Weekly Lobbying Articles
February 3, 2017
Crain’s Cleveland Business
January 29, 2017
Capitol Partners poised for big business in D.C.
Cleveland lobbyist Matthew Cox has been to Washington, D.C., twice in January, including during the Trump inauguration festivities.
Not because the Republican wanted to watch the transition of power from one president to the next. He was there to find opportunities that will continue the rapid growth of his lobbying and public relations firm, Capitol Partners, which took that name a year ago with the opening of a Cleveland office.
Previously, he and partner Eric Weldele had only a Columbus office, a two-person firm operating as Cox Consulting Group.
It's now a six-person firm with the addition at the first of the year of two former lobbyists from the advocacy section of McDonald Hopkins law firm. Earlier last year, Rob Frost, chairman of the Cuyahoga County Republican Party, and Dora Pruce, assistant vice president and director of government and community relations at John Carroll University, joined the firm.
"It was nice," Cox said of his Inauguration Day in Washington. "It's a singular American experience, regardless of what you think of the occupant of the White House. It's what makes our country our country."
Of course, Cox didn't go to the swearing in. "I watched it on TV with some colleagues," he said.
Cox was optimistic about the opportunities in the nation's capital for his advocacy firm. He's hopeful that there will be a thaw in the legislative freeze that kept policy decisions on hold while former President Barack Obama and congressional Republicans were at a stalemate.
"Nothing happened (during the Obama years), and when that happened, people who pay for lobbying activities stopped paying for those activities because nothing was happening," he said. "So what you've seen last month is a huge, dramatic increase in dollars being redirected to lobbying activities because now there's a chance of a lot of things getting done. I think there's a chance for us to take advantage of that."
That was only one of two observations Cox came back to Cleveland with. "The second thing is, it's chaos," he said. "Because no one knows where anything is going yet. So many of the second- and third-tier positions that actually do the work haven't been confirmed or even identified yet."
Despite the bedlam, Cox said the trip was productive. As a result, he expects to head back to Washington two times in the next few months for lobbying and prospecting.
Pursuing federal lobbying work will be easier for Cox this year because of the addition of two seasoned state lobbyists, Mike Caputo and Rebecca Kuhns, from McDonald Hopkins.
Caputo, a non-lawyer who was director of McDonald Hopkins' state and local government practice, has joined the firm as a partner, joining Cox, Frost and Weldele, who leads the firm's Columbus office, in that role.
Cox himself is a former McDonald Hopkins lawyer, who in the early 2000s served in Columbus as senior deputy attorney general under Republican James Petro.
Kuhns, who also is not a lawyer, was a legislative aide before joining McDonald Hopkins. She comes to Capitol Partners as vice president of government relations in the Columbus office.
Caputo spent 13 years at McDonald Hopkins, where he had been director of its state and local government operation. He said he talked with the firm's managing partners last year about the kind of expanded advocacy practice he thought his clients needed, and both sides agreed that a law firm wasn't the right fit for his plans.
"In order to do the job the right way, we have to have a fully built-out advocacy platform," he said. "That includes the ability to orchestrate town hall meetings in key legislative districts and the ability to secure grass-roots support for some of the things we're working on. These things aren't ideally suited for a law firm."
Caputo admitted, though, that not being a lawyer in a law firm had its drawbacks.
"Obviously, the economics are different, and, for me, better being on my own like this," he said. "But that's not why I did it."
McDonald Hopkins, for several reasons, including the death last August of Washington partner Steve LaTourette, decided to shed its advocacy practice. LaTourette, a former member of Congress, had run the law firm's Washington-based McDonald Hopkins Government Strategies (MHGS) practice.
"This past fall, the decision was made to wind down MHGS effective Jan. 1, 2017," a statement emailed from the firm read. "We not only wish Mike and Rebecca the best, but we are continuing to work with them and their colleagues through a preferred-provider arrangement."
The clients Caputo and Kuhns bring to Capitol Partners include STERIS plc, the Cleveland Sight Center, Ohio City Inc. and University Circle Inc.
Cox said Caputo and Kuhns have particular expertise in capital spending. Weldele specializes in utilities.
Cox's area of interest, professionally and personally, is education. He is registered with the state of Ohio as a lobbyist for John Carroll University, his alma matter, as well as Friends of Breakthrough Schools and School Choice Ohio Inc., a nonprofit that provides Ohio parents information about alternative educational opportunities for their children.
"I'm very passionate about school choice," he said. "Vouchers are a great opportunity to mix and match students to private schools."
Education is a focus for Cox in part because he has a son with special needs.
He had hoped to attend the confirmation hearing of Betsy DeVos, a school choice advocate, to be Secretary of Education, but the scheduled hearing was postponed until after his first January visit to Washington.
Cox also said he would like to see education funding move away from a reliance on the local property tax, an issue he said is "the biggest issue still facing this governor and likely the next governor."
Though a Republican, Cox is soft on the Affordable Care Act. It was critical to his being able to start his consulting practice.
"I'm an Obamacare baby," he said.
In 2011, when he was creating his lobbying practice, he hit a roadblock. He learned that if he left McDonald Hopkins, where he was working as an attorney, once his extended health benefits ran out, he wouldn't be able to get health insurance because of his son's special needs. But then he learned that once the extended health benefits from the law firm ran out, he could get the coverage he needed under the then-new Affordable Care Act.
The Tennessean
January 29, 2017
In Tennessee, lobbyists' employers face few disclosure rules
Under Tennessee law, there's no way to find outexactly how much money companies spend on lobbyists and lobbyist-related activities.
State law allows companies and organizations to report how much they paid lobbyists and how much they spent on other related expenditures as a range, not specific amounts. For example, organizations spent between $14.3 millionand $29.6 million on lobbyist compensation during the first half of 2016, according to a Tennessean analysis of state data.
State law also doesn't require those companies to provide additional details about what money is spent on orwho they were trying to influence.Drew Rawlins, executive director of the Tennessee Bureau of Ethics and Campaign Finance, said companies don't need to provide any receipts or detailed accounting information ontheir semiannual reports.
"Since gifts to lawmakers, dinners and drinks to lawmakers are prohibited, I highly doubt that employersof lobbyists are spending funds on these items," Rawlins said.
While gifts from lobbyists are technically banned, there are 11 exemptions to the law, including one for gifts from a "close personal friendship." Meals or dinner eventsalso can be paid for, as long as all members of the legislature are invited and the per-person cost doesn't exceed $59. Even in those situations,the only reporting requirement is that the hostmust report the final cost to the Tennessee Ethics Commission.
Data analysis by The Tennessean shows $2.83 million spent on these events in the first six monthsof 2014, 2015 and 2016 combined. This spending is not included in the lobbyist-related expenditures reportbecause, Rawlins said, many who attend these events are not lawmakers.
There also is no limit or reporting requirements on gifts given by politicos or advocates who may not be registered lobbyists but can still have sway at the statehouse. A Tennessean investigation in 2016 found several examples of this, including state lawmakers allowed to stay at the seaside condo of a wealthy school voucher advocate and aEuropean trip for lawmakersfinanced by a wealthy donor. Legislative leaders have pledged reforms, but as of Wednesday no bills requiring more stringent reporting have been filed.
While laws regulating lobbyists in other states vary, most requirefar more information from those employinglobbyists.
In Indiana, a state with a comparable populationand legislative composition as Tennessee, lawmakers are allowed to receive gifts. The lobbyist must report the name of the lawmaker, value of the gift, what the gift is and time and date of the gift, said Chuck Harris, executive director and general counsel of the Indiana lobby registration commission.All of that information is publicly available on an Indiana state website.
Additionally, expenditures by companiesthat hire lobbyists must be reported in exact values, not in broad ranges.
"If you willfully or intentionally over-report or under-report, it can be a level 6 felony," Harris said, which is punishable by more than two years in prison.
A 50-state survey of lobbyist reporting requirements by the National Conference of State Legislatures shows the extent of reporting requirements in other states.
Kentucky requires employers of lobbyists to report total expenditures, but also to provide an "itemizedlist ofamountsspent for receptions or other events, date, location, name of the group of public servants invited" and an "itemized list of other amountsspent for lobbying, including food and lodging, reimbursements to public officials." At least 16 other states explicitly require some form of itemized reporting, while many others require more information than Tennessee.
"As for lobbying disclosure standards, states vary greatly. So much so that a definable 'standard'is almost impossible to find," said Ethan Wilson, a policy specialist with NCSL. "However, most states do require things such as gifts and travel to be disclosed. Also, most states require disclosure of lobbyist principal expenditures."
KTVA (Alaska)
January 30, 2017
Juneau lawmaker introduces income tax for legislative lobbyists
A Juneau legislator introduced an income tax bill Monday, but only for lobbyists.
Rep. Sam Kito’sHouse Bill 91would levy a 2.5 percent income tax on the annual earnings of legislative lobbyists. The measure would replace the state’s current $250 registration fee.
Kito said the money raised from the tax will support the Alaska Public Offices Commission, which oversees the activity of candidates, political groups and lobbyists.
“That’s where I’m concerned is that we’re not really, actually adequately reviewing activity of lobbyists because that staff has been decreased so much,” Kito said. “What we have down in Juneau now is a clerk that is taking care of lobbying reporting and also responsible for trying to track and make sure that the lobbying activities meet state statute, and there used to be two and a half people in Juneau managing that.”
The Juneau Democrat said the Legislature’s Division of Legal Services has not raised any concerns about directing the income tax at a specific group of Alaskans.
“It’s an industry, and that industry provides an economic activity for the state and as long as we’re taxing those members of that industry equally, I don’t see where there’s difficulty,” Kito said.
The bill also calls for a $100 registration fee from anyone running for political office.
adn.com
January 30, 2017
Is it time for a lobbyist union? Juneau representative proposes 2.5 percent industry tax
Juneau Democratic Rep. Sam Kito III is proposing a special income tax on Alaska's lobbyists — including his own father.
Kito is the son of Sam Kito Jr., one of Juneau's longest-serving lobbyists. This year, Kito disclosed more than $200,000 in fees including contracts with telecommunications company GCI, drug maker Eli Lilly and the North Slope Borough.
Kito III, who worked for his father before being appointed to the Legislature in 2014 by Gov. Sean Parnell, introducedHouse Bill 91on Monday morning. It would require lobbyists to pay a 2.5 percent tax on their contracts.
Though non-binding, Kito's bill suggests its proceedscould go toward beefing up the state agency charged with regulating lobbyists, theAlaska Public Offices Commission, Kito said.
"The bill is to try to support the lobbyists," Kito said in an interview.
As the representative for downtown Juneau, Kito has more than a dozen lobbyists who live in his own district, including his father.
In a phone interview Monday, lobbyist Kito said he wasn't familiar with the legislation and hadn't spoken to hislegislatorson about it — though he expressed no displeasure with the concept.
"He's his own guy," said Kito Jr. "He can do what he wants to do."
Kito III said he wants the revenue produced by his legislation to be directed to APOC, which oversees state laws related to lobbying and campaign finance. Separate provisions in HB 91 would institute $100 registration fees to be paid by political candidates and groups.
APOC's spending, always in jeopardy as an agency that investigates lawmakers,has been slashedrecently by the Legislatureand Gov. Bill Walker as part of their efforts to close a multibillion-dollar deficit, bringing the agency's budget from more than $1.5 million in 2014 to just over $1 million this year.
APOC already charges lobbyists $250 to register each of their contracts, and it raised $120,000 in user fees last year.
Kito said he wants to double the amount of revenue from fees and taxes. That could allow the agency — which currently has just one low-level employee in Juneau — to boost oversight and auditing of lobbyists, he said.
"Right now, we just have somebody that's checking boxes and collecting checks," Kito said.
The idea isn't likely to engender much public opposition, given that lobbyists aren't generally held in high regard, saidJim Lottsfeldt, an Anchorage political consultant whose lobbying clients this year include the ACLU, a fishing industry group and insurance company Moda Health.
"I don't think you'll see people protesting in the street over that bill," Lottsfeldt said in a phone interview. But, he added, "As far as getting it out of the building — I think it might have a tough time."
Lottsfeldt said he wouldn't personally lobby against the bill, joking instead, "I'll let my colleagues do the heavy lifting."
Other lobbyists, in interviews, expressed mixed views, with several noting that the existing $250-a-contract fee can add up quickly. Two others said any taxes would likely be passed on to clients.
The 2.5 percent tax could take a bite out of the income of Juneau's top lobbyists like Kent Dawson and Jerry Mackie. Each has disclosed 18 contracts this year; Dawson's $1.1 million in fees would cost him $27,600 in taxes, while Mackie's $791,000 in fees would generate some $20,000, depending on how much in expenses they could deduct.
Mackie declined to comment and Dawson didn't return a phone message. But Ray Gillespie, who would have to pay a maximum of $12,500 on his $500,000 in annual lobbying fees, sounded open to Kito's tax idea.
"You can quote me on this: Lobbyists should contribute to stabilizing our fiscal situation," Gillespie said in a brief interview in the Capitol stairwell.
By late Monday, Kito said he'd heard from a few lobbyists about his tax proposal but none who was especially critical.
Columbus AliveJanuary 30, 2017
Merger creates new lobbying firm
Columbus-based government-relations firms Singleton & Associates and Capital Action Group have announced their merger with Government Advantage Group.
"As a result of this merger, we have become one of the largest and the most diverse lobbying groups on Capital Square," said John Singleton, founder of Singleton & Associates. "With that diversity comes a larger variety of statehouse relationships and a stronger connection with political and professional groups in Columbus and throughout the state."
John Singleton, founder of Singleton & Associates; Amanda Sines, principal of Capital Action Group; and Kevin Fytryk, principal of Government Advantage Group, will now serve as partners in the new firm, which will keep Government Advantage Group's name.
The new firm will offer services including lobbying Columbus City Hall and the state legislature, along with association management and advocacy.