Auditors say Montana’s system of tracking lobbyists broken

Reports are housed on two different websites, often incomplete, and so late as to be nearly useless

By Darrell Ehrlick for the Daily Montanan

The Commissioner of Political Practices office. (Commissioner of Political Practices)

A new report by the Montana Legislative Audit Division showed that the state tracks lobbyists using a cumbersome and outdated two-database system that is difficult to use, likely inaccurate and the reports are submitted so late that they are of little value in figuring out who is lobbying for or against certain bills.

In a new audit that examined the Montana Commissioner of Political Practices released last week, the Legislative Auditors found that Montana lagged behind most states when it comes to tracking lobbyist activity. A deeper dive into the system showed that many of those lobbyists who testified before the Montana Legislature as it crafted and passed bills didn’t tie back to reports, making the lobbyist’s report of questionable value.

Furthermore, it found that there is no mechanism to check the accuracy of the reports, and that the two database systems often had conflicting or inconsistent information. Moreover, the Commissioner of Political Practices Office has never used the auditing power granted to it by state law to investigate lobbyist’s reports or enforce penalties on those who didn’t conform to state law.

Commissioner of Political Practices Chris Gallus, who was appointed by Governor Greg Gianforte and confirmed by the Montana Senate, wrote that he agreed with the findings of the legislative auditors, and the office’s policies and technology had not really been updated to keep up with the changing the world, which now makes electronic filing the norm. Moreover, Gallus said, because of the limited staff and funding, the office has never had the ability to audit the lobbyists’ reports, which is one of several duties assigned to the office. The Commissioner of Political Practices more often deals with complaints from candidates for office and political parties regarding concerns about campaigning or fundraising.

The report, “Public Access to Lobbying Information,” says that the Legislature likely needs to make changes to state statute that would help transition the COPP to an all-electronic format, as well as consider funding for more user-friendly, functionally capable software.

Currently, Montana remains an outlier when compared to many other states, allowing lobbyists to file reports either electronically or by paper. Those reports are housed on two separate databases, on two different websites. Moreover, Montana doesn’t require some reports if the lobbyist or group spends less than $5,000 during a period, but auditors found that there’s no mechanism for even checking the accuracy, leaving lobbyists and companies completely on their honor to file correctly.

“We found neither of the two COPP databases meets best practices for user-friendly access to the reported information or provides data in download formats that allow Montanans to easily conduct their own lobbying activities analysis,” the report said. “Not only is accessing the disclosed lobbying data challenging, but we also found that the COPP is insufficiently enforcing statutory reporting requirements, meaning data available in the two databases is incomplete.”

The other issue raised by the state legislative auditors is that the timing of the reports renders them functionally useless by those wanting to know which lobbyists and companies were testifying for or against legislation.

“Montana’s lack of regular required report filings paired with a reporting threshold of $5,000 per month in lobbying expenses means Montanans may learn only after a legislative session has ended which companies or organizations supported or opposed bills or issue areas,” the report said.

The auditors also noted that many of the reports were either missing or had incomplete information. Some of those missing reports may be because of confusing wording and statutes, the auditors said. But even when the reports are missing information, auditors said that COPP staff did not follow up or reject the reports.

Auditors said that many states had a set a much lower threshold for lobbying reporting, some as low as $100.

It also found that information contained in the reports often was confusing or inaccurate.

“Itemized expenses did not add up to reported entertainment expenses,” the auditors said.

Of 209 reports the auditors reviewed, many had incomplete or missing information. For example, only two-thirds of the reports even contained records of payments to lobbyists, and about the same number reported any lobbying on any topic. Only 15% of reports identified entertainment expenses, and 11% reported travel expenses, something typically more common for lobbyists and organizations involved in the process.

Auditors noted that in at least five reports they reviewed, principals had made cumulative lobbying payments between $10,000 and $20,000 but had not filed any prior expense reports.

Some of the confusion is created because much of the reporting is left blank, but auditors were unable to tell if lobbyists and organizations weren’t answering the questions, essentially filling out an incomplete report, or reporting $0.

Auditors recommended to legislators to make all reports electronic and mandatory, completely filled in.

“It would decrease COPP staff review time while increasing compliance with reporting requirements as principals could no longer submit reports unless they provided required lobbying information,” the audit said.

Montana differs from other states, too, in that most states require monthly reporting, or at least monthly reporting during the legislative session. Many require an organization to submit a new report if the lobbyist or organization switches a position on a bill or subject.

“This provides citizens with up-to-date knowledge of any lobbying activity,” the report said. “Montana statute, in contrast, requires lobbying reporting as few as three times throughout a two-year time frame.”

Montana’s current reporting system would seem to be a vestige left over from several decades ago. It still offers lobbyists and organizations the option of submitting reports in paper format or electronically. Auditors’ research said that Congress as well as most other states have switched to completely electronic.

“Since the two databases track paper and online reporting separately, staff have to manually track the reporting for the complete group of principles in a spreadsheet to ensure registration and reporting compliance,” the report said. “Manual tracking adds staff time to administering the program and is error prone.”

The Legislative Audit Report ultimately raised the question about the utility of the reports because they didn’t seem to tie back to the actual lobbying activities.

In a random sampling of 10 bills from the 2023 legislative session, auditors noted 29 different lobbyists offering public testimony.

“We could only locate 15 of the 29 lobbyists in either COPP database and the bills in question were reported to the COPP by only 17 of the 29 principals,” the report said. “These observations indicate that complete information is not reliably available to the public, especially regarding bills being lobbied and organizations or companies paying for the lobbying.”

COPP staff told auditors, and the letter from Commissioner Gallus restated that the current staffing levels do not allow for following up on the reports.

“The statute, however, requires the COPP to inspect filed reports and follow up on issues of noncompliance. While requirements exist in state law, the COPP appears to administer the lobbying program without policies or procedures offering guidance to staff on overseeing registration, reporting and compliance,” the report said.

Auditors also noted that other states said they lacked the resources for some compliance measures with lobbying reports.