The Public Eye December 29, 2016
By Taryn Luna and Jim Miller firstname.lastname@example.org
With a cap-and-trade battle brewing and major climate change bills on the horizon, billionaire environmentalist Tom Steyer hit the airwaves last summer ripping the oil industry in TV advertisements around the state.
“Tell your legislator to stand up to the oil companies and protect our clean-air laws,” Steyer said in one version of the ads. “Don’t let the oil companies put their profits ahead of our kids.”
Steyer’s public appeals aired during a critical time in the California Legislature, the end of the two-year session in which lawmakers scrambled to pass bills before the Aug. 31 deadline.
The quarter that covered July 1 through the end of September was so important that companies, unions, trade associations and other groups paid $84.4 million to lobby officials on bills and regulations during the three-month period, according to state lobbyist disclosure filings.
With about a week left in the session, the Legislature passed Senate Bill 32, a heavy lift and a Steyer priority that further reduced the state’s greenhouse gas emission targets to 40 percent below 1990 levels by 2030. Steyer’s political committee, NextGen Climate, spent $7.3 million to influence legislation that quarter.
Under previous rules governing lobbyist disclosures in California, the overall amount of money Steyer forked out is about all the public could glean from state filings. Now, due to new reporting requirements from the California Fair Political Practices Commission, the filings provide the first-ever financial details of Steyer’s multimillion-dollar advertising campaign for SB 32 and other media blitzes from special interests seeking to build support for bills and regulations.
Much as campaigns for candidates and ballot measures seek to win over voters, the filings underline the extent to which special-interest groups employ some of the same resources to make their cases to lawmakers and state officials. They also for the first time provide the public details about which political consultants, public-relations experts, advertising firms and other non-lobbyist advocates are being paid to help influence policy at the Capitol.
The rule “provides a significant first step in closing a glaring gap in current disclosure rules, one that allows vast sums used to influence legislation and agency actions to fly under the radar without meaningful public disclosure,” Emelyn Rodriguez, a senior counsel with the FPPC, said when the agency approved the change at its January meeting.
Back when California’s Political Reform Act was originally implemented in the 1970s, lobbying largely meant directly communicating with lawmakers or state agencies. While outside groups were required to itemize payments made to directly influence state officials, other means of persuasion, such as Capitol rallies, were obscured in a catch-all category dubbed “other payments to influence.”
Today, lobbying firms employ more of those other techniques to exert influence, including social media campaigns, online ads and grass-roots protests. Over the years, the catch-all “other payments to influence” category ballooned, leaving voters in the dark.
The Fair Political Practices Commission, which acts as the state ethics watchdog, changed the rule nearly a year ago to better adapt to 21st century lobbying tactics. The new rule, which took effect July 1, requires lobbyist employers to itemize their “other payments to influence.”
A Sacramento Bee analysis of the new data shows at least $8.1 million in other payments were spent on advertising. Another $1.4 million went to public affairs work, which includes media campaigns, mailings, canvassing and other attempts to shape opinions. Consultants took home another $1.4 million.
Steyer’s committee, NextGen Climate, spent more money than any other lobbyist employer in California during the quarter.
The bulk of Steyer’s money, roughly $6.6 million, went to BlueWest Media. BlueWest is a Denver company that strategically buys commercial and other media slots for advertisements. NextGen paid another $304,500 to Trilogy Interactive, a Palo Alto company that focuses on online communications.
Steyer’s committee paid Armour Media, a Santa Monica advertising agency, $349,614 for advertising during the quarter. On its website, Armour said it executed a multimillion-dollar advertising and lobbying campaign for NextGen over the summer that led to the passage of Senate Bill 32.
Andrew Santana, a spokesman for NextGen Climate, said Steyer’s face in the advertisements made it clear that he paid for the spots.
“Our clean-air ads this summer were transparent and served as a counterweight to the oil industry’s entrenched influence,” Santana said. “It would be great to see oil company executives featured in their own ads.”
The oil company that reported the most “other payments to influence” in the quarter, San Ramon-based Chevron Corp., listed more than $500,000 in expenses, with $303,000 of that categorized as overhead. Of the $190,000 in itemized payments, about half was for staff salaries. The rest of the payments went to public affairs, consulting and research, such as polling, according to the oil company’s filing.
Houston-based oil company Phillips 66 listed $98,000 in “other payments to influence,” with about $73,000 in itemized expenses. The largest of those was a $45,000 payment to the Western States Petroleum Association, according to the company’s filing.
The Western States Petroleum Association, the second-largest lobbyist employer in the quarter, in turn reported spending $2.6 million to lobby California officials. The association, which represents oil interests, reported lobbying on at least 50 bills in its last filing.
The association reported spending at least $462,816 on advertising, whether to oppose Senate Bill 32 or other legislation.
Derek Cressman, a former Democratic candidate for California secretary of state who has written two books on money’s role in politics, said the new payee information will be of most interest to competing Capitol players. The “hyper-disclosure,” he said, will be of less use for everyday Californians.
Good-government groups say the new regulations improve transparency about lobbyist spending, yet they note that there continue to be holes in lobbyist-disclosure laws. It continues to be difficult, if not impossible, to link lobbyist employer spending to a particular bill.
“We think this is a substantial improvement over the prior ‘other payments to influence’ disclosure,” said Nicolas Heidorn, policy and legislation counsel for California Common Cause. “We think groups that spend money on advertising to influence the legislative process should also have to indicate which bills they were spending advertising money on.”
The table below shows itemized other payments to influence from July 1 through Sept. 30, as reported to the state by lobbyist employers. See list of payment categorization codes under table.