2018 lobbying hits $23.1 million with 731 firms registered; both records

John Schaaf

By John Schaaf, Executive Director, Kentucky Legislative Ethics Commission

Kentucky lobbying spending hit an all-time high of $23.1 million last year, blasting past the previous high of $20.8 million set the year before.

The record spending was a ten percent increase over the previous year, and was driven by 731 lobbying businesses and organizations, the most ever registered in Kentucky.

In 2018, 590 lobbyists were paid $20.4 million in compensation, which was about 92 percent of all employer lobbying spending. While the number of employers increased to a record high, there was a four percent drop in the number of lobbyists, indicating a further consolidation of Kentucky’s lobbying industry, with about a dozen lobbying firms handling more than half of the business.

Last year’s top lobbying spender was Altria (Philip Morris and U.S. Smokeless Tobacco Co.), which spent $552,103, a 43 percent increase over Altria’s spending the year before, and more than twice as much as the company spent in 2016, the last year in which a 60-day session was held.

Kentucky Chamber of Commerce was in second place among lobbying spenders, after spending $352,425, a 20 percent jump from the Chamber’s spending in 2016.

The rest of the top five spenders include Kentucky Hospital Association ($194,425); Anthem Inc. ($181,564), which landed in fourth place after just moving into the top ten in 2017; and LG&E and KU Energy ($162,073), which vaulted into fifth place from outside the top 20 the year before.

Others in the top 10 were Kentucky League of Cities ($136,849); Kentucky Justice Association ($133,774); Kentucky Medical Association ($130,785); DXC MS (formerly Molina Healthcare ($129,850); and Kentucky Retail Federation ($128,172).

The rest of the top 20 spenders: Humana ($124,044); United Healthcare ($122,259); 1800Contacts ($120,346); DXC Technology ($120,000); Greater Louisville, Inc. ($119,795); CSX Corp. ($118,590); RAI Services ($112,097); Foundation for a Healthy Kentucky ($110,766); Kentucky Wired ($110,000); and Home Builders Association of Kentucky ($105,893).

 

In 2015, the Legislative Ethics Commission discussed a question raised by a legislative agent (lobbyist), and issued an ethics advisory. A similar question was asked recently, so the advisory is reprinted here.

The question is: “If a lobbyist receives a campaign fundraising solicitation from a member of the General Assembly, may the lobbyist forward the solicitation to the lobbyist’s employer?”

The short answer is a lobbyist can inform his or her employer of a fundraising effort, but forwarding information regarding the amount of money to be paid for attendance at an event, and to whom payment for attendance is to be made, would go beyond merely furnishing information and would constitute solicitation of a contribution by the lobbyist acting, in effect, as an agent for the sponsor of the event.

From the discussion at the (2015) meeting, Commission members are most concerned about members of the General Assembly (or their campaign representatives) sending political fundraising appeals to legislative agents.

Commission members referred to numerous opinions issued since the Commission’s 1993 creation, in which the Commission holds that the Code of Legislative Ethics prohibits legislators from soliciting lobbyists for campaign fundraising.  For example, in OLEC 07-02, the Commission said:

The Commission has long held that it is improper for a legislator to solicit help from a lobbyist in obtaining funds for a campaign.

                KRS 6.731(3) forbids a legislator from using his or her official position to secure advantages or treatment for himself or others in direct contravention of the public interest at large.  The “public interest” is set forth at KRS 6.606, which provides that the purpose of the Code of Legislative Ethics is ‘that a public official not use public office to obtain private benefits’ and ‘that a public official avoid action which creates the appearance of using public office to obtain a benefit.’

                Because of the unique nature of the relationship between a legislator and a lobbyist, it is inevitable that a legislator seeking campaign fund-raising assistance from a lobbyist would be perceived as violating KRS 6.731(3) by using his official position to secure advantages for himself or others in direct contravention of the public interest at large.

See also OLEC 05-01, which states:  “The Commission has consistently ruled that a legislator may not solicit the help of a lobbyist in raising campaign funds for the legislator himself or for another legislator . . . This follows logically from the KRS 6.767 prohibition against a legislator accepting a contribution from a lobbyist, as well as from the KRS 6.731(3) prohibition against a legislator using his position to secure advantages or treatment for himself, herself or others in contravention of the public interest, when the relationship between a legislator and lobbyist is taken into account.

So, the immediate concern is that lobbyists may be receiving fundraising solicitations from legislators, as this raises the potential for violation of the Code of Legislative Ethics.

The Commission directed its staff to increase efforts to inform members of the General Assembly about this issue, and to caution them regarding seeking fundraising assistance from lobbyists.

Since 1993, the Commission has recognized that a lobbyist may properly provide a wide range of information to a PAC (and presumably, the lobbyist’s employer) on such issues as voting records, legislative history, and political intelligence related to members and candidates for legislative office.  Such activity is within the scope of responsibilities associated with the duties of a lobbyist.

However, with the 2014 enactment of KRS 6.811(5), the Code of Legislative Ethics now includes a restriction on a lobbyist’s ability to “directly solicit” a campaign contribution for a legislator or candidate for election to the General Assembly.

The Commission is of the opinion that if a lobbyist’s correspondence informs the recipient of the amount of money to be paid for attendance at a legislator’s fundraising event and to whom payment for attendance is to be made, it would go beyond merely furnishing information and would constitute the solicitation of a contribution by the lobbyist acting, in effect, as an agent for the sponsor of the event, and that would contravene KRS 6.811(5).

The following businesses and organizations recently registered to lobby during the 2019 General Assembly: American Association for Marriage & Family Therapy; Animal Policy Group, LLC; Associates in Pediatric Therapy; Benefitfocus.com, Inc.; Bird Rides, Inc.; BrightStar Care; Coca-Cola Bottling Co. Consolidated; Diversified Gas & Oil Corp.; Equian, LLC; Fund For the Arts; GenCanna Global; Glaxo SmithKline; Green River Alliance Group; and Home Builders Association of Lexington.

Other recent registrants are: Kentucky Academy of Audiology; Kentucky Athletic Trainers’ Society; Kentucky Habitat for Humanity, Inc.; Kentucky Municipal Energy Agency (KYMEA); Kentucky Sheriffs Association; Kentucky Society of Addiction Medicine; Louisville Theatrical Association; Metro United Way; Molina Healthcare, Inc.; National Council of State boards of Nursing; New Meridian Corp.; Novartis Services, Inc.; Partnership to Protect Patient Health; Purple Toad Winery; Rx Development Associates, Inc.; Terrace Metrics; U.S.A. Drone Port; and Zoll.

21 businesses and organizations terminated their registration, and are no longer lobbying the Kentucky General Assembly: Almost Family; American Insurance Co.; American Tort Reform; Balanced Budget Amendment; Bardenwerper, Talbott & Roberts PLLC; Check Into Cash; Christ Hospital; CTIA – The Wireless Association; Express Scripts Holding Co.; Ferring Pharmaceuticals; Full House Resorts, Inc.; Johnson Controls, Inc.; Mallinckrodt LLC; National Home Service Contract Association; Northern Kentucky University Foundation; Otsuka America Pharmaceutical, Inc.; Pew Charitable Trust; Retirement Security Initiative; Securities Industry & Financial Markets Association; TracFone Wireless, Inc.; and Verde Technologies.

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