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Businesses and organizations lobbying the Kentucky General Assembly spent a record $13.6 million during the first eight months of 2014. Compared to the previous record of $13.2 million spent in the same period in 2012, lobbying interests are on track to set a new yearly spending record in Kentucky by topping the 2012 total of $17.8 million.
If, as expected, year-end total spending hits $18.2 million, lobbying spending in Kentucky will have increased by 34 percent in the past 10 years. In 2004, lobbying cost $12.1 million
Most of the top spenders this year were also among 2012’s top spending lobbying interests, including Altria, Kentucky Chamber of Commerce, Kentucky Hospital Association, AT&T, and Kentucky Medical Association. However, several interests have dropped from the list, while others have spent enough to move into the top rank.
For example, Consumer Healthcare Products Association, which in 2012 spent over $500,000 lobbying on issues relating to the sale of pseudophedrine, has cut its lobbying back by 90 percent in 2014; while CSX, Houchens Industries, Kentucky Association of Health Care Facilities, AmeriHealth Mercy, Kentucky Retail Federation, Peabody Energy, and Kentucky Optometric Association have also dropped from the list of top spenders.
Moving into the top spending list since 2012 are Kentucky League of Cities, Norton Healthcare, Wellpoint Anthem Blue Cross/Blue Shield, United Parcel Service, Pew Charitable Trusts, Molina Healthcare, Kentucky Bankers Association, and Boardwalk Pipeline Partners.
There are 646 employers and 550 lobbyists registered with the Legislative Ethics Commission. A listing of registered employers, lobbyists, and lobbying spending is available at the “View Reports” link on the Ethics Commission’s website:
The 2014 General Assembly amended the Code of Legislative Ethics to strictly limit the involvement of lobbyists in the financing of legislative campaigns, and the new statutory language codifies years of Legislative Ethics Commission opinions on lobbyists and campaign finance.
For over 20 years, the Code has prohibited lobbyists from making a campaign contribution to a legislator or legislative candidate. With the 2014 amendment to the Code (in KRS 6.811), the statute now states that a lobbyist“shall notdirectly solicit, control, or deliver a campaign contribution, for a candidate orlegislator.”
Likewise, KRS 7.767 prohibits a legislator or legislative candidate from accepting a campaign contribution from a lobbyist.
In an informal opinion, the Ethics Commission advised a legislative candidate to return a contribution from a PAC, because the contribution arrived in an envelope which also included the business card of a lobbyist.
While the lobbyist did not personally deliver the campaign contribution, the business card in the envelope with the organization’s campaign contribution gives the appearance that the lobbyist is delivering it. While it may turn out that the lobbyist didn’t send the contribution and didn’t put the card in the envelope, those facts could only be confirmed after a full investigation by the Commission in response to a complaint.
With the 2014 changes, Kentucky’s ethics law is the strictest in the nation on issues relating to lobbyist involvement in the financing of legislative campaigns. Ethics Commission staff members are available to answer any questions that may arise, and as it has for over 20 years, the Commission advises lobbyists to avoid campaign finance situations which could lead to the filing of a complaint.
In addition to their home state, Kentucky legislators were invited to lobbying events held in recent months in Alaska, Arkansas, Massachusetts, Minnesota, and Texas.
The local events include a Derby Day brunch at the Brown & Williamson Club at Cardinal Stadium in Louisville, to which all members of the General Assembly were invited, and on which AT&T spent $5,000, Churchill Downs spent $4,221, and Churchill Downs lobbyist Sean Cutter spent $1,250. AT&T also reported spending $2,000 on an August event in Covington in conjunction withSouthbank Partners Developers Day.
The Kentucky Chamber of Commerceinvited all legislators to its Business Summit in July at the Louisville Marriott Downtown, and reported spending $4,031 on legislators at the event.
Lobbyists and their employers sponsored“Kentucky Night” events in conjunction with the annual meetings of several national organizations. At the American Legislative Exchange Council(ALEC) meeting in Dallas, Texas, 33 employers and seven lobbyists reported spending $2,621 on an event at Rosewood Mansion on Turtle Creek.
At the National Conference of State Legislatures (NCSL)meeting in Minneapolis, Minnesota, 69 employers and 16 lobbyists reported spending $7,610 on Kentucky Night at The Venue.
At the Southern Legislative Conference (SLC) in Little Rock, Arkansas, 75 employers and 17 lobbyists spent $5,069 on an event at the Capital Hotel, and at the National Conference of Insurance Legislators in Boston, Massachusetts, six employers and two lobbyists spent $1,145 at Bistro du Midi on an event to which all members of the Joint Committee on Banking and Insurance were invited.
Lobbyist John T. McCarthy reported spending $7,703 on six dinners to which he invited either all members of the Senate or all members of the House. At NCSL in Minneapolis, McCarthy spent $1,615 on Senators at Murray’s Restaurant and $1,352 on Representatives at Coup d’état; at ALEC in Dallas, he spent $1,086 on Senators at the Mansion on Turtle Creek; and at SLC in Little Rock, he spent $599 on Senators at Boscos River Market Restaurant.
In early August, the Council of State Governments national conference was held in Anchorage, Alaska, and McCarthy spent $1,875 on Senators at Orso, and $1,178 on Representatives at Sacks Café & Restaurant.
Spending reports for the period of May 1 through August 31 were due by September 15, but 10 employers have not filed the required reports as of September 30. The employers who have not filed are: Boone County Education Association;Equine Health & Welfare Alliance; Jefferson County Teachers Association;Johnson Controls; KY–811; Kentucky Quarter Horse Racing Association; Preservation Kentucky; Town Branch FOP Lodge #83;United Auto Workers; and Wine Institute.
Fourteen businesses and organization have recently registered to lobby the Kentucky General Assembly. Those include: Accreditation Association for Ambulatory Health Care,which develops standards for ambulatory health care; CareSource Management Services Co., non-profit public sector managed care company;HIMCO - Hartford Investment Management Co., an institutional asset management firm;Institute for Justice, which describes itself as a libertarian public interest law firm;Kentuckians for Entrepreneurs and Growth, a beer distributors’ association;Kentucky Limousine Association; and Kentucky Ready Mix Concrete Association, a trade
association representing the ready mixed concrete
industry.
Other new registrants are: The Kidz Club, a program that provides skilled nursing services in a daycare setting for children who are medically fragile;Merscorp Holdings, which operates an electronic registry known as the MERS system designed to track servicing rights and ownership of mortgage loans; SelfRefind, which offers drug and alcohol addiction treatment; Special Olympics of Kentucky, which provides training and competition for individuals with mental
retardation; Uber, a ridesharing service that uses a smartphone application to connect passengers with drivers of vehicles for hire in Louisville, Lexington, and Cincinnati; Walden University, an online college; andWoodford Forward, land use advocates in Woodford County.
The businesses and organizations which have terminated their registrations and will no longer lobby in Kentucky include: AK Steel; Appian; Celgene Corp.; Ethics & Public Policy Center; HealthPort; IronRock Capital Partners; Kentucky Association of Circuit Court Clerks; KentuckyLECET (Laborers Employers Cooperation and Education Trust); Lloyd’s America; Louisville Convention & Visitors Bureau; Louisville Metro Affordable Housing Trust Fund; National Conference of Firemen and Oilers; One Call Medical; Pain Management Group; Pikeville Medical Center; Shelbyville Laundry; Westfield Group; and Williams Partners.
The August issue of the Ethics Reporter listed Kentucky Crushed Stone Association as having an affiliated political action committee (Highway Industries PAC), but failed to note that the PAC is also affiliated with Kentucky Association of Highway Contractors and Plantmix Asphalt Industries of Kentucky. We regret the omission.
Wealthy citizens have more clout in state government, but stricter lobbying rules can help close the gap, Baylor study finds
NATIONAL –Baylor Media– by Terry Goodrich -- Sept. 16, 2014
WACO, Texas - State legislators are more attentive to wealthy citizens’ political opinions compared to poor citizens’ opinions when making policy decisions, but stricter regulations on professional lobbyists can help curb this trend and promote more equal political representation, according to a Baylor University study.
“Stricter lobbying laws are an important tool for ensuring that citizens’ opinions receive more equal consideration when elected officials make important policy decisions,” said researcher Patrick Flavin, Ph.D., assistant professor of political science in Baylor’s College of Arts & Sciences.
The study, published in the journal American Politics Research, can be found online at Lobbying Regulations and Political Equality.
Flavin used public opinion survey data from the 2000, 2004 and 2008 National Annenberg Election Surveys and compared them to state policies to create a measure of how closely income and political influence relate within each state. He then ranked the states in terms of the equality of political representation.
States in which rich and poor citizens’ opinions are represented relatively equally score high on the rankings, while states in which the lawmakers almost exclusively represent rich citizens’ opinions score low.
The top two states in terms of the equality of political representation are Montana at No. 1 and Minnesota at No. 2, with Alabama and Mississippi coming in at the low end, at No. 47 and No. 48 respectively. (Kentucky is 34th, and Hawaii and Alaska were not included in the rankings because of a lack of public opinion survey data for those states.)
“One common explanation for why affluent citizens tend to be more successful at getting their opinions translated into policy is that industries that tend to share their opinions - such as finance and real estate - are well represented among professional lobbyists in Washington and statehouses across the nation,” Flavin said.
“In contrast, disadvantaged citizens do not enjoy the same level of representation among professional lobbyists, and correspondingly exert less influence over the policy decisions made by elected officials.”
In light of this reality, Flavin investigated whether states that impose more restrictions on the activities of professional lobbyists tend to represent citizens’ opinions more equally. Specifically, he looked at the number of different groups required to register as lobbyists, the frequency of reporting requirements, the types of activities that are prohibited and disclosure requirements.
His statistical analysis revealed that states with more restrictions on professional lobbyists tend to be the most politically equal in terms of representing the political opinions of both the rich and the poor. Flavin explains that “unlike the federal government in Washington where one uniform set of laws governs lobbyists, the states vary, sometimes dramatically. Therefore, we can learn a lot about what types of laws and institutions promote greater political equality by focusing our attention on the states.”
Ethics Commission selects 10 lobbyists for audit
CONNECTICUT – Hartford Business.com– September 19, 2014
Following its usual practice, the state Ethics Commission said it has selected 10 lobbyists at random for audits this fiscal year.
The commission said it will audit registered client lobbyists, which are the companies or entities paying for the lobbying services. The commission will also audit associated communicator lobbyists - typically law firms or consultants - who receive payment for the lobbying work.
Lobbyists selected include Northeast Utilities, MGM Resorts International, Day Kimball Hospital, and Eli Lilly, among others. They were chosen from a pool of 966 lobbyists, which spent more than $71 million in 2013 on legislative and administrative lobbying.
The audits are meant to verify compliance with the state's code of ethics as well as check financial filings for any misstatements. The commission's most recent slate of lobbyist audits, covering 2010, 2011 and 2012, found that four lobbyists submitted one or more of their required ethics filings late. Two reports - from Norwich Free Academy and Coordinated Transport Solutions - failed to include payments to communicators of $5,000 and $2,250, respectively.
Georgia legislators hit the beach
GEORGIA -The Atlanta Journal-Constitution- by James Salzer- September 20, 2014
The Medical Association of Georgia hosted an all-expenses paid retreat for Georgia lawmakers in July at the Jekyll Island Club. Legislators exempted such junkets from limits on lobbyist spending.
The General Assembly’s decision to carve out a sun-splashed exception to limits on big-money lobbyist spending resulted in a hectic beach convention season for lawmakers this summer. There was plenty of mingling, beach time, golf and cocktails to go around, even though many lawmakers were also busy running for re-election.
An Atlanta Journal-Constitution analysis shows lobbyists reported spending more than $100,000 hosting lawmakers and state officials at about two-dozen conferences, conventions, meetings, and “educational” trips, most along the Georgia, Florida and South Carolina coast, during June and July.
That spending is up about 35 percent from 2012, the year before lawmakers passed historic legislation putting limits on how much lobbyists could spend wining and dining members of the General Assembly and other state officials, while preserving spending on conventions.
The numbers may be a bit skewed this year because they include Google’s lobbyists spending thousands to bring lawmakers to California to look at its high-tech innovations.
By law, lobbyists must file reports to the state ethics commission detailing what they spend on lawmakers. But the commission does little more than collect what they get and post it online. In recent years, some lobbyists haven’t reported what they spent on conventions, or haven’t reported it until pressed by the AJC.
That has undermined the transparency intended by lobbyist disclosure laws.
Whether all the spending is being reported or not, it’s clear that calls for ethics reform haven’t put a damper on the traditional beach conventions, even though at least some lawmakers were busy this summer trying to win new terms and raising campaign money.
Other types of lobbyist spending have declined dramaticallysince lawmakers began talking of limiting or banning gifts to lawmakers; such spending fell 53 percent during General Assembly session months from 2012 to 2014. The General Assembly last year voted to put a first-ever limiton gifts from lobbyists, capping them at $75, as of Jan. 1.
But lawmakers made sure to preserve the summer convention season, arguing that the events provide an opportunity to mingle with business owners and hear their concerns. When they passed the spending caps, legislators exempted “educational, informational, charitable, or civic meetings or conferences that . . . directly relate to the official duties of that public officer.” While lobbyists accepted spending caps, many of them strongly supported retaining the summer get-togethers.
Many of the groups that invite lawmakers to annual conventions and meetings have long been prominent lobbies at the Capitol and have a huge financial stake in what happens there.
The Georgia Hospital Association and the Medical Association have a big interest in state health care funding, insurance, malpractice and scope-of-practice issues, such as which treatments nurses and other health care professionals are allowed to perform. Auto dealers lobbied for decades, eventually successfully, to make sure Georgians paid the same taxes or fees on car purchases, whether they bought from dealers or individuals. Grocery and convenience store lobbies worked lawmakers for several years to allow Sunday beer and wine sales in their businesses, first unsuccessfully under Gov. Sonny Perdue, then successfully under Gov. Nathan Deal.
Many of the groups, and their members, are also among the largest funders of legislative campaigns.
Jet Toney, who heads the Georgia Professional Lobbyists Association, said the ability to host lawmakers at such conferences is something “that defines what representative government is about.”
“The interaction between lawmakers and members of a profession is an important dynamic that adds to any professional conference,” Toney said. “I think it’s important for public officials and high-ranking staff to be in attendance at the meetings because it provides some feedback from citizens and taxpayers who are doing business where the rubber meets the road.”
St. Simons, Jekyll Island, Amelia Island, Hilton Head, favored destinations
Convention and conference season is a tradition for lawmakers and lobbyists. The season generally begins in May and runs through August. Legislators are invited to speak to groups, sit on panels or just meet and greet members of associations who have lobbyists working on their behalf at the Capitol during General Assembly sessions. Some lawmakers bring family members and stay for three or four days, giving them time for a few rounds of golf or time at the beach or pool. Some pop in, eat dinner, make a speech, and are gone in a day.
When the economy was booming before the Great Recession, some groups had conventions at places like the Ritz-Carlton on Grand Cayman Island, in Hawaii, or in the Canadian Rockies. The conventions are still held in nice locales, except that the Ritz-Carlton hosting the event is more likely to be on Amelia Island than on Grand Cayman. Now, beach resorts in Georgia, Florida and South Carolina are more common locations, with occasional trips to North Carolina or West Virginia mountain resorts.