Quick Hits

* Former top lobbyist Don Beason has been spotted at Senate Finance Committee hearings, though he does not sign in to the guest sheet.

* U.S. Rep. Patrick McHenry, a Cherryville Republican, is playing a key role on GOP efforts to shape the 2010 Census policies.

* Spurred by N.C. Democratic Party, some 300 people call Sen. Richard Burr's office to complain about Rep. Virginia Foxx's remarks.

* Phones at Foxx's offices not being answered, calls "diverted to a general voice mail box, which was full and unable to record messages."

Some quick math on Beason's lobbying

Don BeasonHow much did Don Beason really make last year?

If Raleigh attorney Michael Weisel is correct, then most lobbyists' clients report from 15 to 30 percent of their payments to the state.

According to a report from Democracy North Carolina, Beason reported $145,521 from 16 clients in 2007.

That would put his actual income at between $485,070 and $970,140.

Of course, Beason is being investigated for underreporting his income — and we use this word to mean reporting below the traditional and reasonable amount used by other state lobbyists — so the real pay could be much higher.

As noted previously, Beason may have reported about 16 percent of his pay from the Albemarle Mental Health Center, five percent from IBM in 2004 and potentially 10 percent from BB&T.

Defining lobbying expenses up to client

Michael WeiselReporting on lobbying expenses is up to the client.

Raleigh attorney Michael Weisel, who is representing some of former lobbyist Don Beason's clients, told Dome that state law requires the client — whether it's a business, advocacy group or special interest — to report how much a lobbyist is paid.

"The lobbyist usually tells the corporation how much of the lobbyist's fee or salary is reportable under North Carolina law, but the principal is responsible (and liable) for reporting," he wrote in an e-mail to Dome.

He said that principals typically report from 15 to 30 percent of a fee or salary paid to a lobbyist, based on the state's definition of reportable lobbying expenses.

"A lot of what a lobbyist does is giving strategic political advice, monitoring legislation, and looking for legislative trends," he wrote. "These are not lobbying activities and are not reportable."

Weisel contends that his clients did not "underreport" their expenses.

No IRS deduction for lobbying expenses

Don BeasonLobbying expenses are not deductible from the federal income tax.

As noted previously, former lobbyist Don Beason is being investigated by the N.C. Secretary of State over the amount of income he reported as lobbying related. (Instead, he may have considered some of his pay for consulting.)

Raleigh attorney Michael Weisel, who is working for some of Beason's former clients, tells Dome that there is a "natural tension" on the issue.

"Any costs/expenses characterized as lobbying are not deductible as a business expense," he writes in an e-mail. "Therefore, a business seeks to minimize the amount attributable to lobbying as defined by the IRS."

On the other hand, state law clearly outlines lobbying expenses. 

Weisel took issue with Dome's use of the word "underreporting" for lobbyists who do not report income for consulting expenses.

"There is no 'underreporting' of compensation despite the investigators characterization," he wrote.

Quick Hits

* U.S. Rep. Virginia Foxx says murder of Matthew Shephard was not a hate crime, but just a robbery, in floor speech today.

* Gov. Beverly Perdue's office has referred to the "swine flu" in press releases, but they've not had any internal discussion on the best name.

* National Rifle Association also opposes state Sen. Don Davis' "puppy mill" bill; earlier opposed similar House bill.

* Charlotte Observer columnist Jack Betts thinks it's "a bit of quirky irony" that former lobbyist Don Beason is being investigated.

Why underreport lobbying income?

Don BeasonWhy would a lobbyist underreport?

Former top lobbyist Don Beason is being investigated by the N.C. Secretary of State for potentially underreporting his lobbying income.

That's led some Dome readers to ask why a lobbyist would do that.

Here are a few possible reasons:

EVERYONE DOES IT. Clients seek advice on political ads, who to support in elections and how to frame an issue for the public. Some of that is legitimately considered consulting.

TO HELP THE CLIENT. To much of the public, "lobbying" is a dirty word. If a lobbyist reported earning a lot, the client's opponents could use that as an attack.

COMPETITIVE SECRETS. If you told the state how much you earned for a given client, another firm could come in and offer to do the same job for less.

JUST BECAUSE. Some lobbyists make a career out of pushing the legal limits. If the state has a loophole that allows them to underreport, they're going to use it.

Have another theory? Post it below or e-mail dome@newsobserver.com.

The consulting loophole, revisited

Don BeasonDon Beason is being investigated for using the consulting loophole.

As previously noted, the lobbyists must tell the Secretary of State how much they are being paid to argue a special interest's cause before the legislature under state law.

But they do not have to disclose any secondary contracts for political consulting or other non-lobbying work.

Once the state's top lobbyist, Beason often broke up his contracts this way, possibly underreporting his pay from BB&T, IBM and Progress Energy.

His contract with BB&T was exactly one-tenth what he earned from Catawba County during a similar period. (Contracts with government agencies would not benefit from the loophole because they are public anyway.)

A special agent with the Secretary of State said in a court filing that the Albemarle Mental Health Center also underreported its payments.

"The Center was being directed by Donald R. Beason to report a significantly reduced amount and not the actual amount of compensation," agent John Lynch wrote in a court filing.

An audit of the mental health center first showed the discrepancy.

Secretary of State investigates Beason

Former lobbyist Don Beason is being investigated.

In a four-page statement filed in Wake County Superior Court, a special agent with the N.C. Secretary of State's lobbying compliance division wrote that he thinks Beason directed some of the 24 groups and companies for which he and his son lobbied in 2007 to include inaccurate information on disclosure forms.

"I have discovered a pattern of under reporting of the lobbyist compensation," agent John M. Lynch wrote. "This under reporting is often done at the instruction of the lobbyist without any written or substantial justification."

The agent said Beason made one request of the Albemarle Mental Health Center, a regional facility in Elizabeth City.

State law treats many reporting violations as misdemeanors.

The affidavit was filed in mid-March in Wake County seeking a judge's help in getting records about Beason from Progress Energy, one of his requests. (N&O)

Highlights of the state lobbyists report

From Democracy North Carolina's 2007 lobbyist report:

* Don Beason, who retired after a shady loan to disgraced Speaker Jim Black became public, reported earning $145,521 from 16 clients, putting him in 29th place.

* His son, Mark, reported earning $279,423 from 16 clients, putting him in sixth place.

* Elizabeth Dalton, daughter of Lt. Gov. Walter Dalton, reported earning $79,343 from five clients, for 56th place.

* Courtney Crowder, now a lobbyist for Gov. Beverly Perdue, reported earning $42,794 from 10 clients, for 116th place.

* Lanier Cansler, now secretary of Health and Human Services, reported earning $31,110 from four clients, for 159th place.

* Don Vaughan, who was elected a state senator last year, reported earning $22,500 from one client, for 206th place.

Ranking shows shuffle among lobbyists

A new ranking says Raleigh has a new top lobbyist. It also says that some lobbyists' influence has been shaped by ethics investigations and a fight over a real estate transfer tax.

The N.C. Center for Public Policy Research released its biannual ranking Thursday of the most influential lobbyists in the state capital. The ranking is based on a survey of legislators, lobbyists and capital journalists following the 2007 long session of the General Assembly.

Roger Bone ranked No. 1, after seven previous surveys had ranked him No. 2 or 3. His wide variety of clients includes Lorillard Tobacco Co., the N.C. Association of Long Term Care Facilities and the Save our Summers group.

Rounding out the top five: John McMillan, John Bode, Franklin Freeman and Zeb Alley.

Previous No. 1 Don Beason fell to No. 35, following revelations about a series of $500,000 transactions between him and former House Speaker Jim Black. Beason later resigned his clients. Black, a Democrat, is in prison on unrelated corruption convictions.

Bob Hall, who filed the original complaint against Black with the State Board of Elections, saw his ranking jump from 49th to 19th for his work with Democracy North Carolina.

Also seeing their rankings rise: Tim Kent (11th), Rick Zechini (12th), Paul Meyer (25th) and Jim Blackburn (31st). All were involved in the fight over a tax on real estate transfers.

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