Lobbyist spending reported up to $74M

The multimillion-dollar business of influencing Tennessee’s Legislature saw increased payments to lobbyists and a jump in expenditures by their clients on wining and dining last year, according to new figures compiled by the Tennessee Ethics Commission.

On the other hand, the amount of money going to so-called “lobbying-related expenditures” — typically advertising or phone bank messages that urge residents to call their legislators to voice support or opposition to a pending bill — declined from 2014 levels.

Combining all types of spending in 2015 disclosed, as much as $74 million was spent on lobbying during the year, compared to maximum reported spending of $69.2 million in 2014. But it also could have been as little as $30 million in 2015, up from about $27 million in 2014.

The figures are not precise because of the way lobbyist-compensation and lobbying-related expenditures are reported. Under a law enacted in 2006, lobbyists and their employers must report such spending only within a ranges — for example, between $50,000 and $100,000 — and need not give an exact figure. One category is simply “less than $10,000.”

This is in contrast to some states that require precise reporting of all payments to lobbyists — a notion staunchly and successfully opposed by Tennessee lobbyists’ lobbying during the special session on reform of state ethics government ethics statutes decade ago that put the present law in place. The special session came a year after five legislators were charged with bribery-related offenses in an FBI investigation. Before then, there was no reporting requirement whatsoever for lobbyist spending.

the numbers

There were 569 lobbyists registered to represent 1,913 clients in Tennessee during 2015, according to Drew Rawlins, executive director of the Bureau of Ethics and Campaign Finance. In 2014, 557 lobbyists registered to represent 1,880 clients.

Lobbyist employers annually file two reports, covering six months each, and the second round of reports for 2015 was filed last month with tabulations completed last week by Ethics Commission staff. The following figures are combined totals from the two six-month reports for 2015:

Lobbyist compensation was somewhere between $25.8 million and $54.4 million. The range for 2014 was between $22.1 million and $48.7 million.

Lobbying-related expenditures were somewhere between $3.5 million and $19.6 million in 2015. The range for 2014 was from a minimum of $4.7 million to a maximum of $19.8 million.

Combining compensation and lobbying-related expenditures, the 2015 range is between a minimum of $29.3 million and a maximum of $73 million. The comparable figures for 2014: Between $26.8 million and $68.5 million.

Rawlins cautioned in an email, responding to an inquiry, that it is difficult to accurately assess whether the 2015 figures indicate a trend toward more money being paid to lobbyists and less on related expenditures, also known as “grassroots lobbying.”

“Some of it can have to do with them reporting by ranges so we don’t get an exact figure,” he said. “It’s hard to tell how much it went up or down.”

In contrast to the broad ranges in the above categories, lobbyist employers must also report the exact amount spent on each event they host with legislators as invited guests. The 2006 law prohibited lobbyists from paying for out-of-state travel, but permits what are called “in-state events” provided all legislators are invited and that they are disclosed.

In 2015, spending on such events — they range from providing coffee and doughnuts at morning gatherings to hear a lobbying pitch from some prominent person to fairly lavish affairs providing evening meals and alcoholic beverages for general conversations — followed a trend of increasing annually in recent years.

Last year, there were 106 such events with total spending of $1,194,169, according to Rawlins. That was up from the previous record $720,039 spent on in-state events in 2014.

Add the $1.2 million on event spending to the lobbyists’ compensation and lobbying-related expenditures and the overall 2015 lobbyist spending total reaches a maximum of more than $74 million. For comparison purposes, the state budget allocated a total of $41 million in taxpayer money to all operations of the Legislature for the current fiscal year, which ends June 30. A minor item in that total is the base salary of $20,884 for each lawmaker or about $2.76 million for all 132 legislators combined.

The interests

The $74 million figure, of course, does not include what some would consider indirect efforts to influence legislators. Many groups that hire lobbyists also operate political action committees that make contributions to legislators’ campaigns and many individuals working for corporations that employ lobbyists do so as well.

The Tennessee Chamber of Commerce and Industry had the most expensive in-state event last year, spending $77,480.

AT&T, which traditionally hosts a reception to mark the start of each legislative session, spent $43,360 on its event last year, second most expensive after the Chamber. AT&T has already reported its spending on the event that opened the 2016 session in January: $57,297. That could indicate another increase in 2016, though the session is still underway and events are still being held — with most other lobbyist employers not filing reports yet.

AT&T is also a traditional leader in payments of lobbyist compensation, sometimes reporting more than $1 million in a year in payments to lobbyists annually. In 2015, 16 lobbyists registered to represent the telecommunications company and it reported paying them somewhere between $400,000 and $500,000 in compensation and somewhere between $20,000 and $50,000 in lobbyist-related expenditures.

In years past, AT&T’s primary objectives in the Legislature have been passage of bills that substantially deregulated the telecommunications industry, a mission that was accomplished. In 2015 and 2016, a primary objective for the company’s lobbying has been to block proposals that would allow municipalities to provide broadband Internet service to rural areas. That also has been successful so far.

Americans for Prosperity, a national organization that presents itself as an advocate for free enterprise, has been a leader in lobbyist-related expenditures in Tennessee — spending a state record $1.1 million on direct mail, radio ads and events aimed at rallying voters to contact legislators in 2014 while spending relatively little on lobbyist payments.

AFP has been pushing repeal of the state’s Hall tax on investment income, for example, starting in 2014 and continuing today with radio ads and video advertising on the Internet, and some on newspaper websites. It has also launched an ad campaign against any increase in the state’s gas tax, which Gov. Bill Haslam has suggested is needed without offering any specific proposal.

Under state law, such groups relying on staff for direct lobbying — as AFP does, registering three people as lobbyists — are called upon to calculate the portion of their overall salary that is devoted to lobbying, then report that as compensation. In 2015, Americans for Prosperity-Tennessee reported spending less than $10,000 on compensation to three registered lobbyists in each of the two six-month reporting periods. But it reported spending somewhere between $250,000 and $350,000 on grassroots lobbying.

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