2019-02 February Newsletter - Kentucky



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Although the General Assembly met for only four days in January to begin the 2019 session, lobbying spending hit $2.2 million and broke the spending record for the first month of an odd-year legislative session.

January’s record lobbying spending comes on the heels of the all-time high $23.1 million spent last year by businesses, organizations, and lobbyists pursuing their interests with the General Assembly.

There are 742 businesses and organizations lobbying the General Assembly, and that is a record number of employers, with 626 lobbyists working for those employers.

This year’s lobbying spending is led by the Kentucky Chamber of Commerce, which spent $40,972 last month, including $5,300 on a Lexington dinner for all legislators. As lobbying priorities, the Chamber’s website cites pension reform, tobacco-free schools, unemployment insurance, and sports wagering.

Altria (Philip Morris) was the second-leading spender at $30,500; followed by Kentucky Hospital Association ($28,483); Kentucky Bankers Association ($21,245); and Greater Louisville, Inc. ($20,785), reporting lobbying on issues including tax, tort, and pension reform.

Other top 10 lobbying spenders are: Johnson & Johnson ($15,750); Kentucky Justice Association ($15,676); Kentucky Association of Electric Cooperatives ($14,691); CSX Corporation ($12,985); and Swedish Match North America ($12,718).

The rest of the spending top 20 are: Humana ($12,620); Kentucky League of Cities ($12,560); Fidelity Investments ($12,000); Kentucky Downs LLC ($12,000); Kentucky Medical Association ($11,809); Catholic Conference of Kentucky ($11,607); Kentucky Credit Union League ($11,263); DXC MS ($10,800); Kentucky Equine Education Alliance ($10,566); and Kentucky Farm Bureau Federation ($10,476).

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A special election for the office of State Senator, 31st Senatorial District, will be held in all precincts in Elliott, Lawrence, Martin, Morgan, and Pike Counties on Tuesday, March 5, 2019.

The candidates in the special election are Darrell W. Pugh and Charles "Phillip" Wheeler, Jr., and the candidates’ financial disclosure statements are posted on the Legislative Ethics Commission’s website, as are the newly-filed financial disclosure statements for all members of the 2019 General Assembly. To access those statements, copy and paste this link into a browser:



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Lobbying employers which have recently registered to lobby include: Alcohol Monitoring Systems, Inc.; Allstate Insurance Company; Cigna Corporate Services, LLC; Cleanse Clinic Corp.; Coalition of Ignition Interlock Manufacturers; CTIA - The Wireless Association; DraftKings, Inc.; Edison Electric Institute; FanDuel, Inc.; Good Food Institute; JACK Ohio LLC; Juul Labs; National Association for Gun Rights; Pain Management Centers of America; Spin; Status Solutions; Susan B. Anthony List; Turo, Inc.; and Wallitsch, James.

Employers which have recently terminated their lobbying registrations include: Ascential Care Partners, LLC; Centerstone; CIOX Health, LLC; Gateway Health Plan of Ohio, Inc.; Goodwill Industries of Kentucky; Innovation Alliance; Polaris Industries, Inc.; Kentucky Film and Digital Entertainment Association; Kentucky Rent-A-Car Association; Kentucky Smart on Crime; Kinder Morgan Energy Partners, L.P.; Pathfinder Capital; and Transparent Business.

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Arkansas grapples with ethics cleanup amid federal probes

ARKANSAS – Associated Press – by Andrew DeMillo -- February 24, 2019

Little Rock - Arkansas has had its share of notable corruption cases over the years, including when a governor was convicted and when a state treasurer was caught accepting bribes stashed in pie boxes.

A flurry of cases in the past two years has been eye-popping, though, even for the most jaded veterans of Arkansas politics. Among those who have been charged are a nephew of the current governor, a champion of campaign finance reform, and a top county official who admitted to taking bribes funneled through the church where he was a pastor.

The recent cases have stirred fears that the Capitol is becoming better known as a hotbed of corruption than for any policy achievements, and legislative leaders are scrambling to repair that image and find ways of deterring future misdeeds.

“Let us begin the session of the General Assembly today with a determination that the culture of greed and corruption is over,” Senate President Jim Hendren told colleagues on the first day of the current legislative session. “We will not participate in it, we will not ignore it and we will not tolerate those who do.”

Since January 2017, seven current or former state lawmakers - none of whom are still in the Legislature — have been ensnared in corruption investigations - most in a probe that looked at state money that was going to nonprofits, including a mental health provider and a for-profit Christian college in northwestern Arkansas.

At the center of that investigation was Rusty Cranford, a prolific lobbyist who admitted last year to taking part in a multimillion-dollar bribery and embezzlement scheme that involved lawmakers.

One of the people he said he bribed was former state Sen. Jon Woods, who co-sponsored a successful 2014 constitutional amendment that banned lawmakers from accepting lobbyist gifts and prohibited corporations from contributing to political candidates in the state. Woods was convicted in the bribery case and is serving an 18-year prison sentence.

Cranford also said he bribed the governor’s nephew, former state Sen. Jeremy Hutchinson, who denies the allegations and hasn’t been charged with taking bribes. However, Jeremy Hutchinson resigned last year after he was charged with misspending campaign funds on things including gym memberships and a Netflix subscription. He has pleaded not guilty.

Hank Wilkins, who served in the state House and state Senate before becoming the top elected official in Jefferson County, pleaded guilty last year to accepting bribes from Cranford when he was in the Legislature. The money was funneled to Wilkins through a church where he was a pastor.

The probes extend beyond the Capitol, too. A federal grand jury in January indicted a former state party chairman who served in the state Senate of conspiring to bribe an ex-judge who admitted to lowering a jury’s award in a negligence case in exchange for campaign contributions. State Sen. Gilbert Baker, who was no longer in the Senate and serving as a lobbyist when the alleged bribery scheme occurred, has pleaded not guilty and is awaiting trial.

All of those investigations were conducted at the federal level, leaving Arkansas leaders pushing for better safeguards at the state level, even if they acknowledge that such reforms wouldn’t necessarily have prevented the recent crimes alleged to have occurred.

“Those are not gray areas. Those are black and white areas,” Gov. Asa Hutchinson said last month. “You don’t need new laws to prohibit it because it was a clear violation of the law. ... Those are matters of integrity and it’s not a matter of legislation.”

The scandals prompted the state Senate to overhaul its ethics rules last year, including expanding financial disclosure requirements for state senators. The Senate also created a committee to handle complaints against its members, but the complaints can only be filed by fellow senators. The recent cases also led Arkansas Attorney General Leslie Rutledge to create a public integrity unit that she said would investigate corruption cases.

″(The public) can’t help but think it’s a jaded process,” said Sen. Keith Ingram, who is the chamber’s minority leader.

Legislative leaders in February unveiled a package of ethics bills aimed at cleaning up the Capitol’s image, including increasing the maximum fines the state’s Ethics Commission can levy and making personal use of campaign funds a felony rather than a misdemeanor. They’re also backing a proposal to make elected officials convicted of certain crimes ineligible to receive their retirement benefits.

“We can pass all the ethics legislation in the world, but someone who is intent on gaming the system (is) going to find a way around it,” Ingram said. “But we can put some teeth in some things, point out some practices that are taking place.”

Lobbying drew more money than Colorado statehouse elections in 2018, showing high cost of influence

COLORADO – Denver Post – by Nic Garcia -- February 8, 2019

Colorado special interest groups, businesses, and government agencies spent more than $33 million to lobby state lawmakers in 2018 - more than all General Assembly candidates and their biggest allies raised in their election campaigns last fall, an exclusive Denver Post analysis of lobbying records has found.

That means more money was spent to influence policy than was spent on electing the lawmakers who write it.

With 100 state House and Senate members, it averages out to a third of a million dollars spent on each lawmaker, persuading them to make, change or oppose bills on issues ranging from who can sell beer to who gets to use the state’s water.

“It’s a startling figure,” said state Rep. Chris Kennedy of Lakewood who would like to see lobbying reform.  “It’s a challenge for us who are really committed to public service to overcome every day.”

The money spent on lobbying doesn’t go directly to lawmakers’ pocketbooks or campaigns. Colorado law forbids lobbyists from lavishing lawmakers with gifts. Instead, the millions bought the time of the state’s 700-plus registered lobbyists, who spend their days persuading lawmakers to introduce legislation, propose amendments or oppose a bill that would harm their clients’ interests.

The Post’s findings, based on multiple requests of state data, illuminate an aspect of government with little accountability and oversight. The spending on lobbying is rarely scrutinized in public because it’s hard to find and understand. Even lawmakers may not know the complete picture until legislation is already law.

Companies, interest groups and even government agencies hire lobbyists to represent their interests at the Capitol. Lawmakers sometimes rely on them for expertise and resources that the politicians don’t have.

They fill a knowledge gap for state lawmakers, who have slim staffs to help research and write legislation. Also, because they can only serve eight years in each chamber, legislators are limited in the institutional knowledge they can build.

“There is a positive view of lobbying in that it provides information to part-time legislators who might not be experts on school finances or access to health care,” said Paul Teske, dean of the School of Public Affairs at the University of Colorado Denver.

The danger is that gives lobbyists access and influence that the general public doesn’t always have.

“They obviously provide information that is favorable to their clients and not the whole picture,” Teske said.

Here’s one example of how lobbying works: The Colorado Medical Society, which represents doctors, spent more than $200,000 on lobbyists in 2018, records show.

Among the many different bills the organization took a position on was one that would have required doctors to use e-prescriptions for some drugs, including opioids.

The society opposed the bill, arguing in part that rural doctors did not have the necessary infrastructure to comply with such a law, which is growing in popularity across the United States as one way to fight the opioid crisis. Despite having widespread support, a committee killed the bill.

This year, the bill is back, and the society is supporting it after some of their concerns were met, including language that would allow doctors more time if they can prove they can’t afford the technology needed to comply.

“Because of our open dialogue with the senators, pharmacists and others since last session, I think we’re going to have a bill this session that takes into account the resources available to small and rural physician practices while still reducing fraudulent prescriptions,” Dr. Debra Parsons, the society’s president, said in a statement.

The six-figure sum spent by the society was just a fraction of the $6.5 million total that health care providers, insurance companies, pharmaceutical companies and other for-profit and nonprofit health care groups spent last year. That’s more than any other industry spent lobbying Colorado lawmakers.

“They were effective last year; they got a lot of our bills killed,” Kennedy said of the health care lobby.  “It’s important that whatever group out there has an ability to comment. But legislators need to be able to stay focused on their own priorities rather than fall down every rabbit hole lobbyists want us to go down.”

Georgia house speaker calls for review of legislator privilege law

GEORGIA – CNHI – by Jill Nolin – February 27, 2019

Atlanta - House Speaker David Ralston said in a blistering speech that he will instruct a bipartisan group to reevaluate a state law that allows attorney-lawmakers to delay court cases after he was accused of abusing that same law.

“I am not defensive, angry or paranoid, but an examination of all the facts causes me to reject in the strongest possible way any accusation or insinuation that I have abused or misused my position,” Ralston said, speaking from the House floor.

His comments came after 10 lawmakers backed a measure “encouraging” the Speaker to step down from the role he has held since 2010, citing an Atlanta Journal-Constitution and Channel 2 investigation that found Ralston had repeatedly used “legislative leave” to delay his criminal court cases.

A century-old law lets attorney-lawmakers request a continuance during and immediately after a legislative session. The law was tweaked more than a decade ago to also apply to legislative conflicts throughout the year. State law gives priority to the attorney’s legislative responsibilities.

The AJC/Channel 2 story found that Ralston used the legislative privilege 57 times during a two-year period and that of the 93 days he said there was a conflict, most of them were outside of a legislative session.

Ralston used his remarks to try to present a fuller picture, saying, for example, that not all the continuances were requested by him.

Ralston, who got emotional, fired back at the media, radio pundits and his political adversaries. He dismissed the criticism as “a prop in a media hit piece or in a campaign ad.” Rep. David Clark, Buford, who has led the push for Ralston’s ouster, is reportedly considering a run for Congress.

“I will say this today that I have never – never – discussed legislative leave with a prospective client, nor have I benefited in anyway by the application of this law,” Ralston said.

But Ralston also said he felt compelled to address the concerns of those who were troubled by what they read or heard about him. He said he will not accept new criminal cases until four cases – the ones that received the most scrutiny, including at least one involving rape and molestation – are resolved.

He said he will also form the advisory group to study the state law at the center of the controversy and look at how other states with part-time legislators approach the issue.

As Ralston left the well, most of his colleagues stood and applauded.

Barred from lobbying for six months, ex-Missouri rep returns anyway to sway lawmakers

MISSOURI - Kansas City Star - By Hunter Woodall – January 31, 2019

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Jefferson City - Less than two months after resigning from office, former state Rep. Kevin Corlew returned to the Missouri Capitol this week to testify for a national organization in what one watchdog said is an act of stealth lobbying.

Some experts question whether his appearance goes against the state’s revolving door law prohibiting former lawmakers from quickly returning to lobby their former colleagues in the Missouri General Assembly.

“If you’re representing an organization before a government for political purposes, that’s the real world definition of lobbying,” said Beth Leech, who studies lobbying as a political scientist at Rutgers University.

Corlew, of Kansas City, narrowly lost his re-election bid to the Missouri House last fall. He then resigned in December, before his term was up, specifically to avoid a new law banning lawmakers from returning to the Capitol as lobbyists for two years after leaving office. Despite managing to avoid the two-year ban, Corlew still must abide by the previous law that required a six months wait before lobbying.

Corlew recently testified to lawmakers on the Senate’s Government Reform committee. On a witness testimony sheet, Corlew identifies himself as an attorney for Kansas City law firm Shook, Hardy & Bacon, though he represented the American Tort Reform Association at the hearing.

On social media, the tort reform group publicized Corlew testifying in support of legislation for the organization.

“I would call him a stealth lobbyist,” said Craig Holman, a government affairs lobbyist for Public Citizen, which advocates for greater ethics and transparency in government. ”He’s working for a lobbying association and promoting legislation.”

Missouri law does include exceptions, such as a person “testifying as a witness before the General Assembly or any committee.” Corlew said that exception meant he was abiding by the state’s revolving door law.

Corlew said the tort reform association is a client of the law firm, but he’s not a member. Testifying was part of his job at the firm as an attorney, he said.

“As with any client, the firm likely will bill (American Tort Reform Association) for my time as an attorney, but they will not be paying me personally or directly,” Corlew said.

Lobbyists in state capitols often testify on behalf of large national organizations who cannot be there in person. Missouri citizens, as well as lawmakers, also testify for and against pieces of legislation in committees.

Lobbyists are required by law to register with the Missouri Ethics Commission and disclose their spending activity. Shook, Hardy & Bacon is listed as not having any lobbyists in the Capitol this session, according to the commission. Corlew has not registered.

The tort reform association has nine lobbyists listed as representing the group in Jefferson City. Corlew is not one of them.

In December, Corlew resigned from the legislature the day before the effective date of a constitutional amendment requiring ex-lawmakers to wait two years — instead of six months — before becoming lobbyists. The Clean Missouri amendment had passed with 62 percent of the vote in November.

Public disclosure of legislation a lobbyist works on moves forward

NEW MEXICO – New Mexico in Depth -- by Marjorie Childress -- February 12, 2019

Santa Fe - An effort to require more transparency from lobbyists passed its first hurdle in the House. The idea behind HB 131 is pretty simple: lobbyists would report a few weeks after a legislative session ends what bills they worked on, including their position on each bill, if they had one.

One of the bill co-sponsors said the measure aimed to help the public have a greater understanding of how policy is made.

“We’re approached in the hallway, approached in the bar, people talk to you at a reception,” Sen. Jeff Steinborn, Las Cruces, told the House’s State Government, Elections, and Indian Affairs Committee.

“All of those things are important to understand the dimensions of influence that go into affecting a piece of legislation. Right now, many times, we as legislators or citizens of state, don’t have a … full view of the actions that have gone on to influence state policy.”

While new for New Mexico, the requirement that lobbyists report the official actions or specific legislation they attempt to influence isn’t new for many states. At least 13 require such information, to varied degree. Even more require lobbyists and their employers report the issues or subject matter they’ve worked to influence during a reporting period.

Steinborn pushed back on suggestions of not having a report at all, saying it was a manageable thing to do.

“You know if you were paid to lobby a bill,” he said. “You can create an excel spreadsheet and check it. Clearly, designated lobbyists would have to make their own system. It’s a very manageable thing to do and the public good is why we would do it.”

Steinborn and his co-sponsor at the hearing, Rep. Dayan Hochman-Vigil, agreed with two amendments made to the bill. One added more time for lobbyists to file their report, and the other would allow lobbyist to say they took “another position” rather than that they supported or opposed the bill.

The rules for when a person has to register as a lobbyist are pretty straightforward. Basically, if a person is compensated - either as an employee of an organization or working as an independent contractor - for attempting to influence legislation or the outcome of a rulemaking procedure, they’re a lobbyist.

There are currently 645 lobbyists registered with the Secretary of State, up from 609 in 2018. A little more than a third of the 2018 lobbyists reported spending money, either campaign contributions or expenditures on meals or other items. But all of the registered lobbyists make money, either through a salary or through their work as independent contractors. New Mexico law doesn’t require disclosure of the amount of money paid to lobbyists by their employers.

Ulster County legislator hit with $7k ethics fine

NEW YORK -- Saugerties Times -- by Christina Coulter -- January 10, 2019

The Ulster County Board of Ethics has fined freshman county legislator Joe Maloney of Saugerties $7,000 for, it said, voting on and advocating for matters involving his spouse, who works for county comptroller Elliott Auerbach’s office.

In its order, the board found Maloney violated ethics law in three instances. In its nine-page decision, the board recommends that Maloney be suspended for three months in addition to the hefty fine. The report is harshly critical of Maloney, asserting that he “is either unwilling or unable to differentiate between ethical and unethical conduct.”

Maloney said this week he has no intention of stepping down, and vowed to challenge the board’s ruling.

He said the ethics board, which is appointed by the county executive, has leveled the charges as retribution for Maloney’s efforts to expose what he alleges is pay-to-play corruption in county politics, as well as “to deter people for listening to the questions that I’ve been asking.”

During his time on the legislature, Maloney has championed legislation that has banned public officials from using their names in public service announcements, fought to overturn the county executive’s veto of a proposed term limits bill which led to the first override of a veto in the legislature’s history, introduced legislation to ban plastic bags in Ulster County, and fought to raise the healthcare insurance contributions of elected officials to match those of other county employees.

Article 44-7 of the County’s Ethics and Disclosure Law states the ethics board has the power to fine an individual up to $10,000 per violation. According to board chairman Derek Spada, no offending public official has ever been fined before.

“I believe that each member of the board found the conduct here to be rather egregious and repeated,” said Spada “It was not just a one-time incident and Mr. Maloney also asked for an advisory opinion before any of this occurred. The board gave an advisory opinion to him and he totally disregarded it on three occasions.”

It is unclear who made the allegations against Maloney — any county citizen has the right to do so. Of five original charges leveled, only three were found to be violation-worthy: voting on the new CSEA contract, which covered his wife, who works as an auditor in the Ulster County Comptroller’s Office; voting again later that month to approve that contract; and for appearing before the Laws & Rules Committee and “arguing for funding to be restored for the position of confidential secretary in the Office of the Comptroller, where his wife is employed.”

The board’s complaint notes that Maloney sought its advisory opinion in December of 2017 regarding which county matters he should recuse himself from due to his wife’s position. The board recommended at the time that “[he] recuse [himself] from any discussions and voting on any related matters pertaining to the Ulster County Comptroller’s Office, including those that concern funding.”

According to Maloney and other county legislators in Ulster’s tight-knit community, it’s commonplace, if not unavoidable, for legislators to have relatives affected by large-scale union contracts. They note that members of the legislature don’t negotiate the terms of the labor agreements, just vote to approve the final contracts.

“In regard to the facts, Joe Maloney voted on a contract that was negotiated by the county executive and the CSEA union and was unanimously supported by the 23-member legislature for the approximately 1000 employees,” wrote Legislator David Donaldson of Kingston in a letter to the editor.

“The fact that a legislator with a relative in the CSEA Union may vote on CSEA contracts is an exception for a conflict of interest under state law since they do not negotiate or take part in the negotiations seemed to be ignored by the [ethics] board. During my 26 years on the legislature, I witnessed various legislators with CSEA relatives voting on these routine contracts repeatedly with no impunity. It is part of their fiduciary responsibility.”

Donaldson was able to name half-dozen instances where legislators with family members working for the county voted on contracts that would affect those relations.

But ethics board chief Spada said this week any legislator who did vote on something involving a family member did the wrong thing. “Based upon the board’s view of ethics, those legislators should not be voting on matters that would affect funding for their spouses or a spouse,” he said. “In our decision in pages four to five, there’s a series of attorney general things that we cited that just repeatedly say that a legislator or elected official should not vote on any matter that would affect their spouse’s compensation or employment.”[pic]

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ETHICS REPORTER

February, 2019

Kentucky Legislative Ethics Commission

22 Mill Creek Park, Frankfort, Kentucky 40601-9230

Phone: (502) 573-2863



Lobbying spending at all-time high for odd-year session

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Newly-registered lobbying employers & terminations

Ethics & Lobbying News from around the U.S.

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