NASHVILLE -- Out-of-state interests have long sought to shape public policy in Tennessee, but some national organizations that are relative newcomers to the Volunteer State have added millions of dollars to the mix of political money and lobbying intended to achieve that influence.
The apparent increase in groups headquartered elsewhere trying to sway decision-making by legislators had limited success in the 109th General Assembly session, a Tennessee News Network review indicates.
But the outside interests are trying. In the session that ended last month, they engaged in controversial issues such as Gov. Bill Haslam's Insure Tennessee proposal and gun laws, all the way down to less-noticed matters such as experimental drugs and state subsidies to parents of children with specified disabilities.
Most prominent in enhanced spending are three national organizations that have dramatically expanded their Tennessee activity within the past three years:
* Americans for Prosperity, based in Arlington, Va., was founded and -- at least initially -- mostly funded by businessmen and philanthropist brothers David and Charles Koch with the proclaimed aim of advocating for free enterprise. AFP's Tennessee operation reported spending more than $1.1 million in Tennessee lobbying last year. AFP reported spending less than $10,000 in all prior reports filed with the Tennessee Ethics Commission since it became active within the state in 2012. AFP reported no explicitly political spending, but state Director Andrew Ogles says the lobbying report covers "educational" ads that sometimes criticized or supported legislative candidates.
* The American Federation for Children, based in Washington, D.C., advocates education reforms involving "school choice" for parents. The AFC's state organization reported spending between $75,000 and $150,000 on Tennessee lobbying in 2014 to the Ethics Commission and reported a total of $606,345 in political spending by the political action committee set up by its state affiliate, the Tennessee Federation for Children, to the state Registry of Election Finance during the 2014 election cycle, including 2013. The state PAC was launched in 2012.
* StudentsFirst, based in Sacramento, Calif., and founded by Michelle Rhee, a former District of Columbia school superintendent, also advocates expanded options for education, including school vouchers. The organization reported spending between $100,000 and $200,000 on lobbying in 2014 -- plus a $13,907 reception for legislators -- and reported spending of $573,917 within the state during the 2014 election cycle by its state PAC, which was launched in 2012. (Rhee was formerly married to Kevin Huffman, who served four years as Tennessee's education commissioner.)
These groups set up shop in Tennessee fairly recently and started building a "grass roots" network of state resident members, although much of their funding still comes from outside the state -- substantial chunks of money transferred from national headquarters in the case of StudentsFirst and AFC.
AFP made defeat of Insure Tennessee its top priority this year and claimed success on that front when the governor's bill died in committee. But a broad school voucher bill was a high priority for AFC and StudentsFirst, and AFP supports the idea as well -- and that bill failed for the third straight year.
AFP has also pushed for repeal of the state's Hall income tax and that didn't happen either, although lawmakers approved an increase in the exemption from the tax that will benefit senior citizens of modest income.
Americans for Prosperity does not disclose its sources of money, as permitted under its legal setup, or how that money is spent except for the lobbying expenditures, which Ogles says include "educational" and "issue advocacy" ads that often criticize a candidate or urge residents to contact legislators and express support for or opposition to a pending bill.
A long list
The groups join a long list of established special interests headquartered outside the state with varying ties to groups within the state.
"We've always had outside influence," said state House Speaker Beth Harwell. "When I started in the Legislature, sitting on the Education Committee, the AFL-CIO would be in the audience, the National Education Association would be in the audience ... and the American Civil Liberties Union has always had a presence here."
Harwell, first elected to the Legislature in 1988, says there once were no major lobbying opponents to such groups, prone to support Democrats.
"That day is over," she said. "Now business understands how important education is, and they are involved, too" through national groups as well as Tennessee business lobbyists.
But Harwell said legislators can be trusted to look to the interests of their constituents, not of the lobbyists.
The speaker referred to the national AFL-CIO being represented by its state affiliate, the Tennessee Labor Council, and other nationwide unions and the NEA being represented by its state affiliate, the Tennessee Education Association. While union political donations have decreased in Tennessee as Republicans gained dominance in the state, the TEA is still active -- reporting $350,130 in spending by its PAC in the 2014 election cycle and between $110,000 and $175,000 in lobbying expenditures.
The ACLU has not made political contributions to state legislators, and the Tennessee ACLU reported less than $10,000 in lobbying expenditures last year. But the ACLU made substantial contributions to a campaign committee opposing Amendment 1 to the state constitution in last year's election. The amendment, which cleared the way for legislation putting new restrictions on abortion rights, passed.
Other interest groups engaged in Tennessee range from the National Rifle Association, which has had considerable success in enacting gun rights legislation, to the U.S. Chamber of Commerce, which has taken to introducing a package of bills drafted at the national level each year that are distinct from the agenda of its state affiliate, the Tennessee Chamber of Commerce and Industry, and hiring its own lobbyists.
Last year, Haslam vetoed a U.S. Chamber-backed bill after determining it had the unintended consequence of reducing penalties for pollution. This year, the offending provision was deleted and the bill, designed to outlaw "flash mobs" in Tennessee, passed again -- with Haslam's signature expected.
The National Association of Realtors PAC last year made its first appearance in Tennessee legislative campaigns, with more than $200,000 in independent expenditures. Its state affiliate, the Tennessee Association of Realtors, made $118,000 in direct donations to legislative candidates.
Off in a category by itself is the American Legislative Exchange Council, which has various Tennessee legislators as members and attendees at twice-a-year ALEC conferences where they can collect "model bills" drafted in meetings with national business interests and bring them back for enactment as state laws. Critics contend the group amounts to the ultimate in secretive out-of-state influence for wealthy corporations, contrasting with the National Conference of State Legislatures, which presents itself as providing information without advocacy.
While not worried about the lobbying by out-of-state groups, Harwell said she is concerned that heavy spending on political attacks, funded by outside groups, is "out of hand" and a matter of considerable concern, but there's not much to be done about it based on U.S. Supreme Court campaign financing decisions.
"If I could put limits in place, I would," she said. "But the courts have spoken, and that's the way it is."
Defeat by spending
In last year's elections, at least two House incumbents were defeated after being targeted by six-figure spending by AFC and StudentsFirst, much of it on attack advertising. They were former Rep. Dennis "Coach" Roach, R-Rutledge, defeated in the GOP primary, and former Rep. Gloria Johnson, D-Knoxville, who lost in the general election. Other legislators attacked, on the other hand, survived -- although by narrow margins in some cases.
Veteran Tennessee political operative Tom Ingram sees nothing wrong with lobbying by out-of-state groups "unless the lobbyist is more interested in underwriting candidates than in educating legislators." But he denounced the "corrupting influence" of big money flowing into campaigns from outside interests.
Haslam, despite losing to AFP in a clash over Insure Tennessee, says he believes that loss was due to other factors and the impact of out-of-state policy efforts is "overstated," although one of those was Republican fear of being tied to "Obamacare" -- a theme AFP emphasized in its radio ads attacking Insure Tennessee.
The governor, responding to questions last week, also said he would defer to those who had been involved in state government longer than he on whether out-of-state influence is growing.
The Legislature's most senior member, Senate Finance Committee Chairman Randy McNally, R-Oak Ridge, said outside influence is growing. He said issue-advocacy groups are "now much more powerful than the political parties."
But Chris Devaney, who stepped down last month as state Republican chairman, questions whether claims of political clout by "third-party groups" are valid, despite their "veiled threats or even threats," and legislators "need to take some of the threats with a grain of salt."
State Democratic Chairwoman Mary Mancini said the groups have effectively frightened many Republican lawmakers "with the threat of a primary opponent." She sees the growth of such groups as part of "a long-range plan of attack" by conservative private interests on the state's public policy.
But state Senate Speaker Ron Ramsey says he believes the only demonstrable increase in out-of-state activity is in the education arena -- a focus of AFC, StudentsFirst and, along with other things, AFP -- and that is a situation where "many business and community leaders have come together to address the need for nationwide reform."
"I think this development is an overall net positive for children in Tennessee and across the nation," Ramsey said in an emailed statement.
When Democrats were in power, groups such as the ACLU and labor unions were involved in campaigns and lobbying, but now more conservative groups are involved, he said.
"While many of these groups, both current and past, may have out-of-state origins, the most successful are those who work with existing grass roots individuals or groups," Ramsey said. "I believe it is a myth that you can just parachute in with a bunch of out-of-state money and influence the General Assembly. Other states may be like that, but not Tennessee."
In-state, out-of-state lobbyists
Larry Noble, senior counsel with the Washington-based Campaign Legal Center, says Tennessee is not alone in the growing influence of "dark money groups" flowing in from outside states to influence elections and decisions of state legislators, all tied to U.S. Supreme Court decisions opening the door to basically unlimited spending with little if any reporting on the sources of that spending.
"What we're seeing is a tremendous rise [nationally] in outside groups coming in and spending money in state, local and federal elections," he said.
In Tennessee, political and lobbying organizations have been established within the state during the past year that could be seen in part as efforts to counter the influence of out-of-state groups. Those organizations include a PAC called Advance Tennessee -- funded by disclosed donors who all are Haslam supporters -- and Tennesseans for Student Success, which registered 13 lobbyists for the 2015 session and has the governor's campaign manager in 2010 and 2014, Jeremy Harrell, as its leader. The sources of Tennesseans for Student Success funding are not disclosed.
Ingram said both of those efforts are an understandable and necessary response to big-money spending and lobbying by others.
Harrell declined to be interviewed, instead sending an email that stated, "We don't see ourselves as the counter to any other group, but rather as a Tennessee-based organization focused on what's best for Tennessee's students."
David Boucher of the Tennessean, Richard Locker of the Commercial Appeal and Andy Sher of the Times-Free Press contributed to this story.