Last year state lawmakers debated how to limit meals, gifts and travel from lobbyists. Turns out, they’d already devised a way to keep receiving them.
Case in point: Republican legislators from the state House held their biennial retreat at the King and Prince Resort on Saint Simons Island last summer. And as in years past, powerful interest groups paid the freight, stroking large checks for food, drink and entertainment.
But there was a big difference in how those special interests wrote their thousand-dollar checks. Previously, they gave their money to lobbyists to shower on lawmakers. Starting last year, they began contributing their money to a political action committee (PAC) controlled by the House leadership, which then disbursed it for the travel, meals and expenses associated with the retreat.
What changed? In 2013, after a bruising and politically uncomfortable debate in the General Assembly over the ethics of accepting gifts from special interests, lawmakers voted to limit gifts from lobbyists and cut off some of the freebies.
It worked: lobbyist spending on House Republicans went down. But spending on meals and travel by the House caucus’ legislative PAC went up, thanks to contributions from the same special interests. So while the accounting changed, the behavior did not.
“It is clearly money laundering to circumvent the ethics law,” said tea party activist Debbie Dooley, who was part of a coalition of groups that pushed for lobbying reforms. “It’s legal but they are taking advantage of the system. … They are thumbing their nose at what the people wanted.”
Rep. Allen Peake, R-Macon, is treasurer of the Georgia House Republican Trust, the caucus’ PAC.
“There wasn’t any change in our message to the lobbyists on how they want to pay for expenses or make donations. That’s their decision,” he said. “At the end of the day you are still going to have full disclosure of every expenditure. If the goal is full transparency, you’re getting it.”
Lobbyists are required to disclose meals, travel and other gifts purchased for elected officials on a monthly basis — and twice a month during the legislative session.
Campaign contributions are disclosed much less frequently. In 2013, state-level committees like the Republican trust filed disclosures every six months, so a donation collected by the trust during the legislative session was not disclosed until months after the General Assembly adjourned for the year.
And while lobbyists are required to report what they purchased and in some cases why they did it, they have no such requirement when they make a straight cash contribution to a PAC.
In 2011, the lobbyists for Atlanta Gas Light and AT&T gave a combined $15,000 for that year’s House caucus retreat. In both cases, the lobbyists disclosed the spending on their monthly report. Last year, PACs for AT&T and AGL ponied up the same $15,000 — but this time they directed the money to the caucus’ PAC. AT&T made an additional gift of another $15,000 after its initial $10,000 contribution.
The treasurer for AT&T’s PAC referred all questions about donations to the retreat to the company’s Atlanta lobbyist, who did not return calls seeking comment.
AGL Resources spokeswoman Kristie Benson said the utility was barred from giving political contributions until 2012 when a new law went into effect allowing utilities to make direct contributions. With the prohibition gone, Benson said AGL made a number of contributions “to a wide array of political organizations.”
While AGL could have continued to disclose the spending as a lobbying gift, Benson said, “We like the transparency of making a political contribution instead of providing meals.”
But the AGL lobbyist continued to buy meals for lawmakers, reporting more than $5,500 to feed lawmakers over the past two years. But it reported no lobbying expenses for the House Republican Caucus.
Benson said AGL was not asked to change its practice and contribute to the Georgia House Republican Trust instead. “This was our own business decision,” she said.
Peake said it was a collaborative decision, much as it had been in past retreats.
“We would go to AT&T and say it will be $5,000 for the meals and the dinner, which they were allowed to pay. They would just pay for the dinner directly,” he said of earlier retreats. But in 2013, the caucus decided to use campaign contributions from many of those same sources to pay the bill.
“It’s just easier to account for it, quite frankly,” he said.
PAC contributions fund meals
The shift in spending has not been limited to retreats. In 2012, lobbyists spent $14,418 on group meals and events for the House Republican Caucus, which includes all the GOP members in the chamber. The next year, with attention statewide focused on lobbying reform, reported lobbyist spending dropped to just under $2,000.
Over the same period, the caucus’ spending on its own meals and meeting expenses through its PAC rose from about $1,000 in 2012 to $11,039 in 2013.
State law forbids lawmakers from accepting political donations during the legislative session; not so legislative PACs like the House Republican Trust, which can receive contributions any time.
That means special interest groups can still make political contributions while legislation that could impact their bottom line or business is under consideration.
On Jan. 9, 2013, the American Federation for Children, a pro-school choice group, gave the trust $5,000. That year, the group lobbied the Legislature to increase the pool of tax credits for private school scholarships. Following a protracted fight, lawmakers added $6.5 million to bring the available credits to $58 million.
On March 5, tobacco giant Altria and Miami-based real estate developer Rialto Capital Advisors, gave the trust $5,000 each. The Altria contribution came amid continued unsuccessful efforts by health advocates to get lawmakers to raise the state cigarette tax by $1 per pack. Rialto hired some of the state’s top lobbyists to fight criticism that its loan collection practices were too aggressive.
The combined contributions were more than enough to feed the caucus at its regular meetings for the entire session.
This year, the caucus continued to pay for meals and meeting expenses out of its PAC. The big contributor to the fund was luxury plane maker Gulfstream, which gave the trust $15,000 in January. In March, the House voted to make permanent a tax break that could save the customers of companies like Gulfstream between $29 million and $40 million a year.
Elizabeth Poythress, president of the Georgia League of Women Voters, said addressing special interest money in the campaign finance system has become more difficult because of rulings from the U.S. Supreme Court.
The Court’s rulings in the Citizens United and McCutcheon cases have held campaign contributions to be constitutionally protected speech, making them more difficult to restrict than lobbying gifts.
Nonetheless, Poythress called the latest shift in how special interests direct their money to legislators “disheartening.”
“It doesn’t surprise me that they are trying to foster ways to get around their own law,” she said. “We knew there was going to be more to be done.”
Ben Wilcox, a longtime government watchdog in Florida, said he saw a similar shift in special interest money when his state cracked down on lobbyist spending.
“Once they passed the gift ban at the end of 1995 … lawmakers were able to set up political committees called CCEs, or committees of continuous existence,” he said.
Those CCEs became pass-through accounts for lobbyists to get money to public officials to pay for meals and travel they could no longer do directly, he said. Florida legislators finally abolished those slush funds last year, but Wilcox said it is hard to keep that kind of money entirely out.
“There’s always a way to do it if you want to do it,” he said.
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