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REVEALED: Loopholes let lobbyists flood lawmakers with campaign contributions despite prohibition

Posted: 3:49 PM, Feb 17, 2022
Updated: 2022-03-07 17:14:50-05
Tennessee House Chamber.jpeg

NASHVILLE, Tenn. (WTVF) — It wasn't supposed to be this way.

NewsChannel 5's cameras recently caught special-interest lobbyists lining up with massive campaign contributions to curry favor with your lawmakers right before they get ready to do the public business.

More than a decade ago, lawmakers supposedly tried to outlaw the practice.

"My impression was that the lobbyist giving was out," said former state Rep. Craig Fitzhugh, D-Ripley.

NewsChannel 5 Investigates asked, "Do you think it was just window dressing?"

"I don't think so," Fitzhugh said. "It may have come about through a, for lack of a better term, a loophole — or wasn't considered at the time."

Historically in Tennessee, scandal has led to calls for reform.

In 2006, then-Gov. Phil Bredesen summoned lawmakers for a special session, calling for a new relationship between government officials and special interests. It was a call for reform that sprang from a legislative bribery scandal... and an undercover FBI sting that ensnared several prominent lawmakers.

"On the subject of ethics, it is time for bold actions," Bredesen said, drawing bipartisan applause.

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Then-Gov. Phil Bredesen addresses a special session on ethics in 2006

"People whose lives and businesses are affected by what we do have the right to employ people to follow legislation, to bring information to the table. But this process needs to be businesslike and arms length across the conference table in the public committee room."

When the final gavel had sounded, a new law banned lobbyist contributions to certain state officials.

Specifically, the law says "no lobbyist shall offer or make any campaign contribution, including any in-kind contribution, to or on behalf of the governor, any judge or chancellor, or any member of the general assembly, or any candidate for the office of governor, supreme court judge, court of appeals judge, court of criminal appeals judge, circuit court judge, chancellor, juvenile court judge, general sessions judge, state senator, or state representative."

But just five years later, video posted to YouTube shows Republican leader Glen Casada openly acknowledging using his position to try to convince the Tennessee Education Association, which lobbies the legislature, to pony up more money to help Republican candidates.

"Democrats do that, the Republicans do that. It's just done," Casada said. "And I actually don't see anything wrong with that. We're trying to raise money."

And just before this year's legislative session, we spotted Capitol Hill's top special-interest lobbyists scurrying from one fundraiser to another with checks in hand.

The big draws: fundraisers put on by House Speaker Cameron Sexton and the Senate speaker, Lt. Gov. Randy McNally.

That data reveals Speaker Sexton raked in almost $180,000 in campaign contributions for his own campaign and his leadership PAC. Lt. Gov. McNally snagged $140,000 for his campaign and PAC.

Combined, the pair got more than $320,000 — most of it from special interests with business before the legislature.

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House Speaker Cameron Sexton, Lt. Gov. Randy McNally pre-session fundraising hauls

So how does that happen?

Before 2006, lobbyists could give political contributions directly to lawmakers.

But since that was outlawed, some lobbyists figured out they could create a political action committee, put money into that PAC, and call it a contribution not from the lobbyist, but from the PAC — and get away with essentially the same thing.

"I mean, I wouldn't call it money laundering, but It certainly makes it difficult to follow the flow of money," said Debby Gould of the League of Women Voters of Tennessee.

NewsChannel 5 Investigates noted, "Essentially, they are saying you 'wash' that money through the political action committee and it's clean."

"Yeah, but it's legal," Gould answered.

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One of the loopholes in the ban on lobbyist contributions to lawmakers

"And that's always a problem when you make things legal that we essentially understand are wrong even when they are legal."

Confidentially, some Capitol lobbyists admit that, as part of their compensation, they sometimes ask their clients to donate money to their political action committees... so they have something to give those whose votes they are trying to influence.

Others show up at fundraisers with checks from their clients or from political action committees operated by their clients — a practice known as "bundling."

Regardless, it gives them a chance to personally put the checks into the hands of the lawmakers they're trying to influence.

"These are down payments to be able to come back and get access during the legislative session and eventually, the votes that they want," said former Republican activist Dan Krassner.

Krassner is the political director with the non-partisan political reform group RepresentUS.

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Dan Krassner, RepresentUS

He said the one thing that unites almost all Americans is the notion that the political system is broken.

"There are too many loopholes now, and they need to be closed," Krassner added.

The group's anti-corruption recommendations call for "stopping political bribery."

They would "make it illegal for politicians to take money from lobbyists" and "ban lobbyist bundling" where lobbyists round up checks and deliver them to the politicians.

NewsChannel 5 Investigates noted the challenge is that people who have the power to change the laws often have no incentive to enact political reforms.

"That is a challenge when you have the fox guarding the henhouse," Krassner admitted.

"But Tennessee lawmakers showed in 2006 that it's possible... This good law that Tennessee passed, it's time to modernize this law, close those loopholes, toughen the enforcement."


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