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Monday, May 31, 2010

Ind. Law - More on "Ethics bill is hailed as a starting point"

Updating this ILB entry from March 3, 210, about the ethics reform bill passed in the 2010 session, HEA 1001, Mary Beth Schneider of the Indianapolis Star has a long, front-page story today headed "Loopholes threaten to undermine Indiana's lobby reform law: Legislators say they might need to revise law to match intent for fuller disclosure." Some quotes:

Its passage was hailed as a step toward better government, but fears are growing that a new law regulating lobbying has whopping loopholes that could let much of the wining and dining go unreported.

At least two sections of House Enrolled Act 1001, the lobbying and legislative ethics overhaul that unanimously passed the Indiana House and Senate in March, are getting new scrutiny that lawmakers say could require them to go back to the drawing board when they return to session.

The biggest concern: a section of the bill that says lobbying-activity reports "may not report expenditures or gifts relating to the performance of a legislative person's official duties."

"That seems to be the exception that essentially eviscerates the entire law," said Ed Feigenbaum, a Noblesville attorney who publishes the Indiana Legislative Insight newsletter. "It's extremely troublesome."

The intent was to allow committees, including the State Budget Committee, which travels the state frequently, to accept such things as a bus ride, lunch or informational materials as they explore issues. But the broad language, Feigenbaum said, doesn't match the intent.

Even lobbyists are raising alarms.

"The concern is that (that section) guts the law," said Anne Doran, a lobbyist with Ice Miller LLP who is chairwoman of the lobby law committee for the Governmental Affairs Society of Indiana, the trade association for lobbyists. "I know very well that that was in no way the intent of the legislators involved. I think that somewhere in the process a word or two was dropped. But that's the one that troubles me."

Sarah Nagy, executive director of the Indiana Lobby Registration Commission, said it's not her job to decide whether a law is troubling, merely to enforce it.

But, Nagy said in an e-mail, "most if not all lobbying is done at the committee level. This provision appears to exempt any and all reporting of expenditures if the lobbying is done at the committee level." * * *

Another section that has raised eyebrows defines groups that are not considered lobbyists. It lists various legislative support organizations, including the National Conference of State Legislatures, the National Conference of Insurance Legislators, and the National Black Caucus of State Legislatures.

But the law broadens the circle of those exempted from lobbying requirements by including "any other national organization established for the education and support of legislative leadership, legislators, legislative staff or related government employees."

That, Nagy said, could allow a lot of lobbying to go on under the radar.

"Essentially all major industries which lobby in Indiana have such national organizations; therefore, if lobbying were conducted through those entities for those industries, there is no statutory duty of registration in Indiana, much less a duty to report expenditures," she said.

Legislators, though, disagree, saying the law specifically refers to legislative groups, not trade organizations such as those that represent pharmaceutical companies or casinos. And they doubted that trade groups could hide lobbying by pretending to be simply an educational legislative tool.

Where is the "may not report expenditures or gifts" language? In the final version of the bill, it is found in SECTION 19, which adds a new IC 2-7-3-3.5 to the Indiana Code. On p. 11 of the PDF version of the Enrolled Act, it is subsection (h), 5 lines down from the top.

There is no such language in the introduced bill, or the bill as it passed the House. It appears for the first time, as far as I can tell, in the bill as it came out of Senate committee.

Posted by Marcia Oddi on May 31, 2010 02:28 PM
Posted to Indiana Law