Thursday, February 21, 2013

Star Wakes Up: Reports On IMS' Influence Peddling To Buy Votes For Its $100 Million State Giveway

The Indianapolis Star, after spending the last two weeks acting as the number one cheerleader for the Indianapolis Motor Speedway and its owners' request to raid the state treasury to the tune of $100 million, has finally awakened to the fact that it has to put on some semblance of being a legitimate newspaper. Lo and behold, one of its reporters discovers what I've been telling you from day one: The IMS carefully began buying influence with lawmakers before unveiling its raid of taxpayer dollars just two weeks ago, which has already successfully cleared the Indiana Senate by an overwhelming margin. Alex Campbell reports:

In the middle of 2011 — with a decision to ask state lawmakers for financial help still months away — Indianapolis Motor Speedway officials began donating tens of thousands of dollars to political candidates.
By the time the election campaign had ended, the IMS had contributed more than $100,000 to Hoosier politicians and campaign committees -- 12 times more than speedway officials had donated over the entire previous 10 years when such contributions totaled about $8,500.
“We made a strategic decision,” IMS spokesman Doug Boles said, “that it was time to be more than a passive observer.”
Boles said the Speedway’s increased involvement arose from a general desire to become more politically active and came before it made specific plans to ask for state assistance.
“It did not,” Boles said, “coincide with our planning.”
The lobbying and more than $100,000 in campaign contributions didn't coincide with the IMS' decision to seek $100 million in state welfare assistance? C'mon, Doug. How stupid do you think people are?  Campbell's story continues:

Those contributions began to pick up in July 2011. By that time IMS had hired Bose Public Affairs Group, a government affairs firm, Boles said . . .
In talking with Bose, IMS decided to “invest in the entire process,” Boles said. That meant supporting candidates at the state and local levels in both political parties. Early on, IMS sent $450 in donations to Luke Kenley, the Republican chair of the Senate Appropriations Committee, and $250 to Democratic Rep. Ed DeLaney of Indianapolis . . .  
As they pushed forward with the possible proposal, IMS officials kept the donations coming. The company gave nearly $60,000 to candidates in 2012.
It also registered as a lobbying organization with the Indiana Lobby Registration Commission for the first time since 2000, reporting it had given tickets, food and drink worth $300 to $600 to 10 lawmakers. IMS has long given away tickets to the big races to all state lawmakers, Boles said, but reported some of the 2012 tickets because they were invitations to a particular suite.
With the campaign contributions, IMS continued on a bipartisan track. It gave $10,000 to the Indiana Republican State Committee, and $10,000 to the Indiana Democratic State Central Committee. IMS contributed $5,000 to Mike Pence’s campaign for governor, and $11,000 to his eventual Democratic opponent, John Gregg. Republican House Speaker Brian Bosma received $1,250; Democrat House Minority Leader Scott Pelath $250 . . .

Several campaign veterans, though, told The Star they hardly noticed IMS’s new strategy.
For example, the senator who proposed moving this bill in the first place -- Indianapolis Republican Mike Young, who received $550 -- said he hadn’t noticed any particular uptick in IMS’ political contributions. In fact, he said, “I don’t know who they contributed to.”
Sen. Tim Lanane, D-Anderson, received three donations in June of last year totaling $1,000. He said that’s about the time he had a fundraiser. He remembers IMS sending money, but said he wasn’t asked about any specific policy proposal.
“I don’t remember if they even attended it,” Lanane said, “or if they just sent a check.”
Lanane said he voted for the Speedway’s taxing district simply because of the track’s historical significance and its importance to the state.
There are only two items of note from this story, which barely scratches the surface of the corrupt behind-the-scenes deal-making that led up to lawmakers agreeing in secret to make the largest single direct welfare grant in state history to the Hulman-George family's IMS. Firstly, why did the IMS cease using its long-time lobbyists at Ice Miller, the law firm that served as the IMS' general counsel for decades? Secondly, why are the vast majority of tickets given away by the IMS to state lawmakers not reported? Boles told Campbell that it only reported a few of the tickets it gave away last year "because they were invitations to a particular suite." Does the IMS get around reporting the gift of free tickets to lawmakers because its invitation to attend the race is extended to all 150 lawmakers? If that's the case, then it's just another example of how piss poor Indiana's financial disclosure laws are for state lawmaker and officials.

UPDATE: A friendly reader sent me this old advisory opinion issued by the Indiana Lobby Registration Protection Commission from 1998, which explains a big hole in Indiana law that permits the IMS to give away more than $30,000 worth of free tickets to Indiana legislators in a single year and never disclose those gifts to lawmakers:


If there is no legislative action upon which the agent or principal is attempting to impose influence, there is no duty to file a lobbyist's Report of Legislative Gift or Purchase, regardless of the amount of the gift. However, if it is determined that the gift was given with the intention of influencing legislative action, there is a duty to register and report.

Corporation "X" is not a registered lobbyist. X provides goodwill gifts, in the form of tickets to a major sporting event, to legislators each year, regardless of whether it is actively lobbying the legislature. In the past, X had the agent actively lobby on certain issues. However, the agent only monitored the legislature this year. The total value of the gifts to the legislators was in excess of $30,000 during a three month period. The tickets came directly from X to the legislators. X has no duty to register and report the gifts with the Commission.

I.C. 2-7-3-6(a) requires that "a lobbyist shall file a written report with respect to a member of the general assembly whenever either of the following occurs: (1) The lobbyist has made a purchase described in IC 2-2.1-3-2(7) with respect to that mem ber. (2) The lobbyist has made a gift described in IC 2-2.1-3-2(8)."

I.C. 2-2.1-3-2(8) requires a legislator to report on its statement of economic interest "the name of any person or entity from whom the member . . . received the following: (A) any gift of cash from the lobbyist. (B) Any single gift other than cash h aving a fair market value in excess of one hundred dollars ($100). ( C) Any gifts other than cash having a fair market value in the aggregate in excess of two hundred fifty dollars ($250). Thus, the aggregate value of the tickets would cause the gifts t o be reported by legislators on their statements of economic interest.

The gift alone does not trigger a duty to register as a lobbyist. It must be determined whether X or its agent was "engaged in lobbying." "Lobbying" means "communicating by any means, or paying others to communicate by any means, with any legislativ e official with the purpose of influencing legislative action." I.C. 2-7-1-9.

An agent who merely monitors the action of the legislature is not communicating with the legislators. Although an entity or person, in giving gifts to legislators, is communicating by any means, each time a gift is given to a legislator does not mean it communication was done with the "purpose of influencing legislative action."

To the extent there is no legislative action upon which the agent or principal is attempting to impose influence, there is no duty to file a lobbyist's Report of Legislative Gift or Purchase, regardless of the amount of the gift. It should be noted, however, that facts and circumstances which support a finding that there was an intent to influence legislative action with the gift will be carefully considered by the Commission.

Yep, the best legislature money can buy.


Had Enough Indy? said...

What's weird is the IMS has been giving to the Councillors and the Mayor's campaigns, too. Mostly D Councillors from my casual look through a couple of weeks ago. Mostly $250 each.

Gary R. Welsh said...

They've always given free tickets to the councilors, and they've always contributed to whoever is the mayor. It is only more recent that they've started throwing money at council candidates, although they've given money in the past to the local parties.

Flogger said...

The Campaign Finance system in US has been always been ripe fruit for corruption and/or influence peddling.

One solution might be at Federal and State Levels, that you must be able to vote to contribute to a Political Campaign, with limits on the amounts. This would eliminate any non-human from contributing to a candidates political campaign.

Part of the contribution is not so much the money, but you are identified as a "Friend" of the contributor. Basically, you have your political passport stamped by important influential people. This is important in attracting other Friends of your contributor to donate also to you or the least not to donate to your opponent.

The duplicity of our current system is sometimes revealed when Mr. Rich donates to both candidates running for the same office.