Tulsa liquor wholesaler Bryan Hendershot had a lot of money on the line when the Senate voted 34-11 to pass Senate Bill 608 on Monday.
The legislation, which passed the House earlier by a single vote, seeks to roll back a narrow part of 2016’s voter-approved alcohol-sales reforms by allowing top wine and spirit brands to be sold by all distributors in the state, instead of allowing manufacturers to decide who can sell their wine and spirits.
Without the change, Hendershot’s company, Boardwalk Distribution of Tulsa, stands to lose tens of millions of dollars each year.
That might explain why Hendershot has been busy pressing lawmakers on the bill, writing an opinion piece for a news site and working behind the scenes with his company’s four lobbyists to navigate the legislative process.
But with heated opposition from other liquor wholesalers, Hendershot turned to another tactic: He and his wife, Betsy, have given at least $95,200 in campaign contributions to 53 lawmakers – or more than one-third of the entire Legislature – since this year’s session began Feb. 4.
The donations come as very few lawmakers have publicly announced re-election plans and well over a year, or longer, before they will face another election.
The donations are legal, despite Oklahoma being one of 28 states that impose at least a partial campaign fundraising moratorium when the Legislature is in session.
An Oklahoma Watch review of recent campaign reports found that other donors also continued to spend heavily during the first half of the session and the three-month window between last year’s election and the start of the session. The filings track spending through March.
Since Nov. 6, donors have given more than $1.7 million to sitting lawmakers and top state leaders, with about 20 percent donated while the Legislature has been in session. The amount will likely climb because of fundraising in the second half of the session – a total that won’t be disclosed until second-quarter campaign finance reports are filed by the end of July.
Campaign finance reform advocates say even though these types of donations are allowable under state law, they are troubling because they raise serious conflict-of-interest issues for public officials.
“It certainly can raise questions whether legislators are trading dollars for favors,” said Aaron McKean, state and local reform legal counsel for the Campaign Legal Center, a nonpartisan group that advocates for stronger campaign finance laws. “And especially with part-time legislators, I think people want their representatives passing bills and not raising money.”
What the Rules Say
State law bans lobbyists and the companies or groups employing them from making or promising to make campaign contributions to legislators or legislative candidates from the first Monday in February until five days after the end of the regular legislative session.
An additional rule by the Ethics Commission once blocked lawmakers from holding fundraising events in Oklahoma County during this period, but that was repealed in 2015.
As this year’s contributions show, there are ample ways to get around the limitations.
Hendershot, for example, was able to donate to dozens of lawmakers during the session because he personally donated rather than going through his lobbyists. Since his contributions came from his personal funds and not from his company, the donations were legal.
Hendershot declined to comment for this article. He was by the far the largest donor during the first two months of the legislative session, but he was not alone, as more than 100 individuals donated to lawmakers during that period.
Along with those who donated during the session, many others donated in the days leading up to the session’s opening. Those included John Jarboe, the owner of Southern Glazer Wine and Spirits, who was among those trying to stop SB 608 from passing. He contributed $2,700 to Sen. Stephanie Bice, R-Oklahoma City, on Feb. 1, three days before the session began.
Another loophole is that the, the prohibition doesn’t apply to many political action committees, which are among the biggest players in campaign finance. A 2009 attorney general opinion found that lawmakers can accept or solicit unlimited funds from PACs during the session as long as the PAC doesn’t employ registered lobbyist.
The $43,520 donated by PACs to lawmakers or statewide elected officials from the start of the session to March 30 is a fraction of the millions that PACs spent before the 2018 general election. But campaign records show several groups targeted top lawmakers who have deep sway in deciding whether bills are heard.
On March 29, for instance, House Speaker Charles McCall, R-Atoka, received $750 from the Oklahoma Cattlemen’s Association’s PAC, $750 from the lobbying firm Fried Kilpatrick Guinn’s PAC and $500 from the Oklahoma Agribusiness Retailers Association.
McKean said if nothing else, this type of spending can add to the perception that there is some type of pay-to-play agreement with campaign fundraising.
Statewide Officials Exempt
As lawmakers continue to take in cash despite the partial fundraising moratorium, there are even fewer restrictions for the one person who must sign off on all bills that pass the Legislature.
Gov. Kevin Stitt and the other statewide elected officials can fundraise as usual during the legislative session.
Stitt showed he was a force to be reckoned with during his gubernatorial campaign, raising $5.7 million in addition to loaning his campaign nearly $5 million.
Donations continued to flow after his election.
Campaign filings show Stitt raised about $280,000 after Election Day through March, including nearly $91,000 after this year’s legislative session began. That is in addition to what he raised for his pre-inaugural events – an amount that doesn’t have to be disclosed until this summer.
The governor’s office denied there are any conflicts of interest related to these donations.
“The total dollars raised this past quarter reflect less than 2 percent of the total amount Governor Stitt raised for his 2018 campaign,” Stitt spokeswoman Donelle Harder said. “If Governor Stitt was worried about how money would influence his decisions, he wouldn’t have started the Legislative session by putting a stop to lobbyists’ contracts with the state.”
Debate Over Stricter Laws
According to the National Conference of State Legislatures, Oklahoma is one of 13 states that only restrict lobbyist contributions during the session. Fifteen other states, meanwhile, block any contributions; the remaining states have no restrictions.
David Keating, president of the Institute for Free Speech, which defends political speech, said there are good reasons for states not to add restrictions to who can donate during legislative sessions.
“The government has to have a good reason for a ban,” he said. “And to me, it would seem that this would infringe on our constitutional right to associate with and support a candidate.”
In addition to philosophical concerns, Keating said there are logistical issues with blocking who can give to lawmakers when they are session. For example, he said a broader fundraising blackout period could make fundraising extremely burdensome during election years when there can be weeks between the end of the session and the primary elections.
He added there are more sensible, effective options, such as requiring campaign finance reports to be filed more frequently during sessions.
McKean, however, argued that stricter laws are valuable even if they just diminish the perception that donors can buy votes. But he acknowledged that donors can find ways around the laws even if policymakers have good intentions.
Even if there is a strong ban on fundraising during the session, there will always be those who donate before and after the blackout period.
The top fundraising day for Oklahoma’s sitting lawmakers and current statewide officials, was the Friday before the start of the session, when dozens of lawmakers or officeholders took in nearly $174,000.
Donors contributed a total of about $592,000 – or more than one-third what was raised the entire first quarter of 2019 – during the week leading up to the session.
“The devil is always in the details,” McKean said. “But there should be a point where citizens need to hold their representatives accountable and make sure their focus is on making good policy and not anything else.”