Bill changes how much lobbyists must report when they spend on legislators

A House committee approved a bill that would potentially lower how much lobbyists report compared to what they actually spend for events where lawmakers or state employees are invited.

The measure would change the reporting rules by requiring that only the fair market value of the food, beverage and other tangible benefits received by the state officer or employee is reported. Currently, reportable expenditures are based on the total expenditure incurred by the lobbyist for the benefit of the organization hosting the event.

It’s not uncommon, for example, for lobbyists or companies to sponsor tables at charitable events. Currently, if they invited legislators to sit at their table, they must report the total amount they spent, even though the market value of food and beverage may be considerably less.

SB1118, sponsored by Sen. John Kavanagh, R-Fountain Hills, was approved on March 1 by the House Government Committee, 6-2, with Democrats Ken Clark, of Phoenix, and Athena Salman, of Tempe, voting against it.

Kavanagh said the bill, which was unanimously approved by the Senate, was brought to him by the Greater Phoenix Chamber of Commerce, which argued that current reporting requirements are unfair.

Mike Huckins, a lobbyist for the chamber, said because the value of the ticket can vary depending on where someone is sitting or how much a sponsor donated to the organization running the event, it’s not an accurate representation of what the lawmaker or public employee received. The cost of the event, he added, goes toward the organization and does not benefit the public official.

However, Clark argued that lawmakers get more than just a meal and a drink out of attending these events. He said lawmakers are invited to them “because they play a prominent role,” and groups want to influence them.

“When I first saw the bill, it seemed reasonable to me to report the fair market value,” Clark said. However, as he looked further into it, he became concerned that reporting the fair market value alone is not transparent, he said.

“If a lobbyist gets you into a $500-a-plate meal or gala, the public has a right to believe that there’s some kind of expectation there,” he said, adding, “If you’re going to report the fair market value, you should also report the total ticket value so the public knows.”

Salman said she has had the opportunity to meet lobbyists and industry representatives at these events, an opportunity she otherwise wouldn’t have had if she isn’t a legislator.

“To me, there’s a value in that,” she said, adding that the current reporting requirements capture that. “To argue the only benefit someone who votes on laws is getting by going to these events is a free meal and a free drink, I think, is misleading to the public.”

Huckins disagreed.

“Obviously, there are other incidental benefits from going to an event, but how do you put a price tag on that?” he said.

An amendment Clark proposed but later withdrew would have addressed this point by requiring that the fair market value and the total value of the ticket be reported. Kavanagh said he hadn’t seen the amendment but would be open to discussing the issue further with Clark.

Rep. Ray Martinez, D-Phoenix, who voted in favor of moving the bill out of committee, said he reserved the right to later change his vote if some of the concerns brought up by Clark and Salman aren’t addressed.