Temporary Ban on Taxpayer-Funded Lobbying Passes

July 21, 2011

Investigative Reports

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The NerveIn what could be a first, a measure designed to put an end to the dubious practice of state entities using taxpayer dollars to lobby the General Assembly has become law.

Rep. Eric Bedingfield, R-Greenville, sponsored the crackdown on taxpayer-funded lobbying as a proviso in the state budget for the current 2011-12 fiscal year.

“The way I look at it is if they’re an agency of the state they should come speak to the representatives directly,” Bedingfield says. “There shouldn’t be a (lobbyist) middleman.”

Saving South Carolina taxpayers a little more than $600,000, the proviso targets both contract lobbying and influence peddling at the State House by employees of state entities.

The proviso (90.20) might be the first of its kind.

A search of state budgets archived on the Legislature’s website dating back to the 1996-97 fiscal year shows that nothing like the proviso has passed in at least 15 years. It is unclear whether something akin to it was on the books previously.

Bedingfield says numerous efforts to ban state-funded lobbying in Columbia were made in recent years, but to no avail. “I think this is the first time it’s ever made it through both bodies,” he says of the proviso clearing the House and the Senate.

The lawmaker says he is ecstatic about it passing.

To what does Bedingfield attribute the successful opposition to nixing taxpayer-funded lobbying in previous years? “It’s difficult for me to say,” he offers. “I think it comes from many, many places.”

One of those places, Bedingfield says, is a revolving door that legislators and other state government types pass through en route to becoming lobbyists.

Exemplifying both the support and the opposition to banning taxpayer-funded lobbying in state government, no fewer than four bills to that effect were filed in this year’s legislative session – and not one of them so much as even received a hearing.

The bills would do what the proviso does not – make lobbying by agents of the state on taxpayers’ time and dime permanently illegal.

By contrast, provisos expire after one year unless renewed.

“I am certainly for making it permanent law,” Bedingfield says of the prohibition he ushered through the Legislature this year.

Nearly a dozen states, including North Carolina and Texas, have deemed taxpayer-funded lobbying objectionable enough to restrict it in one way or another. The National Conference of State Legislatures has the lowdown on that.

South Carolina actually is among these states. Former Gov. Mark Sanford signed an executive order at the beginning of his administration banning Cabinet agencies from hiring independent contractors to lobby lawmakers.

The order remains in effect, but it does not apply to a vast swath of state government that exists outside the purview of the governor’s Cabinet.

Similarly, while Bedingfield’s proviso does not go all the way toward eliminating state-funded lobbying for good, it nevertheless takes South Carolina a giant leap in that direction.

The clampdown:

  • returns $604,000 to the general fund, a mainstay of the state’s operating revenue, that a bevy of agencies and state-supported colleges and universities would otherwise spend on lobbying this year;
  • forbids state entities from using general fund money to contract with outside lobbying firms;
  • and bars state entities from spending general fund money to compensate any of their employees who lobby on their behalf.

Of the $600,000-plus in savings, the biggest chunks come from the Medical University of South Carolina (more than $80,000), the Judicial Department (nearly $60,000), Tri-County Technical College (about $55,000), the University of South Carolina ($53,000 and change) and Clemson University (more than $45,000).

The way that works is, the institutions listed in the proviso must transfer designated amounts of their appropriations to the general fund; the idea being that, rather than spend that money on lobbying, the entities send it back to the state’s coffers.

To enforce the no-general-funds-for-lobbying rule, the proviso directs the S.C. Ethics Commission to require state entities that engage in lobbying to certify that they are not using general funds to do so.

The Ethics Commission, which governs lobbying activity in the state, has set up an online certification process to implement that part of the proviso.

However, in addition to lapsing at the end of the year unless it is reauthorized, the proviso suffers from a couple of other weaknesses.

For one thing, while it puts the kibosh on spending general fund dollars to lobby, it does not explicitly close the door on using federal and “other” funds for that purpose. “Other” funds typically are fees and fines.

In addition, the proviso does not cover certain arms of state government that employ lobbyists, including:

  • the S.C. Research Authority, which is a state-created and state-controlled technology development and real estate management company;
  • the S.C. Public Service Authority, which operates the state-owned utility Santee Cooper;
  • and the Patriots Point Development Authority, which runs a naval museum in Charleston.

On a related note, the Senate passed a budget proviso this year designed to ban state-funded lobbying by managed care organizations that contract with the S.C. Department of Health and Human Services to provide Medicaid services.

The proviso targeted state funding that the managed care organizations receive for administrative costs.

But that proviso, 21.51, was deleted when House and Senate negotiators worked out a final version of the budget. Senate President Pro Tempore Glenn McConnell, R-Charleston, sponsored proviso 21.51.

As for a comprehensive, permanent elimination of taxpayer-funded lobbying at the State House, the four bills in the Legislature hold perhaps the best hope. Lawmakers can take them up when the General Assembly is scheduled to reconvene in January.

Two of the proposals are in the House (H. 3175 and H. 4081); the other two in the Senate (S. 259 and S. 82.)

A pair of legislators who have helped lead the fight to outlaw lobbying on state taxpayers’ time and dime are chief sponsors of two of the bills: Republican Rep. Jim Merrill of Berkeley (H. 3175) and Democratic Sen. Vincent Sheheen of Kershaw (S. 259).

All four bills are pending in the chambers’ respective Judiciary committees.

In an interview for an earlier story by The Nerve, House Judiciary Chairman Jim Harrison, R-Richland, said he was committed to making the issue a priority in 2012 if a bill didn’t pass this year.

Reach Ward at (803) 254-4411 or eric@thenerve.org.