How A Court Decision 36 Years Ago Today Still Shines Light On Influence In Lansing

Michigan’s Lobby Law Dates Back To The 1970s. And It Had To Survive A Court Challenge That United Dozens Of Interest Groups, Including Libraries And Businesses, In Opposition.

 

By CRAIG MAUGER
Michigan Campaign Finance Network


LANSING (May 3, 2019) — Frances Pletz was not your stereotypical Lansing lobbyist. For one thing, she spent her time representing libraries. Her strategies were a bit different as well.

In a 1977 article, entitled “Stroke The Legislators,” she wrote about the Michigan Library Association’s strategies for advancing pro-library policies. She detailed how the association once hired a Benjamin Franklin impersonator to chastise lawmakers for “neglecting the libraries.”

In another instance, Pletz and the library association invited lawmakers to a wine and cheese party at the state’s library-museum complex. The real purpose of the event, Pletz’s article said, was to show lawmakers how badly a new building was needed.

“When we realized we couldn’t serve alcohol on state property, we substituted sparkling Catawba juice,” she wrote in the article. “The bottles popped open just like champagne.”

As dozens of Lansing interest groups rose up in the early 1980s to fight the regulation of lobbyists in Michigan, it was Pletz who became the lead plaintiff. The eventual ruling in Pletz v. Secretary of State came down 36 years ago today. The ruling protected the basic framework of a law that’s still responsible for providing information to the public three decades later.

Longtime Lansing attorney John Pirich was one of the lawyers involved in arguing against the lobby law.

“It was a very, very important decision,” Pirich said of the Pletz case.

The decision upheld a ban on certain gifts from lobbyists to lawmakers, upheld a requirement that lobbyists disclose large financial transactions they have with lawmakers and upheld twice yearly reporting requirements. However, the court rejected a requirement that lobbying organizations disclose their donors and stipulated that the state needed a search warrant before it could inspect lobbyists’ financial records.

Judge William Beasley wrote the May 3, 1983, Court of Appeals opinion in the case, which reversed a lower court ruling. The lower court wanted to throw out the entire lobby law.

Beasley wrote that the state had a “compelling interest” in regulating lobbyists. The Michigan Supreme Court later declined to consider an appeal.


‘Fundamental Constitutional Freedoms’

The Pletz case had been years in the making.

By the mid-1970s, lawmakers across the country were advancing policies that aimed to increase ethics and transparency in government. The driving force behind much of the work was the Watergate scandal, which was rocking President Richard Nixon’s administration.

In 1975, Michigan Gov. William Milliken signed a wide-ranging bill to regulate “political activity” in the state. The bill covered campaign finance, lobbying, financial disclosure and conflict of interests, among other things. The Michigan Supreme Court struck down that law, saying it had violated the Michigan Constitution’s ban on a bill covering more than one distinct subject.

In 1978, legislators revived the lobbying portions of the 1975 law, passing a bill that focused on lobbying regulations. The Secretary of State developed rules to go along with the new law, which was set to take effect in 1981.

But a lawsuit came from a laundry list of individuals, businesses and interest groups that argued the new lobby law was unconstitutional. The plaintiffs included Pletz and the Michigan Library Association, but also the Michigan Chamber of Commerce, the Michigan Council on Alcohol Problems, the Police Officers Association of Michigan and the Detroit Chamber of Commerce, to name a few.

According to one count, more than 100 individuals, businesses and groups joined the coalition challenging the lobby law. The plaintiffs argued in court filings that the Legislature had been “sloppy” in creating a complex system for regulating lobbyists.

 “It is a law that strikes at the heart of the most fundamental constitutional freedoms enjoyed by citizens of the state,” one filing from the plaintiffs said. “It grows out of a legislative history which could identify no particular abuses or evils at which the act might be directed.”

A trial court judge agreed with the plaintiffs, throwing out the entire lobby law. But the Court of Appeals took a different view of the matter.

 

Lobbying Grows, Law Remains

The 1983 Court of Appeals decision upheld the wide majority of the law, saying there was a “compelling” state interest that justified the regulation of lobbyists. But the court struck down a portion of the bill that required lobbyists to disclose the names of donors who contribute money to fund their lobbying.

“The disclosure requirement of the act potentially would discourage individuals from associating with organizations devoted to lobbying,” Judge Beasley wrote.

Another portion of the law said lobbyists had to make financial records “available for inspection upon request by the secretary of state after reasonable notice.” The court interpreted that section as requiring a warrant to be obtained before a search could take place (An official with the Bureau of Elections said he couldn't locate records identifying if such a search warrant had ever been pursued).

The court upheld much of the rest of the law as it was written, including reporting requirements that essentially remain today as spending on lobbying continues to grow.

In 2018, registered lobbyists reported spending $40.3 million, a record total. Fifteen years earlier, in 2003, they spent just $25.5 million.

Now, lobbyists have to disclose the names of lawmakers they buy food or drink for if they spend more than $62 on an individual lawmaker in a month or $325 in a year. The thresholds allow many purchases to go unreported. The threshold policy dates back to the original legislation.

In one court document, then-state Sen. Gary Corbin was asked why lawmakers decided to place the original reporting threshold for food at $15 a month instead of $1, which would capture almost all of the purchases.

“There was serious discussion in the committee. Other people said that that ($1) floor (w)as too low, I think the state Chamber (of Commerce), I remember, testified that that floor should probably be around $20 a month,” Corbin said. “Well, the figure was compromised at $15 during the debate on the Senate floor.”

The threshold was eventually increased and attached to inflation, which is the reason it continues to go up.

John Klemanski, a political science professor at Oakland University, said the Pletz decision was important because it upheld provisions that provided more transparency for state government.

“Information about the political and policy-making process is crucial to all citizens in a democracy and the 1978 Lobby Act made significant contributions toward providing that information,” he said.

But he and others noted that there’s much more that could be done to disclose the influence of lobbyists. For example, Klemanski mentioned the idea of giving the public more information about nonprofit groups, like the American Legislative Exchange Council (ALEC), that create model bills for lawmakers to introduce.

Lansing lawyer John Pirich said there’s likely a reason why lawmakers have done little to update Michigan’s lobby laws since 1978, 41 years ago.

“Who is it going to affect?” Pirich asked. “It’s going to affect the people in the Legislature.”

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