Good morning.

My name is Mark Jennings and I am a consultant with the SymQuest Group in Burlington. As you may know, we have be working with the Secretary of State's office for the past several weeks studying the technological impact of Act 64 on that office.

As a result of my findings Jim Milne and John Howland have asked me to briefly speak with you about some developments in campaign finance disclosure that tie in closely with the proceedings here today.

Specifically, I'd like to talk a little about Electronic Data Interchange, or EDI. I do not come to you today as an expert on EDI. My research on some finance disclosure methods currently in use in other states, however, has uncovered some important information regarding EDI.

As some of you may know, the Council on Government Ethics Laws (COGEL) has adopted a committee whose members are focused on the electronic disclosure of campaign finance information. The committee is made up of members who have been directly involved in the implementation of electronic finance disclosure systems in several states. It is the mission of this committee to assist other states with the development of electronic campaign finance disclosure systems.

This committee met last month in Chicago to discuss ways in which the electronic disclosure of campaign finance information can be made cost-effective and easier for states to implement. It is the vision of the committee that state's not only provide public access to campaign finance information electronically, but that differing states can exchange information about campaign finances.

This is where EDI comes into play. At the December meeting, the COGEL Finance Disclosure Committee announced the receipt of a Joyce Foundation grant for the development of a national standard for the electronic exchange of campaign finance information. According the Bob Watanda, Executive Director of the Hawaii Campaign Spending Commission and a COGEL Finance Disclosure Committee member, the committee was given a presentation on the existing ANSI X12 EDI standard.

Without going into the dry technical details, the ANSI X12 standard defines a series of formats or transaction sets, for exchanging information between dissimilar computer systems. Each transaction set corresponds to a specific type of business transaction. For instance, a transaction set exists for the electronic filing of a tax return. In fact, several industries have developed a series of transaction sets defining standard forms that are typically exchanged between organizations. These include the health care, shipping, insurance, and banking industries. The U.S. Government has developed transaction sets for the electronic filing of tax returns and customs activities.

By adopting the use of a standard, organizations ensure that they can exchange information regardless of the computer systems they use; provided both organizations support the same standard. Although other standards exist for EDI, the others tend to be industry specific. For instance, EDIFACT (Electronic Data Interchange For Administration, Commerce and Transport) offers the specific support for international trade, whereas HL-7 is structured for the health care industry.

It appears the COGEL Finance Disclosure Committee will adopt the ANSI X12 standard and develop a transaction set specific to the electronic filing of campaign finance information. If the committee is successful at meeting their deadline of a 1999 completion date, states could begin incorporating EDI capabilities into their campaign finance disclosure systems in time for the 2000 elections. Eventually, as more and more states adopt the standard, large databases could be developed to merge individual state's campaign finance information. It is the hope of the COGEL committee that financial influences that cross state boundaries can be exposed through careful analysis of the information.

How does this affect Vermont?

Act 64 requires the disclosure of all campaign finance reports submitted by candidates via the Internet. The challenges of presenting the information to the public are insignificant compared to those regarding how the information is entered into the system. Our study discusses two methods by which that information can be entered into a database for viewing through an Internet browser.

One of those methods involves the use of electronic filing software. In this scenario, members of each campaign's staff would enter all information regarding contributions and expenditures into the computer. They would then send the data from the computer to the secretary of state's office through the use of EDI. By having the information entered directly into the system at the point of origin, significant time and money are saved in the processing of the information.

By developing a campaign finance filing system based on the ANSI X12 standards, Vermont would ensure compatibility with systems implemented in other states that are following the COGEL Committee's recommendations. This would also drive down development costs of the filing software as we would benefit from the work being done in other states.

The campaign finance filing example is but one of many that show how the use of EDI can be used to streamline processes and improve access to information. In the future we can expect a greater use of this technology in all facets of life. It is not such a great leap from home banking to electronic voting.