Rent-to-Own Contributions Jump Amid Try for Consumer Owner Protection Exemption

September 25, 2000

Madison - Campaign contributions to Wisconsin legislative candidates and the governor from employees of Texas and Wisconsin rent-to-own companies during the first six months of 2000 rose sharply (Chart 1) at the same time that legislators were considering a bill supported by the industry, according to a Wisconsin Democracy Campaign analysis.

Opponents criticized the bill, which was passed by the Assembly but died in the Senate, for exempting the industry from state consumer protection laws.

The proposal (AB849) was introduced, received a public hearing and was passed by the Assembly - all in a three-week period in March. This is extremely quick action considering many legislative proposals - successfully passed or not - often languish in committees or await consideration by the Assembly or the Senate for several months or the bulk of the two-year legislative session before their fate is known.

“It’s amazing how fast legislation can move when you start making big campaign contributions and you triple your lobbying activity,” WDC executive director Mike McCabe said.

Prior to June 1996, there were no large individual campaign contributions to Wisconsin legislators or the governor from the rent-to-own industry. The industry’s lobbying group, the Wisconsin Rental Dealers Association, also spent little on lobbying except for the $31,860 in the January to June 1996 reporting period when a similar industry-backed regulation bill was before the legislature (Chart 2). That measure received a public hearing, but never made it to the floor in either house.

Once the industry increased its campaign donations and intensified its lobbying efforts, Assembly Republicans inserted a consumer protection exemption for the industry in their version of the proposed 1999-2001 state budget. It was later removed, but that provision and the latest bill introduced in March 2000 coincided with a sharp increase in lobbying (seen in Chart 2) that topped off at $91,620 between January and June 2000, nearly triple the amount they spent lobbying on the 1996 proposal.

In addition, owners and employees of Rent-A-Center of Plano, Texas, Lebakken’s Rent To Own in Eau Claire, and a Rent-A-Center store in Wisconsin contributed at least $19,575 between June 1996 and June 2000, including at least $9,325 in the most recent six-month period.

A breakdown of these contributions by house and candidate/recipient shows that the money was well targeted. Assembly candidates - whose house passed the latest rent-to-own bill - and their legislative campaign committees received $6,475 compared to $2,100 by their Senate counterparts.

Most of the contributions have gone to key decision-makers at the State Capitol (Table), including:

  • $11,000 to the governor, who holds the power to sign a bill into law or veto it;
  • $2,350 to the Assembly Democratic, Assembly Republican and Senate Republican legislative campaign committees which are used by legislative leaders to collect contributions from special interests and help candidates at election time;
  • $1,625 to Republican Assembly Speaker Scott Jensen of Brookfield, Democratic Minority Leader Shirley Krug of Milwaukee and Senate Majority Leader Charles Chvala of Madison. Both Krug and Jensen voted for the bill.
Republican Rep. Frank Urban of Brookfield, who sponsored the regulatory bill, received a total of $1,100 in campaign contributions from the industry a month after the bill was introduced and passed by the Assembly. Urban had no previous record of large individual contributions from the rent-to-own industry.

These findings involving the rent-to-own industry follow a series of reports in recent months on the attempts by other narrow special interest groups to use campaign contributions to influence legislation that affects their business - all at the expense of the general public.

Earlier, the WDC found that the emerging payday loan industry sharply increased its campaign contributions to thwart attempts to lower the interest rates it can charge. In addition, the WDC found that the banking industry increased contributions by 1,300% to a state senator who cast the deciding vote to kill a bill that would have prevented banks from charging consumers fees to use automated teller machines (ATMs).

CHART 1
TOTAL LARGE INDIVIDUAL CONTRIBUTIONS
FROM THE RENT-TO-OWN INDUSTRY
TO THE GOVERNOR AND LEGISLATIVE CANDIDATES*

Chart 1: Large Individual Contributions from Rent-to-Own Industry to Governor and Legislative Candidates

*Includes large individual contributions to legislative campaign committees.

CHART 2
LOBBYING EXPENDITURES BY THE RENT-TO-OWN INDUSTRY
1995 - 2000

Chart 2: Lobbying expenditures by the Rent-to-Own Industry

TABLE
RECIPIENTS OF CAMPAIGN CONTRIBUTIONS
FROM THE RENT-TO-OWN INDUSTRY

Name Party June 1996-
December 1999
Contributions
January 2000-
June 2000
Contributions
Total
1996-June 2000
Contributions
Gov. Tommy Thompson R $6,000 $5,000 $11,000
Rep. Frank Urban** R $0 $1,100 $1,100
Republican Assembly Campaign Committee R $0 $1,000 $1,000
Rep. Antonio Riley D $0 $1,000 $1,000
Assembly Democratic Campaign Committee D $500 $500 $1,000
Assembly Speaker Scott Jensen R $500 $125 $625
Sen. Majority Leader Charles Chvala D $500 $0 $500
Sen. Brian Burke,
Joint Finance Committee
co-chair
D $500 $0 $500
Assembly Minority Leader Shirley Krug D $500 $0 $500
Sen. Kimberly Plache D $500 $0 $500
Paul Nus (Candidate) R $500 $0 $500
Committee to Elect a Republican Senate R $350 $0 $350
Rep. Jeffrey Plale D $0 $250 $250
Sen. Gary George D $0 $250 $250
Jay Griggs (Candidate) R $200 $0 $200
Rep. John Gard, Joint Finance Committee co-chair R $100 $0 $100
Rep. Neal Kedzie R $0 $100 $100
Rep. Gregg Underheim R $100 $0 $100
TOTALS $10,250 $9,325 $19,575

**Sponsor of industry regulation bill