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When is a conflict of interest a conflict? Almost never

Sen. President Eli Bebout’s sponsorship of a bill to give a severance tax break to the oil and gas industry bewildered and angered many legislative observers, since he makes his living producing oil and gas.

Bebout (R-Riverton, SD 26) is the registered agent of Nucor Oil & Gas LLC. How can an official who heads an oil and gas company offer a tax break that most people see as a blatant conflict of interest?

The answer is pretty simple: he lives in Wyoming.

Bebout has served for 14 years in the House and 12 years in the Senate. He is the first person in Wyoming’s history to lead both chambers. That’s a lot of experience and clout he’s built up, but it doesn’t mean he is above the state’s constitution.

Article 3, Section 46, is clear: “A member who has a personal or private interest in any measure or bill proposed or pending before the Legislature shall disclose the fact to the house of which he is a member, and shall not vote thereon.”

Bebout not only voted in favor of Senate File 98, which passed his chamber 17-13, he co-sponsored the bill. The measure went next to the House Revenue Committee, where it died on a 6-3 vote.

There isn’t a constitutional police force or prosecutors group to investigate whether a legislator has violated conflict rules and state laws. Complaints must come from the public and be reviewed by a legislative ethics committee.

That’s what happened in 2016 when four citizens charged that Bebout should not have voted numerous times on abandoned mine land legislation because his corporation has received AML state contracts. The ethics panel unanimously concluded he did not have a conflict of interest.

That result has likely kept others from filing an ethics complaint against the Senate president in 2018. People may consider such action futile, and they may be right.

But it shouldn’t stop a new complaint and ethics investigation on Bebout’s SF-98 co-sponsorship and votes. Under the bill, 25 months after companies drill a well, the state severance tax would have been lowered from 6 percent to 3 percent for the next two years.

Bebout and other supporters maintained the tax incentive was necessary to spark more investment in Wyoming by the oil and gas industry. After the bill was filed, he told the Casper Star-Tribune, “If we pass this through, I think you will see more drilling rigs. It helps our revenue picture.”

That last sentence of Bebout’s quote may well have been true if SF-98 had passed. It’s unclear, however, just whose revenue picture stood to benefit. How much additional revenue Nucor would see is not known, but the tax break would have definitely made the company money on any recently drilled wells.

Declared conflicts of interest are virtually unheard of in the Wyoming Legislature. One notable exception has been Sen. Charles Scott (R-Casper), who has announced numerous conflicts during his 38 years and abstained from voting on related legislation.

Say what you want about Scott’s political positions, he has remained admirably consistent on this issue.

This year freshman Rep. Chuck Gray (R-Casper) made waves in the House Minerals Committee when he declared a conflict and did not vote on the controversial SF-74, which protects critical infrastructure — including cable communication infrastructure which, he told WyoFile, is connected to his family’s media business —  and potentially stifles protest of industrial development. His decision received a lot of attention precisely because it is so rare.

Back in what I remember as the good old days, the media had its own table in each chamber while the Legislature conducted its business. In the House, the press table was near the Speaker’s podium. Whenever a representative on the floor declared a conflict, the Rules Committee would gather near the speaker and try to talk the legislator out of his or her conflict declaration. I remember one legislator loudly telling a teacher colleague, “You don’t have a conflict!”

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Under House Rule 12-3(d) he was right. A “personal or private interest” is defined as a direct financial gain or loss — excluding any gain or loss to a member that is directed by a “substantial class of persons.”

For example, the Legislature considers teachers part of a “class”. So long as the entire class stands to benefit, not just the individual — say from a statewide raise for educators — then a legislator who is a member of that class is free to participate and vote on bills that affect it. The “class” rule extends to other professions.

The question may sound silly, but given the legislative rules it deserves consideration: does the fact Bebout is an oil and gas company executive make him part of a “class,” like the above? I don’t think it does, but Bebout made it part of his defense in an Aug. 3, 2016, Casper Star-Tribune news story:

“We are a citizen Legislature,” Bebout said. “You have a lot of people who have other ways to make a living. We have teachers. Do they not vote on education bills? You have ag people. Do they not vote on ag issues? We have attorneys. What do they vote on in terms of the law?”

We also have wealthy lawmakers. Do they not vote on issues that bring them more money? Of course they do.

Bebout is well-known throughout the state as an oil and gas executive, so his alleged conflict in SF-98 is obvious. But it isn’t for legislators who generally keep quiet about their work.

Wyoming requires legislators to disclose their financial ties, but scant information is available to the public. The Center for Public Integrity, a good government watchdog group, gives the state an “F” for its financial disclosure laws. That sounds about right.  

Legislators must provide the name(s) of employers and companies, but little else. No employer description, value of holdings, range of income, disclosure of spouse’s income sources or clues from dozens of other useful categories are required.

If Wyoming is going to ever have strong conflict of interest enforcement, one of its priorities needs to be comprehensive financial disclosure.

But Wyoming is hardly alone when it comes to substandard conflict of interest rules. The CPI analyzed ethics laws in all states. Here is the conclusion:

“The news organizations found numerous examples in which lawmakers’ votes had the effect of promoting their private interests. Even then, the votes did not necessarily represent a conflict of interest as defined by the state. That’s because legislatures set their own rules for when lawmakers should recuse themselves. In some states, lawmakers are required to vote despite any ethical dilemmas.

“Many lawmakers defend even the votes that benefit their businesses or industries, saying they bring important expertise to the debate.”

The CPI also found that at least 76 percent of state lawmakers nationwide reported outside income or employment. Many of those sources are directly affected by the actions of the legislatures.

When it comes to the worst state conflict of interest laws, Wyoming isn’t even in the running. In Alaska a state legislator can stand and declare a conflict, but if a single fellow lawmaker says “I object,” that’s it, the declaration is overruled. Officially there is no conflict and that legislator votes. Reportedly for laughs, some shout their objections before a colleague’s conflict is even declared.

Well, that would get rid of Wyoming’s lengthy Rules Committee meetings over conflicts and save some time for legislators to debate weightier measures like state songs and allowing hunters to wear pink.

Or we could create some conflict of interest laws that actually have teeth and allow conflicts to be declared, especially when some, like Bebout’s, are obvious. I like that choice better, and I think most of Wyoming would too.

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About the Author

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Kerry Drake is a veteran Wyoming journalist, and a contributor to WyoHistory.org. He also moderates the WyPols blog. He has more than 30 years experience at the Wyoming Eagle and Casper Star-Tribune as a reporter, editor and editorial writer. He lives in Casper.

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3 Responses to When is a conflict of interest a conflict? Almost never

  1. Ken Casner March 17, 2018 at 10:13 pm #

    Is it not a shame, the righteous legislative branch has a rules committee with no teeth in other words, gutless. The real problem with this is why even take the oath of office a person can blatantly ignore his or her oath to support or defend the United States or Wyoming State Constitution. It clearly states this also in Article 6 section 20. I also question why is there no action taken for not once but twice now Senator Bebout is clearly in conflict. Truly some legislators aren’t aware of the conflict, yet the person who is sponsoring the bill or pushes said legislation and then votes knows the conflict especially Eli Bebout… Corruption is power and whirling that power above the oath of office or for personal benefits to a select group best interest is just that, for abstaining is to remove that power with conflict of interest… Today our Nation is seeing first hand our elected officials not accountable when in truth, they scorn the reason to represent us they govern us as if serfs…

    Elk Mountain, Wyoming

  2. Marguerite Herman March 13, 2018 at 10:48 am #

    It’s true that what might seem to be blatant conflicts of interest are politely overlooked by fellow lawmakers, as a kindness and a professional courtesy.
    In one exception I remember from several years ago, a fine person was a new legislator and was reminded that his position on the board of a particular insurance company represented a conflict of interest on particular legislation. When that was pointed out, he quickly and gracefully acknowledged the conflict. So maybe some legislators aren’t aware of a conflict when it arises, for instance when a legislator works for an employer whose clients directly benefit from legislation. (That would be the benefit of the doubt.)
    Nevertheless, I doubt the public knows that there is a process for making a query or accusation of a conflict of interest — and how to make it. At least make that process known and accessible, even if it’s unlikely to result in any action.

    CHEYENNE, Wyoming

  3. Stephen Dechert March 13, 2018 at 8:06 am #

    I don’t often agree with the Drake’s Take, but I absolutely agree with him on this one.

    Pavillion, Wyoming

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