Michigan lawmakers hear out testimony on rules to close the lobbyist gift loophole

Michigan lawmakers heard testimony Wednesday on rules currently being considered that would halt elected officials from working around state prohibitions on accepting gifts from lobbyists.

Michigan law bars elected officials from accepting gifts, like sports tickets or flights if they’re valued above $79, the value set for 2025, but there are concerns that officials have been working around those restrictions by saying they’ve reimbursed back the excess over the legal maximum, in order to appear in compliance. However, there is no guarantee that those elected officials are reimbursing the difference.

The change being considered by the Michigan Office of Administrative Hearings and Rules, or MOAHR, would ban public officials from reimbursing lobbyists in-whole or in-part for the value of a gift that exceeds the maximum allowed value.

An investigation published by the Detroit News last year found that for years lobbyists have been sending lawmakers letters after providing gifts over the allowed value, requesting the excess amount with no way of tracking if the reimbursements ever occur.

Michigan lawmakers have touted plans for government transparency with legislators across the aisle calling for accountability from lawmakers, from making more of Michigan’s government subject to information requests, to limiting the influence of lobbyists on policymakers.

Michigan voters in 2022 voted for requirements for financial disclosure by the Legislature, the governor and lieutenant governor, as well as secretary of state and the attorney general. The new requirements mandate that elected officials, as well as candidates for certain offices have to file annual financial disclosure reports including streams of income and other assets.

Though the partisanly split Legislature has different ideas for how to make government more transparent, Rep. Alabas Farhat (D-Dearborn) said during the Michigan House Joint Committee on Administrative Rules meeting Wednesday, there is a great appetite overall for reform when it comes to establishing trust in Michigan’s government. However, Farhat said rather than create a more transparent process, the pending rules change would ensure that wealthier individuals who enter into office have distinct networking advantages over those with less capital.

“It’s not making it more transparent,” Farhat said. “Everyone that is independently elected comes from a different background of lived experience and a different appreciation for certain abilities to network. These basically just box out those that are coming from different economic backgrounds.”

The process to implement the new rules began last year when Michigan attorney Robert Labrant requested the Department of State to issue an interpretive statement condemning the reimbursement system as a violation of the Michigan Lobby Law.

In July of last year the Michigan Secretary of State’s Office issued a statement saying reimbursing lobbyists or lobbyist agents for the value of a ‘gift’ over $76.00, is prohibited under the Lobby Act.

“Allowing the cost of a gift to be allocated across multiple parties, be they lobbyists or public officials, cannot circumvent the gift ban and in doing so would frustrate the purposes of the Lobby Act,” the statement from the Michigan Secretary of State’s Office said.