Georgia’s top insurance regulator and two senior staffers accepted $100-per-head meals and, in one case, a round of golf last month funded by the industry they oversee, according to recent financial disclosures.
That spending is legal under Georgia law, though Gov. Nathan Deal and other elected leaders forbid or discourage it elsewhere in state government. The sums spent on Insurance and Safety Fire Commissioner Ralph Hudgens and his staff represent larger-than-average lobbyist spending on executive officials. While lobbyists frequently splurge on those elected to office, it is less common for them to pick up the tab for staff regulators who set and enforce rules. One of the entertainment expenditures would be illegal when a new lobbying law takes effect next year.
The case was also notable because a lobbyist twice paid for pricey dinners for a regulator’s family.
Aubie Knight, CEO of the Independent Insurance Agents of Georgia, said there is nothing wrong with hosting Hudgens and his staff at a June convention and trade show at a resort on Amelia Island in Florida, northeast of Jacksonville on the Atlantic Coast. Hudgens and his staff have attended since he took office in 2011 and pay for their own travel and lodging.
Knight said the event allows regulators and insurance agents to discuss industry topics.
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“I don’t have a problem with that, nor does the organization have it,” Knight said in an interview. “I can understand the optics of it, how it could look bad to outsiders. I can understand how some people could look at that and say, ‘Huh, what’s going on here?’”
Hudgens said it was not a conflict of interest to accept meals or gifts from people his office regulates. After being questioned about the spending, Hudgens said his staff will pay for their own entertainment at future gatherings and begin following a new law limiting lobbyist spending before it legally takes effect in January.
“I was in the Legislature 14 years,” said Hudgens, a Republican. “I never felt my vote was for sale, and I don’t think someone taking me out to dinner ever influenced my vote, yea or nay. And I brought that same feeling into the position as insurance commissioner.”
His office makes decisions that have financial consequences for the insurance industry. It approves price hikes sought by insurance firms, licenses insurance companies and agents and investigates consumer complaints.
A lobbyist for the insurance agents, Gould Hagler, reported spending more than $350 to buy meals for Hudgens and his wife over two days.
More unusual was the spending on rank-and-file regulators, such as Steve Manders, who works as Hudgens’ director of insurance products review. He helps review insurance policies sold in Georgia and drafts rules governing the industry.
During one meal, Hagler spent $411 to cover the expenses of Manders, his wife and their two daughters, or just over $100 per head. Hagler also spent $123 to buy Manders a round of golf during the convention. That golf expense would be illegal once a new law takes effect Jan. 1, setting the state’s first limits on lobbying expenditures. Other lawmakers attending the convention also received free meals and, in one instance, lodging.
Hudgens said he was uncomfortable that Manders’ children had attended one of the two meals.
“It’s really disheartening that a staffer would accept a gift who’s in a position to not only influence policy, but individual actions by insurance companies,” said William Perry, executive director of Common Cause Georgia, part of a coalition that pushed to limit lobbyist spending.
Besides Manders, the lobbying group spent more than $350 on meals for Tammy Holmes, who oversees insurance agent licensing, and her husband. The group made similar expenditures on both Manders and Holmes at past meetings, according to state records.
“I really think that more than anything else, we could just kind of chalk that up to being good hosts, Southern hospitality,” Knight said.
Deal signed an executive order in 2011 that bans executive branch employees under his control from accepting lobbyist spending or gifts worth more than $25. Deal’s order also says the state prefers the government pay for employee travel and expenses rather than allowing others to pick up the tab. Deal spokesman Brian Robinson said the order does not apply to executive agencies run by other elected officials, for example, Hudgens.
Georgia adopted a new law this year that will generally limit lobbyists from spending more than $75 at a time to influence public officials starting Jan. 1. However, lobbyists will still be allowed to pay to send public officials and their staff on trips within the United States that are related to their government functions.