Introduction Campaign Contributions Legislative Agenda Lobbying Press Release

Introduction

Realtors, developers and the special interest groups that represent their views at the State Capitol doled out at least $1.4 million for campaign contributions and lobbying from 1993 through 1997. (Table 1)

Type of Contribution	Amount
Individuals giving $100 or more to Gov. Tommy Thompson	$377,477
PAC Contributions to Thompson	$28,862
Total to Thompson	$406,339
Individuals giving $100 or more to a Legislative Candidate	$241,171
PAC Contributions to Legislative Candidates	$69,055
Total to Legislative Candidates	$310,226
PACs Giving to Candidates for Statewide Office, Legislative Campaign Committees and Political Party Committees	$130,000
Lobbying (15,273 hours)	$556,651
GRAND TOTAL	$1,403,216

*WI Realtors Association PAC, Eau Claire & Chippewa Realtors, Milwaukee Area Realtors PAC, Waukesha County Assn. of Realtors.

That spending level and the influence of their 11,000-member Wisconsin Realtors Association puts them among the most active and powerful special interest groups that lobby hard and contribute heavily to the campaign coffers of state elected public officials in order to get laws and state rules that benefit real estate development and sales.

The contributions and lobby spending occurred during two statewide elections - in 1994 and 1996 - and legislative consideration of three state budgets. Gov. Tommy Thompson and the legislature considered, approved and rejected hundreds of items of concern to the industry.

The group's actions and influence should be of concern to Wisconsin residents on several fronts:

• Some proposals backed by the real estate industry put a greater burden on taxpayers. The realtors and other powerful, pro-business special interests traditionally support business tax breaks versus efforts to expand Homestead credits and other breaks that affect average working people.

• The group often lobbies hard against strong zoning and land use laws designed to protect unfettered shores, bluffs and other areas of natural beauty from development.

• Some of the industry's successful efforts to change state real estate laws now limit a buyer's right to sue realtors for expensive repairs they were not told about at the time of the sale.

These findings coincide with the recent introduction by Assembly lawmakers of a half dozen bills that are favorable to the real estate industry. They include measures that would:

• Shift the cost of streets, curbs, gutters and sidewalks in new developments from real estate developers to taxpayers;

• Eliminate a requirement that certain subdivisions comply with local master plans as a requirement for plat approval;

• Exempt seasonal homes from shoreland zoning laws;

• Require local governments to conduct more assessments, provide extra notice to homeowners and pay more legal fees in connection with zoning changes and disputes. Each of these put a greater burden and more costs on local governments. The result - higher taxes.

Many of the bills favored by realtors and introduced late in the regular session of the legislature that ended March 26, could be taken up in an extraordinary session of the legislature planned later this spring. The realtors' significant level of influence is attained through a very sophisticated combination of campaign contributions and lobbying.

Campaign Contributions

Realtors and developers have been very active in general elections as well as recent special and open-seat elections that determined which party controlled the Assembly and Senate. They contributed heavily to Gov. Tommy Thompson, incumbents from both parties, the partisan legislative leadership committees, and the political parties.

At least 710 individual realtors, developers and their families contributed at least $618,648 to legislative candidates and Thompson during the five-year period. Realtor political action committees gave an additional $97,917. An additional $130,000 went to other statewide candidates, legislative committees and political parties.

• Thompson received at least $406,339.

• Legislative candidates received at least $310,226.

• Realtor political action committees also contributed at least $130,000 to legislative leadership committees and the state Democratic and Republicans parties from 1993-1997. The PAC contribution total also includes $8,600 to Wisconsin Supreme Court Justice Jon Wilcox's 1997 election campaign and $1,000 to Rep. Gregg Underheim, R-Oshkosh, during his unsuccessful run for state school superintendent.

• The identified contributions from realtors and developers to the governor represent 6 percent of the $7 million raised by Thompson's campaign since 1993.

Over the five-year period, individual realtors and the Wisconsin Realtors Association political action committee often made larger and more frequent contributions to Republicans (Chart 1).

• 94 Republican legislative candidates directly received at least $242,618.

• 56 Democratic candidates who received at least $67,608.

Realtors also tended to favor legislative incumbents, except when the challengers were Republicans (Chart 2).

• Real estate interests contributed at least $222,829 to incumbents.

• Only $56,072 went to challengers from 1993-1997.

• About $31,000 went to candidates in a dozen open seat and special elections. ($25,425 to special election and $4,900 to open seat candidates.)

These patterns indicate how well acquainted the realtors are with the political process. Republicans have controlled the governor's office for 12 years, and the Assembly for the past four years. Control of the 33-member Senate has flip-flopped by a vote between the two parties since 1993 due to special elections. Contributions to legislative leaders and incumbents are a good investment for powerful special interests because they most often win their elections due to a better ability to tap special interest money, and name recognition. Seniority also translates into power and influence to push legislation that is favorable to a special interest group, or kill measures that are unfavorable.

Unlike the average voter, realtors and other special interests have stronger allegiances to incumbents than to a political party, unless the challengers are Republicans. For example, Democratic Rep. Sheldon Wasserman received no money from realtors as a challenger during his successful 1994 election campaign to represent Milwaukee's 22^nd Assembly District. Since he was elected, he has received $3,575 from real estate interests. However, during his 1996 reelection campaign, realtors also contributed at least $4,190 to his unsuccessful Republican challenger, Polly Beal.

The top 10 legislative recipients of real estate-related contributions received at least $101,976 from 1993 through 1997. (Table 2)

The top recipient was Republican Tom Metcalfe, who unsuccessfully challenged Democratic Majority Leader Charles Chvala of Madison for his 16^th District seat in 1996. Metcalfe received $18,652 from realtors in a race targeted by Republicans. Chvala won with nearly 54 percent of the vote.

Former Racine Republican Sen. George Petak got $18,350 from realtors, mostly in the spring of 1996 when he lost in a recall election that was prompted by constituents who were angry for his support of the Milwaukee Brewer Stadium project. Realtors played a major role in organizing support and contributions to Petak's campaign in an attempt to preserve Republican control in the Senate. Petak received at least $13,125 from 59 realtors during that special election. He only received $5,225 from 19 realtors and the association's PAC two years earlier during his 1994 reelection campaign.
The remaining top 10 recipients and the amount they received from real estate interests were:

• Rep. Rick Skindrud, R-Mount Horeb, $11,270;

• Sen. Peggy Rosenzweig, R-Wauwautosa, $10,975;

• Sen. Alberta Darling, R-River Hills, $9,950;

• Sen. Gary Drzewiecki, R-Pulaski, $7,335;

• Sen. Robert Welch, R-Red Granite, $6,750;

• Sen. Dave Zien, R-Chippewa Falls, $6,545;

• Rep. Eugene Hahn, R-Cambria, $6,150; and

• Rep. Rudy Silbaugh, R-Stoughton, $5,999.

Realtors outside a candidate's legislative district frequently contributed in close races that would determine whether the state Senate was controlled by Democrats or Republicans.

In Petak's recall election, only five of the 59 realtors who contributed to his campaign were from his district. Their contributions added up to only $1,300 of the $13,125 he received from realtors.

In another case, 22 of 24 realtors who contributed to the 1996 reelection campaign of Republican Sen. Gary Drzewiecki of Pulaski lived outside his northeastern Wisconsin district. Several lived more than 100 miles away in the Milwaukee area. They accounted for $5,590 of the $5,875 in contributions he received from real estate interests during the election cycle. Total realtor contributions represented 5 percent of the $121,546 his campaign raised during the 1996 election cycle.

Four realtors contributed a total of $2,200 to his opponent, Democrat Barbara Lawton. Two of them, who gave her a total of $600, were from outside the 30^th Senate District. Drzewiecki won in a close election.

Realtors and developers gave substantial contributions to Thompson and legislative candidates. (Table 3)

• The top eight have contributed $10,000 or more since 1993.

• Two of the top four are from out of state.

• Thompson got at least $73,351 from 43 realtors outside the state, particularly from Illinois. The out-of-state contributions represent 19 percent of the total realtor-related contributions he received from 1993 through 1997.

• Contributions to legislative campaigns totaled at least $62,367 from 271 out-of-state realtors. That amounts to about 21 percent of total contributions to legislative candidates from identified real estate interests.

Legislative Agenda

During the five-year period, the top five recipients alone authored 54 bills and actively backed several dozen others that were listed as items of interest on the realtor group's lobbying reports filed with the state. Many of the bills sought changes generally favored by the industry in tax, environmental and real estate sales laws. Realtors have successfully sought new laws that exempt them from disclosure and liability for costly problems involving property they sell, and that shift the liability to others.

Some of the items tracked by the realtors group and their fate were:

• A bill that exempts brokers and real estate salespersons from state fraud laws was backed by realtors and approved by the Legislature and the governor. The 1996 law limits the liability of realtors if buyers later find a home needs expensive repairs.

Fifteen of 16 lawmakers who authored and cosponsored the bill got more than $49,000 in individual realtor and PAC contributions. Among the sponsors were some of the top recipients of realtor and developer contributions during the period, including Skindrud, Darling and Hahn.

• Another bill to regulate home inspectors was passed in March and awaits the governor's signature. The bill was important to realtors, who have sought to regulate home inspectors since 1991, because inspectors generally represent home buyers and a sale can hinge on their report to the prospective homeowner. In addition to regulating how inspectors may do their job and what they tell a home buyer, the bill threatens license suspension and revocation, and would impose fines of up to $1,000 per violation. It also shifts liability for post home-sale problems and repairs to inspectors.

It was co-sponsored by 48 lawmakers, including six of 10 lawmakers who received the highest contribution - $1,000 each - from the realtors PAC the previous year. All told, 45 of the sponsors received more than $77,000 in individual and realtor PAC contributions.

The measure effectively means that the cost of hiring an inspector - now about $200 - will increase because their insurance costs will increase. Meanwhile, realtors who earns thousands of dollars off their 6 percent commission are virtually free of liability.

The bill was touted as one needed to protect consumers from a scourge of unscrupulous home inspectors. But there were only ten complaints from 1994-1997 filed with the state against home inspectors. On average, home inspectors conduct 65,000 inspections per year.

• Another bill backed by the realtors would have let them establish property liens, like contractors and banks, to collect unpaid commissions.

This measure failed to become law but was co-sponsored by 21 lawmakers. Nineteen of them received more than $67,000 in real estate industry contributions. The active backers of the bill again included representatives and senators who were among the biggest recipients of realtor-related campaign contributions. They included Darling, Petak, Rosenzweig and Sen. Robert Welch, R-Red Granite.

• A bill that would have required pollsters to tell the people they contact who is paying for the poll was opposed by the realtors and it died. Current law only requires pollsters to identify their sponsors when callers ask. They are widely known to conduct polls for political information.

Lobbying

Realtor interests run a powerful political machine that involves a great deal of money, a cadre of lobbyists, slick legislative maneuvers, and a mobilized membership.

The realtors group spent $556,652 on lobbying from 1993-1997 (Chart 3). It has used four to six lobbyists, to push its agenda. The group spent 15,273 hours - an average of 59 hours a week - lobbying lawmakers during the five-year period (Chart 4).

Most of the roughly 400 legislative proposals listed on their lobbying reports to the state Ethics Board since 1993 dealt with tax, environmental and real estate industry regulations.

In some cases, proposals backed by the industry and other powerful special interests were put in the 1993-95, 1995-97 and 1997-99 state budgets even as identical measures were winding their way through the legislative process. Others were included in the budgets by the governor or lawmakers after they had died as individual bills.

Realtors and other powerful special interests often use several different venues at once, including multiple legislative bills, state budgets and state rules, to push their agenda.

Two examples illustrate this point. First, there were several bills and administrative rules proposed since at least 1993 to regulate home inspectors. They finally got what they wanted in 1998.

Second, one proposal that died as a legislative bill reappeared in Thompson's proposed 1997-99 state budget several months later. It sought to reduce accessibility requirements to multi-unit dwellings by revising a state law conform with less strict federal requirements. The measure, along with other policy items was removed by the Joint Finance Committee to be considered as an individual item again later.

The annual "Call to Action" campaigns to urge realtor members to contact legislators about the group's political agenda cost the group about $13,000 from 1993 through 1996.

Every year, the realtors group spends thousands of dollars to mobilize its members to contact their legislators and talk about the industry's interests. Much of that money is spent on an expensive annual luncheon known as "Realtor and Government Day" that's generally thrown only a few blocks from the Capital Square at an expensive downtown hotel.

For instance, last February, Assembly legislative leaders halted legislative business for nearly two hours to let members attend the luncheon sponsored by the realtors at the new Frank Lloyd Wright-design convention center. About 200 realtors and lawmakers dined on lemon chicken with a side of vegetables and wild rice, and chocolate cake for dessert. During the luncheon, which cost lawmakers $11 apiece, tables and seating were arranged by Senate District so that realtors could discuss their issues and concerns with their representative.

Last year's legislative day cost the group $13,940. Costs for the latest party were not yet filed with the state. Since 1993, the group has spent more than $37,000 on lunches to hook up lawmakers and realtors.