Arnold: Close consulting loophole

Submitted by ryanteaguebeckwith on September 4, 2007 - 3:04pm.
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A member of a lobbying advisory council said the consulting loophole should be closed.

Gene Arnold, a former state representative, said that state law should require lobbyists report all payments from their clients, including those for consulting, legislative review and other non-lobbying work.

"I don't see anything wrong with making that transparent," he told Dome. "If money is the mother's milk of politics, then any way the money flows should be made public so you know where the influence is coming from."

Under state law, lobbyists are required to report all payments for lobbying to the Secretary of State, but they do not have to report payments for non-lobbying work.

Arnold said that the advisory council briefly touched on lobbyists' pay, but decided to focus more on how they influenced legislators. But after reading that former lobbyist Don Beason once loaned former House Speaker Jim Black $500,000, Arnold said he's in favor of more disclosure.

"It would be very easy for the General Assembly to say that lobbyists have got to report everything that their clients pay them," he said.

Previously: Beason was paid by BB&T, Progress Energy and IBM for non-lobbying work.

Correction: A previous version of the post incorrectly named Arnold's position on the lobbying advisory council.

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Re: Arnold: Close consulting loophole

Submitted by dude1936 on September 5, 2007 - 7:27am.

I am OK with your reported article concerning the Ethics Commission except I was not the chairman. Mr. Gene Nichols who was head of the law school at UNC was the chairman. gene arnold

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Re: Arnold: Close consulting loophole

Submitted by JayBlair on September 4, 2007 - 11:17pm.

A couple of points:

First, I believe the statute requiring disclosure of lobbyist compensation is found at 120C-403, not the section linked in this report. It is the lobbyist's principal, not the lobbyist who must report compensation.

Second, before claiming that there is a "loophole" we should look at the law to see what it says. It is not at all clear that lobbyist's principals need not disclose all compensation paid to a lobbyist regardless of whether the compensation is for lobbying or other work. 120C-403(b)(3) states that a lobbyist's principal must file a report with the Secretary of State disclosing "compensation paid to all lobbyists during the quarter". Unlike the reporting of expenditures, compensation reporting is not qualified by the phrase "for lobbying purposes" thus it is possible to conclude that the Legislature meant what it said, all compensation paid to a lobbyist without limitation must be reported.

Third, while I believe an argument can be made that principals need only report compensation for lobbying rather than all compensation paid a lobbyist regardless what the compensation was for, the Legislature gives the Secretary of State the authority to develop rules and forms to comply with the statute. I do not think the law precludes the Secretary from requiring disclosure of all compensation regardless of purpose in the reporting forms. No new laws are needed.

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