Louisiana Gov. John Bel Edwards speaks at the opening of the state Legislature session in Baton Rouge, Louisiana, on March 12, 2018. (Gerald Herbert/Pool, AP Photo)
Legislators own everything from gas stations to nursing homes, yet they rarely recuse themselves on bills that directly affect them.
By Rebekah Allen / 06.06.2018
Reporter, The Advocate
Louisiana state Rep. Lance Harris, one of the Legislature’s most powerful Republicans, has cast himself as a purist when it comes to conflicts of interest among state leaders.
In April, he introduced a bill that would have prohibited the heads of state agencies from taking side jobs that overlap with their government roles — arrangements he said could put them in a precarious situation.
“The conflict that you get in is, let’s say you’re over the industry itself,” Harris said that month when presenting the bill in a House committee, “you may promulgate some rules or make some decisions that would be advantageous to that particular company or to that particular industry. That’s what it gets at. It’s just a good-government bill.”
Yet, within weeks of introducing that bill, Harris proposed two separate bills that would have benefitted Leebo’s, a chain of convenience stores and gas stations that he owns, by making it more difficult for larger retailers to sell gas more cheaply than he does. One bill, critics said, would have raised the price of gas by at least 4 cents a gallon at those large retailers.
In an interview, Harris said he saw no irony in his assiduous policing of executive-branch conflicts while also pushing for legislation that would benefit his business interests. “It’s not a conflict of interest, and we know it’s not because the House rules make it clear and so does the Louisiana state law,” he said.
Harris is right that he’s not breaking a rule. Louisiana’s ethics laws, written by the Legislature, allow lawmakers to author, advocate for and cast votes on bills that would enrich themselves, their relatives and their clients, as long as others in the same affected industry would benefit similarly. Regardless of the law, political watchdogs say, such advocacy is troubling.
“If someone has a financial interest in legislation before them, we just can’t imagine that person to be a neutral judge,” said Pearson Cross, a political science professor and an associate dean at the University of Louisiana at Lafayette. “Would you want someone on a jury who will gain financially depending on the outcome of a particular decision? It just shows the craziness of our system.”
This year, The Advocate and ProPublica are investigating conflicts of interest in the Louisiana Legislature. A story in April showed how easy it is for Louisiana’s lawmakers to avoid disclosing income they receive from public sources. The same ethics laws allow lawmakers to openly advocate for their own financial interests.
Even if they’ve recused themselves from voting, legislators can still participate and influence legislation under Louisiana’s ethics laws. And if a lawmaker steps over the line while pushing a bill to benefit himself or herself, complaints can only be brought forward by other members of the Legislature, not the public at large.
Since February, a Louisiana House member who owns a timber company sponsored a measure exempting timber from the state sales tax. Another attorney lawmaker proposed a bill sought by a client, a doctor who lost his license, to revamp the way doctors are investigated and disciplined. A state senator backed a bill that would have helped his brother’s truck stop casino, and legislators who have ownership stakes in nursing homes repeatedly weighed in on bills that would significantly impact their own businesses.
Some of the bills have passed the Legislature; some have not. And some are hanging in the balance, poised to come back in future sessions. In many cases, the lawmakers’ industry ties have been well known among legislators as they’ve debated the proposed laws, often unfazed by the financial benefits their colleagues stood to reap.
The system operates the way it does in part because Louisiana has a part-time, citizen Legislature — in which lawmakers receive modest salaries and often have other full-time careers. It’s expected that they will draw on their professional experience to help inform laws and regulations. The same is true in many other states.
But some say it goes too far. Cross said he’s seen legislators look past egregious conflicts of interest over the years, adding that Louisianans should expect more from their elected officials.
“The idea that someone should recuse themselves during matters of their own interest is a fundamental part of governance in the United States,” Cross said. “The fact that we don’t is just scary.”
Conflicts OK for Some, Not for Others
The way Harris, the Alexandria-based leader of the House Republican caucus, sees it, mom-and-pop convenience stores and gas stations are getting squeezed by national retailers that are undercutting their prices. That’s why he said he proposed a pair of bills to change that.
“In my home market right now, this past weekend, there were two or three national box chains that were selling gasoline” for 17 cents a gallon less than his business could get it for, he told a Senate committee in April.
One of Harris’ bills would have prevented larger retailers who receive a federal subsidy for blending ethanol into their gas from passing the savings on to consumers, a practice he believes is already illegal under state law. The bill sailed through the House, but Harris tabled it before a vote after pushback from the Senate committee. Lawmakers were unfazed by the idea that Harris’ bill could be self-serving, but concerned about the effect the bill might have on their own constituents.
“I don’t want to be saying this, I helped my buddy Lance, but I cost everybody in my state more dollars,” said state Sen. Francis Thompson, a Delhi Democrat.
State Rep. Lance Harris (Bill Feig, The Advocate)
The bill was opposed by national gas retailers and ethanol and renewable-fuel producers, who argued Harris did not understand the consequences of his bill. They said the cost savings generated from the ethanol blending is already factored into gas prices and impossible to separate out.
“I can assure you this, there will be a 4-cent increase in our stores if this bill becomes law,” said Kevin Ainsworth, a lobbyist for RaceTrac, which has 69 locations in the state. “Louisiana citizens will pay more at the pump.”
Harris’ second bill, which would make it easier for businesses to sue retailers who illegally undercut their gas prices, passed both chambers.
Though Harris openly drew on his own experience while testifying about his failed bill, in a recent interview, he downplayed the legislation’s potential effect on him.
“My locations aren’t that close to the big boxes,” he said.
Elliott Stonecipher, a Shreveport-based political watchdog and pollster, doesn’t buy it.
“No matter what the representative says, he is hard at work for his own financial benefit,” Stonecipher said. “The fact remains that taxpayers — those who voted for him, those who refused to, and the massive majority who do not even know who he is — are paying him a salary, and not insignificant expenses, to significantly profit himself.”
Members of the Legislature earn between $30,000 and $40,000 a year for their hours in the state Capitol.
While he was pushing for passage of his gasoline pricing bills, Harris was also advocating for legislation to ban the conflicts of interest of state department heads who work for Gov. John Bel Edwards, a Democrat and a key foe.
Harris didn’t name names when he presented his bill, which ultimately failed, but he said the stakes were too high to test the public’s confidence when it comes to people running the state’s agencies.
“Due to the public trust of being a public servant, it’s very important that you put in 100 percent time and work full-time and you don’t have any perceived or otherwise enhanced conflicts of interest,” he said in the April committee hearing.
Harris said it’s routine for lawmakers to sponsor legislation that favors whatever industry they work in. The governor, who is a lawyer, did the same thing in 2012 when, as a legislator, he sponsored a bill that would have increased the cap on damages people could have collected in medical malpractice lawsuits from $500,000 to $750,000, Harris said. The bill did not pass.
“That would benefit the trial attorney industry, but there were no questions asked when he did that and no articles were written,” Harris said.
Richard Carbo, Edwards’ deputy chief of staff, said Harris’ comparison is off the mark.
“As a lawyer, Gov. Edwards never been involved with a medical malpractice case. But Lance Harris sells gas every single day. At the very least, he could have been upfront with the Legislature that his business is directly impacted by the legislation he was proposing,” Carbo said. “Rep. Harris shouldn’t be taking money from the people he represents just to pad his own pockets.”
Overhaul of Ethics Laws Does Little
In 2008, at the urging of then-Gov. Bobby Jindal, legislators passed an overhaul of ethics laws, tweaking rules about how and when legislators must recuse themselves. Before, elected officials could still vote on matters even when they had a conflict as defined by Louisiana law, as long as they disclosed it.
Now, they aren’t allowed to vote if a bill would treat them differently than others in similar situations. For instance, if Harris proposed legislation that would only benefit his gas stations, he wouldn’t be able to vote on it. But since his bills affect the entire industry, the law doesn’t view them as a conflict of interest.
Louisiana legislators file more than 1,200 bills a year. But since 2004, only four lawmakers per year, on average, have recused themselves from votes because of personal conflicts, according to a review of legislative activity by The Advocate and ProPublica. That number peaked in 2009, when eight lawmakers recused themselves from votes shortly after the Legislature passed its ethics law.
In 2015 and 2017, there were no recusals for legislative votes.
Over time, loopholes in the 2008 law have become clear. First, while lawmakers are not allowed to vote if they have a prohibited conflict of interest, they are still allowed to participate in the debate. Second, if someone outside of the Legislature identifies a violation, it can only be considered if another member of the Legislature decides to take it up.
Alfred “Butch” Speer, the longtime clerk of the Louisiana House who provides legislators guidance on this issue, said in his 40 years on the job, no representative has been censured over a conflict. Brenda Hodge, a spokeswoman for the Senate, said she likewise knows of no censures in the Senate.
Speer calls conflicts of interest a “thorny” issue.
Because lawmakers’ salaries are relatively low, conflicts tend to be embraced rather than avoided. Speer said it’s important that lawmakers who are educators weigh in on education bills, and that lawyers in the Legislature weigh in on proposed changes to the legal system. Likewise, farmers should debate agriculture policy and business owners should help shape regulatory policy.
Firsthand knowledge is what fuels a citizen legislature, he said.
“You don’t want people who have never had the benefit of life experience being the only one to weigh on laws,” he said. “That’s the antithesis of a citizen legislature.”
Julie Quinn, a former Republican senator from Metairie, said she believes the law is written too loosely. At a minimum, she said, people who are financially impacted by bills in some distinct way should have to disclose that orally or in writing during floor debates and votes.
“If my law firm represents State Farm and this insurance legislation impacts State Farm’s business, you should articulate your financial interest,” Quinn said. “Those things never happened, and it should happen. That was the spirit of ethics reform, but the law is so specific that it’s highly unusual that anyone would ever have to recuse themselves.”
“There’s a Line We Do Not Want to Cross”
Earlier this year, lawmakers were called into a special session to figure out how to close a budget gap of hundreds of millions of dollars that still threatens to shutter a range of state services. The prevailing idea was to retain some expiring state sales taxes.
Amid that debate, state Rep. Jack McFarland, a Jonesboro Republican, proposed an amendment that exempted the sales tax for loggers, paper and wood manufacturers. The exemption would have peeled off about $3 million in state revenue.
The break would have benefited his own business, McFarland Timber. But McFarland noted that timber is the largest industry in his district and one of the most important agricultural industries in the state, so he is a natural advocate.
“I appreciate how it can be perceived, I can. And I think about that. Other members have asked me, ‘Are you being self-serving?’” he said in an interview. “And there’s a line we do not want to cross.”
McFarland’s amendment was approved but, ultimately, the sales-tax bill was rejected by a vote of the House. During the second special session, which ended Monday, when another sales tax renewal was considered, the exemption for timber was included in the original bill so McFarland didn’t have to pursue an amendment. He voted for the bill, but it stalled in the Legislature earlier this week.
McFarland said he expressed support to the bill sponsor about including the exemption.
“I said I obviously want it in there,” McFarland said. “It’s the largest industry in my district, so it’s imperative that it’s in there.”
A third special session will take place this month and the issue could come up again.
Lawmakers Who Own Nursing Homes
When the Legislature debates bills affecting nursing homes, a highly regulated industry, legislators’ conflicts of interest are often thrown into high relief. This year, for example, nursing home administrator and state Rep. Bob Hensgens, R-Abbeville, sponsored a bill that would have extended a long-standing moratorium against assisted living facilities that offer nursing care — would-be competitors of nursing homes that offer the elderly more autonomy and privacy.
Sharla Aloisio, executive director of the Louisiana Assisted Living Association, took issue with Hensgens’ advocacy, saying the proposed law would limit “free market and consumer choice.”
“Why is the nursing home industry so anxious to pass such legislation?” she said.
State Rep. Bob Hensgens (Melinda Deslatte/AP Photo)
In an interview, Hensgens said he doesn’t know if the assisted living facilities would be able to compete meaningfully with nursing homes, because there are so few in the state. But he said he proposed the bill only out of concern that the Louisiana Department of Health did not have the staffing to oversee new assisted-living facilities. The bill did not get a hearing in the Legislature, and Hensgens said he opted not to pursue it.
But last year, the same measure was proposed as an amendment on an unrelated bill with a week left in the regular session. The sponsor of the amendment then was state Sen. Fred Mills, who has a 10 percent stake in a nursing home. Mills is also a bank president and owns a pharmacy.
When the bill went to a conference committee to negotiate the final product, two out of the three Senate conferees had financial ties to nursing homes. In negotiations, the proposed five-year moratorium was cut back to a single year.
And this year, after Hensgens abandoned his moratorium bill, Mills for the second year in a row amended an unrelated bill to impose the moratorium for another five years. After pushback from assisted living facility owners, he withdrew the amendment.
Terry Crochet, an assisted living facility owner, said their association sent hundreds of emails to legislators asking them to oppose Hensgens’ bill and Mills’ amendment. He said when the moratorium expires this year, he plans to get a license.
“When Fred Mills tacked on that amendment again, we just came unglued again,” Crochet said. “These people should at least recuse themselves and not directly vote on things that affect their pocketbooks.”
Andrew Muhl, an AARP lobbyist who has backed bills opposed by nursing home owners, said it’s frustrating to have lawmakers who may be motivated by business ties have outsized control over debates that affect the elderly. Last year, The Advocate reported extensively on the influence of the nursing home industry over the Louisiana Legislature and how it has successfully lobbied for financial protections while blocking seniors from getting home-based services they would prefer.
“Unfortunately, we often see legislators with financial interests fight for a bill or kill a bill that impacts their bottom line or is in their best interest financially,” Muhl said. “But is it in the best interest of taxpayers and families?”
State Sen. Fred Mills (Patrick Dennis, The Advocate)
This year, Mills, chairman of the Senate Health and Welfare Committee, also presided over meetings where two controversial bills opposed by the nursing home industry were heard and debated. As chair, Mills didn’t have to vote, but he did weigh in on the debates and asked questions.
One of the bills would have expanded home health services, and presumably drawn business away from nursing homes, by shifting elderly Medicaid enrollees into managed-care plans. That bill was rejected. The other bill would require nursing homes to allow residents to keep surveillance cameras in their rooms so their families can keep an eye on them. It has since been signed into law.
Mills said in an interview that when he first joined the Legislature in 2007, amid the push for ethics reform, he was more cautious about conflicts. In 2011, for instance, because the pharmacy and nursing home he partially owns provides care to Medicaid patients, he recused himself from a far-reaching bill that sought to redirect money from the state tobacco settlement to pay for scholarships instead of a fund where it was used for health care.
But Mills said he hews much more closely to the letter of the law now, openly using his business expertise to inform his decision-making in the Legislature. He noted that he has voted against the wishes of the nursing home lobby before, including this year when he voted for a nursing home camera bill that the industry opposed.
“I struggled with it at first, but then I realized that all of us represent some sort of business interest,” he said.
Originally published by ProPublica under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 United States license.