The names rang a bell. Last month, Bob Hall, executive director of Democracy North Carolina, was reviewing an amended campaign finance report filed by House Speaker Thom Tillis, R-Cornelius. Tillis' initial report, covering the second half of 2011, had drawn complaints because the occupations and affiliations of several contributors weren't fully identified as required under state law.
As Hall moved through the updated list, he started seeing some familiar names. One of them was Gail Blanton, whose occupation was listed as "homemaker." She was on the list for a $2,000 monetary contribution plus $1,562 listed as in-kind. Hall knew her not as a homemaker but as the chief executive officer of Time Investment Corp., which operates a small chain of loan companies in Pitt County. Her in-kind contribution turned out to be a Tillis fundraiser she hosted in Greenville last October where the speaker netted $30,662 in contributions, including $20,762 from donors with ties to consumer loan businesses.
The names in Tillis' amended report were familiar because Hall had conducted a study two years ago on contributions by the state's payday lenders and their push for legislative approval of higher interest rates and more favorable rules for short-term consumer loans.
During the 2010 election, Tillis and other Republicans used the Jim Black and Meg Scott Phipps scandals to illustrate the need for a clean break from Democratic rule, vowing that once in the majority they would clean up Raleigh. But recently released campaign finance reports paint a much different picture of what happened once the gavel changed hands.
The consumer finance industry contributed heavily to the Republican leadership in the 2010 election cycle. In June 2011, those contributions partially paid off when Tillis and House Majority Leader Paul Stam, R-Apex, threw their weight behind controversial legislation that allowed maximum interest rates for some loans to rise from 15 percent to 36 percent. Military officials, who complained these loans left many soldiers mired in debt, strongly opposed the bill. Nonetheless, it passed the House by a 60-55 margin and could be taken up by the state Senate in this year's short session, which begins in May.
Damon Circosta, executive director of the Center for Voter Education, said the lack of any change is doubly disappointing. "[G]iven how much the new majority placed an emphasis on fixing pay-to-play, it's really disappointing how much the new regime looks like the old one."
When the post-session campaign finance reports were released in late January 2012, Chris Kukla, senior counsel for government affairs at the Center for Responsible Lending, said the amount of money the consumer finance industry poured into the effort—$360,000 for lobbyists and more than $100,000 in campaign contributions—explained a lot about why the leadership was so keen to pass the bill.
We don't know what exactly happened in those backroom negotiations over the consumer finance bill, but it's hard to imagine that the industry contributions weren't the elephant in the room.
"We knew senior members of the House leadership were intent on getting the bill through," Kukla said. "I don't think even us jaded veterans anticipated the kind of arm twisting that went on."
The consumer finance industry contributions are only one example of pay-to-play tucked away in the latest reports. Remember the outcry over the Legislature's de facto ban on municipal Wi-Fi? CenturyLink, the telecommunications company formerly known as Embarq, stood to lose if the muni Wi-Fi trend took off. Between August and October 2011, CenturyLink's PAC handed out $47,000 to 82 legislators from both parties.
This year, Hall expects widespread public outrage at the levels of campaign cash, which could spur a renewed call for change. "I think the flow of money in this election is going to be disgusting to people," he said.
One area in desperate need of reform is the campaign-finance reporting schedule, which in North Carolina varies for even- and odd-numbered years. In even-numbered years—state and federal election years—contributions are more rigorously tracked and reported quarterly. In odd-numbered years, only two semiannual reports are required, which prevents watchdogs from monitoring contributions in a timely manner.
For example, the filing deadline for the report covering the second half of 2011 was due in the last week of January 2012. That means contributions made in July went unreported for almost seven months.
Legislators are prohibited from accepting contributions while the General Assembly is in session; as a result, the first two weeks of January, when the Legislature is off, can be very active, particularly for PAC contributions. Last year, in a 49-1 vote, the Senate passed a fix for the reporting gap, but the House has yet to take it up.
The rule on session contributions doesn't stem the flow of money, though. Last year, the Republican leadership embarked on an unprecedented use of mini-sessions, convening another four times after adjourning the regular session in late June. Notably, in September's mini-session, while all eyes were on the debate over the Defense of Marriage Act, bail bond agents saw language favoring their industry attached to a technical corrections bill, which was hustled through both chambers with almost no debate allowed.
According to the most recent campaign finance reports, 12 days after the vote, Bail PAC, the North Carolina Bail Agents Association political action committee, sent $17,100 in checks to 17 legislators, including a $4,000 maximum contribution to Rep. Justin Burr, R-Albemarle. A bail bondsman by profession, Burr claimed he didn't know how the overall bill, of which he was one of four co-sponsors, came to include the provision.
Circosta said examples like these, which took months to see the light of day, are a reason why if we can't stop pay-for-play, we should at least make it more transparent.
"We need a robust, real-time reporting system," he said. "If they want pay-to-play, then let us see it."
This article appeared in print with the headline "You pay, we'll play."