Jul. 25, 2005
Trying to Shed Light into the Money Culture
By J. Barlow Herget
RALEIGH - If you want to see how bad the money culture of lobbying can get, follow Jack Abramoff's story.
He's the Washington lobbyist and friend of House Majority Leader Tom DeLay, R-Texas, who took millions from a Mississippi band of Choctaw Indians who believed they needed some friends in D.C. to protect their gambling operations.
The story is full of payoffs and scams. Abramoff did get them a meet-and-greet photo with an unsuspecting President Bush at the White House in exchange for contributions to Abramoff's friends and political non-profits. One friend alone skimmed off $25,000.
The ending to the sordid Abramoff tale hasn't been written, but the one surprising twist is that the Indians got little for their money. It's far more typical for lobbyists to provide a good return on their client's investment.
Take a look at the work of lobbyists in our state's General Assembly. The money culture during the last three decades has spread like kudzu on Jones Street. Most lobbyists are playing by the rules and most legislators are, too. But are the rules fair? It's money that opens doors and talks.
On some high profile issues such as the proposed state lottery, you can follow the money through campaign finance reports.
But it's harder to uncover what's called “goodwill” meetings between lobbyists and lawmakers where no specific legislation is discussed. In other words, it's just a “friendly” steak dinner, or a round of golf, or seats to a sold out basketball tournament. Such philosophical talks do not have to be reported under current lobbying regulations.
Where the money culture works best is in the details. A company or industry, for instance, will lobby to get a tax break in a revenue bill. Or another group will ask for a change in pollution regulations.
The electric utilities and large banks in the state are among the largest political contributors, and they hire some of the best lobbyists.
An April report from Democracy North Carolina, a non-profit that monitors campaign finances, shows that between 2001-2004, Duke Energy's Political Action Committee (PAC) gave $488,750 to state politicians, and Progress Energy handed out $300,250. Dominion Resources of Virginia contributed $84,650.
The same three paid about $1 million to their lobbyists for the same period.
An earlier accounting showed the state's four biggest banks to be similarly generous. Bank of America's PAC, for example, donated $346,000 between 1998-2002.
A 2003 examination by Democracy North Carolina found that such money is well spent. In the final days of the 2002 legislative session, the utilities benefited along with the banks and other big corporations from a change in the rules used to calculate their state income taxes.
The rules had been expected to raise $32 million in revenue. The legislature also left intact a “bank tax loophole” that reduced banks' tax payments by about $100 million, according to legislative staff.
Lobbyists are the people on the point for such deals. Their “goodwill” buys them access the average citizen doesn't have. Thus, they know the details; they know the legislators, the governor, the Council of State members.
Most important of all, they can direct their clients' campaign contributions to designated elected officials. And in a reversal of roles, they can introduce candidates to the heavy hitters among campaign contributors.
Dan Blue, former Democratic House Speaker from Raleigh, says, “Lobbyists have the ability to channel contributions to [legislature] members, but more importantly, to the leadership who control millions of dollars. Races today have become statewide; you can't go around to country stores or to colleagues at work and get a feel for your constituencies. Now, it's all about raising money.”
The lobby reform bill that is working its way through the legislature will not eliminate the money culture, but it is a practical step that will bring lobbyists' spending out of obscurity and into the sunshine.
Of the four major recommendations from Secretary of State Elaine Marshall's commission on lobby reform, three have been retained. The most important is the closing of the “goodwill” loophole. If the reform measure is passed, lobbyists would report these formerly undisclosed expenses. These reports would be filed monthly during the legislative session.
Also, legislators and certain executive branch officials, such as the governor and Council of State members, would not be able to work as a lobbyist for a year after having served in their respective public office, shutting the “revolving door.”
And Secretary Marshall's office would receive about $312,000 to further computerize the reporting system and to hire enforcement personnel.
While there is no gift ban in the current compromise, there is a registry for those elected officials who don't want to receive any gifts from lobbyists. (Voters should find the registry interesting reading.)
No one has voted against the bill just yet, but sometimes bills die due to inaction. Fortunately, two of the legislature's most influential leaders sponsor the lobby reform bills, Sen. Tony Rand, D-Cumberland, and Rep. Joe Hackney, D-Orange.
They believe it's time to act.
Barlow Herget is a former Raleigh city councilman and writes the Follow the Money column for the N.C. Center for Voter Education.
743 W. Johnson St.
Suite E
Raleigh, NC 27603
919.839.1200