Economic Outlook - December 2006

Law could curb excess of access by lobbyists

Lobbyists had long been like the weather in North Carolina. Everyone, it seemed, complained about them, but nobody did much about them. But a string of scandals involving House Speaker Jim Black and the state lottery helped push major reform through the legislature to Gov. Mike Easley’s desk. The law he signed in August takes effect in January. Bob Phillips is executive director of Common Cause North Carolina, a Raleigh nonprofit that lobbies for open government, and founder of the bipartisan North Carolina Coalition for Lobbying Reform.

What problems did the law address?

Phillips: We had no transparency in our lobbying laws. Lobbyists could spend unlimited money on lawmakers and their family members and the lawmakers’ staff and not have to report a penny of it.

How?

We had what was called the “goodwill-lobbying loophole,” the mother of all lobbying loopholes. You could wine and dine lawmakers, and as long as you didn’t reference specific legislation, you didn’t have to report a penny. There were all kinds of stories of people being given expensive gifts.

Any examples?

Well, they say that there’s a lot of golfing down in Pinehurst during the legislative session. Meals and activities — ACC tournament tickets — those things are provided by special interests that can afford them. No one would be providing those things if they didn’t think they would be getting something from it. The new law will not stop lawmakers and lobbyists from doing things together. But on some occasions the lobbyist can’t pick up the tab.

What occasions?

The classic one-on-one dinner. They now have to follow specific guidelines that deal with the number of lawmakers who are invited and also the number of people associated with the employer of the lobbyist. The idea is to stop these one-on-one meetings where, perhaps, deals had been cut.

How did recent scandals affect this law?

They gave it a lot of energy, but the effort to tighten lobbying laws occurred before the scandals after a national watchdog group, the Center for Public Integrity, gave North Carolina an “F” on its lobbying laws in 2003. That pushed the secretary of state to create a commission to look at the laws and make recommendations for improvement.

What happened to them?

Those recommendations were very good, very far-reaching, but they went nowhere in the legislature. All the scandals then started erupting, and it gave the legislature initiative to come back this past year and go beyond what it had done in ’05.

Political contributions by lobbyists won’t be allowed.

That did pass, but the reform community really wanted to prohibit lobbyists from rais-ing campaign money for the people they are trying to influence. That’s really a bigger part of the problem. The legal campaign contribution limit in N.C. is $4,000, which is a significant amount of money. But when you’re, on average, raising and spending more than $100,000 to win a legislative seat, $4,000 is not as significant as a lobbyist raising $40,000.

So that loophole was left open.

When you are able to raise a lot of money for the people you are lobbying, it’s a huge advantage over everybody else.

What other exceptions need to be cut?

In a perfect world, I don’t think there’s room for spending and gifts when it’s entertainment-related.

Will regulations be tightened even more?

The fact that there are things occurring that are making the news has penetrated the public’s consciousness. Lawmakers are certainly cognizant of that. I think when they come back in 2007, there will be an effort to continue what they were working on in 2006.

Some might think the problem is fixed.

Yes, but clearly more needs to be done. We ought to have more clear, defined lines on when lobbyists can spend money and when they cannot.

What impact will this law have on business lobbying groups?

As lobbyists, we want to know what our competition is doing, and everything will be out in the open. There is still the same kind of access — maybe, we hope, improved access.

Why?

Before, the people who spent the most money on lawmakers were going to have the best access. That’s a very select number of big-time lobbyists. The rest of us — I don’t mean just nonprofit reformers like myself but private-sector business lobbyists — have to get in line behind those folks. This law is going to level the playing field for everyone.

Did you use the goodwill-lobbying loophole to help get this law passed?

I’ve never bought a cup of coffee for a lawmaker. It’s, as much as anything, a function of not having the resources to do that. If I had money, I don’t know whether I would or not. But I have never done it.