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Progress Missouri Files MEC Complaint on Abuse of Lobbyist Gift 'Group Expenditure' Loophole

'But finding out who dined and passed the check isn’t exactly clear in disclosure forms filed with the Missouri Ethics Commission.'

KC Star: 'Five Missouri lawmakers enjoyed an evening at an expensive Dallas steakhouse this summer, with lobbyists picking up the more than $3,000 tab.'

'But finding out who dined and passed the check isn’t exactly clear in disclosure forms filed with the Missouri Ethics Commission.'

Earlier this week, Progress Missouri filed a complaint with the Missouri Ethics Commission regarding the improper reporting of gifts to a small number of Republican legislators on an American Legislative Exchange Council (ALEC) junket as gifts to the "Entire General Assembly." The backstory:

Five Missouri lawmakers enjoyed an evening at an expensive Dallas steakhouse this summer, with lobbyists picking up the more than $3,000 tab.
  

But finding out who dined and passed the check isn’t exactly clear in disclosure forms filed with the Missouri Ethics Commission.
   

Seven lobbyists — representing businesses ranging from Hallmark Cards to Peabody Energy to Ameristar Casino Hotel Kansas City — paid the lion’s share of the cost and reported the gifts as going to “the entire General Assembly.”
  

Five other lobbyists reported the gifts, which also included cab fare to the restaurant, to the individual lawmakers in attendance.
  

Those legislators were House Speaker Tim Jones, Majority Leader John Diehl, Rep. Sue Allen, Sen. Ed Emery and Sen. Wayne Wallingford...
   

Chuck Simino, president of the Missouri Cable Telecommunications Association, spent only $44.24 at the Dallas meal. He said he thinks an invitation was sent out to every legislator earlier in the year. But he still chose to report each gift to individual lawmakers because “I know who is having dinner with us. The total General Assembly was not there, so I cannot report it as such.”

But Representatives Jeremy LaFaver and Caleb Rowden have both stated publicly that they were not invited to the gathering, and that's important. You'll see why in the details below.

Missouri law requires registered lobbyists to report the free food, drink, trips, tickets and other gifts they provide to elected officials as part of their efforts to influence public policy on behalf of their paying clients. But lobbyists are continually and increasingly reporting gifts to handfuls of legislators as 'group expenditures,' even though the lobbyists know exactly which public officials received the gifts.

St. Louis Public Radio’s Chris McDaniel reported in June that “directing gifts to groups has been on the rise” in Missouri, with “nearly 80 percent of all the spending on gifts went toward group” for 2014 at the time of his analysis.  The following chart from St. Louis public radio illustrates the growing lack of disclosure about which politicians are filling their bellies and pockets with lobbyist freebies:

Whether corporations' hired lobbyists are doing this as a favor to the officials they are attempting to woo, or at the request of politicians who would rather their constituents remain ignorant of their actions, we do not know. But the end result is the same, and unacceptable.

Our concerns with the abuse of the 'group expenditure' loophole are simple:

  1. The public should be able to know which lobbyists are wining and dining their legislators. This is the whole point of requiring monthly disclosures of expenses paid on behalf of public officials.
  2. Gifts given to small groups of easily identifiable legislators should be reported as going to these legislators. This is common sense; lobbyists and recipients both know who sat in the restaurant or stadium seats. Many gifts reported as going to large groups of legislators do not meet the MEC’s published standards for group expenditures, or the smell test.  
  3. Allowing lobbyists to state that expensive meals and sports tickets are going to large groups of public officials -- instead of specific politicians -- deprives the public of important information about who is attempting to influence the legislative process with extravagant gifts.
  4. Allowing a small number of lobbyists to improperly report gifts as group expenditures is unfair to the public officials who did not actually accept the lobbyists’ handouts. We all know that the “entire General Assembly” did not fill their stomachs at an expensive Dallas steakhouse, dine at the ‘Best French Quarter Restaurant’ in New Orleans, or enjoy a Chicago Cubs game as part of American Legislative Exchange Council (ALEC) conferences, but that is precisely what Ethics Commission records show.  

Progress Missouri strongly supports strict limits on lobbyist gifts to help clean up the corrupted lawmaking process in Jefferson City. But even in the absence of these basic reforms, the citizens of Missouri should expect honest reporting of the gifts given to their elected officials.

Lobbyists are required to report money spent on behalf of elected officials and their spouses for public scrutiny.  

Registered lobbyists are required to report money spent on behalf of elected officials and spouses, including money spent on beverages, entertainment, food for members of the General Assembly.  (Section 105.473.3(2), RSMo.)

The Missouri Ethics Commission’s Frequently Asked Questions document for lobbyists states that “all expenditures, except for group expenditures, must be reported individually.” The same document also states that gifts may be reported as going to groups of legislatures (e.g., the Entire General Assembly) when “the allowable groups are in invited in writing to the occasion.”

Some lobbyists are reporting expenditures as group gifts for when the standards for this type of disclosure are not met.

Section 105.473.3(2)(d) states that gifts may be reported as going to an entire group of legislators when “all members” are “ invited in writing.”

Missouri Ethics Commission Executive Director James Klahr was quoted in the Kansas City Star as stating that the rules regarding group expenditures are intended apply “when [1] everyone in that group is invited and [2] can reasonably be expected to attend.” (10/06/2014)

Regarding the August 2 gifts reported as going to the “Entire General Assembly” in Dallas, Texas, Representatives Jeremy LaFaver and Caleb Rowden have both stated publicly that they were not invited to the gathering. See:

Moreover, it is absurd to think that all 197 members of the Entire General Assembly could “reasonably be expected to attend” an evening dinner at the Dallas Chop House in Dallas, Texas.

  • The steakhouse is 550 miles from the Missouri Capitol, a drive that would take about nine hours. Many members of the General Assembly would be require to travel even farther to attend.
  • As Klahr told The Star in the story cited above, ““If attending requires (lawmakers) to take time off from jobs and travel to attend a conference out of state, the expectation probably isn’t that all or a majority would go.”

Indeed, the August 2 gifts in question reported as going to the “Entire General Assembly” fails both parts of the test:

  1. At least two legislators publicly stated they were not invited. The number of uninvited members of the House and Senate is presumably higher if legislators in both parties self-identified themselves as non-recipients of the gifts in question within hours of August gift data being made available.  
  2. It is not reasonable to assume that a substantive portion of the Entire General Assembly would dine with these lobbyists on a Saturday in Dallas, Texas.

Lobbyist Charles G Simino reported the names of the individual legislators who attended this dinner because the “Entire General Assembly” did not dine at the Dallas Chop House in Dallas, TX on August.

“I know who is having dinner with us. The total General Assembly was not there, so I cannot report it as such,” he told The Kansas City Star.

Who were these politicians?  Speaker Tim Jones, Speaker-Elect John Diehl, Sen. Ed Emery, Sen. Emery’s spouse or child, Sen. Wayne Wallingford,  Sen. Wallingford’s spouse or child and Rep. Sue Allen.

Progress Missouri has filed a complaint with the Ethics Commission outlining these facts and concerns. You can read it here.

Some lobbyists are reporting gifts as going to the “Entire General Assembly” when only a small number of easily identifiable legislators received the gifts.

Abuse of the group expenditure loophole has been especially egregious by lobbyists following ALEC politicians on their junkets to luxury resorts around the country. ALEC meetings are notoriously secretive, and only a portion of Missouri's ALEC delegation will attend any given conference. Yet lobbyists have reported their expenses on these junkets as gifts to the 'Entire General Assembly' for years.

Consider the following absurdities.

Citizens know that the “entire General Assembly” did not fill their stomachs at an expensive Dallas steakhouse during the 2014 ALEC meetings, dine at the ‘Best French Quarter Restaurant’ in New Orleans during the 2011 ALEC meetings, or enjoy a Chicago Cubs game as part of 2008 ALEC meetings, but that is precisely what Ethics Commission records show.  

It is in the public’s interest for gifts given to individual legislators be reported as given to individual legislators.

Allowing lobbyists to state that expensive meals and sports tickets are going to large groups of public officials instead of specific officials deprives the public of important information about who is attempting to influence the legislative process with extravagant gifts. Moreover, when a small number of legislators and lobbyists improperly report gifts as group expenditures, this is unfair to the public officials who did not actually accept the lobbyists’ handouts.