Law students propose bill to close lucrative Capitol lobbying loophole

The three law students lingered anxiously outside a Capitol hearing room, waiting to learn the fate of an entire school year of work.

They had sponsored a proposal to shed light on who lobbies to sell the state more than $1 billion in goods and services each year, and it had stalled, one vote short in its first committee.

Then, as resignation set in, one assemblyman cast a late ‘aye,’ transforming dejected shrugs and “we trieds” into high fives and fist pumps.

Their ambitious plan to bring scrutiny to a blind spot in government influence had survived its first test, in April. A bigger one is due this week on the Assembly floor.

The bill’s aim is simple: Designate as lobbying the act of communicating with government officials in hopes of influencing how they spend taxpayers’ money on goods and services — and require the lobbyists to publicly disclose that activity.

“When you lobby the Legislature, companies have to report who they’re paying and what they’re paying to lobby” for, said one of the students, Rob Nash, 27, from Illinois. “This is in the same vein.”

But the measure would cast sunlight into an opaque, and lucrative, corner of the influence world. And with that, even backers concede, come obstacles.

“I’ve told them we should call this the ‘invisible death bill,’” said Rex Frazier, the students’ instructor at the University of the Pacific’s McGeorge School of Law in Sacramento. “There has to be an expectation that powerful lobbyists would be hesitant about a bill like this.”

About 5,000 state purchasing contracts a year are worth more than $250,000 — the bill’s threshold for disclosure — according to the Department of General Services, which oversees procurement. Eighteen other states and the federal government require disclosure similar to what the bill’s authors seek.

The state’s association of lobbyists opted not to take a position on the measure. But Frazier, a lobbyist himself, assumes there are stealth efforts afoot to block the measure.

“These lobbyists are very talented,” he said. “They have many ways of being heard without being seen.”

They can discreetly persuade committee heads to quietly shelve legislation, for example, or influence bill analyses churned out by policy staff. Some firms that work on procurement bids also lobby the Legislature and have deep relationships with lawmakers and employees there.

The transparency bill was born around three miles from the Capitol at the bucolic McGeorge campus, where the grounds are dotted with redwood trees and yellow Adirondack lounge chairs.

In Frazier’s clinic, the students were asked to identify a problem in state law and find a way to solve it. The trio of third-year students — Nash; Alex Khan, 28, of Fair Oaks; and Robert Binning, 29, from Auburn — hit on procurement lobbying.

“We wanted something that was substantial,” Khan said.

The students did research, drafted bill language, performed mock committee hearings and shopped for a legislator to carry their proposal. Assemblyman Richard Gordon (D-Menlo Park), a five-year veteran of the Legislature, became its official author.

“When the students came to me and said, ‘Do you realize there is this loophole that allows folks to lobby relative to contracting?’ I said you’ve got to be kidding me,” Gordon said.

“The students of McGeorge have done the public a huge service, because they’ve raised an issue which I just think people haven’t paid attention to, and like me, weren’t even aware” of, he added.

One prominent lobbying firm says on its website that California spends billions each year on goods and services, “making it a market ripe with opportunity.”

The firm, Capitol Advocacy, touts its ability to navigate “complex procurement rules and policies, the state’s budget situation and the nuances of politics in the overall process.”

It advertises a range of services such as alerting clients of potential contracts and “strengthening relationships with key state officials.”

John Latimer, founder of the firm, did not respond to calls for comment about the bill. Nor did several other top-tier lobbying firms that advertise procurement services on their websites.

The pending legislation has no formal opposition. Gary Winuk, an election law attorney and former chief investigator for the state political ethics agency, is bullish on its prospects.

“Our bill keeps moving,” said Winuk, who is advising Nash, Khan and Binning.

But potential roadblocks loom, aside from any stealth campaign against the bill. For example, the measure would amend the Political Reform Act, which requires a two-thirds vote — and therefore some Republican support. No GOP member has voted for the bill in committee.

And at least one Democrat has balked: Assemblyman Sebastian Ridley-Thomas (D-Los Angeles) voted no, objecting that the measure would harm minority contracting, though he did not explain how.

The bill has been tweaked in a bid to exempt companies’ sales employees from having to register as lobbyists. It also was amended to establish the $250,000 baseline.

Meanwhile, Khan, Binning and Nash have gone from disheveled — in class, Khan said, he wore “practically pajamas” — to dapper, much like the lobbyists who roam the Capitol halls.

They’ve picked up other Capitol habits, too, such as strategy sessions at KBAR, a popular watering hole for lobbyists and legislative staffers.

And after graduating last month, Khan is set to become a fellow in the state Senate. Binning will work in the legislative counsel’s office, which drafts bills. Nash is seeking a legislative job.

First, though, comes intensive study for the state bar exam, which means the trio must peel away from their bill, AB 1200, just as the action heats up.

“It’s like you raise your kid, and you hope you raised it right,” Nash said.

Binning concurred: “It’s our baby.”

Twitter: @melmason