By KAREN FAHRION

Lobbyists and the law

Opponents of stricter accountability laws for lobbyists say that such laws would violate rights to privacy and free speech and would be costly to enforce. Proponents say that new laws are the only way to find out how lobbyists influence state government policy

WHO are the lobbyists? What interests do they represent? Who is spending and who isn't? How much money is involved? What groups wield the most financial clout?

These are touchy questions and until recently, it has been extremely difficult to answer them. Differing viewpoints on disclosure are at the root of the issue. Should lobbying expenditures be public knowledge because of their possible influence in our representative democracy? Or should lobbying expenditures be private information since lobbying is only an extension of the citizens' right to petition the government?

State legislatures have generally preferred to avoid the issue by copying each other's makeshift statutes just to get token laws on the books. Attempts to strengthen lobbyist registration has been detoured and dead-ended at every junction in the legislative process. Illinois is no exception.

Only once has the Illinois legislature taken a serious attitude toward lobbyist regulation. That was when the at-large elections of 1964 produced a crop of reform-minded legislators. At that time, the General Asembly enacted some partial reforms along with the current Lobbyist Registration Act which was passed in 1969.

The act replaced a weaker 1957 law passed when the Hodge scandal made lobbyist regulation an unavoidable issue. Since then, the General Asembly has considered approximately 30 bills to strengthen the statute, but most of this legislation has died in committee.

Apparently, the pressure of scandal or an exceptional internal consensus is required before further regulation of lobbyists will be seriously considered. And there is no doubt that the question is a thorny one. Constitutional rights are involved, as well as the distasteful possibility of creating more red tape and another government bureaucracy.

The debate

Opponents of stricter statutes say that such laws would violate lobbyists' rights to privacy and free speech. They further argue that the right to petition the government would not be properly protected under strict disclosure laws, and groups which participate in the political process would be penalized by overwhelming paperwork and fears of fines or bad publicity.

Opponents also point out that both lobbyists and legislators are more professional and ethical than ever before, and that lobbyists provide valuable information to legislators.

Proponents of stricter laws say that full disclosure of spending by the lobbyist and his employer is the only genuine mechanism for preventing governmental corruption or the appearance of corruption. They emphasize the public's right to know the source and size of special interest pressure applied to influence state policymakers who spend their tax dollars. Proponents agree that the lobbying profession has changed. But they point out that since a great deal of lobbying time is now spent with legislative staffs, commissions and state agency officials, the current disclosure law, which requires that lobbyists only report spending which directly benefits legislators, cannot possibly reveal the total amount of time expended and money spent to influence decisions in the legislative process.

Illinois laws

Critics of Illinois' present lobbying registration statute contend that, like the laws in most states, it does not require significant disclosure, is not enforced, and information gleaned from the lobbyist reports is not analyzed and presented to the legislature and public in a useful form. Recently compiled data tend to support these criticisms.

Under the Illinois Lobbyist Registration Act (Ill. Rev. Stat. 1977, Ch. 63, sec. 171), paid lobbyists must register each year with the Secretary of State's Index Division by filing a notarized statement containing their name and address and that of their employer along with a photo and a description of their legislative interests. The law further requires registered lobbyists to submit expenditure reports every April, July and January listing expenditures made to influence the legislative process. The person benefiting from each expenditure must also be listed.

Most Illinois lobbyists comply with the law. Their names, photos and

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expenditure reports are on file in the Secretary of State's Office. The reports are kept for three years, and are open to public inspection.

Unfortunately, the only knowledge to be gained from studying the lobbyist registration reports is the total number of registered lobbyists along with their names and the names of their employers. An examination of registration reports filed by Illinois lobbyists during the first 1979 reporting period, January 1 through April 20, reveals that there were 451 registered lobbyists working for 379 employers. A total of 392 lobbyists (87 percent) had only one employer or client.

Expenditure reports

But what Illinois lobbyists spent in that four-month period remains a mystery. Although expenditure reports should have been filed by all 451 lobbyists, only 403 (89 percent) were filed. And because of loopholes in the statute which exempt most common lobbying expenses from reporting, only 68 (15 percent) of the state's registered lobbyists reported any expenditures at all. The amounts reported by the 68 lobbyists totaled $24,606.74 with 40 (59 percent) reporting total spending between $50 and $1,000, and 22 lobbyists (32 percent) reporting spending less than $50. Only six lobbyists (9 percent) spent over $1,000.

Out of the 403 expenditure reports on file, 51 (13 percent) were filed as many as 60 days after the deadline, and 48 reports had not been filed by July 1, 1979 — the beginning filing date for the second reporting period. This is a fairly good record, considering that the current law lacks enforcement provisions. The Index Division is not required to penalize registered lobbyists who fail to file expenditure forms, and there are no fines or penalties for late or incomplete reports.

Of the state's 451 registered lobbyists, 383 did not have to report any spending under the present law because of loopholes and exemptions which shows that that statute actually exempts most lobbying expenditures. For example, the law does not require reporting of funds used for salaries of lobbyists and staff, or for research, advertising, travel and office space. This makes it impossible to determine amounts spent by individuals or organizations able to afford lobbyists.

Furthermore, although the statute specifically exempts almost a dozen types of common lobbying costs from reporting requirements, it provides no indication of what expenses should be reported or what a reportable expenditure might be. This appears to have confused some lobbyists; several of them filed incomplete reports and others reported expenses the statute clearly exempts, such as postal and secretarial costs.

Of the state's 451 registered lobbyists, 383 did not have to report any spending under the present law because of exemptions

Other weaknesses in the law are its failure to require lobbyists to list what was purchased with the reported expenditures, and to require lobbyists with multiple clients to list the employer benefiting from the reported expenditures. Thus there is no way to compare spending patterns or to determine which expenditures were made on behalf of which client. And although the Index Division publishes lists of registered lobbyists and their employers, it is not required to compile reported lobbyist expenditures. As a result, anyone seeking this information must search over 1,300 forms to compile and compare data.

Other states

The desire for better lobbying laws coupled with legislative refusal to enact comprehensive lobbying statutes has provoked voters in two states to take matters into their own hands. Washington voters in 1972 and California voters in 1974 used their power of initiative (by petition and referendum) to enact the strictest lobbying statutes the states have yet seen. Since then, at least 20 other states have completely rewritten or thoroughly revised their own lobbying statutes to include most of the stricter provisions.

Both the California and Washington statutes require not only lobbyists, but their employers as well, to register and provide detailed information on all expenditures benefiting: 1) state legislators, 2) elected or appointed officials, 3) state agencies, and 4) candidates for office and their families.

Both states require persons who are not lobbyists, but who spend over $250 in a month in California or over $200 a month in Washington on "grassroots" lobbying campaigns concerning state legislation to register and report all expenditures in detail. The California statute also prohibits lobbyists from making or arranging for campaign contributions and limits lobbyist spending to $10 per legislator per month.

In both states commissions were created to administer and enforce these laws, and a series of monetary fines and penalties were established for late, incomplete or missing reports.

Results on the reforms have been mixed. Policy analysts report that the new laws have not deterred political participation, as opponents predicted, nor have they stopped the flow of money through the state legislative process, as not-so-wealthy groups might have hoped. The laws have, however, upgraded compliance with registration and expenditure provisions, making it possible to identify who is spending money to influence state policymakers and to show how the money was spent.

How do lobbyists and their employers spend their money? According to the reports on file in California and Washington, they spent it on practically everyone involved in the legislative process. The reports detail lobbyist purchases of lunches, dinners and drinks for legislators, staffs and state agency employees, not to mention Christmas candles for legislative secretaries.

Employer spending reports include theater tickets for legislators and their wives, as well as air fare, lodging and related costs to transport legislators to corporate headquarters for meetings

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with officers or employees.

The reports also show employer expenditures to pay lobbyists and their staffs and to cover office, research and advertising costs. There is no doubt that all this information gives a much clearer picture than has previously been available of the amount of money needed to use lobbying services.

Both the California Fair Political Practices Commission (FPPC) and the Washington Public Disclosure Commission (PDC) publish reports showing how much money was spent by lobbyist employers by subject category. This makes it possible to compare employer spending — that of labor groups, for instance, as opposed to business groups — and to analyze spending by the different interests which hire lobbyists, such as education, health insurance, banking, etc.

Administrative commissions

Complaints about the stricter laws usually focus on the commissions created to administer and enforce them. Both the California and Washington commissions have added another expensive layer of bureaucracy to their state governments: the FPPC has a budget of over $1 million, and the PDC has a $746,000 budget. Yet after several years of operation, neither commission has come up with a complete and useful analysis of the reported expenditures.

Washington's PDC fails to report the total amount spent by all employers and instead only mentions the highest spenders, without a clue as to how much was reported by lower spending employers. The PDC has also failed to compile information filed by lobbyists, which means if one wants to know what they reported, hundreds of individual records must be searched, just as in Illinois.

The California FPPC report announces that employers spent $40 million on lobbying in 1975-76 and $50 million in 1977-78 without giving equal emphasis to the fact that the lobbyists themselves spent only $28,353 in 1975-76 and $32,288 in 1977-78. Furthermore, the figures on lobbyist spending in California cover only the state's 118 highest paid lobbyists in 1975-76 and its 145 highest paid lobbyists in 1977-78. Expenditures reported by the other 400-500 registered lobbyists are not mentioned in the report or compiled by the commission.

There is also no breakdown and comparison in the California report of how much of the well-publicized millions in employer spending went for salaries, office expenses, travel and research costs; although both lobbyists and employers had to report this information.

By failing to compile and analyze most of the reported information and by presenting partial information in a confusing manner, both commissions have neatly, if unintentionally, managed to weaken the purpose of the disclosure laws: to make lobbyist spending information readily available.

Both the California and Washington commissions have added another expensive layer of bureaucracy to their state governments

Both commissions have also been accused of inconsistency in their enforcement procedures. Some violations of the law have apparently gone unchallenged while others were well-publicized. Some fines for late or incomplete reports have been promptly collected, while others were left outstanding.

The Washington PDC has said it needs more money to effectively enforce the law. But critics of the California FPPC claim the agency has gone overboard on enforcement, and has hired investigators who keep files on politicians and use other police techniques, such as surveillance.

The question now becomes: Can Illinois profit from the California and Washington experiences — gaining the benefits of stricter laws without adding bureaucracy, agency politicking and paperwork? And, should the Illinois Lobbyist Registration Act be replaced, repealed or amended?

Lobby amendment

By carefully amending its present lobbying statute and using existing agencies to monitor report deadlines and contents, the General Assembly might improve the current law with little extra cost to the state. It might even do this without limiting lobbyist spending, bothering employers with paperwork, infringing on constitutionally protected rights or deterring political participation in the state legislative process.

Much of the present confusion over what must be reported could be eliminated by removing the expenditure exemptions so that not only funds spent directly on influencing legislation, but also funds used to employ a lobbyist and provide him with working facilities, could be compared.

This information could be obtained from lobbyists without requiring their employers to file, thus eliminating a major criticism of more comprehensive laws — that the added paperwork discourages participation in the legislative process.

Illinois lobbyists with more than one client should be required to file separate forms for each client served. This would end the present confusion over which expenditures benefited which client.

A workable law would ask lobbyists to report what was purchased with disclosed expenditures and indicate which expenditures were paid by the lobbyist or from the lobbyist's salary and which expenses were paid by the employer.

Fines and penalties should be assessed and collected by the Index Division for late or incomplete reports.

Finally, and perhaps most important, the reports should be compiled and published so that persons wishing to compare spending patterns could to so without searching thousands of registration and expenditure forms.

Karen Fahrion is a research associate for the Illinois Legislative Council where she has compiled a directory of registered lobbyists.

10/June 1980/Illinois Issues