Democracy for sale or rent

Lobbyists wait outside to talk to House Representatives during the regular legislative session Monday, March 27, 2023. Photo by Nicole Neri for the Minnesota Reformer.

In 1915, lawyers representing the United States Steel Corporation approached state Rep. John M. Harrison of Minneapolis to advance a piece of tax legislation. 

Today we’d call these folks lobbyists. The Harrison bill would have capped municipal taxation for small villages on a per capita basis. Minneapolis was not a small village, but Hibbing was, and that’s where U.S. Steel extracted millions of tons of iron ore each year.

With a minuscule delegation of northern lawmakers from the Iron Range, it seemed inevitable that the well-funded lobby supporting the bill would prevail, dramatically slashing the tax revenue of several Range towns. 

This all stemmed from Hibbing Mayor Victor L. Power and his policies taxing the mines for modern schools, streets and civic improvements. Power argued that mining couldn’t last forever, so towns like his should build for the future. And while his political machine wasn’t above self-dealing, he delivered what his voters — mostly foreign-born miners and progressive merchants — wanted.

Power and dozens of Hibbing citizens vowed to fight the tax cut plan of the company — then the largest in the world — and rode the train to St. Paul to launch a surprisingly sophisticated lobbying campaign. For every U.S. Steel lawyer exaggerating Iron Range “extravagance” to a lawmaker, a Hibbing man clamored in with a rebuttal. 

The battle turned when Power hired the clerk of the House off the rostrum to guide his operation. A former newspaperman, Clerk J.E. Lawler said he couldn’t stand by and watch the inappropriate dealmaking of U.S. Steel. 

Lawler’s intimate knowledge of House rules and the proclivities of its members proved decisive. Hibbing’s allies killed the Harrison bill with a strategic floor maneuver in the waning hours of the session. Victor Power returned home to fireworks, a marching band and a crowd exceeding 10,000 people at the Hibbing train depot. 

The people celebrated victory that would pass a fortune through the town’s economy. These dollars built a city, moved it, and rebuilt it again, erecting the storied high school that would later inspire Bob Dylan. 

But when Hibbing’s citizen lobbyists went home, the Steel Corporation’s kept working. In six years, they passed a similar bill, mostly by placating the rest of the state with a relatively small iron ore production tax. Power’s progressive agenda was slow boiled like the proverbial frog. 

As for Lawler, the former House clerk, he turned out to be a mercenary, accepting a lucrative position as executive secretary of the Hibbing Commercial Club not long after the original U.S. Steel v. Hibbing tax fight. 

Iron Range politics have swung back and forth now, but the mining industry’s political hold on the region was never again in doubt. 

What do we take from this episode? 

First, yes US Steel had its lobbyists, but so did the city of Hibbing. The very word “lobbyist” has become freighted with pejorative implications, but the truth is that we all have lobbyists. If you’re a nurse or teacher or small business owner or live in Hibbing or visit state parks, lobbyists speak on your behalf. The other things we can take from the episode is that access matters (which is why Hibbing hired Lawler). And if access matters, that usually means the money and power that can purchase access also matter.  

How it works

We elect leaders to run the government on our behalf. At the local level, it’s pretty simple. In my rural township, elected supervisors set the budget and see that the dirt roads are graded in the summer and plowed in the winter. There are no lobbyists, unless you count the retired people who attend all the meetings. (And they would surely resent that implication.)

But state and federal governments contain far more layers. Millions, billions and trillions of dollars are spent in a sprawling web of interdependent functions. No matter which party or policies we support, the person we elect to Congress or the Legislature can’t do it on their own.

“Let’s face it, society has gotten a lot more complicated,” said John Ongaro, a veteran lobbyist for northeastern Minnesota counties. “As a result, there’s a lot more people in this business. It’s so much more demanding of expertise.”

State law books that filled half a shelf in Victor Power’s time, and a full shelf when Ongaro started lobbying, now fill an entire book case. This affects everything we do, from eating out to educating our kids, from the very technology that delivers these words to you.

A lobbyist advances policy objectives by paying close attention to lawmakers — informing, persuading, browbeating and complimenting as necessary. As such, lawmakers might assume a demeanor of authority, believing that this pitched ado is all for them.

But the lobbyists aren’t there to serve lawmakers. This is a negotiation among interests, a competition even. And it’s not a fair fight.

Lobbyists make more money than the legislators and often know more than the legislators. Depending on their affiliations, they might form close alliances and even personal friendships with the lawmakers. Heck, a whole lot of lobbyists actually served in the Legislature not that long ago.

So when a lawmaker sees a lobbyist, they must decide if they’re talking to a friend, a bully, a conscientious professional or a master manipulator. Sometimes, these colors run like a pack of Starbursts washed in a shirt pocket. 

“Trust is currency and relationships matter,” said Shannon Watson, a former lobbyist who now leads the nonprofit Majority in the Middle.

Lobbyists perform an important role, providing information and context for the decisions made at the Capitol. But accountability for their elevated access and influence rests with sometimes porous state laws and the conscience of individuals.

Money and power make mince meat of such arrangements. Always have.

The revolving door

For the past 40 years, John Ongaro has lobbied at the state Legislature, most of them for the Arrowhead Counties Association based in Duluth. He will retire at the end of the current session. 

He was one of 200 registered lobbyists during his first session. This week, the Minnesota Campaign Finance Board lists almost 1,600 registered lobbyists.

To explain the leap, Ongaro cites more demand for expertise in complex systems — and big financial incentives for passing favorable legislation. Lawmakers are serving shorter stints, too, which eliminates a lot of valuable experience in the Legislature. Lobbyists fill the gap in subject matter expertise, and often a given interest will require several of them to fan out across the Capitol.

“Sometimes it comes down to hiring the best and brightest, but often times it comes down to hiring the most,” said Ongaro. 

If lobbyists have preexisting relationships with legislators, he added, they will have an enormous advantage. That’s why recent or even current lawmakers have become valuable hires for legal, lobbying and public relations firms trying to influence the Legislature.

Last year, former DFL Senate minority leader, Sen. Melisa López Franzen took a job as the University of Minnesota’s chief lobbyist eight months after leaving office.

This year, former Minnesota House Speaker Kurt Daudt, a Republican, resigned to take a leadership role with a government relations firm that refers clients to lobbyists.

Just last month, State Sen. John Hoffman, a Minneapolis DFLer, drew criticism for using his status as a legislator to bring in business for his consulting firm.

Here on my native Iron Range, former lawmakers are more likely than not to have become lobbyists. Former State Sen. Tom Bakk was a long-time DFL caucus leader who finished his last two years caucusing with Republicans. After leaving office two years ago he became a lobbyist for mining and tobacco interests.

Bakk’s predecessor, the late DFL Sen. Doug Johnson, also forged a prolific career as a lobbyist after leaving office.

In 2015, late DFL State Sen. David Tomassoni tried to take an executive director job of the Range Association of Municipalities and Schools while still serving in the senate. RAMS also lobbies the Legislature. Ultimately, he gave up the pursuit amid public criticism.

Former state Sen. Jerry Janezich, DFL-Chisholm, became a longtime lobbyist for the Minnesota State Colleges and Universities, where he now serves on the Board of Trustees.

This isn’t to say that former lawmakers aren’t entitled to seek employment, or that they have nefarious goals in mind. But they are selling a valuable commodity that other people don’t have: recent legislative relationships in a relationship-based profession.

The fix

When the trade of relationships, influence and power becomes so lucrative, sitting lawmakers start gaming out their evolution from legislator to lobbyist. (Former congressman turned pharma lobbyist Billy Tauzin is the perfect example, and Medicare couldn’t negotiate lower drug prices for two decades as a result.)

The revolving door also tends to corrode the public’s confidence that lawmaking at the Legislature is on the up-and-up. The steady erosion of civic trust is slow-walking us into authoritarianism. 

This year, a new law took effect expanding the definition of a lobbyist. Higher income private citizens who spend more than 3% of their time lobbying must register. So must those spending more than $3,000 trying to influence legislation. While this improves transparency, it doesn’t mitigate the sheer power that lobbyists have, nor does it deter the legislator who leaves office to become a lobbyist.

In 2023, Sen. John Marty, DFL-Roseville, proposed a bill that would have banned legislators from becoming lobbyists for seven years. The bill died. This year, Republican lawmakers led by House minority leader Rep. Lisa Demuth authored a bill that would set that limit at two years. 

But the bill with the best chance of passing is a DFL measure that would place a constitutional amendment before voters this fall. Among the provisions of this amendment: expansion of when the Legislature can meet; an independent redistricting commission; and a one-year ban on lobbying when a legislator leaves office.

At minimum, professional influencers like Ongaro and Watson agree that a fixed moratorium on legislators becoming lobbyists is appropriate. The U.S. Congress, by law, sets that term at one year. Minnesota’s House rules also state a one-year ban on lobbying, but it’s not backed by the force of law and is routinely circumvented.

“Something should be done because Minnesota normally leads the nation in reforms like this,” said Ongaro. “We’re behind the pack.”

One obvious solution is to make the Legislature and its relationship with lobbyists more transparent.

“The Legislature needs to apply the government sunshine laws that apply to counties, school boards and local governments to themselves,” said Watson. “Right now you can’t make a data practices request for lawmakers’ e-mails because they have exempted themselves. Who has their ear? Open up your own calendar to public scrutiny.”

With sine die bearing down on this year’s session, we’ll soon learn if voters will get a say on legislative and lobbying reforms this November. If not, we will go around the horn to a new Legislature next year, hoping this time will be different.

Perhaps a recently retired or deposed legislator might be available to lobby on the people’s behalf.

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