>> Hi. Good morning, almost afternoon. Welcome. Thank you for joining us today for our talk about the role of [inaudible] in shaping policy in Michigan. I'm Deborah Horner from the Center for Local, State and Urban Policy, also known as CLOSUP. Today's talk is sponsored by CLOSUP as well as co-sponsored by the department of political science and the environmental law and policy program. It's part of the CLOSUP in the classroom initiative. Through the current Ford School undergraduate course entitled Michigan Politics and Policy, the CLOSUP in the classroom initiative is working to integrate student experiences with the center's research activities. Both the class and this talk are made possible by a grant from the provost office. So [inaudible] thank them. This not only helps us to get U of M's state and local government research in to a classroom, but also allows us to bring in expert speakers like our guest today, Susan Demas. You can read about her full biography in the handout that was given before the talk, but just let me summarize a little bit by telling you that Susan is the editor and publisher of "Inside Michigan Politics." She's been a journalist for 15 years, covering politics for several national and regional publications. She's the only Michigan journalist to have been named to the "Washington Post's" list of best political reporters, the "Huffington Post's" list of best political tweeters and the "Washington Post's" list of best political bloggers. In 2010 Susan helped launch the Michigan Truth Squad which investigates and fact checks political ads and speeches. And most recently Susan served as the deputy editor for Michigan Information and Research Service where she covered national and state politics. So the publication "Inside Michigan Politics" analyzes political and policy trends for several thousand readers, including corporations, trade associations, labor unions, government agencies, the White House and several foreign governments. Founded in 1987, IMP has been cited in many different media sources, including "The New York Times," "Detroit Free Press," "Detroit News," "Christian Science Monitor," "The Washington Post," "Roll Call," "The Wall Street Journal," "USA Today," "Hotline" and the "Associated Press." You may be inspired today by what you hear to make sure that you are voting in the upcoming November 8th election. In case you are not registered, I have brought with me registration forms that will take you one minute to fill out. So I want to encourage you if you're not registered yet, if you're putting it off, please come see me after the talk. I will get you registered and you can be assured to be able to vote here in Michigan on November 8th. And now, without further ado, let me turn the floor over to Susan Demas. Thank you.
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>> Hi. Thank you so much for having me. Can everybody hear me okay? I don't want to use the voice I use with my kids because you won't like that very much. They're teenagers and they don't listen well. So the way that I've structured the talk is I'm just going to kind of give a broad view of kind of the practical issues involved with special interests lobbyists in Michigan politics. And what I'm really looking for too is at the end to leave plenty of time for your questions because I've been lucky enough to come and speak to many different classes at the Ford School over the last several years and of all the talks I do, and I do quite a few, hands down this is where I get the best questions. So I'm really looking forward to that. So, as Deborah mentioned, I'm the editor and publisher of "Inside Michigan Politics." It's a publication that most of you may not have heard about because I write mostly for people in [inaudible] and Washington who really want to know what's going on with Michigan politics. Elections, policy, who's in charge, what they're doing. And it's been around for almost 30 years and, you know, it doesn't look very different from when it debuted. It has blue paper, but we do have a website because I'm slowly, but surely dragging it in to the 21st century. But it's subscription based so it's for a more limited audience. I do a lot of writing for broader audiences, for people basically who hate politics, and try to make them care about it. That's a unique challenge. But today I'm going to go more in to things that people maybe don't know as much about, but are very important in terms of understanding what goes on in Lansing and the rest of the state. To be totally honest, if you understand the way that special interests function in Lansing, you're really going to understand much more of how things work than the vast majority of people do. And there are a lot of stereotypes. People, you know, kind of think of lobbyists as these shadowy figures and nobody quite knows who they are and maybe they meet in parking garages like Watergate, if you guys have heard of Watergate. But, you know, to be honest, the way things function in Lansing, at the capital, you know, these are people who, yes, are out in the lobby. There are many of them, especially on days when there's a lot going on. I anticipate when the legislature finally comes back to really get work done after the election in the lame duck session the capital is going to be quite a busy place and probably be open 24 hours a day towards the end because, just like any of us, we tend to leave stuff until the very end. And cram a lot in. So if you're a reporter, as I've been for 15 years, and I've covered the state capital for 10 years, you know, you see lobbyists all the time. When you go to get your sandwich, they're in the expensive restaurants, not in the ones I go to. You see them out in the hallway. And if you really want to know what's going on with specific pieces of legislation, a lot of times they're going to be able to tell you a lot more than if you interview a senator on the floor. That's just the truth. By way of a little background, I actually started reporting in the state of Iowa which has a part time legislature and it's not nearly -- not nearly as big of a budget, not nearly as much staff. Michigan is, you know, the 10th largest state. It was the 8th when I started to cover it. And we have a full time legislature which a lot of states don't have. So there's always something going on. There are always issues to watch. So it's definitely different than what you might find if you're from other states or, you know, if you take jobs there after graduation. But this will give you a sense of how things work and Washington is not very different. My husband is a political consultant and he does public relations and actually he just registered as a lobbyist a few months ago because there's so much overlap in what he does. So just to throw that out there so you know the fact that I actually do live with a lobbyist. He doesn't do a lot of work that way, but you know when you start talking with people who actually live and work in downtown Lansing it's -- you run across quite a few people who do lobbying in one form or another. So I'm going to start in a place that a lot of people start out when you talk about special interests and right away they want to talk about money because most people, you know, have the perception that special interests get things done by spending money in campaigns and with direct lobbying expenditures. And certainly that is a big part of things in the state of Michigan. If you go to the Michigan Campaign Finance Network, that does a very good job tracking everything. They just put out a report that lobbyist spending is on track to be $21.7 million in July. So it's on track to be the highest amount spent ever, higher than it was by $700,000 at this time of the year in 2015. Not particularly surprising, but interesting to know the numbers. And, you know, when you consider what law makers have to deal with, the vast, vast swath of issues, not to mention their chief duty which under the "Constitution" they have one duty -- Do you know what that is? Their one responsibility in office is to balance the budget every year. Unlike the feds, they actually have to do it. You can say that they may not do it well. I've certainly been there for all night sessions when the government shut down when they did not do it well. But that is what they have to do. And $55 billion is an incredible amount of money. Not too many of us have ever dealt with that amount of money. Not too many people in Lansing, law makers, have had experience with government on that level. Some of them come from local government. Quite a few of them do. More and more in the era of [inaudible] these law makers come to government with no experience whatsoever. The people in town who have the experience come from two places. One, their staff. Two, the lobbying core. There's been quite a bit of overlap in staff and so there's not nearly the institutional knowledge that there was even 5 or 10 years ago. For the lobbying core there are a lot of people who have been there for decades. You know, there's some very prominent former legislators and politicians who are lobbyists. Names that people know. Frank Kelley, the long time attorney general, has a very prominent firm, Kelley Cawthorne. And former Speaker of the House, Rick Johnson, this is going back quite a few years at this point, but his firm is Dodak Johnson. But by and large the people who make up lobbying firms, it's a lot of former staff members. And I've thought about this a lot because four years ago I actually had the opportunity to interview Jack Abramoff and this dates me a bit because this was a scandal a decade ago, but he was kind of the embodiment of everybody's idea of evil in lobbyists. You know, if you saw the pictures, he looked like a mafioso with a fedora. And looked like somebody who was wining and dining people and up to no good. And, as it turned out, he was. He was convicted and -- for influence peddling. And spent some time behind bars. Since then he's really tried to remake his image, peel back the curtain of things that can go wrong, abuses of power, do a public mea culpa. He, frankly, you know, was very charming and really wanted to talk more about his daughter than he wanted to discuss the book that he was hawking, which I thought was a pretty good PR move on his part. But one thing that he said that struck me is he said, you know, "I don't really like hiring former law makers." I mean that's the revolving door we all hear about, right? You go straight from earning a paycheck from the people, tax payer dollars, and then you go to a big fat cat lobbying firm and you make millions upon millions of dollars. Jack Abramoff said, "In general, I don't like hiring former members of Congress, former senators or legislators, for one reason. They're lazy and they don't know what's going on as much. I want their staff members. Those are the people who know how to work. And those are the people who have relationships." And however cliche it is, it's true. Relationships do make a big difference in politics, both in Lansing and in Washington. So if you served for a long time as the committee clerk for like the energy committee and then you go to work for a multi-client lobbying firm that specializes in your specialty of energy policy, well you have a lot of relationships. You have a lot of inside knowledge. You've got a lot of friends who are still at the capital. So that's very useful. In terms of how things really work, I know a lot of lobbyists who care very deeply about policy. Highly intelligent people do not fit that Jack Abramoff stereotype. There are certainly ones who fit it more, but I have to say as a reporter the thing that I've found most eye opening when I started covering the capital full time 10 years ago was the fact that lobbyists do write legislation. And there's really no attempt to pretend otherwise. I can't tell you how many committee meetings I have covered, because I used to be a reporter covering for, you know, day to day publications where I actually had to sit through five hour committee meetings all night for action, all that good stuff that, frankly, most publications don't bother with anymore. And, you know, I would sit there as lobbyists would testify on pieces of legislation and present amendments. And of course some lawmaker would put their name on it, but they wrote it and there was no pretense. That happens quite a bit. So in terms of how things really work in Lansing, lobbyists definitely have a huge role in policy and in how specific legislation is written because, frankly, with term limited lawmakers who are there for a maximum of six years in the House, eight years in the Senate, a lot of them just don't have the expertise to write complex legislation themselves and even some of their staff doesn't. So understanding more about the process and who these people are and how they go about things is really critical to understanding the pace of things in Michigan government. So one of the things that you do see stories of when it comes to lobbyists -- A couple times a year you hear stories about these law makers who get $2,000 worth of free lunches from lobbyists. And that's a fun story and you always want to see if it's your rep or your senator and what they're doing. And that's a good symbol for what people don't like about government, what people don't like about politicians and what they don't like about lobbyists. And really that's a drop in the bucket. A lot of stuff probably is not reported. And there's really no evidence that having a fancy lunch with a lobbyist is going to be more influencing than having, you know, several meetings in your office. But it's something that definitely voters do not care for. It's kind of interesting. We have a state house race going on right now. I'm not sure how many people have heard anything about it. It's at Macomb County. And the county commission candidate who is running for the -- as the republican in a seat, his name is Steve Marino. He's a former lobbyist. And he's been caught on tape at coffee hours bragging to constituents about picking up bar tabs for appropriation chairs and being a big shot and having the ear of the government and the governor and really filling that stereotype of the Jack Abramoff lobbyist. Now, once he's been caught he says he was just talking a big game and he's relatively young, just 27, and I think that may very well be the case. But things like that I think definitely don't inspire a lot of confidence with people because a lot of people that you talk to just assume the government is corrupt and that's the way it goes. So going beyond the general picture, I want to talk a little bit about issue lobbying and some prominent groups. As far as Michigan government goes, there are lobbyists for just about every issue under the sun. As I said, we're a big state, full time legislature, big budget, lots of concerns. And pretty much the movers and shakers tend to be these multi-client lobby firms. Some of them are law firms that really just specialize in more lobbying work. There are a lot of names that people outside of Lansing don't really know, but some of them are Governmental Consultant Services Incorporated, GCSI, there's Kelley Cawthorne and [inaudible] and Associates, Midwest Strategy Group, RWS Advocacy. These groups tend to represent many different causes and companies. They're the biggest spenders, by and large, when you look at those charts of top lobbyist spending. But from there it's pretty hard to know what's going on because were they spending money on the energy fight, were they spending money on the Detroit school fight, on some other more obscure issues? Those are things that don't have to be disclosed. And if you take a look at some of the other big spenders like usually if you go on Michigan Campaign Finance Network they have very handy charts about the top spenders this year, full list. It's a pretty eye opening view of what, you know -- who the players are. As far as this year goes, you had the Michigan Health and Hospitals spend heavily, Nationwide Mutual Insurance, National Federation of Independent Businesses. So, you know, there are a number of issues that they might be involved in. We've certainly had some insurance reform debate, especially on the no fault side which Nationwide would probably be very interested in. Michigan Health and Hospitals Association, obviously very interested in this debate over a healthcare claims tax that involves a lot of Medicaid aid from the federal government. See if you can kind of draw some of the lines that way. And a lot of times when you look at those issue groups, those names shuffle a bit more than the multi-clients do based on what are the hot button issues that year. But there are always going to be groups that will just give a lot of money and campaign donations or on the lobbying side regardless of what's going on, even if their top issues really don't have a shot at getting through this year. It's about relationship building. It's a good way to get a new lawmaker to know who you are. And that's just kind of the way business is done. What I've noticed. Michigan has been under republican control since 2011. There's definitely been a shift in spending. Certainly republicans are getting more money which is typical. You go with the party who's in power. They have much more power to set the agenda and to put it through or to block it. But prior to that, when we had divided government, you would see a lot of groups playing both sides. And there are a lot of groups in town that still do. But more and more kind of dovetailing with more partisanship that we've seen, hyper partisanship. You will see that there are a lot of groups that really do just concentrate on one party or the other. And it's pretty logical who these groups are. For democrats, you know, it's a lot of union groups. Michigan Education Association is a huge player. You've got the UAW [inaudible] carpenters, teamsters. They're not beyond giving to republicans, but unlike in past decades when you could peel off a few votes for things, and you had some very strong pro public education republicans out there -- One of them teaches at the Ford School, Joe Schwartz, who's a very good friend of mine. They're a more rare species nowadays. And so the unions, accordingly, have just concentrated more on getting democrats elected and lobbying democrats who are in office. On the flip side, the Michigan Chamber of Commerce only rarely will endorse a democrat. Not all chambers of commerce are like this. Other states function in different ways, but in our state it's a huge force in republican politics and nationally. Actually the state chamber of commerce was very instrumental in some of the national campaign finance suits that we've seen. Richard Mclellan is a very prominent attorney and does excellent work on their behalf. You do have other business groups that kind of spread the wealth around a little more. Michigan Manufacturers Association. Small Business Association of Michigan. But, you know, the National Federation of Independent Business is even [inaudible] the Michigan chamber. So they only tend to play in that sandbox. And then there are the major forces in Michigan politics that tend to be more bipartisan. Blue Cross, Blue Shield of Michigan which is the top health insurer in the state has cornered the market at about 80%. So they like everybody and they give very generously to everybody. Groups like DTE Consumer's Energy, Michigan Association of Insurance Agents, Michigan Retailers Association, they tend to be less focused on just one party or the other, year depending. And the best example I can give you is one that is very well known in Lansing. Surprisingly not known as much beyond Lansing. And that's the beer and wine wholesalers. If you look, year after year they tend to give, you know, donations to 148 representatives and senators, all of them. Maybe there are a couple of exceptions. There aren't that many issues that really come up that have to do with alcohol. You know, we do have a liquor control commission. Not every state does. We happen to. But occasionally, you know, there are [inaudible] bills and can you sale craft beer and wine at farmer's markets and ancillary issues. But we just had an issue come up about raising the beer tax which was met with hysteria. We have not raised the beer tax in Michigan since the 1960s. That's before my time. But it is considered to be such an off the wall idea because, first of all, it's a good way to anger voters. And there are probably only a handful of lawmakers from either party that really want to go down that road. If any of you were around for the last decade when we had two government shutdowns and the state was broke and we were in recession for an entire decade, we needed money from anywhere. We ended up raising the income tax. We raised cigarette taxes. We didn't even consider raising the beer tax and we were broke. So certainly at a time now when we're in recovery you see very little interest. So, you know, they're an extremely effective lobby. And you've even seen like the Michigan chamber has jumped all over the issue kind of trying to get at the forefront of fighting against the beer tax because it's a popular issue. Why not? You know, now that we've cut business taxes, they have to move on to smaller issues because that was at the top of their list for a long time. And you do see that. When groups tend to meet their major objectives, like for the Michigan chamber cutting business taxes in the state or forming the personal property tax, going after regulatory reform, especially for environmental policy, they've checked off a lot of boxes. Well, the Michigan chamber is not going to fold up. There's still work to be done and a lot of people who support the organization and want a strong business voice in the legislature. So then you see a switch in tactics to some of these smaller issues. Right to Life of Michigan is a great example. We have a lot of major policy limiting abortion in this state. We have waiting periods. We just had legislation a couple years ago that clamped down on clinic practices and shut down a lot of providers. When you look in terms of where to chip away at abortion rights in this state, you have to get pretty creative. If -- You know, because obviously we do have still a federal court decision in play. So they're very creative. You know, we just had this legislation that ups the penalty for so-called coerced abortion. They're always looking at the next fight. They're always looking at ways to inspire their members, to inspire giving. And to stay relevant. They do a very good job with it and they're a group that tends to be more on the republican side of where they concentrate, but there are a number of pro life democrats and they've been very successful with that because even when there was a democratic majority in the state house they still had a pro life majority. So that's your ideal situation as an interest group. A couple more things that I just want to touch on before I want to get your questions. I would say that not all lobbying is equal. You know, I think there's an idea and a lot of times reporters kind of pursue this line of, "Okay. Well, you have a major issue like energy policy reform. So let's take a look at the interest groups involved and how much they're giving to lawmakers and there's a straight line. Well, you got a lot of money from [inaudible]. You're going to vote a certain way." It often doesn't work that way. Money certainly is something that politicians need desperately. So nobody wants to turn down a check. But I've seen a number of times people who have accepted money and the rules don't change. It's really a relationship builder. It's a matter of building trust and trying to get your ideas out there. And, you know, I think some of the smarter groups try and do that with a wide swath of legislators, not just concentrating on one party or the other. And the consistency makes a big difference because if you go in there one year because your big issue is up, all of a sudden you're talking with lawmakers, you're giving your donations, and then you disappear, well, by the time your next issue comes up you don't have those relationships and people know what you're doing and they don't trust you as much. They're going to work with people more who they know and who they've turned to in good times and in bad. Now the depressing side of this is this, and I get asked this a lot. So if I call up my representative, if I go down to the capital to protest, because I care about an issue, how much does my voice count versus a lobbyist? My experience is not nearly as much. They don't know you. A lot of times you're going to go down because you're upset about something. A lot of times they may peg you as somebody who's probably not going to vote for them anyway. All these things work against you. And you're just one person. Or you're not even from their district and you're just inundating their phone lines with complaints about your favorite issue, and so you're not a constituent. And you don't have those relationships. And to me that is the most troubling part about a system that relies so much on lobbying and special interests is that, you know, unless you've hired your own personal lobbyist for your issue, your voice is not going to be recognized as much. Public protests are supposed to be a good way of countering that. I can't really remember the last time I saw a protest move any votes. I'm not saying that you shouldn't do it. It's a constitutionally protected right. I think it's part of democracy. But now that the partisanship is at such a fever pitch, it's very difficult for people to change their minds on things even if they do have a lot of constituents who don't agree with them. And that's definitely a question for us to wrestle with because, you know, people are supposed to have a voice with the people who are supposed to represent them. And not everybody can afford a lobbyist at GCSI. You know, one way that people are very eager to change this is with campaign finance reform. Michigan's campaign finance system is particularly bad just in terms of transparency because a lot of times you have no idea how much money is really flowing in to election until after the election has passed, with late donations and dark money. Dark money is the biggest issue. In 2010 it was widely known that the Michigan republican party spent $25 million on that election, especially with [inaudible] races for the state legislature. Very little of that ever showed up on a campaign finance report because there are ways to cast for money and other ways where you don't have to report them and there are independent groups and whatnot. That's only becoming more and more prevalent. And it's certainly not on just the republican side at all. We had some really big steps towards campaign finance reform on the national level last decade. It's pretty interesting now as you take a look at this election. The two founders of McCain-Feingold are both on the ballot. Facing some tough elections. John McCain and Russ Feingold, McCain is a republican, Feingold's a democrat, they're being vastly helped by pack money at this point because that's the only way that you win elections now that the law has essentially been taken apart by the U.S. Supreme Court. So, to kind of rectify this imbalance, there is a movement towards a U.S. constitutional amendment which, as you know, very high bar to meet. There's been some rumors about trying to do something at the state level, but even to do a constitutional amendment at the state level, which the bar is far lower, in general you would need about $20 million to make that fight. There aren't too many groups out there that have $20 million and there are a lot of groups that I just mentioned that would contribute far more to fight it. So there's really never been a serious attempt. But I think it's worth keeping an eye out on because I think there's a growing consensus. I think a lot of people, democrats and republicans, think that some changes need to be made and we'll have to see if people are willing to spend the money on what's considered to be a wonky process. So I think I'm just going to leave it here and open up to questions and, you know, please tell me if there are other areas that you want me to tackle. I'm happy to talk about whatever you'd like.