Hired Guns: Lobbyists spend loads of money to influence

Robert Morlino and Leah Rush
Hired Guns: Lobbyists spend loads of money to influence
Fri Apr 22, 2005 18:45

Hired Guns
Lobbyists spend loads of money to influence legislators—and in many states, with too little scrutiny

By Robert Morlino and Leah Rush
Data Analysis by Derek Willis

WASHINGTON, May 15, 2003 — While lobbyists and their employers in 39 states spent more than $715 million wining, dining and generally influencing state lawmakers in 2002, many details about how those dollars were spent remain hidden from public view, according to a comprehensive analysis released today by the Center for Public Integrity.

More than half the states received a failing grade for their registration and spending disclosure requirements filed by legislative lobbyists. In fact, no state received an "A" on the Center's 48-question survey. Washington State came in at the top, garnering 87 out of a possible 100 points. Pennsylvania scored a zero because the state's court system rendered the lobby statute null and void in 2002, leaving lobbyists virtually unregulated and the public completely in the dark. (See "Sunset in Harrisburg")

The general lack of scrutiny comes at a time when many states are struggling with their worst fiscal crises since World War II and vested interests are expending more energy to protect their turf in the marbled halls of capitols across the country. More than 34,000 of those interests—companies, issue organizations, labor unions and others—hired a whopping 42,000 individuals to do just that, averaging almost 6 lobbyists—and almost $130,000—per legislator.

One way for the public to trace the fingerprints left on the 29,000 bills states enacted in 2002 is by looking at the disclosure reports lobbyists or their employers are required to file. These reports should show where lobby money came from, where it went, and why it was spent. They are, in short, a critical measure of external influences on both legislation and legislators. But trying to follow that trail with many states' current disclosure mechanisms is a daunting, and sometimes fruitless, challenge.

"Citizens have a right to know how much lobbyists are spending to influence governmental decisions, and who the lobbyists are and what interests they represent," said Bob Stern of the Center for Governmental Studies in California. "If [states] don't have good disclosure for lobbying, the citizens are really missing out on very important information when looking at their state government."

Alan Rosenthal, professor of public policy at the Eagleton Institute of Politics at Rutgers University, agrees. "People should have the opportunity to know who's lobbying for whom," he said. "Money should be disclosed." But Rosenthal also points out that lobbyists can be vital to the political process because they provide information legislators otherwise wouldn't get.

"It would be difficult to imagine the world of democratic politics without lobbyists," he said, adding that lobbying is an inextricable "part of the system of representation" for the citizenry.

In fact, state legislators, most of whom do public work on a part-time basis with limited professional staff, say they rely on lobbyists to perform research tasks and help them wade through the hundred-thousand bills introduced yearly.

To explore the potential impact of that access and the effectiveness of state disclosure requirements, the Center examined aspects of lobby laws—including how the state defined what a lobbyist is, what requirements it has for registration and spending disclosures, and how it regulates legislators-turned-lobbyists—and factored in effective oversight, such as electronic reporting, public access to information and enforcement. Researchers combed through statutes, culled report forms, scoured agency Web sites and conducted hundreds of interviews with lobby oversight officials nationwide.

The Center's three-month study evaluated whether lobby disclosure forms were readily available, listed lobbyists and their employers and disclosed bills pushed or opposed. It also evaluated whether lobbyists reported gifts or campaign contributions to lawmakers. (See Methodology)

Many states, the Center discovered, excelled in some areas of the survey and failed in others (i.e., strong spending disclosure, poor public access to information). From New Hampshire's one-page lobby law to California's 117-page "Lobbying Disclosure Information Manual," overall the Center found a crazy-quilt of disclosure rules. Some results:

* Twenty-seven states received failing scores because their definitions of lobbying excluded some executive branch lobbyists; because of infrequent filing periods; because lobbyists are not required to itemize all expenses; because state agencies fail to provide totals of spending information by year, by reporting deadline or by industry.
* Fourteen states that squeaked in just above failing received low scores because of lax enforcement mechanisms and lack of "cooling off" laws that mandate a break in the time between a legislator leaving office and becoming a lobbyist.
* Nine states drew relatively satisfactory scores because they prohibit lobbyists from giving gifts to legislators and require both monthly spending reports and listings of bill numbers addressed by lobbyists. They also provide electronic disclosure and strong public access to reports.

The Center also examined the statutes governing federal lobbyists and compared them to the states using the same criteria. The results were discouraging—federal lobbying regulations would fall fourth-to-last in the Center's ranking, just ahead of New Hampshire, Pennsylvania and Wyoming, with 36 points. Federal lobbyists are not required to report gifts or other expenditure details, and there is no mandatory auditing or enforcement. At the federal level, more than 25,500 lobbyists spent at least $1.6 billion lobbying Congress in 2002, according to PoliticalMoneyLine, a Washington, D.C., research and consulting organization. (See How the Feds Stack Up)

"Certainly it can be much improved," Celia Wexler, director of research at Common Cause in Washington, D.C., said of the federal regulation. "We worked hard to get the lobby disclosure act passed, so just getting any disclosure was a victory of some sorts. On the other hand, there are major limitations," she said.

Wexler cited the requirement that specific bills lobbied be identified on expenditure reports, and how that information is not often disclosed. "It isn't enforced—that's a major problem," she said. "And it's also a problem that's related to [the lack of] electronic filing. Even when employers do give bill numbers, you can't query the system and find out how many employers lobbied on a particular bill, or who they were."

The existing federal law was approved in 1995.
Triangle of Influence

This analysis of lobbying disclosure rounds out other efforts by the Center for Public Integrity to gauge the level of information available on the triangle of influence on state legislators—personal financial interests, campaign finance interests and lobbying interests. The first report, "Hidden Agendas," analyzed outside interest disclosure laws for legislators; the second, "Undisclosed," ranked states according to the strength of state political party campaign finance disclosure laws.

For this study, the Center scrutinized those who lobby for a living and influence legislation for a livelihood, usually by representing another entity. In 2002, 39 states reported more than $715 million in lobby spending. For 2001, 38 states reported $690 million in lobby spending, up from $565 million reported by 34 states in 2000. The remaining states failed to track an overall spending total or failed to provide the information in a format that allows a total to be calculated. As more states provide spending totals, the overall dollar figure increases. Agencies in Minnesota and South Carolina for the first time included lobby compensation in their recent totals, which also increased the nationwide total.

Most of this money comes from salaries and compensation paid to individual lobbyists for their time spent reaching out to public officials. In all, 32 states do not require individual lobbyists to report fees or paychecks they pull in and 29 states do not require employers of lobbyists to report fees or paychecks they hand out. Salaries and compensation are the main indicators of how a lobbyist spends his most valuable resource: time.

"This is the hidden area in the arena of political money," said Janice Thompson, director of the Oregon Money in Politics Research Action Project. "There's been a lot more attention on the subject of campaign finance disclosure. [Campaigns are] the big, visible event. But the whole lobbying process is implicitly more behind closed doors."

Thompson noted that in 2001, Oregon lobbyists spent close to $18 million influencing legislation, compared to the roughly $12 million spent by candidates in their election campaigns. "This lobbying money is not chump change," she said. Thompson called high standards of disclosure the only tool appropriate to reforming scrutiny of the legislative process.

The Center's study focused on professional lobbyists. Many states do not require individuals who volunteer to lobby, perhaps for a grassroots organization, to register or report expenditures. The "trigger" in most states is the receipt of any compensation—anyone who is paid to lobby is required to register. States set laws up this way to avoid the potential "chilling" affect this type of regulation could have on citizen participation in government.

California's Bob Stern, who helped draft that state's lobbying disclosure laws in 1973, noted that there is a distinction between a citizen communicating on behalf of her or his own interests and one who contracts to do so on behalf of someone else's, though both actions are protected under the Constitution.

"Clearly, it's a first amendment right, but we should have the disclosure of what's going on, and courts have said that while you have a first amendment right to lobby, you can be required to report what you're saying," he said. "We excluded some people lobbying on their own behalf [in the registration requirements] as opposed to the professional lobbyists."

While lobbyists do not limit their activities to the legislature, 16 states do not include other activity, such as lobbying the governor, in the definition of lobbying. Some of these states require lobbyists to report executive branch communication only when it is directly related to legislative action.

In 26 states, legislatures designate independent or outside bodies to oversee legislative lobbying, usually a state ethics or public disclosure agency. Another 18 legislatures leave lobbyist regulation to the secretary of state, typically through the elections department. In six states, legislatures have kept regulation of their lobbyists to themselves, basically chaperoning their own dates with influence-buyers.

Three states—Florida, Iowa and Kentucky—designate separate agencies to regulate lobbyists of the executive branch.
Loopholes and Exceptions

Wisconsin and Montana are the only two states, not counting Pennsylvania, that do not require individual lobbyists to file spending activity reports. All reporting responsibility lies with the companies or organizations that directly employ lobbyists, known as lobby principals or lobby employers.

For these two states—Wisconsin and Montana—Center researchers surveyed the lobby principal disclosure rules. That is, they treated the lobby principals as if they were individual lobbyists. Due to Wisconsin's statutory lobby spending limitations, its score rose considerably, to sixth. Montana's rank remained low at 30th.

Wisconsin's lobbying statute states, "No lobbyist may ... furnish to any agency official or legislative employee of the state or to any elective state official … 1. Lodging. 2. Transportation. 3. Food, meals, beverages, money or any other thing of pecuniary value." Such expenditures make up most of what is reported by lobbyists in states that do not have such a ban.

The Wisconsin Ethics Board is charged with overseeing lobbying activity in that state. According to Roth Judd, the board's director, this strict ban on spending means no money is being spent wining and dining legislators. "[The ban] is a straightforward rule that's easy to understand, easy to follow and easy to administer," Judd said. "The limits are so clear."

Under the law, only expenditures related to the cost of operating a lobbying enterprise must be reported—such as compensation for employees, as well as research and printing expenses. Since those involve lobbyist employers directly, the responsibility of reporting falls to them. According to Judd, the rigorous law eliminates the complications of separate reporting forms and deadlines. "It makes it so easy for everyone—for the lobbyists [and] for the legislators," he said.

In spite of the spending ban, however, the influence of money remains a significant factor in Wisconsin politics, according to Mike McCabe, executive director of the Wisconsin Democracy Campaign. "I would argue that it's much less harmful for a lobbyist to buy a legislator a cup of coffee than it is to make sure that thousands of dollars find their way into the legislator's campaign account," said McCabe.

Wisconsin is one of 48 states that allow lobbyists to make campaign contributions to legislators, either during the election season or at any time during the legislative cycle.

"The gift ban ... has a gaping hole in it." McCabe said. "I've encouraged the ethics board to redefine what ‘something of value' means." McCabe noted that Wisconsin has, in his view, a long history of "squeaky-clean" politics that has been undermined significantly by the rising costs of campaigns and their dependence on large corporate contributions. "The lack of willingness to adapt to changing circumstances and our inability to deal with political ethics in our state is a real problem."

Roth Judd acknowledged the loophole allowing lobbyists to give campaign contributions as a way around the spending ban. "That's a real issue that should be dealt with better than it is," he said. "There was a conscious decision to set up campaign finance laws as administered by a separate agency. ... I'm hoping that there will be some rethinking of that proposition." Judd said that there is a case to be made for integrating agencies governing lobby and campaign finance laws in order to more effectively monitor the interests affecting state policy.

Minnesota has a lobbyist gift-giving ban, and but has no restraints on campaign donations by lobbyists. The state ranked 20th with 62 points because of additional loopholes in disclosure, such as lack of information on what type of legislation lobbyists are attempting to influence, lack of disclosure about what business associations lobbyists may share with legislators, minimal analysis of spending that does occur and absence of a "cooling off" period for legislators who become lobbyists.

Tennessee bars lobbyists from providing gifts to legislators and other public officials. But the state ranks 45th with 45 points because it fails to require disclosure of any aspects of lobbying activity other than campaign contributions given by lobbyists.

In addition to similarly tight spending bans, Kentucky and South Carolina both prohibit lobbyists from giving campaign contributions to legislators any time during the year. They rank second and third (tied with Connecticut) respectively in the Center's survey.

But lobbyists can bypass even those tough restrictions. Richard Beliles, state chair of Kentucky's Common Cause chapter, pointed out that Kentucky law does allow spending on legislators if lobbyists invite the entire branch of the state government to a function, such as a dinner party, and that these events have been on the rise in the past five years.

"The community groups, environmental groups, even ones who have paid lobbyists, are at a big disadvantage. We can't throw a big party for the


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