Legislative Action

Ethics reform:
lobbyists, legislators and public officials

By WEN HUANG

In January, Rep. David Hultgren (R-94, Monmouth) mailed more than 25,000 surveys to his constituents, asking for their needs and concerns. The results were astonishing: An overwhelming majority responded that misconduct and corruption in state government were their top concerns.

Numerous scandals, racking different levels of government in recent years, have eroded confidence in public officials: the Keating 5 hearings at the national level, the Greylord scandal in Cook County Circuit Court and the bribery indictments of several Chicago 1st Ward figures in the federal Gambat probe.

The public concerns have prompted the introduction of many ethics bills in the General Assembly this year, more than 25 in the House and seven in the Senate. From one-page bill limiting gifts to legislators to the 86-page Illinois Legislative Ethics Act, the bills would regulate lobbyist disclosure, set an ethics code for legislators and state officials, and reform campaign finance.

Despite the crowded the agenda facing the legislators this year, sponsors for these bills believe that at least some ethics bills will get out of the House by June 30.

One target for reformers is the Illinois Lobbyist Registration Act, whose failings have been criticized by both legislators and the public interest group. Common Cause/Illinois. In its 1991 report, "Desperately Seeking Disclosure," Common Cause reveals that of 869 organizations that employed lobbyists, only 69 registered with the secretary of state. Among those registered, only 13 organizations reported any expenditures separately from their lobbyists. Common Cause says, for example, that the Illinois Leadership Coalition reported employing at least nine lobbyists to pursue legislative action on Chicago's McCormick Place convention facility/stadium project, nicknamed "McDome," but listed no lobbying expenditures.

Rep. Hultgren and Rep. Barbara Flynn Currie (D-26, Chicago) say current law requires lobbyists to reveal little of what they actually spend and requires no audit of the forms. "It strikes me as unconscionable if the legislature does not decide this year to finally be a little stronger minded about our lobbyist disclosure laws than we have been in the past few years," Currie says.

The series of reports by Common Cause caught the attention of Gov. Jim Edgar, who has called for "sweeping new disclosure by lobbyists" and changes in ethics requirements for state employees. In his State of the State address Edgar said, "We must insure there is no doubt that state officials are acting on the behalf of all Illinoisans, and not other special interests."

Edgar's proposals to toughen the Lobbyist Registration Act are in S.B. 1369. Initiated by the Board of Ethics, which falls under the governor, the bill would require lobbyists to report all expenditures over $25 on legislators and government officials, including gifts, political contributions and special fundraising activities. John Manske, executive director of Common Cause, describes the bill as "very moderate" but says it shows the governor's commitment to reform.

At the immoderate extreme, Rep. John Matijevich (D-61, Waukegan), proposes in H.B. 326 to limit what lobbyists can do. The bill would stipulate that no lobbyist may furnish legislators and government officials with lodging, transportation, meals or any other thing of value except for a campaign contribution when the legislature is not in session.

Matijevich's bill is modeled after strict Wisconsin lobbyist regulation law. Recognizing that compromise will be required, Matijevich opted to start with a strong measure. "It is better to give the legislators and the committee something strong and then compromise downward from that. On the other hand, if Wisconsin can do that, why can't we?" he says.

Common Cause's Manske, a former Wisconsin legislator, says that the new Wisconsin law caused lots of moans and groans from both the Wisconsin state legislators and lobbyists. He believes it will be difficult to get Illinois legislators to buy the tougher propositions of the Matijevich bill.

Two years ago, Manske had worked unsuccessfully with Rep. Currie for passage of H.B. 1704, which would have expanded the Illinois Lobbyist Registration Act to cover lobbying for and against any administrative actions. It would have required lobbyists to report their expenditures on a quarterly basis instead of three times per year, with a brief description of the lobbyists' position on general matters for which they sought legislative or administrative action. The bill would also have prohibited state officials and employees from lobbying state government for one year after leaving the office. The failure of H.B. 1704 in 1989 prompted Manske to become more practical in 1991: "We have to open the door and to start somewhere."

Numerous scandals, racking different levels of government in recent years, have eroded confidence in public officials

Still other lobbyist reform proposals are similarly moderate. The sponsors of similar House and Senate bills claim their proposals for lobbyist reform are a reasonable compromise between the tough Matijevich bill and the weak current law. Though not identical, both bills would require more detailed reporting by lobbyists and regular review of their disclosure reports. Reps. Hultgren and Currie and nine other

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Legislative Action

House members are sponsors of H.B. 898. Sens. John Cullerton (D-4, Chicago) and Arthur Berman (D-2, Chicago) are sponsors of S.B. 215.

Currie explains the intent of her proposal, "My bill does not say that people may not receive freebies or whatever and that lobbyists should be limited in what they spend in influencing policy outcomes, but it does say that the public has the right to know who is spending what in influencing executive and administrative decisions." She says that the sponsors are amenable to changes and will consider any reasonable response so that some consensus can be achieved.

Sen. Cullerton believes not all lobbyists will hate his bill: "The lobbyists who read the bill will find something they actually like." S.B. 215 would raise the amount requiring itemized reporting to $100 from the $25 established in 1974, and it would require fewer reports from lobbyists.

In brief, these bills would require:

• Every lobbyist to file two reports annually (between the first and 20th day of January and July) on all lobbying expenditures, thus reducing from three to two the reports filed with the secretary of state.)

• Lobbyists' spending reported under five categories, with itemized reporting of any direct expenditure spent on the legislators (over $25 in H.B. 898 and over $100 in S.B. 215).

• Notification by lobbyists of persons named in their disclosure reports as having received items from the lobbyists and the value of the items.

• Imposition of a $25 penalty for reports filed late, after a 10-day grace period.

Whether lobbyists love or hate reforms, some question the validity of the Common Cause reports. One longtime lobbyist explains: "Their reports seem to imply that there is something unwholesome and illicit going on and that politicians are being dined and wined. If there was this criminality, the FBI would have been here a long time ago. To the public, politics itself carries the connotation of dirtiness, and Common Cause uses their reports to grab media attention and throws gasoline into the fire."

More tempered criticism comes from Steve Brown, press secretary to House Speaker Michael J. Madigan (D-30, Chicago). Brown says Common Cause is well-intentioned, but its interpretation and use of data needs examination: "The media is reporting what they find out. They are listening to groups like Common Cause which has the de facto reputation of being arbiter of what is right and what is wrong, and I just think that it requires a fairly detailed examination of what is happening."

Others fear that stronger lobbyist regulation laws could limit access to the legislative process. Rep. John Dunn (D-101, Decatur), chairman of the Judiciary I Committee, says that enacting stricter laws and requiring intricate record keeping will

Ethics reform in other states In 1988, a scandal involving a lobby group's illegal campaign contributions spurred debate about Wisconsin's comprehensive lobby, ethics and campaign finance code. In the aftermath of the scandal, Gov. Tommy G. Thompson appointed a commission to recommend changes in the state's laws and in 1990, the governor signed the ethics reform and lobbying regulation legislation. The new law merged the lobby regulation function of the secretary of state's office with the state ethics board, according to a September 1990 report by Common Cause entitled "Conflict-of-interest legislation in the states." Since 1972, more than 32 states have enacted laws that require financial disclosure by statewide elected officials, and 23 states have revolving door provisions prohibiting former public officials from representing clients before public agencies. In 1990, Massachusetts Gov. Michael Dukakis introduced a code of conduct for state employees that places strict limits on the acceptance of gifts, limits buying or leasing of property formerly owned by the government and provided additional assistance to the state's ethics commission to implement and enforce these new provisions. In June 1990, California voters passed with 63 percent of the vote a comprehensive ethics reform ballot measure (Proposition 112). The measure will ban honoraria and limit gifts to legislators to an aggregate amount of $250 per single source per year. The provision will also prohibit former lawmakers and state officials from lobbying their agency for one year. California Citizen Compensation will be created to set salaries for state officials. Unlimited campaign spending touched off a series of campaign finance reforms in more than 40 states. In Alabama, Alaska and Florida, the state government imposes limits on direct corporate contributions, while New Hampshire and 20 other states totally prohibit direct corporate contributions. An Arkansas statute limits an individual contributor to $1,500 per election. In Hawaii individuals can donate only $2,000 in a primary or general election. In Michigan, three gubernatorial elections have been held under a public financing system — the tax check-off system, which allows taxpayers to designate a portion of their tax liability for distribution to political parties and candidates. In the primary, candidates who raise at least $50,000 in contributions of $100 or less qualify for a match of $1 for each $2 in contributions under $100. Candidates who accept public money are bound by an expenditure limit of $1.5 million for the election cycle. In the general election, candidates receive a flat grant of $750,000, or 75 percent of the expenditure ceiling. Contributions are limited to $1,700 for statewide races, $450 for Senate races, and $250 for House races. In tax year 1988, the most recent year for which data are available, 13.5 percent of all taxpayers participated in the state's tax check-off system, which collected $1,558,000. In 1989, five gubernatorial candidates qualified for the maximum public funding for their primary campaign. One of the toughest state lobbying laws is the California Political Reform Act, known as Proposition 9. It includes: • Detailed monthly expenditure reports by lobbyists and their employers while the legislature is in session and quarterly reports at other times. • Coverage of persons and groups that attempt to influence regulatory actions by state agencies as well as actions by the state legislators. • A $10 per month limit on how much a lobbyist may spend on any public official. • Tough penalties enforced by an independent, bipartisan fair political practices commission. The constitutionality of Proposition 9 was affirmed in 1979 by the California Supreme Court. Wen Huang

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increase the costs of lobbying. Well-to-do organizations and well-to-do lobbyists are able to absorb the time and overhead of the additional record keeping equirement by hiring additional accountants; organizations that want to advance a cause, but can barely afford a lobbyist, might be precluded from lobbying activities. The result, says Dunn: "We shut the doors of the legislative process to a segment of society."

Any restriction on lobbying has another effect: limits on the right of individuals and organizations to express themselves in front of the legislature, since lobbyists by definition are representing groups of citizens or interests. Says Dunn, "I want to see changes made, but we ought to be careful not to throw the baby out with the bath water."

In order to keep the baby, on April 24, Dunn's House Judiciary 1 subcommittee voted out H.B. 898 as a vehicle bill. Dunn hopes to hold committee hearings during the summer to get more input from individuals and organizations in a search for a piece of legislation that can, on the one hand, curb the likelihood of excessive lobbyist influence and, on the other, avoid overburdening small lobbyists.

In order to be certain the bath water is temperate enough, both the House and the Senate have created judiciary committee subcommittees to deal not only with these lobbyist disclosure bills but also with others on ethics of government officials and employees, mainly through amending the Illinois Governmental Ethics Act.

Dunn's committee passed another vehicle bill to handle proposed revisions to the Governmental Ethics Act. H.B. 1428, sponsored by Rep. Grace Mary Stern (D-58 Highland Park), would exempt teachers employed by a school district or a community college district from filing the usual ecomomic interests statements required of certain state employees. But the bill is intended to incorporate a number of proposed revisions to the Illinois Governmental Ethics Act.

Those revisions would come from agreements to reforms put forth in separate bills, namely:

• H.B. 1328, which would put restraints on the use of a public position to acquire benefits for business or social acquaintances.

• H.B. 1329, which would prohibit any public officials from voting on a question when the official has an economic interest or potential economic benefit.

• H.B. 1331, which would apply to elected state and local officials the $100 annual gift limit from any person known to be interested in governmental action by the official.

Other possible candidates for inclusion in this governmental ethics vehicle bill are H.B. 2412 by Hultgren and the 86-page Matijevich bill (H.B. 1663). Both have provisions that would stipulate that legislators, state officials and state employees are prohibited from:

• Authorizing any payment from his or her office allowance to his or her family members or relatives.

• Using his or her position to assist a relative in securing employment or a contract.

• Soliciting or accepting any additional compensation for performance of duties.

Any restriction on lobbying has another effect: limits on the rights of individuals and organizations to express themselves in front of the legislature

• Engaging in or permiting any unauthorized use of state property (including by family members).

• Using campaign funds for personal economic benefit, to supplement personal income or enhance personal life style.

Further provisions prohibit legislative candidates from borrowing from their campaign funds and from loaning them to any other person or group, and they require that all post-election contributions be treated as illegal gratuities. Other provisions would prohibit any registered lobbyist from serving as a legislative campaign manager or director and from hosting any legislative candidate's fundraising event.

Other provisions that could be mixed into the vehicle's bath water include:

• For legislators and their assistants —detailed disclosure on the sources and amounts of outside income received if their objectivity and ability to exercise independent judgment in the public interests has been challenged.

• For legislators — an eight-member Legislative Ethics Board to advise them on ethics questions.

Gov. Edgar's ethics proposals concentrate on state employee ethics and are similar to Gov. James R. Thompson's Executive Order No. 3 of 1977, which requires more than 900 appointees under the governor to disclose certain personal finances in the hope of identifying conflicts of interest. Carried in the Senate by Sen. Carl Hawkinson (R-47, Peoria), Edgar's proposal is in S.B. 1368. Hawkinson says the bill restructures the statements of economic interests required of certain state and local government employees and no longer ties the requirement to employee income. John Larsen, Board of Ethics chairman, says Gov. Edgar hopes to upgrade some of the disclosure standards both in the executive order and in the Illinois Govenmental Ethics Act.

Campaign contributions raise many questions about government ethics. The election committees in both chambers considered but postponed action on campaign reform packages.

H.B. 1010 revived the perennial issue of creating a Gubernatorial Elections Finance Act. It would set limits on contribution amounts that individuals, companies and organizations could make to gubernatorial candidates. At the same time, it would provide public matching campaign funds for qualifying gubernatorial candidates via a voluntary income tax check-off similar to the federal system for presidential campaign funding.

H.B. 1611 would have amended the election code to prohibit any candidates for state senator or representative from transferring during any 12-month period more than $500 in cash or in-kind contributions valued at more than $500 to any state political committee of another candidate.

Despite the mounting public pressure to do something on government ethics, issues like redistricting, the budget and the extension of the two-year temporary surtax are likely to overshadow ethics bills this year. Reps. Currie, Hultgren and Matijevich believe some ethics proposals may survive. Voters, like those that Hultgren surveyed, will be watching.

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