Crony Capitalism at Its Finest

Member Group : Citizens Alliance of Pennsylvania

On Tuesday, ABC 27 ran a revealing two-part story about one of the more influential lobbying firms in Harrisburg. Opinions vary about how influential Long & Nyquist are in reality. However, their roster of lobbyists contains some well-connected people. From ABC 27:

"Long was the top staffer in the Senate for decades, first under Pro Temp Robert Jubelirer then under Joe Scarnati.

"Todd Nyquist was Scarnati’s chief of staff. The pair left the legislature to found the firm in 2007, but have remained close to the Senate Republican caucus.

"Long married Amy, longtime staffer to Senator Pat Vance (R-Cumberland).

"Nyquist is married to Noel, former staffer to Senator Don White (R-Armstrong/Butler/Clearfield/Indiana/Westmoreland).

"Both wives work at Long Nyquist, according to its website.

"So does Megan Crompton, wife of Drew Crompton, Scarnati’s chief counsel.

"So does Megan Callahan, wife of Krystjan Callahan, chief of staff to House Majority Leader Mike Turzai.

"So does Tim Nyquist, Todd’s twin brother and former chief of staff to Appropriations Chair Jake Corman.

"Mike Long’s son, Casey, makes $104,000 as a Scarnati staffer."

Despite being a firm run by Republicans, the client roster includes a who’s who of organized labor. Long & Nyquist lobbied for the UFCW to derail liquor store privatization and has the largest teachers’ union in the state as a client.

To make matters more interesting Long & Nyquist also run a political consulting business. In that part of the business, they are responsible for electing and re-electing members of the House and Senate. What better way to build relationships that have some feel indebted to you for their job?

The second part of the story provides a clear example of the crony capitalism that fostered by the cozy relationship between the lobbying firm and the Senate Republican Caucus. The short version is that a company that produced explosive detection equipment contacted President Pro Tempore of the Senate Joe Scarnati about their product. Scarnati thought the product had potential, and he had $1.5 million allocated to the Pennsylvania State Police (PSP) in order to buy the equipment. The PSP tested the products and found that it did not meet their needs, so they passed on making the purchase.

So far so good, an example of free markets working but the story doesn’t end there. From ABC 27:

"Undaunted, Scarnati amended a bill dealing with the Racehorse Development Fund to include $1.5 million for the technology and steered the money toward the Office of Administration. The House stripped it out.

"But in 2014, funding for the technology appeared again.

"This time it was a $1.5 million grant to the Pennsylvania Commission on Crime and Delinquency for a pilot program.

"Governor Corbett’s staff was baffled as to why Scarnati’s office kept pushing funding for a product State Police didn’t want.

"In a memo obtained by abc27, Corbett’s budget employees quoted Scarnati’s Chief Counsel Drew Crompton as saying he was shifting the money into the Office of Administration’s budget, "to give me more options if I keep hitting walls with PSP (state police)."

"Crompton’s wife, Megan, is a lobbyist at Harrisburg firm Long Nyquist and Associates.

"One of her clients is Chemimage." (Emphasis added)

You would be hard pressed to find a better example of why government directed "capitalism" always fails. Here we have a clear situation where money was not being directed to a company because they had the best product. Rather, a purchase was being made by the government because the company hired the best lobbyist.

It is worth noting that the Governor, to his credit, line-item vetoed this expenditure.

Although lobbyists certainly influence elected officials, at the end of the day they only have as much power as voters are willing to give up to them. When we take an active role in governance by building relationships with elected officials, becoming candidates for office, etc. taxpayers turn the tables. Most make decisions based on winning the next election. If they think a vote will cost them too many votes, they will go the other way. When a member of the House or Senate hears the unvarnished truth from their constituents, it reduces their reliance on a lobbyist or campaign consultant as a source of information.

If you want to reduce the influence of lobbyists talk to you elected officials often enough that they remember your name. Then make sure to tell them what you expect from them before they cast their vote.