Pennsylvania’s lobbying disclosure law isn’t meeting its aim, oversight report finds

Pennsylvania’s lobbying laws suffer from a host of problems, including issues of transparency and enforcement, a report by a new legislative committee has found.

“If the scope of the lobbying disclosure law is to figure out who spends money on who, I think the current law fails at both,” House Government Oversight Committee Chairman Seth Grove, R-York, said Wednesday after the panel held a hearing on the report.

The findings are from the first report released by the committee, which was established to investigate how laws passed by the General Assembly are implemented. The panel has subpoena power.

Lobbyists — or hired guns who work on behalf of organizations seeking to influence the Legislature’s decision making — are required to register with the Department of State. They, as well as the organizations that hire them, report their expenditures to the state.

But the report, approved unanimously by nine Democratic and Republican lawmakers, found that current laws make under-reporting of expenditures easy, audits infrequent, and ensuring compliance difficult.

House leadership from both parties referred the topic to the Oversight Committee in May. The report specifically looked at how a law passed in 2018, sponsored by House Majority Leader Bryan Cutler, R-Lancaster, has impacted state lobbying statutes.

Cutler’s bill mandated electronic reporting of lobbying expenses and increased penalties for non-compliance.

The oversight panel’s report suggests that instead of requiring organizations that hire lobbyists to report lobbying expenses, all reports should come from the lobbying firms themselves.

This could correct a current issue that allows lobbyists to obscure costs by dividing expenses over multiple clients at the same firm.

The report also recommended audits of the disclosure program conducted by the Department of State become public. Currently, they are confidential by law. 

According to summaries from the Department of State, 20 percent of lobbying firms or individuals filed a late registration between 2015 and 2017, while 8 percent submitted a late expense report.

While there was no requirement to do so, none of the audits that revealed late reporting were transferred to the state Ethics Commission for investigation.

The Department of State outsourced audits of lobbying expenses to private firms, the report found, including one that employs lobbyists in Harrisburg.

The committee found no  evidence that audits had been negatively impacted, but the report recommended preventing such conflict of interests in the future.

The committee also suggested eliminating a $300 lobbying licensing fee and instead funding lobbying compliance efforts from sales taxes on lobbying services, such as communications with public officials.

The fee provides roughly 50 percent of the budget for lobbying rule enforcement, according to Grove. Beefing up the state allocation, and building a better website for lobbying disclosures, might also be necessary, he added.

Peter Trufahnestock, president of the Pennsylvania Association of Government Relations, said in an email that the lobbyist organization’s board would review the report.

Pennsylvania passed its first law regulating lobbying in 1961. The current regulations were established in 2006.

In a statement, Cutler said he was reviewing the report.

Read the full report here.