News from MCFN: 02/22/2012
(517) 482-7198 or (517) 896-2246
Record spending by MI lobbyists in 2011
Recession over in Lansing money-in-politics sector
LANSING – Reported Lansing lobbying expenditures totaled $35,348,800 in 2011, according to figures compiled by the Michigan Campaign Finance Network from reports filed with the Michigan Department of State. That amount is up by 11 percent compared to 2010 and it is a new state record for annual lobbying spending.
Reported lobbying expenditures had shown robust growth of 85.7 percent from 2001 to 2008, increasing from $18,459,254 to $34,278,459. However, they dropped in 2009, and again in 2010, to $31,831,842, the lowest reported total since 2006.
“This leading indicator suggests that the recession is over in Lansing’s money-in-politics sector,” said Rich Robinson of the nonpartisan Michigan Campaign Finance Network.
Multi-client firms dominated the top of the list of the state’s leading 200 lobbyists, as they normally do. Governmental Consultant Services, Inc. was first at $1,354,102. It was followed by Kelley Cawthorne at $1,196,765.
Third on the 2011 list was StudentsFirst. The education choice organization led by former Washington, D.C. superintendent of schools Michelle Rhee reported spending of $955,818, including $900,000 spent for advertising. Former Rep. Tim Melton (D-Auburn Hills) resigned his seat from the 29th District of the Michigan House of Representatives in 2011 to join StudentsFirst.
Following StudentsFirst on the list of the top 200 lobbyists were multi-clients Karoub Associates ($935,659), MHSA ($611,290) and Wiener Associates ($604,077).
The Michigan Health and Hospital Association was the top spender among Michigan-based interest groups at $533,070, good for seventh place on the top 200.
“The reports filed by Michigan’s multi-client lobbyists illustrate the great weakness of our state’s lobbying disclosure system,” said MCFN’s Robinson. “The firms report spending and they name their clients, but they don’t report how much they spend representing those clients.”
A report released last week by Texans for Public Justice shows the results of Texas’ more rigorous reporting standards. All lobbying contracts between lobbyists and their clients must be reported.
Let them eat cake
While Michigan legislators were passing laws to reduce citizens’ dependence on unemployment insurance and cash assistance for needy families in 2011, they drank and dined heartily thanks to a quarter-million dollars of private sector influence peddlers’ welfare for officeholders. Lobbyists reported spending almost $92,000 for food and beverages for individual legislators, and another $160,000 for food and beverages for legislators at group receptions.
Freshman Rep Frank Foster (R-Pellston) was the leading beneficiary of the lobbyists’ hospitality, enjoying $4,291 of individual dining perks, in addition to his share of the group receptions. That was consumed over 103 House session days in 2011.
Senate Majority Leader Randy Richardville (R-Monroe) was the leading individual consumer of lobbyists’ hospitality in the Senate with $4,181 in complimentary repast.
The 30 leading individual consumers of lobbyists’ hospitality, each of whom enjoyed at least $1,000 in dining perks, consumed 59 percent of what was reported.
AT&T, reporting its activity as Michigan Bell Telephone, was the leading provider of group food and beverage, having spent $41,254, including $22,000 for a reception for the 2011 State of the State address.
Fixing the holes
Michigan lobbying disclosure can be described most charitably as spotty. Multi-client firms report what they spend, but they don’t report what is spent for whom.
Lobbyists report some of the dining and travel perks they provide, but not unless their spending exceeds arbitrary reporting thresholds (in 2011: $55 for dining, and $725 for travel and accommodations). There easily could have been tens of thousands of dollars of additional dining and travel hospitality for legislators in 2011 that was not disclosed.
Gifts, including tickets for entertainment, are banned, unless their value is less than $57.
Financial transactions between lobbyists and officeholders, or members of their families, don’t have to be reported unless they exceed $1,150. A lobbyist could loan an officeholder $1,000, but the state doesn’t ask and the lobbyist probably won’t tell.
Some lobbying spending simply isn’t reported. The Detroit International Bridge Company spent $6 million in 2011 for television advertisements exhorting viewers to tell their legislators and the governor to stop a new public-private international bridge between Detroit and Windsor. None of that advertising was reported in the state’s lobbying disclosure system and DIBC isn't even registered as a lobbyist in Michigan.
Here are a few simple reforms that should be adopted:
• Multi-client firms should report all contracts, naming the client and the amount of each contract.
• All food and beverage hospitality provided by a lobbyist to a lobbyable official should be reported from the first dollar spent.
• All travel and accommodations provided by a lobbyist to a lobbyable official should be reported from the first dollar spent.
• All entertainment gifts for lobbyable officials should be prohibited. Gifts should be limited to plaques, or the like, given in recognition of service.
• Any financial transactions between a lobbyist and a lobbyable official, or a lobbyable official’s family member, should be reported from the first dollar.
• All lobbying advertising should be reported, whether it is direct or indirect.
Lobbyists should be presumed to be rational economic actors who represent rational economic actors. Citizens should have a right to know what they are spending to advance their clients’ interests.
The Michigan Campaign Finance Network (MCFN) is a nonprofit, nonpartisan organization that conducts research and public education on money in Michigan politics.
(517) 482-7198 or (517) 896-2246