Politics & Government

What $9 million gets you at the SC State House

AP

The billionaire Koch brothers spent more than $80,000 to lobby the S.C. legislature this year, trying to kill a proposal to increase the state’s gas tax.

They succeeded.

Others paid even more to keep a tab on S.C. legislators, sometimes without a easily visible goal.

The amount of money and manpower spent to lobby legislators makes one thing clear: Trying to influence the S.C. Legislature is a full-time job.

Dozens of lobbyists, registered with the state, made $9.3 million this year lobbying the state’s lawmakers on behalf of companies, interest groups and public entities. Those groups were hoping to get their preferred legislation passed or prevent legislation, which they viewed as harmful, from getting legislators’ stamp of approval.

(You can view the earnings of S.C. lobbyists and their clients, in The State’s online database.)

Legislators also depend on lobbyists, says South Carolina’s highest-paid lobbyist.

“Most legislators do not have huge staffs, so they depend on lobbyists to do research,” said Richard F. Davis of Capitol Consultants, the state’s highest-earning lobbyist this year, according to S.C. Ethics Commission filings.

“And they have to be factual and honest,” Davis added. “If you misrepresent a fact to a legislator, your lobbying career is in jeopardy because they have to be able to trust you.”

Perhaps more than ever, however, political spending is under the microscope of public scrutiny.

Major political candidates from the right and left – Republican Donald Trump and Democrat Bernie Sanders – have decried what they see as rot in government. Government, which once served the people and answered to them, now serves vested interests, producing crony capitalism, they say.

Top lobbyists – like Davis – make hundreds of thousands of dollars a year representing clients at the S.C. State House, according to disclosure reports that lobbyists are required to file with the State Ethics Commission twice a year.

The top-spending organizations that hire those lobbyists – called “principals” – dole out six figures a year to ensure they have a voice in the sausage-making process.

“They may have more than one” lobbyist, John Crangle, former state director for Common Cause and a volunteer lobbyist for that advocacy group, said of the groups that employ lobbyists. “They might have one to monitor the House and one to monitor the Senate, or so they can split committee assignments. That’s not uncommon.”

People think we wine and dine every night.

Lobbyist Richard F. Davis

A smaller entity, Crangle said, “may only have one (lobbyist), or they may have an employee do it, who goes and monitors a committee.”

Outgoing state Sen. Wes Hayes, R-York, said he often heard from lobbyists on both sides of an issue, whether it was when they spoke at a committee hearing, called a senator’s office or waited in the State House lobby, the place that gives lobbyists their name.

“It’s part of the (legislative) job,” Hayes said.

Davis says many people have a distorted view of what lobbyists do.

“My neighbors joke about it to me. ‘Oh, you’re a lobbyist,’ ” he said. “People think we wine and dine every night. It’s not like that.”

Besides acting as researchers, lobbyists have to convince a majority of the Legislature of the effects – good or bad – of a particular action.

“You have to build a coalition,” Davis said.

‘Defensive’ lobbying

Sometimes, lobbying groups focus on a single piece of legislation.

But often a company will spend large sums just to know what is going on in the Legislature and get in front of anything that might affect it.

Telecommunications giant AT&T paid $154,081 to 10 lobbyists in 2016 “on behalf of AT&T South Carolina and certain affiliated entities,” the company reported to the Ethics Commission at the end of May.

That made AT&T the top spender this year, even though no specific telecom-related bills were introduced in the legislative session that ended in June.

“There’s always a big presence (of lobbyists). But, sometimes, it’s defensive,” said Crangle of Common Cause. “It’s not intended for a specific bill.”

Hayes noticed the same defensive activity from his side of the dais. “A lot of them feel the need to have people monitor (the Legislature) or, by the time they find out about something, it will be too late.”

Davis said lobbyists or his staff – of about half a dozen – provide a wide spectrum of services to clients beyond pushing for specific bills to be passed.

“We advise them on legislative strategy or do a lot of research on a particular issue,” he said.

$82,124.68 Spent by Koch Companies and Americans for Prosperity opposing an increase in South Carolina’s gas tax.

Ashley Landess, president of the small-government, low-tax S.C. Policy Council advocacy group, says many companies lobby defensively to keep ahead of any movement in the Legislature.

“Especially with utilities, a lot of providers are at the mercy of the General Assembly,” she said. “So, there’s a lot that could have an impact on their business.”

Crangle said AT&T – which did not reply to a request for comment – likely would be interested in “any tax bill.”

“A lot of the tax burden has shifted from residential to commercial (property), and they are a big operation, a big physical presence with buildings and equipment,” he said.

Others lobbying the Legislature have a specific agenda.

Koch Companies Public Sector – an arm of the conservative Koch brothers’ industrial empire, which ranges from Brawny paper towels to carpet to cattle to chemicals to Dixie Cups to lumber to mining to refineries – spent $77,000 to lobby the S.C. legislature this year.

The Koch-affiliated Americans for Prosperity political group spent another $5,124.68 opposing an increase to the state’s gas tax that would have paid for road repairs.

“They were opposed to the efforts to raise the gas tax if it was not tied to an income tax cut,” Crangle said.

The proposed gas tax hike ultimately died in the state Senate after passing the S.C. House.

Bang for their buck

It’s not just private companies that have lobbyists. Public entities also want to make sure legislators respond to their needs.

The second largest spender this year, according to Ethics Commission filings, was the Municipal Association of South Carolina. The group, which represents 270 S.C. cities and towns, spent $138,860 to lobby this year’s session.

Deputy executive director Reba Campbell, a registered lobbyist who oversees the municipalities’ advocacy efforts at the State House, said her group works to educate lawmakers on the issues facing cities and towns. It also tries to “fight off” bills that would cause trouble for cities.

“What my job is and what I would like it to be are often different things,” Campbell said.

This year, the Municipal Association was focused on getting more money into the state budget’s local government fund, which has been underfunded for years. Before they left town in June, legislators increased the amount the state pays local governments by $10.6 million, a lobbying win that still left the fund $90 million below the level set in state law.

The Municipal Association also pushed legislation to standardize business licenses across different jurisdictions and make it easier to clear out blight.

Both proposals failed.

So do lobbyists really get those they represent a bang for their buck?

If you misrepresent a fact to a legislator, your lobbying career is in jeopardy.

Richard F. Davis

“You can’t judge it by saying we passed X number of bills, or we stopped X number,” said the Municipal Association’s Campbell. Instead, Campbell said she measures success or failure by how well the needs of S.C. cities are represented.

It is understandable that cities want to be at the table when the state is deciding how to spend its money, Crangle says. “If the state sneezes, local government catches pneumonia and dies.”

Campbell says the Municipal Association might have landed high on the lobbying list because the organization tries to be transparent in its legislative efforts.

“Some only count as lobbying what they do at the ropes (separating the State House lobby from the legislative chambers),” Campbell said. “But the bigger part of what we do is advocacy work, talking to legislators and informing them on different issues. We report that, too, but others may only disclose direct lobbying.”

The Policy Council’s Landess says that distinction creates a blind spot in lobbying disclosures.

Some groups “only count the time spent talking to legislators as lobbying,” Landess said. “That doesn’t represent a full payment.”

Landess says the full effects of lobbying are obscured by other issues the official lobbying reports leave out as well. For instance, her organization supports requiring legislators to disclose the sources of all their income. Some legislators, she adds, now do consulting work for the same groups that are lobbying their fellow lawmakers.

“You can have a legislator acting as a lobbyist,” she said, “and it’s off the books entirely.”

Lobbying the SC Legislature

A look at the top 5 lobbying groups this year and the state’s top 5 lobbyists:

Biggest spenders

AT&T Services: $154,081

Municipal Association of SC: $138,860

S.C. Hospital Association: $125,477

Duke Energy Carolinas: $113,632.34

S.C. Association for Justice: $111,541.33

Highest paid lobbyists

1. Richard F. Davis, Capitol Consultants: $773,686.11

Represents: 3M, Accenture, ACLU of South Carolina, Administrative Law Judge Division, ADP, Amazon, Assisted Living Federation of America, Behavioral Health Services, Century Aluminum, city of North Myrtle Beach, Cognosante, Colonial Life, Community Health Solutions, Compass Municipal Advisors, Consolidated Multiple Listing Service, DraftKings, FanDuel, Fresenius Medical Care, Home Builders Association, Horry-Georgetown Technical College, Kenneth Shuler Schools of Cosmetology, Kool Smiles, Labsource, McLeod Regional Medical Center, Molina Healthcare, North Myrtle Beach Chamber of Commerce, Palmetto Paper, Rave Mobile Safety, S.C. Alarm Association, S.C. Animal Legislative Coalition, S.C. Apartment Association, S.C. Area Association of Air Medical Services, S.C. Association of Cosmetology Schools, S.C. Captive Insurance Association, S.C. Dental Association, S.C. Education Association, S.C. Pharmacy Association, S.C. Recyclers & Dismantlers Association, S.C. State Museum Foundation, S.C. Vending Association, S.C. Collectors Association, Taser International, the Alliance for Responsible Consumer Legal Funding, Phoenix Center, town of Lexington, Tomlin Interest, Venice LLC, Vulcan Materials

2. Tony Denny: $223,063.65

Represents: Absolute Total Care, Altria Client Services, Belron U.S., Comcast, Ductile Iron Pipe Research Association, Duke Energy Carolinas, FGA Action, Intuition Solutions, Lynches River Contracting, Municipal Association of S.C., Mylan, S.C. State Museum Foundation, S.C. Council on Competitiveness, S.C. Orthopaedic Association, South Carolinians for Responsible Government, State Tax Credit Exchange, Timken Co., Timeshare Closing Services

3. Theodore D. Riley: $213,708.30

Represents: Allergan USA, American Cancer Society Cancer Action Network, city of Greenville, Education Management Corp., Gilead Sciences, the Governor’s School for the Arts Foundation, Pitsco, Roper St. Francis Healthcare, Save the Children, Save the Children Action Network, S.C. Alliance of Boys & Girls Clubs, S.C. Society of Health-System Pharmacists, S.C. Children’s Hospital Collaborative, S.C. College of Emergency Physicians, UHS of Delaware, WellCare of S.C.

4. Dwight F. Drake: $213,177.48

Represents: Advance America Cash Advance Centers, Aiken Regional Medical Centers, Altria Client Services, Apple, AT&T, BMW, HealthSouth Corporation, Healthy Carolina, Kiawah Resort Associates, MillerCoors, NWEA, SCRA, Securities Industry and Financial Markets Association, Tenet Healthcare Corp, the Regional Medical Center, Tidelands Georgetown Memorial Hospital, Wal-Mart, Western Union

5. Rexford P. Kneece: $207,793.62

Represents: American Express, Association of Community Pharmacists, CNU Online Holdings, Enterprise Holdings, Independent Consumer Finance, Motion Picture Association, National Association of Theatre Owners of N.C. and S.C., S.C. Propane Gas Association, Swisher International.

Lobbying groups also sometimes try to defeat legislators

Lobbying is only one way to influence legislators’ decisions.

Many of the same organizations that lobby the S.C. Legislature also get directly involved in political campaigns, either making donations to candidates or giving money to groups that oppose or support legislators.

“They have a tremendous ability to intimidate people,” John Crangle of the Common Cause good-government advocacy group said of the monied interests. “When they (legislators) see a financial avalanche that’s about to fall on them ... they know to back down or that money can be used against them in an election campaign.”

If lobbying efforts weren’t enough to halt an increase in the gas tax, “the Koch brothers and (Koch-backed) Americans for Prosperity can also make campaign expenditures,” Crangle said. “That’s how Wes Hayes got knocked out.”

In June, state Sen. Hayes, R-York, lost his bid for a seventh term in the Senate to a Republican primary challenger.

Hayes says the money spent against him came more from “national organizations, like the Club for Growth and Americans for Prosperity, that give to the governor and the leadership PACs.”

“The opposition to me was more philosophical, from the perception that I wasn’t conservative enough,” Hayes said.

In particular, Americans for Prosperity opposed a proposed gas tax increase. Hayes’ willingness to support that tax – to pay to repair the state’s crumbling roads – was the subject of robo-calls in his Upstate district during the primary, another way the power of money can make itself known to a member of the Legislature.

“If you know that, next, there might be robo-calls against you,” Hayes says, “it might cause you to have second thoughts.”

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