Read the SD Open and Clean Government Act

There is a problem in South Dakota. The powers that be are able to peddle their influence and use your tax dollars to push their agendas and receive personal favors and campaign contributions. More details of the problem can be read here.

There is a low-cost solution. The SD Open and Clean Government Act.

Download a printable version of the initiative without the explanation here.

SOUTH DAKOTA OPEN AND CLEAN GOVERNMENT ACT

WE, THE UNDERSIGNED qualified voters of the state of South Dakota, petition that the following proposed law be submitted to the voters of the state of South Dakota at the general election on November 4, 2008 for their approval or rejection pursuant to the Constitution of the State of South Dakota.

The substance of the proposed amendment is as follows:

BE IT ENACTED BY THE PEOPLE OF SOUTH DAKOTA.

Section 1. That Section 12-27-21 of the South Dakota Codified Laws be amended to read as
follows:

No public body, public officer, person in the employ of the state or any of its political subdivisions, or candidate for public office may, directly or indirectly, direct, permit, receive, require, or facilitate the use of tax revenues or any other public resources for campaign, lobbying, or partisan purposes, including payment of dues or membership fees of any kind to any person, league, or association which, directly or indirectly, engages in lobbying, campaigns, or partisan activity. No candidate, political committee, or political party may accept any contribution from any state, state agency, political subdivision of the state, foreign government, Indian tribe, federal agency, or the federal government. A violation of this section is a Class 1 misdemeanor.

Section 1 prohibits the use of your tax money to be used for or against partisan or ballot question campaigns or to lobby the legislature for a political agenda, such as raising your taxes. There are no sweetheart deals or exceptions made for special interests. This is only fair.

Section 2. Any person who knowingly spends or receives funds in violation of this section shall pay full restitution for the greater of the public cost or for the market value of any misappropriated resources. A knowing violation of §12-27-21 is grounds for discharge of an employee. A knowing violation of §12-27-21 is deemed corrupt misconduct.

Section 2 puts teeth into the law. Not only would a person who raids the public trust for political spending have to repay the illegally-spent funds, they could be fired from their job and be labeled as corrupt, which carries harsh penalties as far as their ability to service in government or hold a public position.

Section 3. The provisions of this section do not limit public officials in the performance of their constitutional duties, and do not apply to:

(1) Communications among and between a member and a staff member of a legislative body, or between an elected or appointed public officer and a legislator or a legislative staff member;

(2) Comments by an elected official or communications from an elected official that are designated for constituents;

(3) Appearances by a public officer or employee pursuant to a specific request to appear before a public body to provide information;

(4) A public employee acting in an uncompensated personal capacity, undirected in any manner by, and who does not purport to represent the interests of, a public employer; and

(5) An authorized employee of the office of the Supreme Court, Governor, lieutenant governor, attorney general, secretary of state, auditor, treasurer, and commissioner of school and public lands, and other principal departments of the executive department of government having responsibility to assess the impact of proposals which affect the administration of government.

Section 3 allows for all government officials and employees to work within their position to communicate with the legislature and direct public policy as needed. Officials and public employees can appear in Pierre or use the phone or e-mail to communicate with legislators. They can testify when requested by the legislators. They can communicate with constituents. Any government official whose job is to assess the effects of proposed legislation on the state can share their views and opinions per their job description.

Under Section 3 (1), Elected officials can even lobby all they want, so long as they don’t hire expensive outside contract lobbyists to do it for them. In their individual capacities, not representing their department, and on their own time, employees can lobby the legislators (Section 3 (4)).

Section 4. Terms as used in of §12-27-21 mean:

(1) “Direct, permit, receive, require, or facilitate the use of tax revenues or any other public resources for campaign, lobbying, or partisan purposes,” includes

(a) The use of public funds, facilities, rights of access, equipment, supplies, or trademarks to influence any election;

(b) Undertaking, promoting, or distributing studies, surveys, analysis, descriptions, or other communications using public resources in a manner specifically calculated to induce support of, or opposition to, proposed legislation or ballot questions; and

Section 4 (b) specifically captures campaign spending by government players, including using your tax dollars to put together expensive studies and presentations that claim neutrality but are actually calculated to influence legislation or an election.

(c) Incurring any public administrative expenses or activities to allocate or designate portions of public employee income to entities that engage in lobbying or partisan activities, other than charitable organizations qualified as exempt from federal income tax under section 501(C)3 of the Internal Revenue Code, or the corresponding section of any future federal tax code;

Section 4 (c) allows payroll deducted donations to true public charities, designated as 501c3. By law, these organizations already have strict restrictions on lobbying activities. Other than payroll deductions for donations or 501c3 non-profits, payments of tax revenues to organizations that do lobby for political agendas is prohibited. Payroll deductions from public employees to organizations that lobby or participate in partisan activities are not allowed.

(2) “Campaign,” includes
(a) Communications or expenditures related to the pursuit of a public office, either electoral or appointive;
(b) All lobbying; and

(C) Efforts paid in whole or in part by public revenues or resources to coordinate or induce members of the general public or any segment thereof to directly influence legislative activity by communicating with members of a legislative body, supporting or opposing legislation within this state, or supporting or opposing a petition drive or ballot question;

(3) “Lobbying,” includes attempts to directly influence legislative activity by communication with any member or employee of a legislative body, or with any government official or employee who may participate in the formulation of legislation.

While lobbying is defined here, section 3 protects certain communications with the legislature that are a part of a public official’s or public employee’s job as outside the scope of this law.

(4) “Person,” includes any natural person, business entity, organization, committee, political party, campaign fund, and association.

(5) “Public officer” and “person in the employ of the state or any of its political subdivisions,” include any person who is elected, appointed, or employed by this state or any political subdivision of this state, including persons who are independent contractors or consultants hired by the state or a political subdivision of this state.

(6) “Tax revenues or other public resources,” includes all state and local government revenues and resources, and does not include and revenues paid or resources provided by the United States government.

Presidential candidates who receive federal campaign funds can campaign in South Dakota. Those who receive federal funds, which are not distributed by the state government, are exempt from this law.

Section 5. No person may enter into a government contract if such person also employs, hires, or retains the services of a current or former legislator or legislative staff member who is less than one year removed from such public position. A person who knowingly violates this prohibition is guilty of a misdemeanor and shall, in addition to other penalties, forfeit any contractual rights to any payment or reimbursement, and shall make restitution to the state in the amount of funds accrued during the period of violation. This subsection shall not apply to a bona fide position, trade, occupation, or profession in which a person engaged or obtained certification within one year prior to becoming a legislator or legislative staff member.

Section 5 prevents, for the period of 1 year, a practice of peddling influence in return for a “golden parachute” after leaving office. This 1 year cooling off period ensures that legislators and legislative staff members do not abuse their position by arranging a contract for hire. The restriction is on the would-be government contractor, not on the legislator.

It does not prevent a person form returning to their calling. In fact, a person that held or was certified in a profession before moving to public service, and then returns to that profession, they are exempt from this law. A nurse becomes a legislator, and then moves to Blue Cross Blue Shield (as a government contractor) – this is allowed under the law. A nurse becomes a legislator and then moves to LodgeNet as a program manager for the state economic development funds – this is not allowed.

Section 5 does not prohibit legislators and legislative staff members from seeking positions in the private sector. Instead, it only says that their employer cannot use the influence and stature gained while they were serving to gain an unfair advantage in obtaining a government contract for 1 year. Again, the exception is if a person returns to their previous profession after leaving the legislature.

Section 6. Beginning on the date a government contract is awarded and extending until two years following the conclusion of that contract, no holder of the public office with ultimate responsibility for the award of the contract, no candidate for that office, and no person acting on behalf of either may knowingly solicit, accept, or direct a contribution from the holder of the government contract or an immediate family member of the holder. No candidate or other person may knowingly accept or make a contribution that is solicited or directed in violation of this subsection. A person who knowingly violates this prohibition is guilty of a misdemeanor and shall, in addition to other penalties, shall make full restitution to the donor. A knowing violation of this section is deemed corrupt misconduct.

Section 6 prohibits a type of “pay to play” – because you gave me a campaign contribution, I’ll ensure you get that state contract.

The politician that ultimately is responsible for the award of a competitive-bid contract (health and education would fall under the governor, law enforcement would be the attorney general’s jurisdiction, maintenance of public lands would be the responsibility of the commissioner of school and public lands, communication and energy companies are governed by the PUC, etc.) cannot accept or solicit a campaign donation from a holder of the company (someone with more than a 5% share in the company).

Employees can make donations, as long as they are not actually sham “pass-through” donations, where a restricted holder gives a “bonus” to an employee with the understanding that the bonus is to be used as a campaign donation.

The prohibition extends for 2 years to cover the next election cycle of any official awarding a contract; otherwise all government contracts could end a few days before an election and be renewed a few days after the election, allowing the competing organizations time to max out on campaign donations.

While it is the responsibility of the political candidate to ensure that they are not receiving illegal campaign donations under this section, two actions can safeguard the candidates. First, a simple disclaimer in state contracts explaining this section and listing which political offices are affected by accepting the contract can be sent to all state contract holders. Second, the “open” website created in section 9 allows campaign personnel to quickly check to ensure that donors are clear to give.

Accepting an illegal donation is a misdemeanor and could result in being deemed guilty of corrupt conduct.

Section 7. Any person entering into a no-bid government contract awarded by the state or any of its subdivisions shall be considered a holder of the government contract and shall contractually agree to cease making, inducing, or soliciting contributions or independent expenditures, directly or indirectly, through any officer, employee, immediate family member of any officer or employee, vendor, or agent, to or for the benefit of any candidate for any elected office of the state or any of its political subdivisions, or to person who intends to make such a contribution within the state or any of its political subdivisions, for the duration of the contract and two years thereafter. The contractual agreement shall provide that any violation of this provision by the holder of the government contract shall, in addition to other legal consequences, result in forfeiture of any contractual rights to payment under the contract, and in payment of restitution to the state in an amount of not less than twice the amount of the contribution. Any person who knowingly violates this provision, or accepts contributions on behalf of a candidate or other entity in violation of this provision, shall pay restitution to the state in an amount not less than twice the amount of the contribution. If the treasurer of any entity subject to such agreement obtains knowledge of a contribution made or accepted in violation thereof by that entity, then liability for the violation shall be also attributable to the treasurer unless the treasurer notifies the secretary of state about the violation in writing within three business days of learning of such contribution. A knowing violation of this section is deemed corrupt misconduct. If a person has previously been determined to be responsible for violating this section, the person shall be ineligible to hold any government contract, or public employment with the state or any of its political subdivisions for three years. The Governor may temporarily suspend any debarment under this subsection during a declared state of emergency.

This section deters the government contracting practice known as “pay to play” – If I give you a campaign contribution, you’ll give me a state contract.

Any person (company holder or employee) entering into a no-bid contract will contractually agree to forgo giving any campaign donations to political candidates for the duration of the contract and two years following its termination. Anyone who breaks this prohibition will lose their right to be paid for the work performed under the state contract, and will have to pay twice the amount of the donation in restitution to the state.

A candidate cannot accept donations that are contractually prohibited, and will have to pay twice the amount of the contribution to the state.

If the campaign treasurer or another party to the contract discovers a contractually prohibited donation, they must report it to the secretary of state in writing within 3 business days to avoid being liable.

It is the responsibility of the contractor to ensure that no one gives a political donation.

It is also the responsibility of the political candidate to ensure that they are not receiving illegal campaign donations under this section. Two actions can safeguard the candidates. First, a simple disclaimer in state contracts explaining this section and explaining the consequences of making a contractually prohibited campaign donation can be sent to all state no-bid contract holders. Second, the “ transparency” website created in section 9 allows campaign personnel to quickly check to ensure that donors are clear to give donations.

Accepting an illegal donation is a misdemeanor and could result in being deemed guilty of corrupt misconduct, which can be grounds for impeachment. If a person violates this section twice or more, the person will be ineligible to hold a government contract (called debarment) or a government job for three years. This prohibition of employment can be temporarily suspended by the Governor in the case of a declared state of emergency.

Section 8. In addition to other actions, penalties and remedies provided by state law, a violation of section 7 of this Act may be established and enforced by the filing of a verified complaint in the circuit court. The court may appoint a referee to take testimony and make findings and recommendations. The complaint may also be filed by a private citizen, or non-governmental group or entity, only if the complaining party has first presented to the attorney general a request to file a complaint, along with a sworn affidavit setting forth supporting facts, and the attorney has failed to file a complaint within fifteen days from receipt of the request. If a complaint is filed in the circuit court by a private citizen, or a non-governmental group or entity, then the attorney general may intervene and prosecute the complaint. The following provisions shall control a complaint to establish a violation of and to enforce section 7 of this Act:

(1) Within twenty-one days from the filing of a verified complaint, the court shall sua sponte, make a determination based in the verified complaint whether there is probable cause that a violation has occurred;

(2) If the court determines that there is not probable cause that a violation has occurred then the complaint shall be dismissed without further proceedings; and

(3) In the event the complaint is dismissed for lack of probable cause then the court may award costs and attorney fees against the complaining party, other than the state.

Section 8 allows a process by which the state attorney general can enforce this law.

If and only if the state attorney general refuses for some reason to enforce the law, citizens watchdogs can bring a complaint to the courts, if they have evidence to establish probable cause that someone broke section 7 (non-bid contracts) of this law. This is to protect against political “go along-get along” insiders giving each other cover. On the other hand, to protect against abuse of this process by anyone who would make false accusations, the court can quickly dismiss a case that has no merit, and sanction the plaintiff you brought the case. Basically, these cases should prove themselves by reference to public records. The citizen watchdog can cross-reference campaign finance records with the public contractor summaries made transparent by section 9 of this law, and if the names match there is a violation.

Section 9. The secretary of state shall promptly publish a summary of each government contract on a searchable website accessible from a conspicuous place on its official public website, for a period of at least ten years. Any holder of a government contract shall promptly prepare and deliver to the secretary of state a true and correct "Government Contract Summary," in digital format as prescribed by that office, which shall identify the names and addresses of the holders and all other parties to the government contract, briefly describe the nature of the contract and goods or services performed, disclose whether it is or is not a no-bid government contract, disclose the estimated duration and end date of the contract, and disclose the contract's estimated amount, and apportioned sources of payment. The summary shall also disclose any other relevant contract information as determined by the secretary of state, to the extend disclosure would not violate federal law, trade secrets, or intellectual property rights.

This simple website, detailed in section 9, will include only the information disclosed by the contractor to the secretary of state about the contract. It is not meant to be a comprehensive source for all encompassing information on the state’s contracts, but a jumping off source where citizens can easily learn how their tax money is being spent. It also works as a safeguard for candidate committees to check the legality of donations. This South Dakota law is designed to be virtually cost free! The contractor basically just sends an e-mail form with facts about the contract – who are the holders; it is a sole source or open bid contract; when will the contract begin and end; etc
This is as simple as ordering a book on Amazon.com. The information then appears on the government’s website for all to see.

Section 10. Terms as used in sections 5 to 9 of this Act, inclusive, mean:

(1) “Contribution,” includes money, monetary donations, loans, and any in-kind donations, but does not apply to volunteer activities by individuals that do not otherwise qualify as an in-kind donation;

(2) “Government contract,” includes any contract awarded by an agency or department of this state or any public body receiving state subsidy or authorized to levy taxes, for the purchase of goods or services for amounts greater than five hundred dollars, indexed for inflation per the Consumer Price Index after the year 2010. A contract for services includes collective bargaining agreements with a labor organization representing employees but not employment contracts with individual employees;

Small, incidental contracts will not be listed on this website. Also, individual employment contracts are exempt and will not be made public under this law.

(3) “Holder of the government contract,” includes any party to the contract, including partners, owners of five percent or more interest, officers, administrators or trustees of any person who is a party to the contract, or, in the case of collective bargaining agreements, the labor organization and any political committees created or controlled by the labor organization;

(4) “Holder of the public office with ultimate responsibility for the award of the contract,” includes any elected official who may award the contract or appoint an official responsible for awarding the contract, or any elected official of a public body where the contract is awarded by that public body;

Health and Human Services, Education, and other administrative departments without an elected official at the head are ultimately the responsibility of the Governor.

Law enforcement contracts are the Attorney General’s jurisdiction.

Contracts to maintain public lands are the responsibility of the Commissioner of School and Public Lands.

Contracts with communication and energy companies are the responsibility of the PUC.

(5) “Immediate family member,” includes any spouse, child, spouse’s child, son-in-law, daughter-in-law, parent, sibling, grandparent, grandchild, stepbrother, stepsister, stepparent, parent-in-law, brother-in-law, sister-in-law, aunt, uncle, niece, nephew, guardian, and domestic partner;

(6) “No-bid government contract,” includes all government contracts that do not use open, blind competitive bidding processes for procurement. Collective bargaining agreements qualify as no-bid government contracts if the contract confers an exclusive representative status to bind all employees to accept the terms and conditions of the contract; and

(7) “Person,” includes any individual, business entity, organization, committee, political party, campaign fund, and association.

South Dakotans for Open and Clean Government
PO Box 2109
Sioux Falls, SD 57101-2109
Phone: (605) 271-8290
info@cleanupsd.com