Loopholes abound in some lobbyist gift bans

A proposal to ban lobbyist gifts to state officials sounds pretty straightforward to most voters.

“B-A-N. It means none,” said Gordon Jones, a retired executive who lives in north DeKalb County.

“Nothing whatsoever,” said Jane Jones, his wife.

The Joneses are talking about eliminating gifts like these: In 2010, a lobbyist spent $17,000 to take House Speaker David Ralston, his family and staff to Europe to learn about high-speed trains. This summer, House Ways and Means Chairman Mickey Channell spent much of June at Florida resorts with lobbyists picking up the bill in exchange for his attendance at industry conferences. Every year, the Savannah Area Chamber of Commerce spends more than $80,000 on a seafood feast for the entire Legislature.

But all of these perks could remain legal if Georgia legislators follow the example of other states, where loopholes are often written into the legislation. Ralston, who proposed the Georgia ban, declined to discuss how strict the ban might be. The AJC’s review of bans in other states finds that such laws often don’t go as far as voters might expect.

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Consider California, where lobbyists can’t take an official out to dinner, but the lobbyist’s employer can. Or Arizona, where lobbyists exploited a loophole in the law for years to send powerful state legislators to out-of-state football games. Or Iowa, whose $3 gift cap didn’t stop the state’s education chief from attending an expenses-paid conference in Brazil.

Alabama’s gift ban, on the other hand, has changed the way state leaders do business, a key ethics official said.

The proposed ban in Georgia is expected to come up in the legislative session that begins in three months. The measure has yet to take shape, but the possibility of loopholes worries Athens attorney Regina Quick, who in January will be one of the newest members of the House Republican Caucus.

Quick is one of the original signers of a pledge to support capping lobbyists’ largess at $100 per gift. Claiming ethics as one of her campaign issues, Quick went on to defeat incumbent Rep. Doug McKillip in the GOP primary to claim the seat (she has no general election opponent).

Even so, Quick says, she made it clear that she supports an outright ban rather than a cap — and a ban means what it says.

“I hope that nobody is going to get Clintonesque on this and defy logic and common sense,” she said.

Have you met my boss?

While some states have absolute prohibitions on lobbyists giving gifts, they say nothing about gifts from the people who hire them.

Businesses or groups such as power companies or banking associations that employ lobbyists are called “principals,” and some states that ban lobbyist gifts allow gifts from principals. That means California legislators can take sports tickets, spa treatments, even paid vacations from special interests without violating that state’s ban.

Those three examples – and several others – were included in a bill this year that sought to strengthen the California law by banning some of the more egregious examples of gifts from principals. The bill passed one house of the Legislature but died in the other.

“It’s a huge deal,” said Dan Schnur, director of the Unruh Institute of Politics at the University of Southern California. “Reasonable people can disagree whether a comprehensive gift ban would have an impact or not, but banning gifts from lobbyists and not their clients does not accomplish much at all.”

In Georgia, lobbyists frequently complain about people who are not registered as lobbyists spending money on gifts for legislators and not reporting it. Jet Toney, chairman of the Georgia Professional Lobbyists Association, said this kind of wildcat spending could get worse if legislators here opt for a California-style ban.

“If the Legislature bans or caps only the registered lobbyists, then the members or the employers of organizations who are represented by lobbyists will become the entertainers,” he said.

Currently, California officials can accept gifts worth a total of $420 annually from any single non-lobbyist.

Schnur said California’s rules have caused a lot of confusion, in part because there are numerous exceptions, but he said it the state’s law is better than nothing.

“You can’t expect any law or regulation to fix all possible conflicts,” he said. “On the other hand it is not an excuse to throw up your hands and do nothing.”

Everyone’s invited!

In Iowa, lobbyists are held to a $3 limit on gifts to lawmakers. That’s enough to buy a greeting card or a cup of Starbucks coffee, but little else.

The system works, with the exception of a gigantic loophole allowing lobbyists to give away unlimited food, drinks and entertainment for events to which every legislator is invited. The Hawkeye State isn’t the only one with such a workaround. Other states have similar exemptions for “widely attended” events that let lobbyists circumvent bans or caps on spending if large groups of public officials are invited.

Iowa lobbyists foot the bill for hundreds of legislative functions a year. The Des Moines Register calculated earlier this year more than $1 million in meals, parties and event tickets in a little more than two years in a state that supposedly had a virtual ban on lobbyist gifts.

A number of states have similar exemptions for large, general-invitation events.

Tennessee tightened its ethics laws after a 2005 FBI investigation into official bribery sent 11 people to prison, but the state still allows lobbyists to throw parties as long as every legislator is invited.

Eighty-six such events took place in the first six months of this year at a total cost of $668,447, according to records from the Tennessee Ethics Commission.

The Pilot Flying J., a Knoxville-based truck stop company a private company co-owned by Gov. Bill Haslam, spent $72,000 on such events – more than twice what anyone else spent. At the time, the Legislature was passing legislation to phase out the state’s estate tax, greatly benefiting family-owned businesses like Haslam’s.

Still, the new rules have altered the relationship between politicians and lobbyists, said Dick Williams, chairman of Common Cause Tennessee. The new rules mean lobbyists can no longer take legislators out for a private dinner or drinks, he said.

“The climate now is that if somebody did that they couldn’t keep it secret for very long,” he said.

Mass-attendance events already are common in Georgia.

The Wild Hog Supper has served as the semi-official start to the legislative session for half a century. It started as an event paid for by the Agriculture Department, but now it is solely funded by lobbyists.

Rep. Mary Margaret Oliver, D-Decatur, has long supported limits on gifts, but she thinks widely attended events are not the kind of gifts that anger voters.

“There is a role for business entertainment in the political world,” she said. “As a practical matter I think those will continue to exist in some manner.”

Derailing the gift train

The Alabama Legislature rewrote its ethics laws in 2010 following scandalous behavior between public officials and gambling lobbyists. Jim Sumner, longtime director of the Alabama Ethics Commission, said the new restrictions on gifts changed the political culture almost overnight.

For 15 years, lobbyists could wine and dine lawmakers at will, only reporting the expense to the public if the tab exceeded $250 per day. The new law, which was tweaked earlier this year, allows a lobbyist to spend $25 per day, up to $150 per year, on a legislator for food and entertainment.

“We’ve gone from $250 to $25. It’s like stopping a train going 100 miles per hour,” Sumner said.

The exceptions written into the Alabama law show how difficult it is to draft a law ending the practice of clubby favoritism at the state capitol without causing unintended, or embarrassing, consequences. Because the law prohibits public officials from accepting any gift from any source, there were myriad questions. For instance, what if a legislator won a raffle? What if a police officer gets a low-interest loan? Can a city councilman receive a Christmas card from a contractor? Can a public official and a loybbyist who were friends before the official was elected still exchange gifts?

All of these are written in as exceptions in the Alabama law, each with carefully crafted verbiage.

Another question faced by Alabama and other states seeking to restrict gifts is what to do about out-of-town conferences? Lobbyists for trade associations and other groups love to have influential politicians come to their group’s summer conference, often held at a posh beach resort.

The Alabama law also allows public officials to accept transportation and other costs to attend conferences but with a laundry list of qualifiers. For example, the public official must “meaningfully” participate, usually as a speaker or panelist; in most cases, the meeting must be in Alabama; and the meeting has to have a formal agenda related to the public official’s position.

Moreover, the official should only accept a trip that “could not reasonably be perceived as a subterfuge for a purely social, recreational or entertainment function.”

In practice, Sumner said most of the travel and expensive gifts just vanished.

“Oftentimes in the past, under the old rules and regulations you might have a lobbyist call up three of four members of the Legislature and say, ‘Let’s go to Hilton Head and play golf for the weekend.’ That’s all off the table now,” he said.

With events now largely confined within the state, lobbyist-funded trips have become unusual, he said.

A ban on lobbyists gifts may not rule out such travel in Georgia.

A House bill introduced last year seeking a $100 cap on lobbyist gifts would have allowed state officials to take trips costing less than $2,000 that are paid for by special interests. If the amount exceed $2,000, the official would have to ask a joint legislative committee for permission to get reimbursed. A bill in the Senate contained similar language, but set $750 as the upper limit for no-questions-asked trips. That bill also only capped gifts given by lobbyists.

Robert Smith, chairman of the political science department at Kennesaw State University and an expert on legislative ethics, said voters expect a gift ban to effectively end special interest gifts to legislators. But there likely has to be some flexibility built in, he said.

“If you buy me a cup of coffee at a Starbucks, I guess I’m not sure this would influence me to take a stance one way or another,” he said. “But if you are flying me to a football game … well, gee, that just doesn’t look right. I think that truly is at the heart of what the lobbyists caps or bans are supposed to be.”

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