Lobbying Belongs on the Reform Agenda

06/12/2009 05:12 am ET | Updated May 25, 2011

Several of the elaborate schemes that drove the impeachment of former Gov. Rod Blagojevich and the criminal conviction of former Gov. George Ryan were assisted by powerful lobbyists, who enjoyed extraordinary access to the state's chief executives. Lobbyists close to Blagojevich allegedly shook down industry groups and state contractors for campaign contributions. Lobbyists close to Ryan extorted millions of dollars from vendors by threatening to separate them from lucrative state contracts.

These recent events suggest that the standards for honorable and legitimate lobbying are in peril. If Illinois ever hopes to sanitize itself from the stench of political corruption, it must expose lobbying to the light of day and demand higher ethical conduct from state lobbyists. Perhaps this point is best illustrated by a brief history of recent lobbying misconduct.

By all accounts, Lawrence Warner and Donald Udstuen could serve as the poster children for lobbying reform. After Ryan's election as Secretary of State in 1990, Warner launched a lobbying career to capitalize on his friendship with Ryan. Warner enlisted the help of Udstuen, a lobbyist for the Illinois State Medical Society.

Over the next eight years Warner, Udstuen and Ryan engaged in various conspiracies to extort payments from vendors. Millions of dollars in kickbacks were collected from vehicle sticker makers, computer services contracts, facility leasing contracts and photocopier leasing deals. Warner was eventually slapped with a 41-month prison sentence. Udstuen was given an eight-month sentence after cooperating with federal prosecutors.

Prosecutors are currently examining the conduct of lobbyists close to former Gov. Blagojevich. Lobbyist John Wyma never held a title within state government, but he was clearly one of the governor's closest advisers. Wyma immediately registered as a state lobbyist after serving as Blagojevich's political director during the 2002 election. He quickly amassed an impressive stable of clients, including AT&T Inc., Exelon Corp., Kraft Foods, Northern Trust Corp., Unisys Corp., Lehman Brothers Inc., Provena Health Care, Phillip Morris USA and the Chicago Transit Authority.

While Illinois does not require lobbyists to disclose the financial terms of their client relationships, federal records reveal that the Lehman relationship was particularly lucrative. According to the Municipal Securities Rulemaking Board, Lehman paid Wyma $550,000 over two and a half years for procuring public finance business. Wyma's efforts proved beneficial to Lehman, which helped Illinois float more than $2.1 billion in revenue bonds during Wyma's service period.

Wyma has not been accused of any wrongdoing and has not been charged in the government's indictment against Blagojevich and others. News reports have identified Wyma as the person referred to as "Lobbyist A" in the indictment and "Individual A" in the earlier criminal complaint. Lobbyist A was present when Blagojevich and others allegedly discussed fundraising demands on various individuals and entities doing business with the state. The criminal complaint indicates that Wyma provided information about these alleged demands to federal authorities.

Lobbyist Alonzo "Lon" Monk, Blagojevich's former chief of staff, also assisted in the ousted governor's criminal schemes, according to the indictment. Monk is heard in taped phone conversations discussing a campaign contribution from the owner of two Illinois horse racing tracks. At the time of the conversation, a bill benefiting the horse racing industry was awaiting Blagojevich's endorsement. Monk acknowledged squeezing the industry official for a substantial campaign contribution before the effective date of new restrictions on campaign donations.

The federal indictment also describes potentially criminal conduct by Robert Kjellander, who was a lobbyist for Bear Stearns & Co. in 2003 when Illinois was refinancing $10 billion in pension obligation bonds. While Kjellander has not been charged with wrongdoing, the indictment describes a kickback scheme in which Blagojevich, Monk and other insiders allegedly directed the bond deal to Bear Stearns because its lobbyist agreed to provide hundreds of thousands of dollars to the conspirators from the fee he would collect. Kjellander reportedly collected $809,000 through the pension deal.

It is unclear what statutory structure could have prevented these lobbyists from their roles in these alleged conspiracies. But fundamental weaknesses in Illinois' lobbying statute certainly prevented wider public awareness of their activities. Moreover, Illinois' weak lobbying infrastructure nurtured their arrogance and emboldened their corrupt schemes.

While the Illinois Reform Commission recommends a ban on campaign contributions from lobbyists, the more vexing problem involves the profound cloak of secrecy beneath which Illinois lobbyists operate. The Lobbyist Registration Act requires the state's 2,100 lobbyists to register annually, disclose the names of clients and provide brief lists of expenses. But Illinois' lobbyists disclose little beyond these minimal requirements. Indeed, the Center for Public Integrity has ranked Illinois 45th in an evaluation of registration, spending, transparency and enforcement requirements in state lobbying statutes.

By way of comparison, Wisconsin requires biannual reporting of all expenditures on lobbying activities including: payments to contract lobbyists; compensation and fringe benefits paid to in-house lobbyists; travel and living expenses; and purchases of research, printing, advertising and other services. Even Cook County and the City of Chicago require greater disclosure, including billings, from lobbyists than does the State of Illinois.

We recommend more thorough reporting requirements for Illinois lobbyists. Organizations lobbying state government should be required to disclose their expenses for lobbying. More thorough disclosures of the state officials and agencies contacted should also be implemented.

In addition, we favor a "cooling off" period between the date a government employee leaves public service and his or her lobbying former colleagues. Finally, we would suggest that the Secretary of State be given broader authorities to enforce the state's lobbying laws.

Illinois must take steps to aggressively monitor the activities of political insiders. As recent history suggests, lobbyists with close personal relationships with elected leaders were all too willing to engineer and oil the dubious schemes that came to define the Ryan and Blagojevich administrations.