Corruption Risk Report Card
Rank among 50 states: 21st

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The story behind the score

A well-publicized bribery scandal brought a “sea change” in ethics regulation. But critics say parts of the regulatory system remain toothless. Read more from SII State Reporter Adam Hochberg.

Latest state news for North Carolina

The offices of the Arizona Commerce Authority are housed in downtown Phoenix at the Freeport-McMoRan Center, the gleaming glass headquarters of an international mining firm of the same name. The authority, which oversees state corporate tax incentives and grants worth hundreds of millions of dollars, is not quite a public agency, as its location two miles east of the state government complex suggests. It’s led by a board of directors run by the governor and Jerry Colangelo, who, after four decades as an Arizona sports and real estate mogul, is a local icon.  Sixteen other corporate executives also sit on the board, including Richard Adkerson, President and CEO of Freeport, to which the authority paid about $411,000 in state funds last fiscal year for renting the space.

There’s a name for this arrangement. The Commerce Authority is a “quasi-public” entity, or a public-private partnership. About 10 other states have also given control over lucrative corporate tax incentives to similar organizations, which are often run by the states’ most influential businessmen, generally at the pleasure of the governor. Supporters say these partnerships are more nimble than government bureaucracies and are insulated from the vagaries of electoral politics. But both liberal and conservative watchdog groups say the practice takes a government function already prone to mismanagement and obfuscation and makes the situation worse by giving oversight of business incentives to businesses themselves.

On October 26, 2011, the Illinois legislature passed a bill that authorized construction of a multi-billion-dollar smart grid and reshaped how utility companies seek approval for raising electricity rates. Consumer groups opposed the measure, saying it was a handout to utilities.

But the final blow for opponents came three months later when former state Rep. Kevin McCarthy, who had pushed the bill through the legislature only to resign after winning its passage, registered his own lobbying firm and signed his first clients. Prominent among them: Commonwealth Edison, one of the state’s largest utilities.

By Janet Coats

Lobbying is as much a part of the legislative process as roll call votes and committee meetings. Every year, state capitals are filled with legislators and lobbyists, rubbing shoulders as deals are made and laws are thrashed out.

Organizations of all political stripes hire lobbyists to press their case with legislators. In many instances, lobbyists have developed subject matter expertise that adds to the discourse about a particular bill. While the word lobbyists conjures up images of backroom deals and undue influence, their role in the legislative process can be -- and often is -- constructive.

The key to keeping lobbyists in their proper role lies in transparency. Laws that require disclosure of who lobbyists are working for and how much their are paid allow citizens a view into the web of relationships that surround issue advocacy. But the laws are only as good as the enforcement -- and that means regular auditing to ensure accuracy and completness of information.

In the State Integrity Investigations' review of lobbying disclosure laws around the country, North Carolina received an A and a top ranking. It's easy to see why when you review both that state's laws and the methods of enforcement.

North Carolina law ensures several levels of transparency:

  • Lobbyists are required to register with the state
  • The rules apply to those who lobby the governor as well as the legislature
  • Lobbyists are required to report both what they spend to lobby and how much they are paid to do it
  • Those who employ lobbyists are also required to report payments to all lobbyists on a quarterly basis
  • The secretary of state's office follows up on all these requirements with regular audits. It checks all lobbying reports for completeness, cross-checks all monthy and quarterly reports and compares lobbyist disclosure reports to those of their employers to assure the information is consistent.
  • Perhaps most importantly, the information is available to the public. Government watchdogs in North Carolina report that lobbyist disclosure forms are posted promptly on the secretary of state's website, and they were unfamiliar with any cases where a disclosure form was delayed because of sensitive information.

Lobbyists will always be part of the process. The key to balancing the voices of lobbyists with those of individual citizens is disclosure, auditing and availability of information to citizens.


State Integrity news for North Carolina and South Carolina from the Charlotte Observer:

A study by the State Integrity Investigation, which ranks states by their corruption risk, found that both North and South Carolina public record laws fail to provide an appeals process for denied requests or impose penalties on agencies violating public records laws.

North Carolina’s access to public records ranked 43rd and South Carolina ranked 50th in the study, which also evaluated state budget processes, lobbying disclosure and judicial accountability. Both received an “F” in public access to information.

Advocates for open government say the culture of secrecy creates obstacles for both citizens and media organizations seeking public records. These disputes are often only settled after expensive, lengthy lawsuits.

Read more from the Charlotte Observer.

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State integrity news for North Carolina from SII partner WFAE:

Recent news of resignations in North Carolina House Speaker Thom Tillis’ office due to relationships between members of his staff and lobbyists has prompted ethics law questions among some in state politics. The situation has brought up questions about which lobby laws are fair, which don’t make sense, and where more disclosure is needed on the part of the lobby organizations and lawmakers alike. We spend the hour dissecting North Carolina lobby law and talk about what new guidelines might be on the horizon.

Listen to the discussion from WFAE - Charlotte.

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