Legislature(2003 - 2004)

03/31/2003 01:38 PM Senate JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
               SB 89-LOBBYING/ LEGISLATIVE ETHICS                                                                           
CHAIR SEEKINS reminded members that  the committee would continue                                                               
taking public testimony on SB 89 today.                                                                                         
MR.  STEVE CLEARY,  Executive  Director,  Alaska Public  Interest                                                               
Research  Group (AkPIRG),  expressed  opposition to  SB 89.  They                                                               
believe  it would  gut the  lobbying regulations  and don't  feel                                                               
there  are  any  problems  with the  current  lobbying  act.  The                                                               
extensive  discussion on  a similar  House  bill shows  confusion                                                               
about what lobbying  is. It's erroneous to  say that registration                                                               
limits on free speech he said.                                                                                                  
AkPIRG's biggest concern  with SB 89 is that it  will exempt many                                                               
people who  are lobbyists from  having to register  as lobbyists.                                                               
This  will allow  lobbyists  to host  fundraisers  and donate  to                                                               
political  candidates  who  are   outside  of  their  legislative                                                               
MR.  CLEARY said  he  reviewed the  2003  lobbyist directory  and                                                               
found 3  volunteer lobbyists,  16 representational  lobbyists, 65                                                               
professional  lobbyists, and  96  employee lobbyists.  It is  the                                                               
employee  lobbyists  that will  be  exempted  from regulation  as                                                               
lobbyists,  which will  encourage  more companies  to employ  in-                                                               
house lobbyists than  to hire professional lobbyists.  He said he                                                               
understands that small businesses need  to be represented, but he                                                               
doesn't think  the current regulations  prohibit them  from doing                                                               
He repeated that  AkPIRG's main concern is that SB  89 will allow                                                               
employee  lobbyists  to back  up  their  lobbying with  cash  and                                                               
SENATOR THERRIAULT commented that Mr.  Cleary said SB 89 guts the                                                               
lobbyist   statutes,   yet   he  acknowledged   that   the   paid                                                               
professional lobbyists  are still  covered by another  section of                                                               
the  bill and  will  not  be impacted.  In  addition, Mr.  Cleary                                                               
indicated the real problem is  that a lobbyist, even one employed                                                               
by a company  who lobbies more than four hours,  would be able to                                                               
contribute to a campaign. He  noted that contributions would have                                                               
to be  fully disclosed and  capped at  $500. He asked  Mr. Cleary                                                               
how it would  harm the process if  a mom and pop  gift shop owner                                                               
spent more than  four hours testifying on a  piece of legislation                                                               
and talking  to legislators  and then wanted  to contribute  to a                                                               
Senate campaign  and disclosed that.  He said he spoke  with APOC                                                               
staff last  week that said it  was always a bit  nonsensical that                                                               
such  a person  is precluded  from donating  to a  campaign since                                                               
disclosure would be required.                                                                                                   
MR. CLEARY  said he believes  the four hour  limit is a  good one                                                               
and eliminating  the ban  on donating  outside of  one's election                                                               
district is of  concern because they believe  that influences the                                                               
process. That is  the reason that bit of  campaign finance reform                                                               
was instituted and  has been upheld by the  courts. Donations are                                                               
capped  at $500  and  must  be disclosed,  but  whether a  person                                                               
donates outside of  his or her district is  of importance because                                                               
it gives that lobbyist too much power.                                                                                          
SENATOR THERRIAULT said to be  a lobbyist requires four hours and                                                               
one minute and  the lobbyist then loses the  right to participate                                                               
in the political  process, even if the person is  a small mom and                                                               
pop operator  because the language  in this bill does  not impact                                                               
contract lobbyists. He again asked where  the real danger is of a                                                               
small  business  owner  wielding   tremendous  influence  in  the                                                               
legislative  process, especially  if  that  small business  owner                                                               
must disclose his or her contributions.                                                                                         
MR.  CLEARY  replied the  danger  is  not from  small  businesses                                                               
wielding  more  power.   To  talk  to  your   own  legislator  is                                                               
participating  in   the  political   process,  but  to   talk  to                                                               
legislators in an  attempt to change something  for your business                                                               
is lobbying so  AkPIRG is going to try to  keep them separate. In                                                               
1996 the vote was to put a limit on fundraising and donations.                                                                  
He said his greater concern with  SB 89 is the employee lobbyist.                                                               
A company with  enough financial resources to pay  an employee to                                                               
go to  Juneau will have  an advantage because  smaller businesses                                                               
in  the  same field  will  not  have  the  same access  to  their                                                               
legislators.  If that  lobbyist  can fundraise  and donate,  that                                                               
company will get more of an ear from legislators.                                                                               
SENATOR  THERRIAULT noted  that  last week  APOC  said that  four                                                               
hours is  unreasonable and  suggested 16  hours. In  addition, he                                                               
told members  that if a business  hires an employee to  engage in                                                               
lobbying,  there is  a good  chance  that employee  will have  to                                                               
MR. CLEARY said  his concern is that a company  might hire two or                                                               
three lobbyists to  split up the work so they  could sidestep the                                                               
intent. He  said he doesn't  see any  problem with the  law right                                                               
now  because it  provides full  disclosure  of who  is trying  to                                                               
influence  lawmakers. To  raise  the bar  will  not inspire  more                                                               
small businesses to  lobby. Their time is more  valuable than the                                                               
$100 registration fee. This bill would  open it up for medium and                                                               
larger businesses to be able to  back up their lobbying with cash                                                               
and AkPIRG believes that is very harmful.                                                                                       
CHAIR SEEKINS asked  Mr. Cleary if AkPIRG wants to  take away the                                                               
average  person's ability  to talk  to their  legislator and  any                                                               
legislator they thought was friendly toward their cause.                                                                        
MR.  CLEARY said  it depends.  Talking  to your  legislator is  a                                                               
civic duty, but if a person  is talking to 60 legislators about a                                                               
business  matter, that  is  lobbying.  If a  person  is going  to                                                               
lobby,  that person  should register  and should  not be  able to                                                               
back up lobbying efforts with fundraising and donations.                                                                        
CHAIR SEEKINS asked  Mr. Cleary if he limits  his conversation on                                                               
topics of interest to AkPIRG to his own legislator.                                                                             
MR. CLEARY said he does not.                                                                                                    
CHAIR SEEKINS asked if he is a registered lobbyist.                                                                             
MR. CLEARY  said he is not  because he hasn't reached  the number                                                               
of hours for which he would be required to register.                                                                            
CHAIR SEEKINS asked what the number is.                                                                                         
MR.  CLEARY said  currently  that  number is  four  hours of  any                                                               
direct lobbying.                                                                                                                
CHAIR  SEEKINS asked  if  he limits  his  lobbying activities  to                                                               
appearances before public sessions of the legislature.                                                                          
MR. CLEARY said  he does, but he has also  spent about 30 minutes                                                               
making phone calls to legislators.                                                                                              
CHAIR SEEKINS asked  Mr. Cleary how close he is  to spending four                                                               
MR. CLEARY said he would have  to look at his records and respond                                                               
at a later date.                                                                                                                
CHAIR SEEKINS asked who funds AkPIRG.                                                                                           
MR. CLEARY  said they  are funded  from individual  donations and                                                               
grant money from foundations.                                                                                                   
CHAIR SEEKINS  asked Mr.  Cleary if he  is lobbying  while giving                                                               
MR. CLEARY said that is his understanding.                                                                                      
CHAIR SEEKINS  said he wants  to hear  from anyone that  wants to                                                               
talk to him  on an issue. He doesn't believe  he is just supposed                                                               
to represent one district. As a  legislator, he should be able to                                                               
listen to  people from all areas  of the state. His  intent is to                                                               
make sure  that the real  lobbyists are not  let out of  the net,                                                               
but that  other people who  want to influence  legislators aren't                                                               
made into lawbreakers.                                                                                                          
SENATOR  FRENCH said  he believes  the current  exemption on  the                                                               
lobbying law excludes Mr. Cleary's activities here today.                                                                       
CHAIR SEEKINS agreed with Senator  French. He said the problem is                                                               
confusion and his intent is to  not make criminals out of people.                                                               
He then called Graham Storey to testify.                                                                                        
MR. GRAHAM STOREY,  Nome Chamber of Commerce,  stated support for                                                               
SB  89   for  several  reasons.   First,  Alaska  has   the  most                                                               
restrictive time  requirements of any state.  California uses one                                                               
third  of  the  time  spent   in  direct  communications  as  its                                                               
yardstick. The Nome  area has one Representative  and one Senator                                                               
and, although they are very  capable individuals, they do not sit                                                               
on every committee and do not  have time to closely examine every                                                               
bill that  might affect Nome.  For example, the Senate  Labor and                                                               
Commerce  Committee  is  considering  a bill  that  will  have  a                                                               
substantial  impact on  the  Nome Chamber  of  Commerce, but  the                                                               
Senator for  Nome is not  on that committee. Therefore,  he would                                                               
like  to be  able to  talk to  the Labor  and Commerce  Committee                                                               
members without  having to  count that time  toward making  him a                                                               
professional lobbyist.                                                                                                          
He advised  that during testimony in  the House it came  out that                                                               
direct  testimony  before  a  committee   is  indeed  a  lobbying                                                               
activity and APOC  was present and agreed that that  is the case.                                                               
During  a  previous  Senate  hearing,  it  was  conjectured  that                                                               
testifying before a  committee might not be  lobbying. This alone                                                               
shows  there is  confusion  at  APOC about  what  is  and is  not                                                               
lobbying and  needs to be clarified  in law. Mr. Storey  said the                                                               
opponents  of this  bill seem  to be  in favor  of punishing  the                                                               
smaller and  medium sized businesses  such as those that  make up                                                               
the Nome  Chamber of Commerce  in favor of large  businesses that                                                               
can afford to have professional lobbyists.                                                                                      
MS. TAMMY KEMPTON, the Juneau  branch administrator of the Alaska                                                               
Public Offices Commission (APOC)  and the regulator of lobbyists,                                                               
told members  that the  question of  whether testifying  before a                                                               
committee  is considered  to be  lobbying  depends. AS  24.45.161                                                               
says this chapter does not apply:                                                                                               
     ...to  an individual  who  lobbies  without payment  of                                                                    
     compensation or other consideration  ... and who limits                                                                    
     lobbying  activities   to  appearances   before  public                                                                    
     sessions   of  the   legislature,  its   committees  or                                                                    
     subcommittees  or to  public hearings  or other  public                                                                    
     proceedings of state agencies.                                                                                             
Therefore,  if a  person  is not  getting paid  to  sit before  a                                                               
committee and testify, that person is  not subject to the law. If                                                               
that person  is an employee  who is testifying, once  that person                                                               
hits four hours, that person needs to register.                                                                                 
CHAIR SEEKINS asked if Mr.  Cleary's time spent testifying before                                                               
the  committee would  count if  he  spent time  lobbying his  own                                                               
MS. KEMPTON  said it  depends on  whom else he  talked to,  if he                                                               
talks to his own legislator that is specifically exempt.                                                                        
CHAIR SEEKINS asked where that is located in statute.                                                                           
MS. KEMPTON  said it is  in the  same section, paragraph  (b). It                                                               
     Nor does  anything in this  chapter prevent  members of                                                                    
     the legislature  from discussing with  constituents the                                                                    
     advisability  of   passing  legislation   then  pending                                                                    
     before or to be presented to the legislature.                                                                              
That has  always been interpreted  to mean a  constituent talking                                                               
to his or her legislator is not subject to the lobbying law.                                                                    
SENATOR OGAN  said the Key  Campaign gives a presentation  to the                                                               
Legislature  every year.  He  suspects someone  pays  his or  her                                                               
expenses, but  he hasn't  confirmed that.  Other groups,  such as                                                               
school  districts, do  the same  thing and  their students  spend                                                               
more  than four  hours  in  the Capitol.  He  asked  if they  are                                                               
considered to be lobbyists if  they get reimbursed for reasonable                                                               
travel and living expenses.                                                                                                     
MS. KEMPTON  said yes, someone  whose travel and  living expenses                                                               
are  reimbursed is  supposed to  register  as a  representational                                                               
lobbyist.  There is  no fee  and all  of the  other prohibitions,                                                               
such as contributions, don't apply.                                                                                             
SENATOR  OGAN asked  if APOC  issues  cards for  representational                                                               
MS.  KEMPTON said  APOC doesn't  issue  cards, but  they do  list                                                               
those names on  their website. For the most part,  APOC has never                                                               
gone  out and  tracked down  representational lobbyists.  Groups,                                                               
such as  the Key  Campaign, are not  being compensated.  They are                                                               
only reimbursed for expenses.                                                                                                   
SENATOR  THERRIAULT asked  if a  company employee  that testifies                                                               
before a committee  on legislation would have to  count that time                                                               
as lobbying hours.                                                                                                              
MS. KEMPTON  replied the employee  would have to count  that time                                                               
and  that's why  APOC  believes  the four  hour  limit should  be                                                               
raised to 16 hours.                                                                                                             
SENATOR THERRIAULT asked  if Mr. Cleary's testimony  on behalf of                                                               
AkPIRG would count toward lobbying hours.                                                                                       
MS. KEMPTON said  it should and Mr. Cleary called  APOC with that                                                               
SENATOR  THERRIAULT  asked  if   APOC  still  contends  the  word                                                               
"regular" should be struck from the statute.                                                                                    
MS. KEMPTON replied:                                                                                                            
     I have  a copy of what  the commission marked up  and I                                                                    
     believe they provided  you with a copy.  I believe they                                                                    
     decided 'regular'  should be  left in the  statute, but                                                                    
     that in the  explanation where you have  it divided out                                                                    
     between  small  [i]  regular, small  [ii]  substantial,                                                                    
     that should be  changed so that you're  only defining -                                                                    
     and  defining together  - substantial  or regular.  The                                                                    
     reason  for this,  one thing,  is  because when  you're                                                                    
     defining  regular  in  that lower  case  i,  it's  only                                                                    
     relating it to legislative  action but lobbying is also                                                                    
     executive branch.  And, so,  if you  just do  this, now                                                                    
     you  have  a regulation  that's  in  effect that  would                                                                    
     remain  in  effect. It  would  be  four hours  now  for                                                                    
     administrative  action and  it  would be  60 hours  for                                                                    
     legislative action  and I think that's  probably a real                                                                    
     problem.  So what  the  commissioner  proposed is  that                                                                    
     substantial  and regular  receive the  same definition,                                                                    
     which would be  16 hours in a 30-day  period for direct                                                                    
     communication  with a  public  official or  legislative                                                                    
SENATOR THERRIAULT  asked if APOC  believes those two  words need                                                               
further  refinement in  the statute  and that  the existing  four                                                               
hour limitation in regulation is too restrictive.                                                                               
MS. KEMPTON said APOC prefers  16 hours because they believe that                                                               
four hours is too restrictive. APOC  would be happy to change the                                                               
number  in  regulation if  that  is  easier  than placing  it  in                                                               
SENATOR THERRIAULT asked  if APOC would portray  those changes as                                                               
gutting  the law.  He wanted  to make  it clear  that a  watchdog                                                               
group  is  aware of  the  issue.  Although  part can  be  changed                                                               
through  regulation  and  the other  through  statutory  changes,                                                               
making those changes will not strip the oversight of lobbyists.                                                                 
MS. KEMPTON  asked members to  note the other change  proposed by                                                               
CHAIR SEEKINS interjected to say  he had not yet distributed that                                                               
change  to  the  members.  He  said he  would  copy  the  written                                                               
suggestions  he received  from Mr.  Wood and  distribute them  to                                                               
members and  then the  committee would take  them up  as possible                                                               
amendments at the next meeting. SB 89 was held in committee.                                                                    

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