Are economic developers lobbyists? What you need to know about Alabama’s most misunderstood ethics bill

Last week saw the end of the 2018 legislative session in Alabama, with the final days providing this year’s fill of political drama and heated debate. Perhaps the most controversial bill was the Legislature’s passage of a bill that distinguishes the role of economic developer in the state from that of lobbyist. This might be the most misunderstood issue seen in Alabama in quite some time, and if you rely on the opinion writers of the state for the facts surrounding this issue, then you’d be sure to believe that any legislator voting for its passage should be next in line for indictment.

Alabama has had no shortage of scandal surrounding governmental leaders, so it is understandable that any change to ethics laws should be scrutinized to ensure that all elected officials are held accountable.

If only HB317 had any effect on those laws, the rhetoric of the media would be warranted. Sadly, we live in a place where Chicken Little has been right too many times and Alabamians have seen the political characters in our story crash from the sky.

Here are the facts:

— When the newly elected Republican Legislature passed sweeping ethics reform in 2010, there were not many economic developers in the state who also considered themselves lobbyists.

— Traditionally speaking, and defined by the law, lobbying is described as “promoting, opposing or in any manner influencing the of legislation before any legislative body”.

— So, as far as the normal course of business goes for an economic developer, only in the event you are being paid to influence legislation would you be considered a lobbyist.
— However, section 36-25-1.1 of the Alabama Code states that “Lobbying includes promoting or attempting to influence the awarding of a grant or contract with any department or agency of the executive, legislative, or judicial branch of state government.”  Theoretically, this language could mean that an expansive number of activities or roles are defined as “lobbying”, including those involved in incentivizing new jobs and investment.

— More notably, site selection consultants who represent the private companies looking to expand or locate to Alabama would fall into the category of lobbyist.  The implications here could be catastrophic to Alabama’s ability to compete for new jobs and investment.

— Once the question was raised, those in the profession did the right thing, they sought clarity from the Alabama Ethics Commission to determine how to define the act of lobbying for their professional community.

— After years of considering this topic, a draft opinion issued by the commission indicated that it was unclear on whether or not the profession should consider themselves lobbyists and further stated that the lack of clarity was certainly a problem under the current definition of the law.

Why the bill is necessary:

The current law defines terms in a way that creates more questions than it provides answers and the Alabama Ethics Commission was unwilling to clarify the terms and regulations that apply to this profession. The more than 500 economic developers in our state have been operating in a grey area for years, uncertain of their professional obligation to comply in part or whole with the current law.

Here’s why economic-developers-as-lobbyists doesn’t work:

Let’s say economic developers are defined as lobbyists who have to register any entity that pays them. For most, this would be the chamber of commerce or industrial development board that employs them.  Sounds simple, right? The group would fulfill the annual educational requirements of any lobbyist and continue to comply with the financial requirements associated with elected officials.  There is not one developer in the state who would object to that, right?  Wrong.

What about the group of consultants who shop for locations across the country?  Each one would have to register with the Ethics Commission by January 31^st each year on the off chance they may have a project in Alabama, then make an extra trip to Montgomery to attend lobbyist training.  As a former site selector, I can assure you, when tasked with the process of elimination, any location that requires you to jump through these types of hoops gets chopped out of the gate.

The current code of nebulous ethics laws on the books today would further require disclosure of confidential project information that would preclude the process from taking root in Alabama.

So why are our headlines filled with new project announcements if economic developers can’t do their jobs?

Only recently have the scope of these concerns been called into question.  Alabama has been a leader in recruiting jobs and investment while operating under the assumption that those who are responsible for recruiting and expanding our economy are not considered lobbyists unless they are actively influencing legislation at the state level.  The law’s language had to be addressed and clarified or those headlines would be a thing of the past.  Without the passage of HB317, the clear-as-mud terms of the law and the Ethics Commission’s inability to provide clarity would be a sign to all those representing corporate investment that Alabama, once a major competitor, is now closed for business.

What now?

The new clarity in the law is not perfect, far from it.  But regardless of whether economic developers are considered lobbyists or not, elected officials still have to play by the same rules enacted in 2010.  Nothing has changed in that department.

To the members who sorted through the rhetoric and voted in favor of this bill, thank you for allowing those responsible for the good headlines to continue to do their jobs.  Perhaps this election cycle, instead of chastising those in the Legislature that have actually done something toward providing solutions, we should consider our votes for those who are willing, even temporarily, to solve the hard problems.

Allison Ross is the publisher and owner of Yellowhammer Multimedia