A letter from a powerful lobbying association demanding an apology was delivered to Rep. Rick Hansen (DFL-South St. Paul) after he asked pointed questions after it was revealed in committee on Thursday, February 26 that the group wrote wrote HF616.
Forum News Services reporter Don Davis covered the incident in South St. Paul lawmaker's questions draw apology demand.
It may simply seem like a momentary kerfuffle, but a review of the continuation of the committee's hearing of the bill on Tuesday, March 3 reveals a classic case of regulatory capture.
Legislators, it seems, may not ask questions of lobbyists representing interests brought to the Minnesota legislature. But legislators (who are quite comfortable letting special interests write the bills) may grandstand about how scientists and civil servants are incapable of setting regulatory standards.
Who will those comfortable legislators turn to for advice, if not an agency's technical and scientific staff? Any guesses?
Regulatory capture: a primer
What do we talk about when we talk about regulatory capture? Investopedia provides a basic introduction:
Regulatory capture is a theory associated with George Stigler, a Nobel laureate economist. It is the process by which regulatory agencies eventually come to be dominated by the very industries they were charged with regulating. Regulatory capture happens when a regulatory agency, formed to act in the public's interest, eventually acts in ways that benefit the industry it is supposed to be regulating, rather than the public.
Public interest agencies that come to be controlled by the industry they were charged with regulating are known as captured agencies. Regulatory capture is an example of gamekeeper turns poacher; in other words, the interests the agency set out to protect are ignored in favor of the regulated industry's interests.
Bluestem doesn't think that the MPCA is captured yet, but bills like HF 616, which a lobbyist for the Coalition of Greater Minnesota Cities admitted was written by the CGMC on behalf of those who face new standards for phosphorous in treated waste water, edges us closer to this normal and casual political corruption.
What's the matter with phosphorus?
Phosphorous, by the way, is the pollutant that causes those nasty-looking algae blooms. As some unfortunate pet dogs learned last summer, it's not just nasty-looking, it's toxic to animals that enter or drink the water.
The EPA has asked states to develop a standard for cities and other "point" sources to meet--though as John Persell has pointed out on March 3, many cities in Minnesota were ahead of the curve. He cited the example of Bemidji, which had done the right thing for its area lakes, which feed into the Mississippi River; removing the nutrients from its water removed them for those downstream.
Bull hockey: the Coalition of Greater Minnesota Cities' beef
This brief exposition brings us back to the Don Davis article, South St. Paul lawmaker's questions draw apology demand. Davis writes:
The Coalition of Greater Minnesota Cities demands an apology from a east metro lawmaker after he appeared critical of the group last week during a House committee hearing.
However, Democratic-Farmer-Labor Rep. Rick Hansen of South St. Paul said Wednesday that what the coalition considered harsh questioning was part of his ongoing attempt to change the Capitol culture of giving special interest groups power.
A coalition lobbyist was testifying about an environmental bill affecting cities when Hansen asked if the group wrote the bill. Lobbyist Elizabeth Wefel said the coalition did.
Then Hansen turned to about campaign contributions.
"Is the Coalition of Greater Minnesota Cities one of the largest contributors to campaigns in the state of Minnesota?" he asked.
Wefel responded that cities cannot donate to campaigns or have political action committees that give to campaigns. . . .
Ah, but their paid lobbyists can (and do; see the searchable database here at the Minnesota Campaign Finance and Public Disclosure Board).
There's another question as well that Hansen didn't raise. How much did the cities that are members of the CGMC pay for lobbying activities? In this case, that would involve writing the bill.
Fortunately, we don't have guess about this stuff, at least not for years past, for the office of the State Auditor (a constitutional office not to be confused with the Office of the Legislative Auditor) is charged with reviewing how much cities spend on lobbying services.
The latest report is for 2013 (issued in 2014) notes in its executive summary that:
In addition to the $3.9 million paid directly to staff and contract lobbyists, local governments paid dues of $10,967,446 in 2013 to local government associations that also represented their interests before legislative, administrative, or other governmental bodies. . . . These associations spent $4,213,414 on lobbyists and lobbying in 2013. This represents an increase of 8.6 percent over 2012. Of the $4.2 million spent on lobbyists and lobbying by these associations, $3,837,539 was funded exclusively through dues. This represents an increase of 9.4 percent over the $3,509,101 in association dues that were spent on lobbying activities in 2012 (pg. 5).
And the Coalition of Greater Minnesota Cities? On page 11, under the headline Associations With the Highest Expenditures on Lobbying Services, we learn that the Coalition was the biggest spender, clocking in at $835,674.
Under Compensation Paid to Firms or Staff for Lobbying Services on page 12, the state auditor's report states:
In 2013, Minnesota local governments or associations of local governments paid ten firms or employee lobbyists $100,000 or more to provide lobbying services. . . . The ten firms or employees receiving $100,000 or more in payments from lo cal governments or associations of local governments are listed below in Table 3.
Leading the pack is Flaherty & Hood, P.A. at $894,740; the next lobby shop, Messerli & Kramer, received less than half that at $442,187.
The lobbyists registered for the Coalition of Greater Minnesota Cities are found here on the MCFPDB's site. Click on all of the hot links under the lobbyists' names, and you'll find all but two--former Range powerhouse legislator Douglas Johnson and Jeff Van Wychen -- work at Flaherty & Hood P.A.
Essentially, the hired guns of the cities--which are asking that water quality standards be set by the legislators--wrote the bill for the legislators. We don't imagine they'll stop paying those lobbyists when it comes time to set those standards.
In the meeting, Hansen said little about his motives for the line of questioning, other than: "Money is everywhere in our political system." . . .
Hansen told Forum News Service that he has begun asking questions like he did in McNamara's environmental committee because the Capitol culture has turned too much to favoring special interest groups.
Hansen, who said he will not apologize to the coalition, said: "It's money that is pollution in the system."
While lobbyists traditionally write bills and ask legislators to sponsor them, Hansen said the practice is getting worse and special interests, not legislators, appear to be taking the lead on promoting bills in committees. . . .
Same bill, new day
In the March 3rd continuation of the hearing on the same bill, we see an example of a legislator who's perfectly comfortable with yanking standard-setting from an agency's technical and scientific staff and turning into over to the lobbyist-led lawmakers.
In The “bull hockey” tournament at the Bemidji Pioneer staff blog The Paul Bunyan Ballot, Zach Kayser reports:
In response to testimony, Rep. Tony Cornish, R-Vernon Center, went on a rant against the watershed experts sitting across from him, who had testified earlier. While he claimed at the start it would be “respectful” it turned out to just be threatening:
I was offended by the arrogance of the bureaucrats that testified here today in saying that we weren’t qualified to make decisions.
You wouldn’t even exist if it wasn’t for the Legislature. Or your funding, your pensions, or your planning, your operations. We gave you rule-making authority, of which many of us regret. And the reason we’re here today, and we have some of these bills, is because of this arrogance. And instead of standing between the EPA and the farmer, and the businessman, and the miner, and the power companies, what you people, it seems like, are doing is worshiping the shrine of the EPA, and saying ‘There’s nothing we can do.’ It’s just offensive.
Like Rep. Persell, Kayser takes exception to Cornish's grandstanding:
Contrary to what Rep. Cornish believes, part-time elected legislators that may or may not have any idea of what phosphorus even is are most certainly not more qualified than the Minnesota Pollution Control Agency to regulate pollution. Also contrary to what Cornish believes, the primary directive of the MPCA and the watershed groups is to combat pollution, not combat the Environmental Protection Agency.
But with the help of folks like Cornish, settled in the mould of his heavily thickened comfort with all this, the regulated and their paid lobbyists can set those standards.
That, dear readers, is regulatory capture at its most pure.
What won't be quite so pure is the water we drink and play in.
UPDATE: The Star Tribune editorial board uses Persell's colorful remarks as the jumping off point in Keep politics out of water protection in Minnesota:
Rarely has a Minnesota House committee hearing come to such a colorful close as it did on Tuesday. After listening to back-and-forth testimony on legislation that would require legislative approval of new water-protection standards for Minnesota lakes and rivers, Rep. John Persell accurately summed up a complicated issue with one epic, uniquely Minnesota utterance:
“Bullhockey.”
Noting that many Minnesota cities have done their part to meet new phosphorus-reduction requirements from wastewater treatment plants, Persell, DFL-Bemidji, said this is a fairness issue, that other cities don’t want to do their part.
According to testimony at the House Environment and Natural Resources Policy and Finance Committee hearing, the Coalition of Greater Minnesota Cities played a key role in writing the legislation. Phosphorus is a pollutant that spurs algae growth and can turn sky-blue water into pea-soup green. Currently, the Minnesota Pollution Control Agency (MPCA) takes the lead in determining water-quality standards and issuing permits for wastewater plants. . . .
H.F. 616 and 617, carried by Rep. Dan Fabian, R-Roseau, calls for legislative signoff on new water-quality standards, which are essentially a goal set for how much of a pollutant a water body can handle and remain healthy. His second bill would require additional scientific and cost reviews of MPCA protections.
Legislation has also been introduced in the House and Senate to prevent enforcement of the state’s longtime standard for sulfate. This pollutant is linked to mining and wastewater discharge and can harm natural stands of wild rice. Controversy over the state’s sulfate standard has been swirling for several years as its scientific footing undergoes review. Enforcing the standard will add to the price tag of proposed Iron Range mining projects and will be costly for current operations to adhere to.
Industry and special interests have lent these pieces of legislation broad support. Legislators from mining areas, as well as outstate districts with small sewage plants in need of updates, are also pushing this. And that’s the problem. Water protection isn’t merely an economic development issue.
But giving veto power to legislators over new safeguards would boil the debate down to that — a result that would not serve Minnesotans and future generations well. ...
Read the rest at the Star Tribune.
Photo: Representative Rick Hansen (DFL-South St. Paul).
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