Common Cause reports make case for ethics reform

Two new reports from Common Cause New Mexico further reveal the need for ethics reform in state government.

The reports, released Tuesday, examine the roles the health care and real estate industries have played in New Mexico politics in recent years. They’re enlightening looks at how corporate money has influenced the Legislature, governor and other elected leaders.

The first, which you can read by clicking here, reports that the real estate and development industry gave almost $1.5 million in campaign contributions to New Mexico politicians during the 2006 election cycle.

The second, which you can read by clicking here, reports that the health care industry, during the last four election cycles, has contributed more than $660,000.

At the same time, the reports reveal that the major players in those industries were given big roles in shaping public policy.

Matt Brix, executive director for Common Cause New Mexico, said the reports highlight the need for ethics reform.

“Now more than ever, we need comprehensive ethics reform and clean elections in New Mexico,” Brix said. “Industry contributions have simply drowned out the voices of regular voters. The time is now for the Legislature to act and limit industry contributions and remove special interests from campaign financing.”

The reports come as the House is quickly moving several bills related to ethics reform, but the Senate is doing almost nothing. Key senators have questioned the need for ethics reform.

Developers give, developers benefit

The report on developers examines the industry’s massive contributions, including more than $150,000 given by Forest City Enterprises, the developer of Mesa Del Sol in Albuquerque.

In 2006, the Legislature approved the Tax Increment Development Act, which essentially allows local governments to buy bonds for economic development and repay them later with tax revenue. The act, the report states, provides “hundreds of millions of dollars in public subsidies” for development projects.

The legislation failed in 2005 after questions were raised about its workability. Before the 2006 session, however, Forest City and its partner were looking at Mesa Del Sol and wanted public assistance. The company gave big, including $65,000 to Gov. Bill Richardson’s campaign and almost $45,000 to candidates for land commissioner, before the session started. It also assembled what Common Cause called “a dream team of lobbyists” that included former House Speaker Raymond Sanchez.

The result: The Legislature approved the act literally one minute before the end of the 2006 session. Months later, the City of Albuquerque used the new law to fund Mesa Del Sol.

One of the criticisms of the act is that, because it commits so much future tax revenue, less is available for future public infrastructure needs. But concerns about the act, including that it encourages sprawl, may not have been “properly vetted in the legislative process” because of the campaign contributions, Common Cause reported.

The group also looked at the state law that allows local governments to impose impact fees on developers. That law, the Development Fees Act, was first approved in 1993.

However, it excludes schools, libraries and community centers from public infrastructure costs that can be passed on to developers, who generally pass them on to homebuyers. Impact fees can only be charged for the costs of roads, sewage systems and similar infrastructure.

That has left many school districts struggling to keep up with growth, the report found. In 2003, Speaker of the House Ben Lujan introduced a bill that would allow impact fees to pay for schools. The industry fought and killed the effort in 2003 and 2004.

“The question that must be asked in light of the legislative history is this: Did the industry’s hefty campaign contributions… play a role in protecting the industry-friendly provisions of the Development Fees Act?” the report asks.

Health policy has to be pro-industry

In the area of health care, Common Cause notes that Medicaid cuts, coupled with the state’s high level of uninsured citizens, has “created an impending health care crisis in New Mexico.”

How has the state responded? Under Richardson, the handling of the problem has been intentionally favorable to the health care industry. Common Cause notes that it can’t fully document the industry’s influence because “gifts to public officials, for which New Mexico has no monetary limits, and the hiring of lobbyists are two additional methods employed by the health care industry to influence the political process. Due to New Mexico’s relatively lax disclosure requirements, it is virtually impossible to fully enumerate the level of influence in the areas of lobbying and gift giving.”

As for campaign contributions, Common Cause found that they went to Democrats and Republicans, from statewide elected officials to legislators who aren’t in leadership positions. In 2002 alone, the industry gave almost $275,000 to New Mexico politicians, with Richardson receiving almost half of that, more than $131,000.

Richardson has repeatedly said that donations buy access but not support.

It’s access that he’s given. In 2003, Richardson convened the Health Care Coverage and Access Task Force. He then created the Insure NM! Council and charged it with dealing with the problems identified by the task force.

The council included lawmakers and the lieutenant governor, but also had many representatives from the health care industry.

“All told, the vast majority of major health care providers in the state at that time were represented at the Insure! NM table,” the report states.

What’s the result of all this involvement? Read on:

“Because of the active participation of the industry in the Insure NM! Council, all policy recommendations were ostensibly palatable and preferable to the industry. Notably, most recommendations of the council created public-private partnerships in which the state provided funding to increase the number of citizens who had access to health insurance, which is provided exclusively by private companies. Even the state’s Medicaid program is administered by a private company,” the report states.

Here’s the kicker:

“It was noted by legislative members of the council that the industry’s participation on the council created an environment where compromise was inherently necessary and therefore all recommendations (and particularly those that were passed by the Legislature and then signed into law) had the pro-industry stamp of approval attached to them,” the report states. “The health care industry, therefore, has had an enormous impact on the most recent and high-profile changes to New Mexico’s health care policies.”

Richardson’s access included his support.

There’s more. In 2002, the Legislature approved and former Gov. Gary Johnson, following his last session in office, signed into law a bill that allowed the state to negotiate drug prices for state Medicaid recipients at bulk rates and bargain for lower prices.

That happened despite the efforts of the industry to kill the legislation.

Enter Richardson, who effectively killed the law the next year by granting management of the state’s Medicaid program to Presbyterian Health Services, making it the “sole agent for negotiating prescription drug costs for Medicaid patients,” the report states.

What’s the big deal?

What’s the problem with all this industry involvement?

“The health care industry is by its very nature a for-profit industry; therefore, its interests lie in its bottom line,” the report states. “It is important to ask the question, therefore, are the health care policies that have emerged in recent years, with copious input from the health care industry, the best and most effective policies for the citizens of New Mexico? By investing so heavily in our state’s lawmakers, has the industry successfully gained access at a level that is in stark contrast to the real needs of New Mexico’s people?”

To answer that question, one need only to realize that there were far more representatives of health care providers and business on Richardson’s council than there were citizens or people representing citizens, even if you include lawmakers and the lieutenant governor as representatives of citizens.

“… our state’s elected officials must never forget that their ultimate responsibility is to the people of our state, and not to those that contribute dollars for re-election,” the report concludes.

It appears that many of them may have forgotten that. Senate Majority Leader Michael Sanchez, D-Belen, is the most influential politician who has been critical of ethics reform during this session. If you want to call or e-mail him to demand ethics reform, here’s how you can reach him: