Tuesday, July 31, 2012

New Rules on Disclosure of Donors to NYS Lobbying Campaigns – Lobbying in Plain View of Consumers and Shareholders

Posted by Kelly Williams

Today the Joint Commission on Public Ethics adopted draft regulations implementing a portion of the 2011 ethics bill that requires that lobbying entities spending in excess of $50,000 per year on lobbying expenditures disclose the identity of their sources who give in excess of $5,000 in a 12-month period.  The regulations will implement a new disclosure regime that will enable the public, the media and lawmakers to understand who stands behind the large lobbying campaigns in the state.   Long-standing and well-accepted laws at the national and local level have long required lobbying entities to disclose their own identities and their expenditures.   But every once in awhile, a large campaign would be organized by wealthy corporate interests just for the purpose of passing or defeating a specific piece of legislation with a moniker that didn’t provide any clue about who was really behind the effort.  The source of the funds for these lobbying organizations and expenditures wasn’t part of the system of lobbyist registration and disclosure.   We believe the new regulations put in place today constitute the first disclosure system for donors and sources to lobbying organizations.  The new regulations will go a long way towards increasing transparency and accountability and may ultimately end the practice of this “black box” lobbying in our state.    Going forward large lobbying organizations in New York State will be disclosing their sources and donors much the same way donors to political campaigns and independent expenditure advertising are disclosed.   Large lobbying campaigns will now be conducted in plain view.  The combination of the new lobbying source disclosures and existing political disclosures may also provide useful information in the years to come. 
The new regulations allow for lobbying organizations to apply for an exemption to the general rule requiring disclosure for instances where the lobbying organization shows “by clear and convincing evidence that disclosure of the …[source of funds] will cause harm, threats, harassment or reprisals to the [source] or individuals or property affiliated with the [source]. “    This process was intended for the benefit of donors to controversial campaigns, such as those for civil rights, who in some states have been the subject of intimidation and harassment.  
It remains to be seen how the Commission will grant exemptions going forward.  We would urge the Commission to clarify that disclosure is the rule, exemption the rare exception.   One of the factors enumerated in the regulations is of concern to us: it allows the Commission to take into consideration: “The impact of disclosure on the ability of the Single Source or Client Filer to maintain ordinary business operations and the extent of the resulting economic harm.”  This factor was not part of the bill passed in 2011, it has been added by the drafters of the regulations at the Commission.   We strongly urge that this not be used to allow for-profit businesses to cloak their lobbying expenditures by arguing that they face an economic boycott or shareholder disapproval if their identities are disclosed.    Consumers have a right to know, and shareholders have a right to voice their concerns. 

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