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Investigations rock Michigan, Washington legislatures.

Legislative sessions in Michigan and Washington began under clouds of public controversy.

Michigan legislators have been faced with dealing with a financial scandal involving misuse of up to $740,000 from the House Fiscal Agency petty cash fund. Results are an ongoing investigation, suspension of the agency's director and deputy director, and firing of six staff members.

Washington lawmakers came under fire after an investigation by the Public Disclosure Commission (PDC) uncovered illegal use of legislative staff and public facilities in campaigns from 1989 to 1992. Staff members and party caucuses were fined, but now the state attorney general has launched an investigation of her own to examine how individual legislators may have been involved.

The PDC fined each party caucus $100,000. Fines against four legislative staffers were suspended for two years and could be waived if there are no other violations of campaign law. Two staffers were required to pay $1,000 fines. No legislators were fined.

In response to the investigation and as part of a stipulated agreement with the PDC, Washington legislators have developed standards of conduct governing use of public facilities. The Legislature has also adopted leave polices designed to ensure that any campaign work is not done on state time.

Legislative leaders are studying further limits on campaign activities. They propose to prohibit legislative employees from recruiting or campaigning for legislative candidates and to ban paid benefits for employees on leave without pay for purposes of campaigning.

Due in part to the illegal campaigning issue, several citizens' organizations are considering lawsuits or initiatives with direct impact on the legislature. A group successful in writing term limits into Washington law is now considering a measure to limit health care and pension benefits for lawmakers and to eliminate funding for caucus staff.

Michigan's woes extend well beyond allegations of improper use of staff. The House is reeling from charges of major improprieties involving its Fiscal Agency petty cash fund.

A review of the fund found over $740,000 in questionable payments since 1990, including violations of state policy in regard to large fees to contractors for unspecified services.

Other financial irregularities included allegations of payment of unauthorized bonuses to certain employees of the agency.

The agency director, John Morberg, and his top deputy, James Heckman, have been suspended pending a state attorney general's probe that could take up to a year. Six employees--alleged to have received large, secret bonuses from the agency's petty cash fund in addition to regular salaries -- were fired.

The last audit of the agency was in 1976.

With membership tied 55-55, the House is led by co-speakers who have agreed that the agency should be abolished. The question remains one of how to replace the bipartisan agency, which has been in the hands of the Democrats since its inception in 1971 and was responsible for keeping track of budgets for the House.

Representative Dominic Jacobetti, who oversaw the fiscal agency in his position as chairman of the House Appropriation Committee, was removed after 18 years and replaced by Democratic and Republican co-chairmen.

As state police and the state auditor general investigate use and alleged misuse of the petty cash fund, the Michigan House considers creation of Democratic and Republican budget staffs or possible formation of a new fiscal agency, designed to reduce costs and prevent the alleged abuses currently under investigation.

As if the House Fiscal Agency probe wasn't enough in February, in an unrelated investigation, the assistant director of purchasing for the Michigan House was facing embezzlement charges.

Assistant Director Dennis Mast was arrested after a routine audit by the state auditor general's office uncovered alleged embezzlement of approximately $31,000 in state funds.

Mast is also suspected of stealing a series of checks used as evidence for the embezzlement charges.

Charges are pending on seven counts of embezzlement and one count of obstruction of justice.

Allegedly, checks written on a House cash fund were deposited in Mast's personal account. The series of checks to be used as evidence in the case were locked overnight in an office pending further review and were gone when auditors returned to work the next day.
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Title Annotation:On First Reading; finacial scandal in Michigan and illegal campaigning in Washington
Publication:State Legislatures
Date:Apr 1, 1993
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