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Mobtown Beat

Wait in the Lobby

Budget Gap Could Hamper Ethics Reform

By Molly Rath | Posted 2/21/2001

At long last, the scandal-scarred General Assembly is poised to pass lobbying- reform legislation that even one of the legislature's leading critics characterizes as "the real deal." But while the bill puts teeth into efforts to curb influence-peddling in Annapolis, the legislation is only as good as the state's ability to enforce it--and that ability remains in doubt. The measure forces a tiny, paper-pushing state agency into the unfamiliar role of ethics cop, and at the moment the state isn't ponying up the money for the transition.

On Feb. 1, the House of Delegates approved House Bill 2, which would ratchet up penalties for ethical violations and give the State Ethics Commission much broader authority to act against lunch-buying lobbyists. Any day now, the state Senate is expected to follow suit. But the nearly $200,000 the legislature's fiscal experts estimate the Ethics Commission will need to enforce the tough new rules isn't included in the pending state budget.

"This [bill] is the real deal," says Kathleen Skullney, former executive director of Common Cause-Maryland, which has long pushed for lobbying reform. "The catch is enforcement [by] the State Ethics Commission, and if they don't get the funding to implement the law it will be meaningless. . . . If a referee never calls a foul, then what good does it do to say that's a foul?"

HB 2 and its Senate counterpart, SB 75, incorporate almost verbatim the suggestions of the Study Commission on Lobbyist Ethics, formed by the legislature in 1999 in the wake of a series of high-profile scandals that led to the expulsion of a state senator, the resignation of a delegate, the imprisonment of two big-money State House lobbyists in separate fraud cases--and widespread public concern that lobbyists, via campaign contributions, gifts, business relationships, and other mechanisms, unduly influence legislators to act favorably toward their clients.

The bill includes stricter requirements for disclosure of campaign donations and other financial links between lobbyists and legislators, and lays out a much more specific roster of prohibited activities, including those that led to the fraud convictions of top lobbyists Bruce Bereano in 1994 and Gerard Evans last year. It increases both administrative and criminal fines for violations (the latter as much as tenfold) and--perhaps the key provision--authorizes the Ethics Commission to suspend or even revoke violators' lobbying licenses. Currently, there is no mechanism for preventing scofflaw lobbyists from conducting business as usual; Bereano's ability to continue plying his trade even while doing time in a halfway house fueled criticism over lax ethical oversight.

"I think the legislation proposed by the [Study] Commission [on Lobbyist Ethics] is very comprehensive and addresses in a significant way all the major problems we were presented," says Donald Robertson, the panel's chair and a former Democratic delegate from Montgomery County.

The lion's share of responsibility for enforcing this sea change in Annapolis culture would fall to the State Ethics Commission, which currently operates out of a Towson office with a staff of seven and an annual budget of approximately $600,000. The bill's demands, which include hiring a staff attorney, would raise the agency's operating costs by $183,500 in fiscal year 2002--money not included in Gov. Parris Glendening's proposed budget--and about $150,000 a year for the next four years, according to the legislature's Department of Fiscal Services.

Glendening spokesperson Raquel Guillory says prospects for funding the bill "still remain to be seen." In late March or early April the governor will review projects not included in his original spending plan and decide whether to fund them through his supplemental budget.

While the money's absence from the budget alarms Skullney, she says she is "optimistic" that legislators will find the cash: "Supporters of the bill clearly understand the need to fund it." David Brewster, legislative aide to bill co-sponsor Sen. Brian Frosh (D-Montgomery), also expects the funding to come through, saying he "wouldn't see it as a hassle" to find the $183,500 in the $23 billion state budget.

With or without the funding, the new law would thrust an entirely new role on the Ethics Commission, which is currently empowered only to hold administrative hearings in response to allegations of ethical violations by lobbyists and to petition the courts to levy any discipline. The extent to which an agency that has long existed largely to sift through thousands of disclosure reports a year can flex its new muscle to impose fines and put lobbyists out of work remains the biggest unknown about the bill.

Commission chairperson John O'Donnell could not be reached for comment.

Even if the funding materializes and the Ethics Commission cracks down, some critics contend the bill's tough new language only goes so far to curtail the cozy relationships between lobbyists and legislators, and the special treatment afforded certain powerful parties under existing ethics law. There will still be junkets for elected officials at taxpayers' expense; those lobbying for the state's biggest handouts will still be excluded from strict oversight requirements; and special interests will still vie for--and get--special treatment.

For example, while the bill requires lobbyists to disclose the invitees whenever they schmooze legislators in Annapolis, it is silent on out-of-town entertaining, a practice that raised eyebrows in August when Bereano hosted a four-hour cruise during a five-day trip some 40 legislators took to Biloxi, Miss. Maryland taxpayers, who paid for legislators to travel to Biloxi, still don't know which ones attended Bereano's cruise.

Also, Skullney is critical of the last-minute scuttling of a provision prohibiting lobbyists from sitting on state boards or commissions, a move spurred by an outcry in the nonprofit community. Nonprofit organizations, which often have small staffs, contended that they shouldn't have to chose between lobbying and serving on, say, a commission seeking to curb sprawl or end lead-paint poisoning.

"They're trying to get at corporate big-money problems and end up hitting the little guy the worst," says Terry Harris, president of the nonprofit environmental group the Cleanup Coalition. "It's a classic case of legislators not paying attention to unintended consequences."

Legislators apparently agreed, amending the provision to apply only where "a conflict is reasonably expected to occur." But Skullney views the change ominously.

"Here again we have an example of wishy-washy language diluting a provision on behalf of a particular set of special interests," she says. "Is it a big deal in the overall scheme of things? Not necessarily. But it seems to me you must be willing to . . . subject yourself to the same stringent rules you want others to be subjected to. In the United States we call that equal protection of the law. We just never quite get there all the way."

Perhaps the biggest crack in the bill, however, is one on which Harris and Skullney agree: the exemption from the measure's controls on lobbyists representing nonprofit, independent universities and colleges, churches and religious organizations, and local governments.

"When you're talking about the kinds of handouts that the jurisdictions are looking for--a $23 billion budget and the goody packets involved in that--the jurisdictions pay people to lobby. And not only do the taxpayers not see that sight, they don't see who does it and the amount of taxpayer money spent to do it," Skullney says. "There is a very big contingent of [local government] special interests in Annapolis, and they're exempt."

Many states subject local jurisdictions to the same lobbying regulations as private corporations, but Robertson says his panel decided not to touch Maryland's government exemption, pending further study.

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