"Covina Nonprofit Fund Raising - DOC"
Los Angeles Times April 2, 2010 Friday Home Edition PENSION FUNDS; Bill pits CalPERS vs. Wall St.; Legislation seeks an end to commissions paid to investment 'placement agents.' Legislation to ban commissions paid to intermediaries for steering California's public pension money to investment houses has spurred a lobbying war led by Wall Street's powerful Blackstone Group, allied with such major banking firms as Wells Fargo & Co. The battle over fees for so-called placement agents is heating up as the bill gets its first hearing in the state Legislature next week. The fight arose amid a series of federal and state investigations in California and New York into possible corruption and influence peddling at major public pension funds, including the California Public Employees' Retirement System, the nation's biggest. The U.S. Justice Department is monitoring the other investigations, said a high-level CalPERS official, who didn't want to be identified because of the sensitive nature of the probes. Huge commissions paid only for favorable results is a "system that invites corruption," said state Treasurer Bill Lockyer, a CalPERS board member. Blackstone Group, which not only invests state pension money but also owns a placement agent firm, has hired a Sacramento powerhouse in government relations and lobbying to fight the legislation. That firm, California Strategies, has a stellar list of former state officials as partners, including its latest hire -- James E. Burton, a former CalPERS chief executive. CalPERS is on the other side, seeking to eliminate the incentives that fueled allegations last year of influence peddling at the $206-billion fund. It is pushing the key measure in the reform legislation -- a provision that would ban paying commissions to middlemen. Winning passage would be a challenge for CalPERS despite its riches and clout in the financial world. "This is looking more and more like it's going to be deep-pocketed financial giants against the workers, retirees and taxpayers of California," Lockyer said. The state treasurer, state Controller John Chiang and CalPERS board President Rob Feckner are lining up bipartisan support for the bill, AB 1743. Blackstone spokesman Peter Rose said the company had no problem with California's effort to register placement agents as lobbyists and to limit campaign contributions and gifts to pension fund officials -- all part of the reform bill. Those actions could keep "political fixers and influence peddlers" away from pension funds, he said. "Our concern with this bill is simply the ban on contingency fees," Rose said. Blackstone earns fees for managing $4.4 billion in investments contracted by CalPERS and the $130-billion California State Teachers' Retirement System. The firm, which manages $96 billion in assets, earns fees on capital committed to its own private equity, real estate and credit-based funds. Blackstone's wholly owned Park Hill placement agent, based in San Francisco, has earned commissions on more than $110 billion in investments with 73 private equity, hedge, venture capital and real estate funds, according to the company's website. Placement agents, Rose contends, play a useful role helping small and sometimes minority-owned investment funds put together sales pitches that would get the attention of investment staffs at large bureaucracies such as CalPERS. "Most of these [investment] funds are fairly small and can't afford to pay a large monthly retainer," Rose said. Under a contingency fee system, they don't get paid unless they're successful. But those small firms shouldn't feel compelled to hire a placement agent to get a hearing at CalPERS, said Joseph Dear, the system's chief investment officer. The bill's sponsor, Assemblyman Edward Hernandez (D-West Covina), said he was committed to banning commission payments as part of a disclosure process that protects the pension system from improper influences. Good-government advocacy groups are standing behind Hernandez. "We're talking about multimillions of dollars to single individuals. That goes beyond a simple incentive to do well," said Kathay Feng, executive director of California Common Cause. "People are outraged by this contingency system that gives people outrageous bonuses." Other major players -- Wells Fargo, Credit Suisse First Boston and the Securities Industry and Financial Markets Assn. trade group -- have raised objections to the bill in talks with the staff of the Assembly Public Employees, Retirement and Social Security Committee, which Hernandez chairs. The industry group supports increased regulation of placement agents but opposes any changes in the way they are paid. Prohibiting commissions "amounts to a placement agent ban," said Andrew DeSouza, an association spokesman. Placement agent activities at CalPERS, until recently, were unregulated and occurred largely out of public view. But in May, the CalPERS board, alarmed by a corruption scandal at a New York state pension fund, ordered its investment partners to report their financial relationships with placement agents. The disclosures last fall contained a bombshell: A former CalPERS board member, Alfred J.R. Villalobos, garnered at least $70 million for getting CalPERS and CalSTRS to invest in a handful of big funds. The disclosures of the fees and Villalobos' hiring of a former CalPERS chief executive, Fred Buenrostro, caused an embarrassed CalPERS board to hire a Washington, D.C., securities lawyer to look at possible conflicts of interests and overpayments of investment management fees. At the same time, California Atty. Gen. Jerry Brown has issued a number of subpoenas and has been working with his New York counterpart, Andrew Cuomo. A two-year New York investigation into pension fund corruption has led to convictions of high-profile officials, fund managers and placement agents, including an investment manager and a placement agent from California. The CalSTRS board doesn't want the bill to impede the access of female- and minority-owned investment firms to public pension fund business. Seizing that issue, opponents of the measure contend that cutting off commissions would hurt the prospects for small investment firms in getting a piece of the investment action at big funds such as CalPERS. Placement agents are an economic and effective marketing tool, said Deborah La Franchi, chief executive of Strategic Development Investments, a small, female- owned investment management firm in Los Angeles. "It allows a firm to focus on portfolio management without also having to develop a marketing department as well," she said in a letter to the Securities and Exchange Commission, which is proposing a nationwide ban on the use of placement agents. The same type of political pressure already is being felt in California, state Controller Chiang said. "Any time you take on the financial lobby you can expect to have to climb a tall wall," he said. Passage of the Hernandez bill is no sure thing because the measure, by law, needs support from at least two-thirds of the Legislature. But a successful opposition campaign could backfire on the securities industry, Lockyer warned. State and local government pension funds already have the authority to outlaw placement agent activities related to their investments. "If we can't reform these practices," the state treasurer said, "then I'm for a ban." Fresno Bee (California) March 30, 2010 Tuesday FINAL EDITION Quinto responds to ethics concerns; Ex-Fresno official made calls to aid Granite Park soon after leaving post. A former city of Fresno finance director said she was not paid for consulting work she did for the failed Granite Park project after she left City Hall employment. Ruth Quinto, Fresno Unified's deputy superintendent/chief financial officer, said in an e-mail she "made a few phone calls" for Granite Park developer Milt Barbis several months after she began working for the school district. However, Quinto said, "I did not receive compensation." Quinto's response to questions from The Bee comes in the wake of Fresno County Grand Jury criticism that she had a conflict of interest when she did work for Barbis, whose project she pushed while a city employee. "The grand jury believes that [Quinto] had a 'revolving door' conflict of interest and should not have entered into a business relationship with the developer," the report stated. Quinto was the city's chief financial officer in December 2004 when the City Council voted to guarantee a $5.2 million bank loan to Granite Park Kids Foundation. Quinto was among Granite Park's strongest supporters at City Hall, helping write the staff report that supported council approval of the loan guarantee. Barbis was a key official in the project. The nonprofit foundation owned 18 acres of ballfields at the 42-acre recreation-retail project in central Fresno. The foundation defaulted, and the city paid off the loan and recently took possession of the 18 acres. Interim City Manager Bruce Rudd has estimated it will take at least $1 million to rehabilitate the weed-infested soccer fields and three run-down major-league replica ballparks, funds the cash-strapped city doesn't have. Barbis filed for personal bankruptcy protection late last year, and a federal court in February discharged $8 million in debts, most connected to Granite Park. The Bee was unable to contact Barbis. City Council criticized The grand jury this month issued a report criticizing the City Council for failing to use common business sense in approving the loan guarantee and ignoring long- established city policies that might have revealed the foundation's financial weaknesses. Although it does not mention her by name, the report also stated that Quinto acknowledged having had a "consulting relationship" with Barbis to do work at City Hall for The Zone Sport Center LLC. Barbis was a partner in the company, which owned the project's 24-acre retail portion. Quinto became an interim assistant city manager in early 2005, and her last day as a city employee was July 31, 2005. On Sept. 16, 2005, Karen Bradley, then-interim controller for the city, wrote a letter to then-Assistant City Manager Rudd saying that Barbis a week earlier had told her that he would be "engaging" Quinto help him in negotiating some additional financial deals with City Hall. Bradley wrote that Quinto "subsequently called and left me several voice messages that she will be acting on behalf of Granite Park as a consultant and wanted to move very quickly" on formation of a special district to help fund construction of infrastructure improvements at the project. Bradley wrote she was concerned Quinto's consulting for Granite Park so soon after she had left the city's employ might violate the code of ethics for certified public accountants and could harm the city's reputation "with respect to independence, integrity, and objectivity." Bradley and Quinto both are certified public accountants. The city in 2005 had no policy prohibiting a former interim assistant city manager from consulting or lobbying City Hall within months of leaving the city's employ. However, Quinto's efforts on behalf of Barbis apparently did cause concern for city officials. The Bee obtained from the city a copy of an unsigned letter dated Sept. 22, 2005, from then-City Manager Andy Souza to Quinto in which Souza wrote the city believed it would be in the best interests of all parties that she stop lobbying City Hall on behalf of Barbis. "Due to your previous employment with the City as its former City Controller and as a result of your in-depth involvement with the previous Granite Park loan guarantee transaction, your objectivity and independence as well as that of the City's could be called into question," Souza wrote. Souza on Monday said he can't recall whether the letter was mailed. Quinto said in a voice-mail message Monday that she never received any correspondence from City Hall on the issue. In December 2006, Barbis, in response to questioning by then-City Council Member Tom Boyajian, said Quinto after leaving City Hall "was giving me consultation" on financing options for infrastructure improvements at Granite Park, but the plans never materialized. Boyajian said the Barbis-Quinto consulting deal was "a huge conflict of interest." About three weeks ago, Quinto issued a public statement acknowledging she had had an "arrangement" with Zone Sports Center to help the company with "City policies and procedures" early in her tenure at Fresno Unified. Quinto said she "voluntarily terminated this arrangement with the [company] in recognition of the enormity of the challenges facing me in my new position at Fresno Unified School District." At the same time as Quinto's statement, Fresno Unified Superintendent Michael Hanson also issued a statement. He expressed his "total confidence" in Quinto. Not registered as lobbyist Quinto emphasized throughout the City Hall loan-guarantee debate more than five years ago and in subsequent interviews with The Bee that her support for Barbis' request was a disinterested public-policy decision based solely on the jobs, tax revenues and green space that Granite Park promised to deliver. City policies would have prohibited her from working as a consultant or lobbyist for Barbis while also working for the city. Quinto began work at Fresno Unified as assistant superintendent/chief financial officer. Her contract requires her to get the superintendent's approval before taking on any outside professional activities such as consulting "for consideration" -- money or other compensation. The contract requires Quinto to give the money to the district unless she does the work while on vacation. Quinto's contract states that her "outside professional activities shall not occur during regular work hours or otherwise interfere with [her] ability to satisfactorily perform the duties of her position." It also states that the district Board of Trustees may fire her for breaching the agreement. Quinto said Monday in a voice-mail message that she does not recall the details of her phone calls to City Hall or the time of day she called. City Hall requires all lobbyists to register with the City Clerk's Office. The office has no record that Quinto registered during 2005. City policy defines a lobbyist as anyone "who is employed or contracts for economic consideration, other than reimbursement for reasonable travel expenses," to influence any piece of business that might go before the City Council. In response to a recent state Public Records Act request from The Bee, Fresno Unified stated that it has no written record of Quinto asking for Hanson's permission to do outside work for Barbis. On Friday, Quinto in her e-mail stated she made "a few" phone calls for Barbis "months after I started my new position at Fresno Unified." Quinto also said she did not attend any meetings at City Hall on Barbis' behalf, "either public or private." Asked if she had told Hanson of her consulting arrangement with Barbis, Quinto wrote, "It was five years ago and at this point I do not remember if I had a conversation with Superintendent Hanson about it." The Bee asked Quinto why she agreed to enter a consulting arrangement with Barbis. Quinto wrote: "Milt talked to me five years ago and months after I started my new position at Fresno Unified about assisting him in understanding City processes and procedures." In a telephone interview on Friday, Hanson said he would neither confirm nor deny whether he and Quinto in 2005 discussed her work for Barbis. However, he said, there is much about that period that he can't recall. "I don't know what happened" between Quinto and Barbis, Hanson said. Quinto was not paid for her work on Barbis' behalf, no identifiable "work product" was delivered to Barbis and Quinto's work for the district did not suffer, Hanson said. "I'm a bit mystified how this continues to hang around," Hanson said. Hanson said the Quinto-Barbis deal after she left the city's employment does not affect her employment with the district. "It doesn't rise to the level of being a concern for her contract," Hanson said. The Salt Lake Tribune March 29, 2010 Monday Canyons' lobbying may be illegal Since its controversial divorce from Jordan, Canyons School District has enjoyed a political and financial edge that critics say cuts like a knife. The reason is far from serendipitous. Canyons employs a stable of prominent lobbyists -- it is the only major school district to do so -- at a taxpayer cost of nearly $200,000 per year. And it may be illegal. Each of the four lobbyists, listed on the district payroll as "government relations specialists," boasts more than a dozen clients. The names represent a who's who of Utah power brokers ranging from EnergySolutions and Reagan Outdoor Advertising to the Utah Transit Authority and Intermountain Healthcare. "It's been very beneficial for us," says Keith Bradford, business administrator for Canyons. "They spend a lot of time up there at the Legislature." But language under the state's Budgetary Procedures Act may prohibit the practice. The law lists a "public education entity" among agencies receiving legislative appropriations which "may not expend any monies to pay a lobbyist." School districts have two main sources of revenue: local property tax and state income tax. Bradford said districts receive no direct funds from the Legislature. He and state attorneys agree the law is open to interpretation. The ambiguity over "any monies" also renders a court challenge anything but black and white. But new Senate Majority Leader Scott Jenkins says that loophole "absolutely" should be cinched. "I tried a couple years ago, and I couldn't get the support," he said. "Maybe that's something I'll look at again this year." Jenkins, R-Plain City, argues Canyons' perceived advantage may pressure other districts to hire lobbyists at a time when budgets are bleak. "It ends up being a little bit of a snowball. That's how cities feel," he said. "It really bothers me the way we have to pay to lobby ourselves. [Any school district representative] can walk in our office anytime, night or day." Most do just that. "If there's a bill that we want to talk about, we get invited often times by committees to come and testify," said Davis School District spokesman Chris Williams. "Plus we meet with our delegation before each session. We haven't found it necessary to have a lobbyist." Granite assistant superintendent Martin Bates says he doesn't know of a single school district that does. "We work on having good relationships with our legislators," said Bates, noting lawmakers usually initiate the contact. "We don't have a lobbyist, and that's not something we've built into the budget." The story is the same across the Wasatch Front. Canyons is the only one among Utah's 10 largest school districts that pays a registered lobbyist. Many argue it is too expensive; others say it's overkill. Alpine lists one lobbyist under state disclosures, but that was because his law firm was used for assistance on a bond election, according to Alpine spokeswoman Rhonda Bromley. "We've never paid him for anything or used him at the Legislature," she said. "Nor have we paid anyone." If the practice is not illegal, it is politically unseemly at least, says Jordan spokesman Steve Dunham. "We don't see the need to spend taxpayer dollars in that way." Still, the expense seems to be paying dividends for Canyons. In November 2007, voters approved the Jordan split, which created the east-side Canyons District. It took effect last summer. But the wound continues to rankle families in Jordan who maintain the west side now is saddled with a smaller tax base. Since the split, Canyons exclusively enjoys the commercial-tax spoils of the Interstate 15 corridor. A lawsuit challenging the split failed. And during the recently concluded 2010 legislative session, an attempt to establish statewide equalization for funding schools also fell short. Rep. Greg Hughes, R-Draper, who was chairman of the committee that shepherded the equalization fight, voted 'no' along with the panel's majority. He is sympathetic to Canyons, saying its uniqueness prompted the 2009 hires. "We know what lobbyists do -- they are purveyors of information," he said. "Canyons, being the newest school district in the state, had a story to tell." Hughes concedes the hired help "certainly stands out," but says it also was strategic in light of the equalization effort. "You have to play defense when you feel like you're being attacked." Bradford, the Canyons business administrator, is matter of fact about a school district's need to influence the Legislature. "There needs to be an avenue to do that," he said. "A lot of times, you're competing with private entities that are paying lobbyists." Bradford predicts any challenge would lose in court, noting his lobbyists are employees, not independent contractors. And he defends his team's collective influence. "Other districts probably have people up there. I guess they don't have as high of profile employees as we've hired." The top gun on the team is Charles Evans, the "director of government relations," and a full-time employee who makes nearly $125,000 annually. Evans notes he was first hired in the fall of 2007 by the Jordan School District before making the move to Canyons in January 2009. "It's a little bit of a misnomer to say that nobody else uses anybody," said Evans, who lists 19 other clients on his lobbyist disclosure form. "People are up there all the time from other school districts. I just think Canyons has been more straightforward about it." Evans, who later hired Spencer Stokes, Michael Zuhl and Jordan Garn, says he is not familiar with the state law in question, but does not see any legal conflict. "They worked through all that when I was hired." The genesis of the language comes from a 2001 bill sponsored by then-Sen. Beverly Evans, who worked for years as an administrator at Uintah Basin Applied Technology Center. It is unclear if the original intent was to prevent lobbyists at school districts. But Dunham, at Jordan, says even if it is not prohibited, the decision should be economic. What it comes to, he said, is the priorities of district leaders. Representing Canyons Canyons School District employs four registered lobbyists as "government relations specialists," at a yearly taxpayer cost of nearly $200,000. All four list Canyons School District on their lobbyist disclosure forms. The hired guns include: Charles Evans » He earns $124,103 from Canyons and lists 20 clients, including EnergySolutions, Reagan Outdoor Advertising and the Downtown Alliance. Spencer Stokes » He earns $25,000 from Canyons and lists 19 clients, including 1 800 Contacts, EnergySolutions and the Utah League of Credit Unions. Michael Zuhl » He earns $25,000 from Canyons and lists 18 clients, including Utah Transit Authority, West Valley City and the Metropolitan Water District of Salt Lake & Sandy. Jordan Garn » He earns $12,293 from Canyons and lists 12 clients, including Intermountain Health Care, Summit County and General Motors. Budgetary Procedures Act 63J-1-210 (2) » A state agency or entity to which monies are appropriated by the Legislature may not expend any monies to pay a lobbyist. The Olympian (Olympia, Washington) March 27, 2010 Saturday Banks rev up the lobbyists to help keep tax break Supporters of ending a tax break for banks are struggling to win the votes they need in the Legislature. Majority Democrats are looking for exemptions to purge from the state’s tax code to help close a $2.8 billion budget shortfall, and making banks pay taxes on part of the interest they earn on home mortgages would raise $50 million. But banks have made the case that targeting Wall Street giants will have unintended casualties closer to home, for medium-size local banks and anyone trying to buy a house. Amplified by lobbyists patrolling the Legislative Building, the banks’ message has persuaded enough Senate Democrats so far to stifle proposed changes. Rep. Ross Hunter and other House Democrats are trying to persuade them to tax earnings above $120 million from interest on a home’s first mortgage, along with all earnings from mortgages that banks have resold. Most local banks would not be affected. Of the nearly 20 community banks in Washington, only the two largest – Washington Federal and Sterling Savings Bank – would be affected by the cap. “We’re really trying to be careful with the community banks,” Hunter said, “but I think it’s unreasonable that these big hunking banks get to do business in Washington and don’t pay taxes here.” No other state entirely exempts first mortgages from taxation, the Medina Democrat said. The decades-old deduction appears to have started to help now-defunct Washington Mutual, he said. Capping banks’ mortgage deduction is one of several controversial tax ideas prolonging the special session in Olympia. House Democrats also want to collect sales tax on custom software and make shoppers from out of state pay sales tax. Senate Democrats prefer raising the sales tax by a fraction of a penny. Some senators who support raising taxes are worried about the fallout from taxing mortgage earnings at a time when some local banks are folding and homeowners are struggling. Tacoma-based, 78-year-old Rainier Pacific Bank failed last month. The tax “will get really passed through to the homebuyers,” said Sen. Rosa Franklin, a Tacoma Democrat, “and they already are having a lot of problems as it is.” HEAVY HITTERS Citigroup, KeyBank, Wells Fargo, Bank of America, JPMorgan Chase : Many of the large, out-of-state banks have lobbyists looking out for their interests in Olympia as lawmakers threaten tax hikes. Big and small banks and their trade associations have at least 17 lobbyists registered to represent them this year, not counting others who represent mortgage brokers, credit unions and other financial firms. Many of those lobbyists split their time between banks and other clients. The financial industry as a whole spent $243,000 on lobbying in January and February as the session geared up, according to the most recent state Public Disclosure Commission findings. “I know a lot more people working for the banks this year than there has been in normal years,” Hunter said. “I think they’ve hired a bunch of the heavy hitters this year.” If there are more lobbyists, said Dave Fisher, a spokesman for the Washington Bankers Association, it’s a sign of the concerns banks have about the effect of taxes on their bottom lines in a “challenging time” for the industry. TAXES HIT BANKS DIFFERENTLY Capping the mortgage deduction would be “devastating” for Washington Federal Savings, the state’s largest bank, its chief executive said. The bank earned three times the level where the exemption is proposed to be capped. CEO Roy Whitehead said the bank earns about $3,600 over the life of a $100,000 home mortgage and would see that drop to roughly $2,700 under the cap. Banks say they would be hit hard enough by the rest of legislators’ tax increases. A proposal to raise as much as $84 million by changing how the state taxes out-of- state companies, including banks, has widespread support among Democratic lawmakers. Companies that do significant business in Washington would have to pay business and occupation taxes even if they don’t have a physical presence here. Banks say $72 million of those new B&O tax revenues would come from their industry. That would be more than the total B&O tax bill for commercial banks in 2007. While those changes would hit large, out-of-state banks, Hunter says in-state banks would actually see their tax burden decrease. The effect on community banks is at the center of the debate over the mortgage exemption. Supporters say capping it would mostly hit big banks. “This benefit has been flowing to large, out-of-state banks that are largely responsible for creating the financial crisis and precipitating the current economic downturn,” said Sandeep Kaushik, a spokesman for the pro-revenue Rebuilding our Economic Future Coalition. Kaushik said big banks are hiding behind small ones to preserve their tax break. Kaushik’s coalition, including labor and health care groups, ran newspaper ads asking whether banks bailed out by taxpayers and allowed to hand out bonuses need another tax break. “There’s no differentiation now in the minds of the public between Washington Federal and Goldman Sachs or JPMorgan,” Whitehead complained. “They sort of paint us all with that same broad brush, but here we are, a company that didn’t participate in any of the abuses.” Rochester Democrat and Chronicle (New York) March 27, 2010 Saturday Democrats' 'pay-to-play' letter comes under fire ALBANY - Senate Democrats are under fire for a campaign fundraising letter that offers a seat on a Labor Advisory Council if union leaders contribute up to $50,000 to the Democrats' election campaign. The letter, penned by Sen. Jeff Klein, D-Bronx, is being criticized by Republicans and good-government groups as a clear pay-to-play effort. In exchange for the campaign contributions, the letter states, donors would be invited to "exclusive" meetings with Senate Democratic leaders and be involved in policy conversations around the party's campaign strategy. Susan Lerner, executive director for Common Cause/NY, called the letter "scandalous and embarrassing." "It is such a blatant pay-for-play proposal," Lerner said. "There's nothing covert about it. It's just overt: Give us money and you get time with leaders." The letter, first reported Wednesday by the New York Post, seeks union leaders' contributions to sit on the panel being created by the state Democratic Senate Campaign Committee. All 62 seats in the Senate are up for election in November, and Democrats hold a slim 32-to-30 majority. By contributing $50,000, a donor could serve as a chair of the panel. For $25,000, a donor could get "general membership." "Advisory Council Chairs will have the unique opportunity to advise the Senate Dems on the structure and focus of the Labor Advisory Council," the letter signed by Klein, who heads the campaign committee, reads. "In addition to all meetings, conferences and events that are included with the Advisory Council membership, the Advisory Chairs will be invited to an exclusive meeting with the Senate Democratic Majority leadership." Senate Democratic Leader John Sampson, D-Brooklyn, defended the letter, saying it's a routine fundraising mechanism for political parties. He pointed to the National Republican Campaign Committee's Business Leadership Trust as an example, and said Senate Republicans engaged in the same kinds of fundraising when they were the majority in Albany. Klein said the Democrats' campaign committee plans similar advisory councils on business, environmental and women's issues. "Donor councils are standard fundraising vehicles used by political campaign committees on both sides of the aisle," Klein said. Senate Republicans seized on the letter as an example of Democrats abandoning their pledge to reform Albany. Senate Minority Leader Dean Skelos, R-Nassau County, suggested it could be illegal. "It was absolutely over the line," said Sen. Thomas Libous, R-Binghamton, who heads the Republican Senate Campaign Committee. "It continues to show the public that this is the kind of overall leadership you are seeing from the Democratic Senate." After former Senate Republican Leader Joseph Bruno was convicted last year on corruption charges, Lerner said she would think lawmakers would be more sensitive in their fundraising. Gov. David Paterson, a former minority leader of the Senate Democratic conference, said the argument that fundraising has historically been done that way doesn't work. "I would advise that in Albany, copying that what your predecessors engaged in is not usually a prescription for success," he said. Paterson, in an appearance on WOR-AM (710) on Thursday, said his version of ethics reform, which the Legislature didn't approve, would have addressed this situation. "We have to eliminate pay for play. There's nothing in their ethics reform that addresses situations like this," Paterson said. He added, "The ethics reform bill that I want the Legislature to pass, that they wouldn't pass when they went and passed their own, that would cure this problem in a heartbeat." Florida Times-Union (Jacksonville) March 26, 2010 Friday Speaker unveils tougher ethics bill; It boosts violator fines, bars lobbyists from session hobnobbing. ATLANTA - House Speaker David Ralston unveiled a sweeping ethics proposal Thursday that would double fines, shorten reporting periods and give an oversight panel authority to police conflicts of interest. It would even outlaw lobbyists sending e-mails or text messages to legislators while they are in session or during committee meetings. "I think this bill is a substantial step forward to improving our ethics laws in Georgia," he said. The nearly 40-page bill includes many ideas that Democrats have pushed in recent years, but not all of them. Democrats had wanted to see a specific dollar limit or complete ban on gifts to elected officials, including clarification on the value of airplane travel. Ralston spent months working on the details with Rep. Mary Margaret Oliver, D- Decatur, who called the bill bipartisan. "I'm very pleased to be here with what I believe is a very good product," she said. Ralston said the point of the bill is to make as much information available to the public about gifts and then let the voters decide what amount is too much. "The ultimate judgment on gifts is in the hands of the public," he said. He noted that requiring more frequent reports from lobbyists on what they spend on legislators would better arm the public. "The media has the opportunity to write those articles because of what we have done to make those rules more open and more transparent," he said, noting that those stories could be more frequent, as often as every 15 days during a legislative session. Ralston personally presented the bill to the members of the House Ethics Committee, made up of senior members of both parties. "It's a step in the right direction," said Democratic Leader DuBose Porter of Dublin, who said it should go further to include an outright ban on gifts. Ralston replied the he found it ironic to hear complaints from Democrats because Republicans had already passed two other pieces of ethics legislation since their takeover in 2004 that Democrats could have enacted in their 130 years of control. After Ralston left the meeting for a conference on the budget, Democrats tried to add a gift ban and other changes to the bill but were voted down by the Republicans. It was an ethics scandal that brought Ralston to the speakership before the current session began. Former Speaker Glenn Richardson resigned after his ex-wife announced on television that she had evidence of his affair with a utility lobbyist at the time he was sponsoring major legislation on her company's behalf. Ralston took office promising broad ethics reform. Thursday, he made no apologies for introducing his proposal with just 10 days left in the session. "It's more important to get it right than to get it quick," he said. "My goal was not to make anybody happy. My goal was to fix problems." While much of the bill boosts existing fines and shortens the intervals between lobbyist-spending reports, the newest feature is dealing with conflicts of interest. It specifically makes it illegal for an elected official to threaten to use government staff or resources against someone and also outlaws an official doing anything for personal gain. Critics have long felt frustrated that the State Ethics Commission had no power to investigate complaints of conflicts of interest. Ralston's bill not only gives the commission that authority - and a new, longer name - but includes a constitutional amendment to guarantee individuals the right to make complaints against public officials. A joint ethics committee of the House and Senate set up two years ago to handle complaints against legislators about conflicts of interest would be disbanded. The only notable complaint it dealt with was an allegation that Richardson was having an affair with a lobbyist, which it dismissed for lack of evidence. "It is my view and determination that that entity has not been terribly effective," Ralston said.