Democracy North Carolina
For Release: Monday, July 17, 2006 Contact: Bob Hall 919-489-1931
Special-Interest PACs Donate $7 Million to Legislators in 2004 Election
As the General Assembly grapples with whether to regulate the fund-raising activities of lobbyists, a new study finds that the house parties and other events hosted by lobbyists for legislators are rarely disclosed on campaign finance reports.
In a search of over 200,000 records covering contributions and expenditures from January 2003 to April 2006, researchers found only 11 cases of legislative candidates acknowledging the liquor, food, invitation letters, and other forms of in-kind donations that lobbyists provide to help fund-raising events. The goods and services come from lobbyists for pork producers, billboards, state lottery proponents and opponents, and education groups – but the total listed is only $5,005.
“The public gets hardly any information about how lobbyists move money into the political system in North Carolina,” said Bob Hall of Democracy North Carolina, a watchdog group that monitors campaign finance reports.
“Political observers know that lobbyists are hosting an increasing number of fund-raising events for legislators, caucus committees, and executive branch politicians. But you don’t see the lobbyists’ spending for those events listed, even though state law says such in-kind donations should be disclosed on the beneficiaries’ campaign finance report.”
Hall also said a proposed restriction on lobbyists giving more than a total of $4,000 per election to all legislative and Council of State candidates would have, by itself, “a small impact on their clout and even less impact on the money chase that dominates North Carolina politics today.”
Less than half the registered lobbyists in 2003-2004 made a donation to a state candidate or party over $100 during that period, Democracy North Carolina found. The top 10 donor-lobbyists gave a total of about $200,000 to legislative candidates, while the next 251 gave $274,000.
Contract lobbyists Dave Horne, Marsha Jones, Don Beason, and Zeb Alley topped the list.
The total of $450,000 from lobbyists to legislative candidates in the 2004 election pales next to the $7 million donated by special interest PACs (political action committees), Hall noted. Much of that PAC money is directed to candidates by lobbyists and feeds what he called an “unhealthy co-dependency between needy politicians and special interests in need of special favors.”
He recommended a “stick and carrot approach” to reduce the power of lobbyists in Raleigh –
(1) a ban on lobbyists soliciting money for legislators and Council of State officials, (2) a limit on their direct contributions, and (3) as an incentive, access to public campaign funds for the candidates who voluntarily reject special interest contributions and gather a large number of small donations for voters. Proposals for all three measures are still awaiting action in the General Assembly as part of a package of reforms adopted by a special study commission.
Highlights from the findings (see next two pages of tables):
· In-Kind Donations. Democracy North Carolina analyzed over 200,000 records from the State Board of Elections that cover contributions and expenditures for legislative candidates from January 2004 to mid-April 2006. The group found only 11 cases of in-kind donations attributed to lobbyists with a description that linked the activity to fund-raising. About 15 other cases had vague or no description. (See details on first table.)
The 11 in-kind contributions total $5,005 and came from such well-known contract lobbyists as Zeb Alley, Roger Bone, and Al Adams, from Theresa Kostrzewa, who represented beer and pork producers, and from Tony Adams of the NC Outdoor Advertising Association.
· Direct Donations. The analysis also shows that only about a dozen lobbyists would be impacted by a proposal (in the lobby reform bill on the House floor) to limit their total contributions to state-level politicians to $4,000 per election (primary, run-off, and general) or $12,000 in an election cycle.
The top 10 lobbyist-donors gave 44% of all the donations from lobbyists to legislative candidates in 2003-2004 – $200,000 of the $450,000 total. Then Co-Speaker Jim Black was the leading recipient of those funds, receiving $54,050, followed by Co-Speaker Richard Morgan ($47,470) and Senate President Pro Tem Marc Basnight ($33,550). Overall, Mike Easley was the top recipient of contributions from lobbyists in the 2004 election, with $103,000.
· Party Donations. A $4,000 limit can be circumvented, Hall said, because under the proposal lobbyists can still give unlimited amounts to the political parties for caucus committees that benefit the Democratic and Republican members of the General Assembly.
In fact, 16 lobbyists gave a total of $16,900 to the N.C. Democratic Executive Committee in early 2003 as the General Assembly was reconvening. Lobbyists donated a total of $69,165 to political party committees during the 2004 election.
· PAC Donations. Hall said the biggest way lobbyists funnel money into campaigns is through directing the contributions of their affiliated political action committees (PACs) to key allies. Millions of dollars are disbursed to nearly every member, with larger amounts going to the legislature’s top leaders and major committee chairs. Sen. Stan Bingham, Rep. Carolyn Justice, and Rep. William Current are among the only legislators who refuse PAC contributions.
In the 2004 election, Hall said PACs supplied $7 million of the $23 million raised by legislative candidates (not counting unidentified donations or money transferred between candidates).
Because limits typically have loopholes, Hall pointed out that any set of restrictions should be accompanied with incentives to make it possible for candidates to voluntarily reject donations from lobbyists and special-interest groups.
He said a bill for a pilot public financing program for legislatives candidates in four districts would be one place to begin. The bill (H-1851) was recommended by the House Select Committee on Ethics and Government Reform and could receive a floor vote later this week. Candidates would need to raise a large number of small donations from voters and refuse PAC donations in order to qualify for a competitive amount of “clean” campaign funding.
“One way or another, the money chase must be addressed,” said Hall. “It’s the pressure pushing politicians into mistakes and scandals. It will only get worse without some creative solutions.”
In-Kind Contributions for Fundraising Listed for Lobbyists on
Campaign Disclosure Reports, 1/2003 to 4/2006, In Date Order
11 Listed As Related to Fundraising for Legislative Candidates
Date Amount Donor/Lobbyist Candidate & Purposed Listed by Candidate
2003.12.04 150.00 ADAMS, AL ROSS, DEBORAH
BEVERAGES FOR FUNDRAISER
2004.04.20 485.00 WILLIAMS, HOPE YONGUE, DOUGLAS
FUNDRAISING RECEPTION (FOOD, BEVERAGES)
2004.05.03 500.00 BONE, ROGER SWINDELL, A B IV
BEVERAGES, PAPER PRODUCTS FOR FUNDRAISER
2004.05.06 500.00 ALLEY, ZEB WILKINS, W A (WINKIE) JR
FUNDRAISER AT HIS HOME FOR WILKINS
2004.07.23 350.00 ADAMS, TONY LAROQUE, STEPHEN
CAMPAIGN FUNDRAISING EVENT
2004.10.11 240.00 NEELY, CHARLES DALTON, WALTER H JR
FUNDRAISER DINNER
2005.10.06 563.98 ALLEY, ZEB WILKINS, W A (WINKIE) JR
FUNDRAISER-REFRESHMENTS
2005.11.04 1105.26 ADAMS, TONY LaRoque, Stephen
FUNDRAISER INVITATIONS
2005.11.17 325.00 KOSTRZEWA, THERESA LaRoque, Stephen
FUNDRAISER
2006.01.18 126.00 MCDOWELL, TIMOTHY YONGUE, DOUGLAS
POSTAGE/FUNDRAISER INVITATIONS
2006.02.08 660.36 WILLIAMS, HOPE YONGUE, DOUGLAS
FUNDRAISING REFRESHMENTS, DECOR, ETC
Total $5,005.60
Sample Without Reference to Fundraising These may or may not be related to fundraising
2003.09.04 350.00 BONE, ROGER MORGAN, RICHARD T
[NO PURPOSE LISTED]
2003.12.11 330.00 WILLIAMS, HOPE GRADY, ROBERT
IN-KIND CONTRIBUTION/FOOD
2004.04.01 342.69 PORTER, TRAVIS BLACK, JIM
2004.09.22 480.00 BODE, JOHN STEVENS, RICHARD Y
FOOD AND BEVERAGE
2005.01.25 4000.00 ADAMS, TONY BASNIGHT, MARC
40 SIGNED, LTD ED. ART PRINTS @$100 EACH
2005.11.10 210.00 TILSON, HUGH STEVENS, RICHARD Y
2006.02.14 47.96 GUNNELLS, DURWARD SWINDELL, A B IV
BUTCH DONATION-SOFT DRINKS
2006.03.02 200.00 REED, MELISSA RIDPATH, EDWARD A
HOUSE PARTY FOOD AND DRINK
Prepared by Democracy North Carolina, July 2006. Based on a review of campaign contribution reports processed by the State Board of Elections for 2003-2004 election cycle and part of 2005-2006 cycle.
Contributions from Lobbyists in 2003-2004 Election Cycle
Lobbyist/Contributor To General To Council To
Assembly of State Political TOTAL
Candidates Candidates Parties
HORNE, B DAVIS JR $33,750 $ 2,750 $ 0 $36,500
JONES, MARSHA 27,000 0 2,500 29,500
BEASON, DON 25,750 500 3,000 29,250
ALLEY, ZEB D 19,850 6,900 3,200 29,950
EUDY, KENNETH L 18,750 12,250 2,000 33,000
CLOUD, RANDOLPH 18,500 10,800 5,350 34,650
BODE, JOHN 16,000 13,000 0 29,000
WEBSTER, WILLIAM IV 15,900 0 0 15,900
GRECZYN, ROBERT JR 13,500 7,000 0 20,500
BUTLER, PAUL JR 12,200 500 0 12,700
BONE, ROGER 12,100 2,500 300 14,900
KAPLAN, HARRISON 11,785 500 1,350 13,635
PREYER, JANE B 10,050 3,000 3,600 16,650
ADAMS, TONY 9,100 0 0 9,100
COPE, DANA S 5,750 6,000 500 12,250
PORTER, W TRAVIS 5,750 3,000 750 9,500
EDMISTEN, RUFUS L 5,650 3,735 1,750 11,135
KAYLOR, ROBERT W 5,550 500 0 6,050
DORSETT, JENNIE 5,500 0 250 5,750
PETERSON, JOHN H 4,750 0 1,500 6,250
KILLIAN, LEON 4,600 2,750 300 7,650
MISKEW, DOUGLAS P 4,250 0 1,500 5,750
MACFADYEN, AL 4,025 6,500 1,150 11,675
261 OTHER LOBBYISTS
GIVING OVER $100 $159,137 $212,403 $40,165 $411,705
TOTALS $449,197 $294,588 $69,165 $812,950
CANDIDATE AMOUNT
EASLEY, MIKE $103,000
BLACK, JIM 54,050
COOPER, ROY 49,775
MORGAN, RICHARD T 47,470
NC DEMOCRATIC EXEC COMM 40,475
BASNIGHT, MARC 33,550
PERDUE, BEVERLY M 28,550
BALLANTINE, PATRICK J 27,878
MOORE, RICHARD H 25,050
MINER, DAVID 19,550
RAND, TONY 19,450
SMITH, FRED 18,975
CULPEPPER, BILL 15,320
BRUBAKER, HAROLD J 12,200
HOYLE, DAVID W 11,950
COBB, W BRITT JR 11,440
COBEY, WILLIAM W JR 10,200
NC REPUBLICAN EXEC COMM 10,000
STEVENS, RICHARD Y 9,500
GIBSON, PRYOR 7,950