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Reports show state lobbying is high-stakes, big business

Tuesday, August 07, 2001

By Joe Harrington and John M.R. Bull

HARRISBURG -- A Philadelphia packaging company spent more than $100,000 in an attempt to influence the state Legislature in the last three months, ranking it 14th among lobbyists in the world of state power politics.

Not coincidentally, Crown Cork & Seal Co. Inc. had a bill before the Legislature that could save it millions of dollars.

The company hoped lawmakers would approve a measure that would free it from liability for asbestos injury claims and wanted it done fast before it was hit with more legal judgments. It had already paid more than $176 million in claims.

So it hired a team of lobbyists, and within weeks a bailout bill to exempt the company from additional claims was brought to a surprise vote. It failed in the House, barely, but the fact that there was a vote highlights the influence lobbyists have on the state's legislative process.

It's big business, with high stakes.

Financial disclosure reports filed last week with the state Ethics Commission revealed that the top 20 lobbying operations had spent $9.4 million so far this year.

Under a 1998 state law, lobbyists must report how much they spend on direct lobbying efforts, such as talking to state lawmakers, and indirect efforts, such as phone banks or mailings to influence state legislation. They must also disclose how much they spend overall on gifts and trips for state lawmakers.

The reports provide only rough information on how much money each company, business or professional lobbyist spends to influence state legislation. Exactly how much money is spent, on what day it is spent and what is bought with it does not have to be reported.

But the reports do give the public at least a glimpse into how much money is being allocated to influence state legislation. Until the 1998 law was passed, there was no way to know the extent of lobbying efforts.

That information, however, soon could be hidden again.

The state Supreme Court heard arguments in the spring by two lawyers who are seeking to overturn the law on the grounds that many lobbyists are lawyers and only the courts have the right to regulate the professional activities of lawyers. Commonwealth Court agreed with that argument last year in a 4-3 decision, which was appealed by the state attorney general.

The Supreme Court ruling could come at any time, and if the court agrees with the lawyers, the law could be nullified.

As a result, the state Ethics Commission has not filled two vacant auditor positions nor upgraded its computer system to better handle financial disclosure information, said John J. Contino, the commission's executive director.

"We believe disclosure is an important part of allowing the public to have some degree of confidence in the system," said Steve MacNett, general counsel for the Senate Republicans. "To lose the law would only serve to increase public cynicism."

More than $45 million was spent on state lobbying efforts last year, the first full year that lobbyists were required to report their expenditures. That includes salaries, office space, phone bills, mailings, phone banks, and gifts and donations to lawmakers.

Spending this year is on pace to match and possibly exceed last year's total. First-quarter disclosure filings show that the lobbying industry spent $11.9 million to influence legislation.

Second-quarter filings have not been fully tabulated, but they show that the Pennsylvania Chamber of Business and Industry, with $803,000, topped the list of spenders.

Telecommunications giant AT&T ranked a close second, spending $800,000 in the second quarter.

"Pennsylvania isn't extraordinary in this regard," said Lenora Vesio, an AT&T spokeswoman. "Because it is such an important market for us and others, the stakes can be viewed as high."

AT&T is trying to break into the local phone market, and lobbyists perform the important function of conveying the company's point of view to lawmakers and government agencies, Vesio said.

AT&T also had been lobbying the Public Utilities Commission to deny Verizon access to the long-distance market dominated by AT&T.

Verizon had its own army of lobbyists in that battle, ranking fourth among big spenders in the second quarter of this year, dropping $450,000 on lobbying efforts during those three months.

Even the lobbyists have lobbyists. In fact, the lobbying industry is represented by the Pennsylvania Association of Government Relations.

David Tive, a past president of the association, said lobbyists also had interests that needed to be protected.

"If I'm a business owner, I have a stake in the laws affecting my business," Tive said. "But I don't have time to attend hearings and talk to legislators, I've got a business to run. Even Common Cause has lobbyists. That's the way the system works."

Rep. David Levdansky, D-Elizabeth Township, said that in today's political climate, businesses and organizations needed to spend considerable sums on lobbying in order to get their concerns aired.

"No legislator sells his vote for a round of golf or a dinner," Levdansky said. "We need not only to control lobbyists, we need to control ourselves."

Sen. Allen Kukovich, D-Manor, said some lobbyists had even written legislation.

"I wouldn't call it corrupt," Kukovich said. "But it is a corrupting influence."

Kukovich also said that the way political campaigns were financed gave lobbyists too much power to twist the legislative process to their benefit.

In the case of Crown Cork & Seal, Republican leaders in the House bypassed the committee process. No public hearings were held. Most lawmakers knew little or nothing about the company or the reason for the amendment.

The bailout provision was in an unrelated bill, which, if passed, would have exempted the company from paying additional legal claims that it insisted it had been slapped with unfairly.

In 1963, Crown Cork purchased a canning company, which had a division that used asbestos. Crown Cork sold the division three months later, but decades later, the company was sued for asbestos problems caused by the division it hadn't owned for 30 years. It lost in court, faced more lawsuits, and wanted the Legislature to pass a law to prohibit it from being held liable for the problems anymore.

The bailout bill's opponents argued the measure would circumvent the judicial process, which had already ruled the company was at least partially liable for asbestos injuries. Although the bill failed on a close vote, it is expected to be reintroduced when the Legislature returns to work next month.

Rep. George Kenney, R-Philadelphia, who supported the bill, said he was surprised to learn that Crown Cork was among the top spenders on lobbying.

"They've never been too involved in lobbying before," Kenney said.

Joe Harrington is an intern for the Pennsylvania Legislative Correspondents Association. John M.R. Bull is the Post-Gazette's Harrisburg correspondent.

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