Ethics and the Legislature: Money, secrets, power rule dome (AJC)

Posted: 7:19 a.m. Sunday, Jan. 6, 2013

Ethics and the Legislature: Money, secrets, power rule dome

It’s your Legislature, but a powerful unelected few often decide issues that affect your life.

Ethics and the Legislature: Money, secrets, power rule dome photo
Jason Getz
The hallway on the third floor of the State Capitol is filled with lobbyists and lawmakers during last year’s legislative session. Much of recent ethics reform talk involves gift bans or caps from lobbyists, but there are other weaknesses in Georgia’s ethics laws.

By Chris Joyner and James Salzer

The Atlanta Journal-Constitution

Before the 2013 General Assembly utters a prayer, pounds a gavel or debates a bill, your legislators will observe a different sort of tradition: the feeding season.

Ravenous lawmakers crowd around the trough of campaign contributions, taking in more than a million dollars in the early days of the new year. The feeding stops abruptly with the start of the session on Jan. 14 – to protect the integrity of the legislative process.

Then the parties, receptions and intimate dinners commence – every night for three months. Free booze will flow in lobbyist hospitality suites. The most influential lawmakers will dine privately and attend sporting events or concerts with lobbyists and business leaders picking up the tab.

On the floor and in the committee rooms, you can identify the most powerful lawmakers simply by checking their fundraising and lobbying totals. The cost of access to a legislator rises as he does: being promoted to chair a key committee doubles his campaign contributions and lobbyist gifts.

Lobbyists, having purchased access, write or propose bills favoring their clients and persuade lawmakers they have “befriended” to introduce them. Then the lobbyists testify on behalf of their legislation and buttonhole other legislators to vote yes. It is a recipe for success, partly because many lobbyists know more about lawmaking than lawmakers do, and partly because they pay handsomely to whisper in lawmakers’ ears.

All of these practices, in Georgia, are legal.

“There is a whole lot of difference between wrong and illegal,” said Savannah Alderman Tom Bordeaux, a former Democratic state lawmaker. “It doesn’t mean it is not horribly wrong and hurtful to the public. I think the public has no idea how close the lobbyists and the legislators work together. The public would come in and see it and say, ‘Excuse me, aren’t you supposed to be representing me?’”

Much of the recent attention to ethics reform has revolved around a ban or cap on lobbyist gifts, and that’s what lawmakers are expected to debate this year. While critics say those gifts amount to legal bribery, it is not the only area where Georgia’s ethics laws are weak.

There is no law in the state telling legislators whether they can vote on a bill when they have a conflict of interest. Lawmakers rely on weaker chamber rules instead. The people with the most influence over legislation are typically the people with the most money at stake. And much of the important work goes on behind closed doors where the public has no access.

The system set up by lawmakers leaves much of the policing to them. The only outside agency with any real power to investigate legislators – the state ethics commission – has seen its funding and authority slashed in recent years by the General Assembly.

When they convene this month, Georgia legislators will have a historic opportunity to reform the way they work. Or they may opt for business as usual.

Incoming Senate President Pro-Tem David Shafer, R-Duluth, said he will support legislation limiting lobbying gifts, as he has in the past. He is less confident broader ethics reform would result in more ethical conduct.

“It is important that we have strong ethics laws, but in the end, ethical behavior comes from within the individual,” he said. “There is only so much that laws and rules can do.”

Special interests

Carrying the ball for special interests

“It’s not about politics, and it’s not about money,” Sen. Tommie Williams, R-Lyons, wrote in 2007, explaining why he wanted to clear the way for a cancer specialty hospital to open in Georgia.

In fact, it was about both.

Williams was Senate majority leader and the No. 1 legislative backer of Cancer Treatment Centers of America, a for-profit cancer hospital that wanted to move into Georgia and needed a special law to do it.

Williams delivered for the company and, the AJC has learned, the company now has delivered for Williams.

The cancer hospital needed an exemption from the state’s Certificate of Need law, which is meant to prevent an oversupply of medical facilities. And the company was willing to pay an enormous pile of cash to get it. Beginning in 2006, CTCA spent $314,650 in campaign donations, giving large sums to party PACs and individual contributions to dozens of individual legislators.

The top legislative recipient: Tommie Williams, at $10,900.

Using campaign contributions to persuade or reward legislators is not new.

In 2000, the Georgia Cemetery Association’s executive director sent out a frank letter to association members saying Senate Majority Leader Charles Walker, a Democrat, had helped save the industry from “devastating legislation” proposed by the secretary of state. “NOW IT’S PAY BACK TIME!!” the letter added, announcing plans for a $1,000-a-head fund-raiser for Walker.

Along with campaign money, the cancer hospital group also hired top-drawer lobbyists who spent nearly $42,000 in 2007 and 2008 on dinners, trips and other gifts on Williams and other dozens of other lawmakers.

In 2008, Williams’ bill passed the Legislature, with 89 percent of lawmakers in favor, and Cancer Treatment Centers of America was in business. The company’s campaign giving peaked that year at $89,150, including a spending spree of nearly $30,000 in the first week of January, right before the Legislature convened.

The hospital opened its doors, in Newnan, in August. Tommie Williams, who is the outgoing Senate president pro-tem, joined the hospital’s board of directors at roughly the same time.

There’s nothing illegal in what the company did. When asked about the contributions, CTCA spokeswoman Kristin Schaner said as much.

“Regarding your inquiry, we don’t have anything to add,” she said in an emailed statement. “We made full disclosures on (the) contributions. The law is intended to ensure transparency and we abide by that law.”

Williams is compensated for serving on the board of the new CTCA hospital, but CTCA would not say how much.

“Sen. Williams receives the same amount of compensation for attendance and participation in board meetings as other board members,” Schaner said.

Williams did not return phone calls seeking comment, but according to Georgia law he doesn’t have to answer to anyone about his board appointment or what he makes from it. Legislators do not have to report personal income unless it comes from firms they or their spouses own that do business with the state.

CTCA’s political spending in Georgia was remarkable in part because the company had no history of political contributions. According to the National Institute on Money in State Politics, the company did not begin giving politically until 2006 – right when it began the push for its Georgia location. Most of those political donations went to Georgia.

In 2009, with the needed legislation signed by the governor, campaign cash from the company dropped to $29,200.

Williams’ relationship with CTCA raises a troubling question over the financial ties between legislators and special interests. They are hard to prove, in part, because the current system relies on lawmakers to voluntarily report when they have a financial conflict and the state ethics commission does not have the authority to investigate them.

“People make a lot more money out of their conflicts of interest than they do from campaign donations,” said former House Republican leader Bob Irvin, who believes the ethics commission should be empowered to investigate legislative conflicts.

Georgia is one of 14 states with no law regulating when or how state lawmakers debate or vote on a piece of legislation when they have a financial interest in it.

Instead of a law, the House and Senate both have rules concerning conflicts of interest, and the rules are weak in both houses.

“It’s the fox guarding the henhouse,” said McCracken Poston, a former Democratic House member from Ringgold who championed ethics reforms in the 1990s. “Any time you have a bill affecting the behavior of the Legislature, the Legislature is the one that decides.”

Sometimes it is tough for citizens to figure out whether a politician has a conflict because the state’s financial disclosure requirements are weak as well.

State law requires politicians to disclose only the most general information about the sources of their income, and only when they meet certain thresholds or conditions.

About 30 lawmakers either work for or have part ownership in businesses that earned money from state agencies last yearSome reported it, some did not, in part because state law only mandates that they report it if the payment exceeds $10,000 and the lawmaker has ownership stake in the business.

INFLUENCE

Side by side with the lobbyist

Rep. Howard Maxwell settled into his seat at a Feb. 24, 2011, meeting of the House Insurance Committee, shuffled some papers and began telling his fellow committee members about his bill. It was a narrow but complicated measure dealing with insurance paperwork.

Maxwell, an insurance agent and the committee’s vice chairman, had been asked to carry the bill by the Independent Insurance Agents of Georgia. The bill had opposition, so just in case he needed help, sitting next to Maxwell at the committee table was Gould Hagler, longtime lobbyist for the insurance agents group.

Motioning to Hagler, Maxwell informed the committee, “If you’ve got questions I’ll try to answer them individually or we’ve got people here to help me with it.”

For Maxwell, Hagler was a resource; for Hagler, Maxwell was a delivery system for the bill.

Rather than introduce him as a lobbyist, Insurance Committee Chairman Richard Smith, R-Columbus, just chuckled and described Hagler as Maxwell’s “partner in crime.”

Hagler never said a word and was never mentioned by name. There was no reason to introduce him.

Since 2003, Hagler’s group has contributed more than $90,000 to members of the House Insurance Committee.

The bill received a “do-pass” recommendation from the committee without a single question. The bill became law and the insurance industry got the extra legal protection it had sought.

The partnership between politicians and lobbyists is complex, mutually dependent and can lead to some awkward hand holding.

Georgia has a “part-time” legislature, meaning most senators and representatives have other jobs when the General Assembly isn’t in session. As a result, legislators say, they must rely on the expertise of industry representatives to craft complicated pieces of legislation. And lobbyists must rely on legislators because they cannot pass the bills themselves.

Hagler said his role in bringing the legislation to Maxwell is not unusual. Lawmakers have to get their ideas from somewhere, he said.

“Many if not most suggestions of changes to laws come from outside the Legislature. That’s how things work in a democracy,” he said. “They don’t just sit around dreaming up things. They come from places like citizens and organizations like ours.”

Maxwell said having Hagler beside him wasn’t that unusual. Sometimes lobbyists do the actual presenting of legislation, he said.

“You’ve got to have the people that know the facts. Most of these people have been around for a long, long time,” he said. “I’ve worked with Gould ever since I’ve been in the Legislature.”

Hagler said his job is to represent insurance agents around the state. Those agents are constituents as well as business people and they need a voice in Atlanta, he said.

That some of that comes through political giving is no crime, he said.

“We do have a political action committee. We use that money to support candidates who are pro-business,” he said. “This industry is vital to the economy of the state. You can’t have commerce without it. We don’t make any apology for that.”

Hagler said the current system may have its rare excesses, but “in the 30-something years that I’ve been doing it I’ve seen very little of it.”

But entrenched and connected lobbyists often have more influence on bills than individual legislators and much more than individual citizens.

Rep. Ben Harbin, R-Evans, has been in the legislature since 1995 and said lobbyists have always helped to write bills, in part because legislators are part-time officials with little staff to do the heavy lifting for them. As result, special interests have “a lot of input” and can offer some pretty one-sided bills.

“Industry is always going to try to draft a bill that benefits them. They are not going to look after the other guy,” he said.

Harbin said that balance of power is a factor in how bills get written.

“When you had legislators who had been there 20 or 30 years, they would pick up on something … they would try to bend it a little to add a little more fairness,” he said. “I think that’s harder to do today just because you don’t have the institutional knowledge and we don’t have the staff like you do at the D.C. level to read it. “

Poston said new lawmakers find out early on that many legislative battles are turf wars between competing occupations and businesses.

“On a lot of these things, you’re just down there and it’s like play land, you don’t have any dog in that fight, you don’t have constituents involved and you have a vote,” he said.

MONEY

Legislative power has a constant companion

At the Capitol, money and power are more than just close friends. They love each other.

As a result, people in powerful positions are money magnets. Take, for example, Richard Smith.

In 2010, Smith was chairman of the House Budget and Fiscal Affairs Oversight Committee, a somewhat dreary committee that takes up the occasional bill dealing with state budgeting procedures. The next year, House Speaker David Ralston tapped Smith to head the Insurance Committee, substantially changing the Columbus Republican’s profile.

The year before his new chairmanship, lobbyists spent $448 on Smith. The next year, they spent nearly 10 times that amount on him.

Smith’s political life got a lot easier, too, as campaign cash started flowing from doctors’ groups and insurance PACs. Smith has raised more than $168,000 in the 2012 campaign cycle, twice what he received in the 2010 cycle.

When he became Insurance chairman, Smith said, his goal was to make himself available to those with business before the committee, but to do so in a fair, impartial way. The campaign contributions are a reflection of that, he said.

“I still like to think they want me to get re-elected because I’m fair and accessible,” he said. “I don’t know if it is to curry favor.”

Smith has not had an opponent since he was first elected in the 2004 GOP primary. Yet he has taken in hundreds of thousands in campaign donations and has $97,529.89 in his campaign account.

So what does he do with the cash? Some of it goes to pay for his legislative expenses, like his room in the Sheraton Atlanta Hotel during the legislative session. About $20,000 went to pay bills for his web site, fundraising consultants and other campaign-related expenses, like a $350 smart phone.

Smith also gave away a fair amount.

Since he became Insurance chairman, Smith has sent $27,250 to other GOP candidates or campaign funds. He also made $7,625 in contributions to charitable groups in the Columbus area. In the two years prior to being Insurance chairman, Smith contributed $14,600 to Republican candidates and causes. His campaign contributions have increased 87 percent.

Smith said the contributions and lobby-funded dinners have no impact on him – or on other legislators.

“I’ve been there eight years and in that period I’ve never seen a vote bought by a lobbyist,” he said. “The legislators I know at the Capitol are some of the finest people you will ever meet and the lobbyists are some of the finest people you ever meet and they don’t go and buy votes.”

Poston sees it another way. Lawmakers open themselves up to being influenced by lobbyists who line up with meals and free tickets, he said.

“The well-worn adage is, ‘well, I can’t get bought for a meal.’ Maybe you can’t be bought for a meal, but if you really like that restaurant and have no means to pay for walking into that door, maybe you can,” he said.

If lobbyists and corporate contributors are not trying to buy influence, then the relationship between power and money is a mighty big coincidence.

Lobbyists spent twice as much on House Appropriations Chairman Terry England in 2010 than they did they year before when he was just vice chairman. House Banking Chairman Greg Morris saw his campaign contributions grow by 77 percent when he took over that committee, while Rep. John Meadows’ contributions doubled when he became Rules Committee chairman.

On the Democratic side, House Minority Leader Stacey Abrams of Atlanta was just another Democrat in 2010. When she became leader of her caucus the following year, her donations tripled and her lobbying tab more than doubled.

The political arithmetic works in reverse as well. Harbin was House Appropriations chairman in 2010 but lost the powerful job the next year. Did his lobbyist friends and PAC contributors stick with him?

Not really.

Lobbyists spent $11,664 on Harbin in 2010 for food, drink and entertainment. Last year, it was $3,653.

Campaign donations plummeted 61 percent for Harbin from 2010 to now.

“I still raise money from the same people I did before. The checks just look different. There are less zeros there,” he said. “It was expected, I knew how it worked.”

Harbin said rank-and-file members, like him, have one vote, but committee chairman have the power to hold up a bill in their committees or let it through.

“That’s why so much money flows to the chairman,” he said.

Tom Boller, who spent 37 years lobbying at the Capitol before announcing his retirement in September, said money has become an increasingly important part of the relationship between lobbyists and lawmakers.

“There are some groups and businesses have money, others don’t,” he said. “The speech that has a lot of money behind it has more influence than the speech that doesn’t.”

It’s not as if every state operates this way. Georgia is one of three states with no restrictions on the gifts lobbyists can give to public officials, and some states, like North Carolina, prohibit lobbyists from giving to campaigns.

SECRECY

What goes on behind closed doors

While much of the work of state government takes place in full view of the public, part of it is hidden by design.

Former Republican Rep. Jill Chambers of Atlanta said sometimes it was hard to see the direct influence powerful lobbyists have on bills until it was too late. Often the fate of a bill is decided in private, rather than in a public committee hearing, she said.

“It would have happened in a private meeting between a lobbyist and somebody in leadership,” said Chambers, who lost her bid for reelection in 2010. “The lobbyist wouldn’t even necessarily come and tell you they were against the bill. They might sit and monitor the meeting, but then they would take care of it behind the scenes.

“There were a lot of things happening after hours I wasn’t included in,” she said.

Georgia is one of 13 states in which the legislature is exempt from open records and meetings laws. The General Assembly allocates itself $39 million a year for operations, but when reporters asked for details on how that money is spent, House and Senate officials initially denied the request, citing the General Assembly exemption. After it became clear the story would focus on the General Assembly’s reluctance to release information, a limited amount of information was produced shortly before publication.

Hiding how tax money is spent isn’t uncommon. Taxpayers pour about $1.3 billion annually into state pensions. But after years of receiving criticism over inflated pensions, the General Assembly passed a law in 1997 banning the retirement systems from telling Georgians how much retired state employees, lawmakers and university staffers receive.

About 1,100 of those retirees get more than $100,000 a year from the system. One gets more than $300,000 a year for life.

The state provides more than $50 million a year in tax credits to people and businesses that donate money to private school scholarship organizations. But the state’s education agency plays almost no role in the program and legislators in 2011 passed a law making it a crime for state officials to release key information about how the money is spent.

“My guess is the public naively thinks it’s accidental you can’t get that information,” Bordeaux, the former Democratic representative, said. “It’s not accidental you can’t track the money. It is intentional. It is designed to keep it from the public, from the press.”

Hearings on the state’s $19 billion annual budget are open until it’s time to make the final decisions. Then a small group of legislative leaders gets together behind closed doors to haggle over differences between the two chambers.

Lawmakers often get the final product on the final day – and sometimes night – of legislative sessions, when they are debating and voting on dozens of other bills. They typically have little time to study what’s in the budget before they vote, just as they often have little time to review last-minute amendments added to legislation on the final day.

One such case came up late in the 2012 session when lawmakers amended a fishing license bill with a provision sealing the records of some ethics commission cases against politicians.. The Senate passed the measure with about two hours left in the session, but the House killed it once news got out about the provision.

Some say, with good reason, that there is more transparency than in the past.

Rep. Rich Golick, R-Smyrna, carried Gov. Sonny Perdue’s ethics reform package in the mid-2000s that, among other things, increased the financial disclosure requirements for lawmakers. He said the public knows more about lawmakers now than when he first was elected 14 years ago both because of new laws and the fact that more records are on the Internet.

“My sense is the transparency level is much higher than it was 14 years ago because of technology, (more frequent) reporting requirements, increased financial disclosure requirements,” he said. “More information is always better because it allows voters and the public in general to take information and make conclusions on the facts.”

But much remains hidden, too. Last year, the General Assembly approved an overhaul of the state’s open government laws, but legislators made sure they remained exempt. Backers of the rewrite knew making the Legislature subject to open meetings and records would kill the bill.

“We always seem to find a reason to give ourselves a blanket exemption to this law,” said Sen. Josh McKoon, R-Columbus, a lawyer and ethics reform advocate.

While limiting lobbying gifts is a front-burner issue, McKoon, who begins his second term this month, wants broader reforms. He already has filed legislation calling for constitutional amendments to give the attorney general power to empanel a statewide grand jury to investigate claims of government corruption and to provide dedicated funding to the state ethics commission.

He said he also would like to see separate legislation applying the state’s transparency laws to the Legislature.

“I would be very concerned that we not give anybody the impression that the only thing that needs to happen is to establish a $100 cap on gifts,” McKoon said.

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