The end of the election cycle and the advent of new policies at the Secretary of State’s Office have led to a monumental spike in the number of lobbyists who are overdue in filing their annual spending reports.
The Secretary of State’s Office sent out 492 failure-to-file notices in mid-April to private organizations and governmental agencies — categorized under state lobbying laws as principals and public bodies — that had not yet submitted 2008 annual reports on lobbying activities, a dramatic jump from the 77 who did not file their 2007 reports on time, according to the Secretary of State’s Office.
Elections Director Amy Bjelland said the reason for the spike in late filings is a combination of repercussions from the 2008 election and a recent change in the way the Secretary of State’s Office notifies lobbyists of the approaching deadline for filing expenditure reports.
The campaign season brought a large number of out-of-state organizations into Arizona to lobby for candidates and ballot initiatives, and Bjelland said some may have left town and forgotten that they still had to file their annual reports.
Additionally, numerous department heads, who also serve as their agencies’ primary lobbyists, left their posts when Jan Brewer succeeded Janet Napolitano as governor, and Bjelland said some may not have realized they still had to file the annual reports for their departments. Brewer named former state Senate President Ken Bennett as her replacement.
Possibly the largest contributing factor, however, may be a policy Brewer — then the secretary of state — changed regarding notification about the filing deadline. Prior to late 2008, the Secretary of State’s Office sent letters to lobbying organizations to remind them of the impending deadline. That policy ended in late 2008, but Assistant Secretary of State Jim Drake said many people were unaware of the change and did not realize the deadline was approaching because they had not received their customary reminder letters.
Drake said the Secretary of State’s Office may reinstitute the old policy in some form.
“We’re going to front-load this a little bit so that, one, we don’t have to scramble after the fact and try to cajole people into complying, and two, since the process did change, I think it may not have been fair to them,” Drake said. “Granted, you’re supposed to … do this, but at the same time, people were very used to a system where you had a lot of notice.”
Principals and public bodies have two weeks to file their annual reports after they receive notice that they’re late. Drake said 181 of the original 492 have not filed since receiving their late notices, and “stuff’s still trickling in.”
“I think you’re going to see the 181 go down substantially further, too,” Drake said.
Once that two-week window has closed, cases can be referred to the state Attorney General’s Office, and organizations that fail to file their reports can be fined up to $1,000. Such cases do not impact an individuals’ ability to work as lobbyists, even if they receive the maximum fine.
However, Bjelland said it rarely comes to that. The Secretary of State’s Office hasn’t referred a case to the attorney general since 2007, and that case involved a person who hadn’t registered as a lobbyist, not someone who didn’t file an annual or quarterly report. Attorney General’s Office spokeswoman Anne Hilby said the case ended when the would-be lobbyist simply decided to cease her lobbying activities rather than register.
Even when people don’t respond to the late notices within two weeks, the Secretary of State’s Office generally tries to find a way to work with the late filers. Bjelland said people who forget to file their reports usually aren’t trying to thwart the system. Some people simply lose track of time, she said, or lose the secretaries who often handle those responsibilities.
Bjelland said most lobbyists have nothing to gain and much to lose from not filing annual or quarterly expense reports. Their livelihoods depend on lobbying, she said, and there is a stigma attached to breaking the rules.
“I don’t mean to make excuses for people, but I think we’re human and we try to understand that here,” she said. “I think everybody knows the difference between making a human error and purposefully trying to get around the law.”
Drake also pointed out that people often rotate between government service and lobbying, dubbed the “revolving door” of politics. If someone works as a lobbyist for the first three quarters of the year and switches jobs for the fourth, that person might forget to file their final quarterly report, or the Secretary of State’s Office may not realize they have stopped lobbying before they send out a failure-to-file notice.
“You know how small the circles of state government are. Some of these people lobby for one year and then they transition back into government service. They might not have been required to file that fourth quarter,” Drake said.
But even if the late filings are honest mistakes, compliance must be enforced in order to maintain the integrity of the system, Bjelland said. As a cautionary example, she points to the AzScam scandal, in which seven legislators were accused of taking bribes from an undercover law enforcement agent who was posing as a lobbyist.
“The main interest is compliance. You want them to comply, and then if you have something egregious” you refer it to the AG’s office, Bjelland said. “Unfortunately, people can be dishonest, and so I think that’s why this is important. It’s something that shouldn’t be discounted.”