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Lobbyists’ Cash Loophole

Lobbyists’ Cash Loophole

The law requires the Secretary of State to design an online form for lobbyists to use to report the value of entertainment, parties and campaign donations in the months leading up to each legislative session.

BY RENE THOMPSON AND DAN VUKELICH

The New Mexico Secretary of State has allowed lobbyists to exploit a loophole that hides the true source of much of the money they pour into political campaigns.

An ABQ Free Press analysis of the reports of 530 paid lobbyists who worked the Roundhouse during the 2015 session shows that the source of $451,252.50 in political donations they made is untraceable.

Vol II Issue 19, September 23, 2015We’re not talking about a two- or even four-year election cycle.

We’re talking about $451,252.50 of $770,308 that 35 lobbyists gave to candidates from May 1, 2014, through last Jan. 15.

The loophole involves a section of the online form that lobbyists use to report donations without revealing the identity of the client who is the source of the cash.

Most top lobbyists represent multiple clients during a legislative session. Some represent as many as two dozen.

Only four of the 530 lobbyists whose reports ABQ Free Press examined identify political contributions given on behalf of their clients.

Depending on who’s talking, the problem lies in the design of the Secretary of State’s form, the advice the office gives to lobbyists on how to fill out the form, or with the lobbyists themselves.

Kenneth Ortiz, a spokesman for Secretary of State Dianna Duran, said unclear language in the Lobbyist Regulation Act is the source of ambiguity. The office is working to change the form. A bill passed in the 2015 session calls for more precise reporting, he said.

“Due to recently passed legislation and feedback such as yours we are currently working with our system vendor to enhance the search and download capabilities of lobbyist and campaign finance reports,” Ortiz wrote in an email. “This enhancement should be available by 2016.”

The loophole

All political candidates must report donations by contribution amount, name and occupation of donor and date of the contribution.

So, theoretically, someone with the necessary resources who wants to track possible political influence over a particular candidate or officeholder could check that candidate’s individual campaign finances reports.

But trying to track influence over the 112-member Legislature would involve looking at the reports of hundreds of primary and general-election candidates.

Another approach would be to check the amount of money a particular industry donated – either directly or through their lobbyists – then compare those amounts with the success or failure of bills in the Legislature and signed or vetoed by the governor.

That would involve looking through fewer reports.

But you’d be out of luck.

And here’s why.

The law requires the Secretary of State to design an online form for lobbyists to use to report the value of entertainment, parties and campaign donations in the months leading up to each legislative session.

Top 10 Lobyists Whose Reports
Don’t Identify Source of Campaign Cash

Stephen Perry: Chevron USA…………………………………………$62,000
Dan Weaks/Marla Shoats, lobby for 18 companies…………….$47,100
James Bullington: lobbies for 24 companies……………………..$40,875
Leland Gould: lobbies for Western Refining Inc………………..$35,900
Vanessa Alarid: lobbies for 13 companies…………………………$32,700
Deborah Gorenz: lobbies for 2 companies………………………..$28,200
Robert Donaldson: lobbies for Altria Inc…………………………$27,800
Shelby Fletcher: lobbies for Pfizer, Inc……………………………$20,000
Sandra Bellino: lobbies for Merck Sharp & Dohme Corp….$15,000
Lawrence Horan: lobbies for 20 companies……………………$13,700
Mark Duran: lobbies for 13 companies………………………….$13,550

Source: New Mexico Secretary of State’s office

The Secretary of State’s form has five parts, forms A, B, C, D and E.

Form A is a summary of the lobbyist’s information. Form B should show the value of gifts given to candidates or officeholders – Lobo basketball tickets, for example.

The money that lobbyists spend on parties, drinks, meals and entertainment generally goes on Form C.

The amount of political contributions that a lobbyist makes on his own behalf goes on Form D. Many lobbyists give in their own name to maintain good will and access to legislators.

Clients’ or bundled donations above $500 or money funneled through a lobbyist to a candidate or officeholder are supposed to go on Form E. The donations reported there should be broken out by client, client’s address and occupation and the amount given on that client’s behalf.

According to the Secretary of State’s office, when a lobbyist opens up Form E online, it automatically creates the required fields.

And that’s the loophole.

Almost no one uses Form E. Instead, lobbyists reported a total of $451,252.50 of the $770,308 they gave in campaign contributions since last May on Form D – without an explanation of the money’s source.

The husband-wife lobbying team of Dan Weaks and Marla Shoats, who represent 18 clients, reported that they gave candidates and officeholders $47,100 but they didn’t identify the source

James “J.D.” Bullington, a lobbyist who represents 24 clients, reported $40,875 in contributions, also with no indication of where the money came from.

One could posit that most or all of the $62,000 in donations that lobbyist Steven Perry reported in political donations came from his sole client, Chevron USA, but some could have come from Perry himself. Same for the $20,000 reported by Shelby Fletcher, who lobbies for Pfizer, Inc.

In the great majority of lobbyists’ reports, it is impossible to ascertain where the money came from.

What they say

ABQ Free Press attempted to contact all the lobbyists mentioned in this story. Only one spoke to us on the record prior to our print deadline.

Charlie Marquez, a lobbyist who represents seven companies, reported $2,400 on Form D and $2,250 on Form E. He said the problem lies in the definition of “bundling.”

“When I was collecting all these checks to give to candidates, I had questions about the bundling, so I called the Secretary of State’s office, and I asked them how they define bundling,” he said.

“They said it was a function of me simply gathering checks from individuals from a PAC group or if they were different entities until they’re all together, and as long as I am the person who is giving the legislator the contribution, then I have to report those bundled checks,” he said.

“I think there are several interpretations, and I think that some people believe that bundling is taking multiple checks and combining them into a single total,” Marquez said. “As lobbyists, we no longer submit paper forms, so if it’s not catching what’s on Form E, then it’s recording a total that’s misrepresented.”

Lobbyist Dan Weaks said after the print edition came out that he and his wife, Marla Shoats, try to identify on whose behalf they donate money, using a system where in the line items of their reports, they insert a line with the name of the client and the sum of 1 cent or 2 cents or 3 cents. That break in dollars amounts in the hundreds of dollars is to segregate the contributions on behalf of each cof their clients.

Larry and Tom Horan, reached after the story went to press, said the amounts listed on their reports are, in fact, donations they made on their own behalf and not on behalf of clients.

Reaction

Viki Harrison, executive director of Common Cause New Mexico, which advocates for open government and campaign-finance transparency, said the difficulty of tracking the influence of a particular industry is well known.

“For us, the problem with that system is that we should be able to go in there and say, ‘Give me all the gas lobbyists from this year,’ and you can’t do that. You shouldn’t have to be tracking it down over 500 PDFs. It should be portable and you should be able to pull everything out through searching or cross-referencing different years.

“So we met with the Secretary of State’s office probably in June, and they told us, ‘Everything was fine, it’s totally compliant with the law,’ and we said, ‘No it’s not,’ so we went back and talked to journalists, the clients and the foundation, followthemoney.org.

“And what we did then was send specific memos to the Secretary of State telling them the specific ways they were not in compliance, and they actually replied right away and said, ‘You’re right, we’ve not entered into a contract with our vendor and we are going to get that implemented this year.’”

Ortiz said that process is underway, despite the absence of Secretary of State Dianna Duran, who was charged in August with 64 counts of fraud and embezzlement involving alleged use of her own campaign fund to gamble at casinos around the state.

— Rene Thompson and Dan Vukelich

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Albuquerque’s definitive alternative newspaper publishing an inquisitive, modern approach to the news and entertainment stories that matter most to New Mexicans. ABQ Free Press’ fresh voice speaks to insightful and involved professionals who care deeply about our community.

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Albuquerque’s definitive alternative newspaper publishing an inquisitive, modern approach to the news and entertainment stories that matter most to New Mexicans. ABQ Free Press’ fresh voice speaks to insightful and involved professionals who care deeply about our community.

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