Michigan AG Opinion Tightens Rules on Financial Disclosures for Elected Officials and Candidates

A formal legal opinion released on Wednesday, June 5, by Michigan Attorney General Dana Nessel upholds financial disclosure rules for elected officials and candidates. Under the Candidate for Office Financial Disclosure Act & Public Officers Financial Disclosure Act, which was enacted after the passage of Proposal 1 in November of 2022, many candidates and public officials have new annual financial disclosure requirements with the State of Michigan.

Current officeholders (not candidates) were required to report three additional disclosures regarding expenses covered by a lobbyist or lobbyist agent:

• • Gifts: meals and refreshments from a lobbyist or lobbyist agent that exceed the monetary thresholds.
  • Travel Payments: travel and lodging payments for or reimbursed to a public official in excess of $1,000 (NEW 2024 limit).
  • Charity Payments: payment to a charity in lieu of a honorarium payment, which is a payment for an appearance, speech, article or activity related to the performance of the officeholder’s duties.

Additionally, officeholders and candidates were required to submit the first financial disclosure report by April 15, 2024. Under the new law, elected officials were mandated to report the following:

• • Spouse’s name, occupation, and employer.
  • If spouse is a registered lobbyist or lobbyist agent.
  • Positions held and source of employment-based income during the previous calendar year if more than $1,000.
  • Positions currently held as an officer, director, trustee, consultant, partner, proprietor, representative, or employee.
  • Non-business assets, securities, and real property with a fair market value of $1,000 or more held during the previous calendar year.
  • Any non-employment-based income of more than $200 during the previous calendar year.
  • General terms and source of any agreements or arrangements regarding future employment, leave of absence, continuation or deferral of payments or benefits from an employer.

The opinion was requested by Secretary of State Jocelyn Benson, after her office received several inquires regarding certain reporting requirements under the Michigan Constitution and the Public Officers Financial Disclosure Act (PFDA).

Here is an overview of the Attorney General’s formal opinion, which can be found here. [1]

• • The Secretary of State may required public officers to provide an address or other identifying information when an officers reports “sources of unearned income” (Article 4, 10(2)(a) of the Michigan Constitution and § 7(1)(g) of the Public Officers Financial Disclosure Act, MCL 15.707(1)(g)).
  • The Secretary of State may require public officers to provide descriptive information such as an address, location, or other identifying information when reporting “stocks, bonds, or other forms of securities” of a certain value (§ 7(1)(i), of the Public Officers Financial Disclosure Act, MCL 15.707(1)(i)).
  • Public officers must disclose any gifts, travel payments, travel reimbursements and payments to charity in lieu of honoraria received from a lobbyist or lobbyist agent that are required to be reported under state law (Article 4, 10(2)(f) and 4 10(2)(g) of the Michigan Constitution and § 7(1)(m) of the public Officers Financial Disclosure Act, MCL 15.707(1)(m)).
    • Gifts, travel payments and travel reimbursements received from a lobbyist or lobbyist agent must be reported regardless of whether the lobbyist or lobbyist agent actually reported the gift, travel payment or travel reimbursement.
    • The Secretary of State may require public officers to provide factual information such as the date of a gift, travel payment, travel reimbursement, or payment to charity in lieu of honoraria made by a lobbyist or lobbyist agent. The name and identification number of the lobbyist from whom the gift or payment was received may also be required.
  • Attorney General Dana Nessel: “Officials are also required to report gifts, travel payments and reimbursements from lobbyists or lobbyists agents as outlined in state law, regardless of if the lobbyist reported them. If a lobbyist or lobbyist agent fails to report gifts or payments that are required to be reported, whether unintentionally or otherwise, a public officer should not be relieved of making their own disclosure. The gifts, travel payments, or travel reimbursements were still made, and it is these financial transactions that the people, by adopting the amendment, agreed must be disclosed by adopting the amendment.”

This opinion will not increase the information available in the financial disclosures that were required for this year. The Secretary of State will be able to increase reporting requirements for the next annual report for office holders and candidates.

Dykema’s Government Policy Advocacy team is closely monitoring this issue and is available to discuss any questions or concerns you may have.

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[1] Nessel, D., State of Michigan, & Michigan Secretary of State. (2024). Opinion No. 7325 Date: June 5, 2024. https://www.michigan.gov/ag/-/media/Project/Websites/AG/releases/2024/June/OAG-7325.pdf