When should legislators recuse themselves?

The North Carolina General Assembly deals with a cornucopia of issues affecting people’s pocketbooks. Many of those issues affect the finances of legislators themselves.

One case that has recently received attention is Rep. John Bell (R-Wayne). The chairman of the House Rules Committee has been involved in the progress of several bills related to hemp regulation. He is also the head of Asterra Labs, which manufactures and distributes hemp products.

Is that legal? Is it ethical?

The legality of legislators voting on bills that will affect their income

I was recently asked those questions for an article by Axios and The Assembly. I replied that Bell is probably OK:

Bell is in a “comfortable position” legally, said Andy Jackson, director of the Civitas Center for Public Integrity at the conservative John Locke Foundation.

“I don’t think you could have a functioning legislature if you made everybody recuse themselves every time there was a bill that might affect their pay,” Jackson said.

But what ethics rules don’t address is what happens if legislation helps Bell “and a handful of other people in the industry essentially corner a market because they’re already established,” Jackson said.

I was not just making that up. North Carolina law establishes when legislators should recuse themselves from debating or voting on a bill (G.S. 138A‑37.(a)):

Except as permitted under G.S. 138A‑38, no legislator shall participate in a legislative action if the legislator knows the legislator or a person with which the legislator is associated may incur a reasonably foreseeable financial benefit from the action, and if after considering whether the legislator’s judgment would be substantially influenced by the financial benefit and considering the need for the legislator’s particular contribution, including special knowledge of the subject matter to the effective functioning of the legislature, the legislator concludes that an actual financial benefit does exist which would impair the legislator’s independence of judgment.

That part of the law says legislators should recuse themselves from a “legislative action” (for example, voting, debating, or drafting bills) if they believe that they would have some “reasonably foreseeable financial benefit” from that action. Bell certainly qualifies. He said that one bill he is opposing would force him to “lay off all 20 of his employees.”

However, the law has two ways around that recusal requirement. The first is the benefit to the legislature of a “legislator’s particular contribution, including special knowledge of the subject matter.” If the General Assembly is considering a bill regulating the hemp industry, having someone familiar with that industry involved in the process would help legislators better understand what they are regulating. Similarly, farmers may be helpful when crafting farm bills, bankers when considering banking regulations, etc.

Even if the personal benefit to the legislator from legislation outweighs the benefit to the General Assembly of having that legislator involved in crafting the legislation, there is another way to avoid recusal. G.S. 138A‑38.(a)(1) allows legislators to act on bills that would financially benefit them, or actively oppose bills that would harm them, if the benefit or harm is “no greater than that which could reasonably be foreseen to accrue to all members of that profession, occupation, or general class.” In Bell’s case, his involvement in hemp-related bills does not violate state ethical standards as long as the bills do not affect him more than anyone else in the hemp business.

However, there is a gray zone between a bill that would provide a benefit exclusively to a legislator (clearly requiring recusal) and one that broadly and equally affects a whole industry (clearly not requiring recusal). A bill could provide a disproportionate benefit to a legislator and a handful of people while hurting others in an industry. For example, a legislator who owns a business could support legislation that increases regulations for companies like hers to raise barriers for new businesses to enter the market, saving her and a few other established business owners from competition.

Bell does not appear to have crossed into that gray zone, but legislators should be aware that the recusal rules should not just be triggered if a bill benefits a legislator and no one else. Bills affecting competition within an industry, advantaging some over others, could also be suspect.

The post When should legislators recuse themselves? first appeared on John Locke Foundation.