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12 May 2017

From Foes to Friends: Lobbyists Make Amends to Lawmakers With 'Make-Up Money'

Written by  Laurel Rosenhall
From Foes to Friends: Lobbyists Make Amends to Lawmakers With 'Make-Up Money' Max Whitaker for CALmatters

Days after Tim Grayson won election to the Assembly, a Sacramento lobbyist greeted him at a reception with sheepish congratulations. Her client had supported his opponent during the campaign, the lobbyist explained, but now that he’d won, she told him she wanted to move past the election and forge a good working relationship.

Oh and by the way, did he need any money to cover costs from the campaign?

“Make-up money” is what it’s called in Sacramento—the contributions that flow to newly elected officials from interest groups that backed a losing candidate during the campaign. It’s a completely legal way of saying, in political terms, “Let’s kiss and make up.”

Grayson has not taken advantage of the offer; campaign statements to date show no contributions to the Concord Democrat from clients of the lobbyist who introduced herself in November. But conversations like theirs often occur in the months after an election, as interest groups shift from betting on a winner during the campaign to lobbying those who won a seat in the Capitol.

“The best way to make amends, fortunately or unfortunately, is a contribution,” said GOP political consultant Mike Madrid. “It’s not uncommon to have a strategy where somebody spent six figures against (a candidate), with approval to write them a check to rebuild the relationship” if that candidate ends up the winner.

In other words: make-up money is built into the budget for interest groups that spend big on politics. Those groups had a lot at stake in the 2016 legislative races, because it marked the last time for the next eight years that a significant number of Assembly seats would be vacant. A review of campaign finance reports from last year’s most contentious races shows plenty of make-up money in the mix. It came from trade associations, corporate interests and labor unions.

Some examples:

• In the race for a Malibu-area state Senate seat, the dentists’ trade association spent nearly $50,000 opposing Democrat Henry Stern. After he won, the dentists gave him $4,200.

• In the race for a San Jose-based Assembly seat, the Realtors association spent more than $483,000 attacking Democrat Ash Kalra. After he won—and landed a spot on the Assembly’s Housing and Community Development Committee—the Realtors group gave Kalra $8,500.

• Realtors made another losing bet in the Democrat-on-Democrat race for a Glendale-area Assembly seat, spending nearly $253,000 to support Ardy Kassakhian. After his opponent, Laura Friedman, won, the Realtors’ group wrote her a check for $6,800.

Friedman said she met with the Realtors after the election—just as she met with many other interest groups—for a version of the “let’s move on and have a good relationship” conversation. The money, she said, doesn’t impact how she’ll vote on their issues.

“I don’t feel like I’m holding a grudge, but I’m certainly not going to not work with them, not take their meetings or not take in their perspectives,” Friedman said. “My goal is to represent my constituents and my conscience.”

The dentists and Realtors associations are among the biggest spenders in legislative races, pouring millions into recent election cycles. Both groups declined requests for interviews. The dental association provided a statement saying its political action committee “puts a great deal of consideration” into choosing which candidates it supports.

Interest groups that spend smaller sums of political money have done some flip-flops, too:

• In the race for a Palo Alto-area Assembly seat, two local labor unions—one for firefighters, another for school support staff—that gave to the losing candidate have since written $5,000 checks to the winner, Democrat Marc Berman.

• PG&E and the pharmaceutical industry association both donated to the campaigns of the losing candidate for a Salinas-area Assembly seat. Weeks after the election, the businesses wrote checks to the winner, Democrat Anna Caballero.

• In October, the prison guards’ union gave $4,200 to Grayson’s opponent in the race for his Assembly seat. Two months later, the union wrote a check for that amount to Grayson.

Grayson, who previously worked as the chaplain for the Concord Police Department, said his relationship with the prison guards’ union stems from his own career in law enforcement—not from the money they donated.

For interest groups he doesn’t really know, Grayson said he finds offers of “make-up money” awkward. He said he never followed up to seek a donation from the lobbyist who introduced herself at the post-election reception.

“My first desire is to meet and have a conversation in which they can get to know me, who I am, what I am and how I am,” he said. “What they choose to do after that, that’s their business.”

There is nothing illegal about giving “make-up money” to a politician, said Jessica Levinson, a law professor who is president of the Los Angeles Ethics Commission. Political contributions break the law only when they involve a direct exchange of money for governmental action.

But, she said, giving money to the winner of an election—after backing an opponent—shows that donors are looking to curry favor with whomever has the power to make decisions.

“It brings into stark relief what we all know, which is that people give money to get something,” Levinson said. “You’re not expressing support; you’re buying access and influence.”

Laurel Rosenhall is a contributor to CALmatters.org, a nonprofit, nonpartisan media venture explaining California policies and politics.

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