Interest groups spend thousands on social events for lawmakers, with no disclosure
PIERRE — Politicians, lobbyists and liquor dealers gathered in the back room of a restaurant.
It was mid-January, a couple of weeks into South Dakota’s annual legislative session.
Everybody was unwinding after a long day at the Capitol, chatting and mingling.
Pork roast was on the menu. People lined up for drinks at the bar.
The atmosphere was social, but it was also an opportunity for lobbyists and industry stakeholders to cultivate relationships with lawmakers and, ultimately, influence legislation.
And it was all thanks to the South Dakota Licensed Beverage Dealers & Gaming Association, an interest group that represents bars, restaurants and casinos statewide.
Nothing about the event was subject to public disclosure — who was there, what was talked about, or how much money the host group spent on food and drinks for lawmakers.
South Dakota’s lobbying disclosure laws don’t apply to the “Legislative Social Calendar,” which included 109 events during this year’s January-to-March legislative session. The South Dakota Chamber of Commerce & Industry maintains the calendar on behalf of the dozens of organizations that host events.
On this year’s calendar, auto dealers and truckers invited legislators to “Pierre’s largest sundae bar.” Electric utilities hosted a lunch not only for lawmakers but also for the public utilities commissioners who regulate the industry. The National Guard, health care organizations, bankers, and the trust industry were among the hosts of other events, including breakfasts, luncheons, mixers, dinners and socials.
Disclosure laws riddled with exemptions
State laws require the secretary of state to keep a directory of registered lobbyists, listing their names, employers, contact information, and the subjects of legislation they plan to lobby about, among other information.
State laws also require lobbyists and their employers to file annual expense reports by July – roughly three months after the annual legislative session ends – showing “all costs incurred for the purpose of influencing legislation.”
But there are exemptions in the law for lobbyists’ own meals, travel, lodging, phone calls and other “necessary personal needs” during the legislative session.
Those exemptions mean that many expenses are never disclosed. Flipping through the hundreds of annual disclosure forms from lobbyists and their employers often reveals nothing more than the names of the lobbyists and their associated organizations. The expense fields on the forms are often left blank.
A state law also allows gifts from lobbyists to individual lawmakers to a cumulative value of $115.47 in a calendar year (the number is adjusted annually for inflation). But that cap is riddled with exemptions written into the law. Those exemptions include any food, entertainment or beverage provided for immediate consumption, and any service or event intended “to educate or inform” public officials on matters of public policy.
In other words, events on the social calendar are exempted from disclosure.
Gift limit also weakened by exemptions
There was no limit on the value of gifts to legislators until Initiated Measure 22, a ballot measure passed by voters in 2016 that introduced a $100 limit. Beyond that provision, IM 22 was a massive anti-corruption measure that also created a publicly funded campaign finance system, established an independent ethics commission, and put new limits on campaign contributions, among other reforms.
However, in 2017, opponents of IM 22 convinced a judge to put the law on hold, and the Republican-controlled Legislature repealed the law. Legislators then enacted some individual provisions of IM 22, including the $100 limit with annual adjustments for inflation and numerous exemptions.
David Owen is president and chief lobbyist for the South Dakota Chamber of Commerce & Industry, which maintains the Legislative Social Calendar. He said whatever people think about the social-calendar events, the exemptions in current law clearly allow them to happen without public disclosures.
“Should that be a publicly recorded expense?” Owen said. “Our decision after IM 22 was no, that’s food and drink for immediate consumption and those conversations are something we want to foster, not inhibit. And so the secretary of state does not collect that information.”
Free food and drink provided by interest groups to legislators has thus become an accepted part of the legislative process in Pierre, according to Jordan Mason, a lobbyist for the Freedom Caucus Network, a subgroup of Republican lawmakers.
“And that’s the problem when people say, ‘We don’t have corruption.’ I’m like, ‘It’s institutionalized,’” Mason said.
Owen acknowledged that some of the events on the social calendar are open to the public while others are open only to the host group, lawmakers, other state officials and their spouses. And he understands how those events invite criticism.
“They’re only open to, say, the membership of the Auto Dealers Association so that the public can’t flow in and out of there,” Owen said. “And so, in that case, you’re kind of restricting access to those.”
That’s something Rick Weiland, who helped get IM 22 on the ballot, also recognizes. He said it should all be disclosed in public documents.
“I don’t know if there is a direct correlation between a dinner and corruption, but I do think it’s the transparency issue,” Weiland said. “Does a steak dinner buy your vote? I think that’s maybe a bridge too far. But transparency is the antidote to that.”