectionable measure.”

Vermont scored a D+, ranking 25th nationally, in a Center for Public Integrity investigation, with low scores partly because it lacks a state ethics agency and asset disclosures.

Shumlin isn’t troubled by Vermont’s low scores on government transparency reviews. “I think that’s a beautiful example of when national trends don’t reflect the reality in Vermont,” he said.

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Anne Galloway

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  • Gaelan Brown

    “The governor said he’d never seen corruption in the Statehouse from either party over the course of his political career.”

    What a joke. Wake up Vermonters, you are being lied to.

  • Carl Werth

    So Shumlin invests in oil and oil exploration?


    And the integrity level of our state’s government is rated low?

    Jeezum! I sure wish I was shocked by any of this.

  • Rob Pforzheimer

    Last week in the gov debate Shumlin was asked what movie star would best portray him. He said Dustin Hoffman. Pinocchio would be a better choice.

  • Bruce Post

    Thank you, Anne, and thank you, Allen Gilbert. The story and the effort to expose Vermont’s “insiders’ culture” deserves attention and comment.

    Quite frankly, I have been around the track more than once in public service. I love living in Vermont. I have been here or serving a Vermont officeholder much of the time since 1965. Yet, I have lost patience with politicians extolling Vermont’s own special virtue. To quote Joe Biden, that’s “malarkey.”

    I remember what Ronald Reagan said about dealing with the Soviets: Trust, but verify. Well, the resistance to government transparency, disclosure and ethics laws here in Vermont seems to send another message: Trust; why verify? After all this is Vermont.

    I hate to sound as if I have reached the point of being a curmudgeon. Rather, I’ll quote Corinthians: “When I was a child, I talked like a child, I thought like a child, I reasoned like a child. When I became a man, I put childish ways behind me.”

  • Tony Redington

    It was a while ago, but in “honest” NH as director of a housing agency which pumped a quarter billion dollars into the State in three years, including about 20 new and rehab housing projects, voluntarily submitting to the Secretary of State yearly personal income tax returns was an act of immunizing myself from the types of smelly public/private development relationships which inevitably occurs. The voluntary tax return submission also covered the Constitutional Convention where I served for a year.

    Vermont, like most states, still in large part gets run by and for the 1%–and financial disclosure needs to be done so that the rest of us, the 99%, know who is doing what, who is voting what, and in many cases, unfortunately finding the natural connection between the “what,” the “vote” and the finances of the elected representative.

  • Randy Koch

    How much difference would it even make if have full disclosure? What happened when it turned out that Liz Miller, an important Shumlin Adm figure, had a disqualifying conflict since her husband was in business with a utility she whose interests she was promoting.

    Nothing much.

    It’s part of the Vermont state political culture to embrace this kind of sleaze. Shucks, it doesn’t really count as sleaze if it’s Green Mountain sleaze. It’s not like we’re in Cook County or something.