Investigation puts scrutiny on lobbyists, political ties
HARRISBURG — For lawmakers seeking campaign help and the lobbyists who want to influence them, the path to power can run through the same offices that line State Street here.
On behalf of industries and professionals they represent, more than 900 lobbyists spent more than $500 million last year to push, shape or block legislation in Pennsylvania's General Assembly. That's nearly $2 million per legislator and far more than the about $287 million state taxpayers pay to run the nation's largest full-time legislature of 253 members, a Tribune-Review analysis found.
Those same legislators pay some lobbyists — many of them their former aides — to run their election campaigns, meaning each relies on the other for millions of dollars every election cycle. But the lobbying industry again is under increased scrutiny as a result of a federal investigation.
The probe resulted this month in the guilty plea of lobbyist John Estey, former Democratic Gov. Ed Rendell's chief of staff, to wire fraud. It occurs as those seeking to reform the industry push for full spending disclosure, a gift ban and an end to lobbyists running legislative campaigns.
“I think it's a danger. It is a conflict of interest,” said Sen. Scott Wagner, R-York County. “I don't care how you shake or bake it.”
Estey wasn't the only lobbyist contracted by the FBI's front company. Long Nyquist & Associates, a lobbying firm founded in 2009 by former top aides to Senate Republicans, lobbied on behalf of the sham company Textbook Bio-Solutions LLC, according to state records. Long Nyquist has not been accused of any wrongdoing.
“There are no conflicts that exist,” Long Nyquist wrote in an emailed response to Trib questions. “As a lobbyist, our role is to present information for our clients to the legislators and each legislator makes up their own mind.”
Since its founding, Long Nyquist's political action committee has spent more than $500,000. At the same time, a campaign consulting company — LN Consulting Inc, which is run out of the same office as the lobbying firm and is led by the same people — received more than $4.8 million from candidates and political committees.
In some cases, the firm has worked on Republican campaigns while lobbying for organizations — the Pennsylvania State Education Association and the union representing state liquor store employees, to name two — that lobby against GOP priorities such as curbing teacher pensions and privatizing liquor stores, records show.
Long Nyquist stated LN Consulting no longer works for the Senate Republican Campaign Committee, which Wagner is running for the 2015-16 election cycle. But this year, the firm has worked for the Republican State Committee of Pennsylvania, the GOP candidates for attorney general, auditor general and treasurer, one Senate candidate and two House hopefuls. In previous years, the firm worked to elect numerous judges, as well as House and Senate candidates.
Long Nyquist isn't the only lobbying firm that runs campaigns. Ray Zaborney leads Maverick Strategies, a lobbying firm, and Red Maverick Media, a company that runs Republican campaigns. His wife, Jen Zaborney, runs Maverick Finance, a firm that handles fundraising for campaigns. Ray Zaborney said he's the only employee to work for Maverick Strategies and Red Maverick Media, and that Maverick Finance is solely his wife's company.
“A lot of the controversy comes over the way that people conduct their business,” Ray Zaborney said. “I don't take clients that are against broad Republican philosophies ... I never say to (candidates), ‘I have a client who's for this. You should be for this.' I don't see a client on an issue I'm lobbying on if I know they're against it.”
Ray Zaborney said his wife has “no involvement at all” in lobbying.
Lobbyists often argue they're being tarnished because of the actions of a few bad apples. A former undercover FBI agent, James Wedig, said typically “five to 10 percent” of firms or legislators are susceptible to corruption. Wedig was involved in the Abscam sting that nabbed public officials from the local to federal level, and a California investigation he oversaw used a phony shrimp company to catch crooked legislators.
The FBI caught Estey in April 2011 when they gave him $20,000 through its phony company to disburse to legislators. Pennsylvania allows unlimited donations from individuals and political action committees, but doesn't allow businesses to donate directly to candidates.
That same month in 2011, three Long Nyquist employees deposited a total of $17,500 in the firm's PAC, which then gave Senate President Pro Tempore Joe Scarnati's campaign a $17,500 donation on April 21, according to the PAC's campaign finance report. Long Nyquist denied any connection between the donations.
In an email response, Scarnati did not address Trib questions about the $17,500 donation. He stated he hasn't been contacted by “any law enforcement agency” about the FBI's lobbying investigation.
“Our company-affiliated PAC's reports are transparent, filed with the Department of State, and we utilize compliance legal counsel as it relates to its operation,” Long Nyquist stated.
The ties between Long Nyquist and Senate leadership — indeed, between many lobbying firms and the leaders they try to sway — run deep.
Todd Nyquist, of Long Nyquist, is Scarnati's former chief of staff; Tim Nyquist, Todd's twin, is a former Scarnati aide. Mike Long, Todd's partner, is former chief of staff to ex-Senate President Pro Tempore Robert Jubelirer, R-Altoona; Long's wife Amy, is a former GOP Senate and House staffer. Nyquist's wife, Noel, is a former Senate Republican aide working at Long & Nyquist.
Megan Crompton, wife of Senate Republican General Counsel Andrew Crompton, works at Long Nyquist, while Long's son, Casey, is a top aide to Scarnati.
When Zaborney wanted to expand his lobbying business, he hired Krystjan Callahan, former chief of staff to now-House Speaker Mike Turzai, R-Marshall.
The First Amendment of the Constitution guarantees the right “to petition the government for a redress of grievances.” Pennsylvania's Constitution, which is older than the nation's, says in Section 20: “Citizens have a right ... to apply to those invested with the powers of government for redress of grievances or other proper purposes by petition, address or remonstrance.”
The state's lobbying law, like most in the United States, deals mostly with disclosing who's lobbying for whom, and whether they're directly connected to political campaigns.
“What these laws are really designed to do is prevent the appearance of impropriety and preserve a sense of public trust in government. Sometimes that's as important as preventing” actual corruption, said Ethan Wilson, policy specialist at the Center for Ethics in Government at the National Conference of State Legislatures.
Pennsylvania is one of only three states that require lobbyists to say if they're working on someone's election campaign. Lobbyists are required to disclose their work for a campaign only if they're the campaign committee's chairman or treasurer — the two positions candidates have to name when they form their committee.
All five of the employees listed on the web page of LN Consulting — the campaign counterpart of Long Nyquist's lobbying firm — are registered as lobbyists. None list an affiliation with a political campaign. The firm has been paid $2.8 million by the state Republican Party, $185,000 by the campaign of Sen. David Argall, R-Schuylkill County, and $161,000 by the campaign of state Rep. Mark Mustio, R-Moon — its top three benefactors.
“If you're a lobbyist running a campaign, your lobbying clients have a huge advantage with the officials whose campaigns you are running,” said Barry Kauffman, executive director of Common Cause of Pennsylvania, himself a registered lobbyist. “There need to be lines between the two functions.”
Wedig, the ex-FBI agent, called it “a case of the fox guarding the hen house.”
Stan Rapp, a partner at Greenlee Partners, one of the state's largest lobbying firms, said Greenlee doesn't run campaigns but does conduct fundraisers for lawmakers. The legislator isn't charged. The events are accounted for as “in-kind contributions” to the legislator.
“That's the legal, ethical way to do it,” Rapp said. “It's transparent.”
S.R. Wojdak & Associates, a firm founded in 1977 by the late Democratic Rep. Stephen R. Wojdak of Philadelphia, does not manage campaigns or conduct professional fundraising for elected officials, although it holds fundraisers for lawmakers and governors, said Steven M. Crawford, managing vice president and former chief of staff to Democratic Gov. Rendell. The Wojdak firm hosted fund-raisers for Gov. Tom Wolf, a Democrat, and for Republican Gov. Tom Corbett. The costs for a facility are reported as “in-kind donations” to the candidate, and “our clients buy the tickets,” Crawford said.
Doing active campaign work “is a business model that ends up being suspect,” Crawford said. “We specialize in government. I have a very strict policy against getting into campaigns.”
Rapp, a former aide to Sen. Henry Hager, a Republican leader in the 1980s, was one of the first in the industry to call for lobbying reform.
What's needed is “full disclosure and a (state registration) system that works properly,” said Judith A. Eschberger, president of JAE Government Relations and a member of the Pennsylvania Association for Government Relations who has worked on lobbyist reform for 10 years.
Kevin Shivers, a registered lobbyist and executive state director of the National Federation of Independent Business, the largest organization representing small businesses in the nation, said when he travels to national conferences, “People ask, what the heck is going on in Pennsylvania?”
Democratic State Treasurer Rob McCord pleaded guilty to extortion, Democratic Attorney General Kathleen Kane faces trial on obstruction of justice and perjury charges, and an FBI sting investigation has netted Democrat Estey as part of a federal probe.
“It's embarrassing,” Shivers said.
Brad Bumsted and Mike Wereschagin are Tribune-Review staff writers.