Michigan lawmakers’ new gig: consulting, not lobbying

Lansing — Former state Rep. Scott Dianda registered as a lobbyist seven months after leaving the Michigan House, but four months later he still hadn't disclosed who hired him.

The reason, Dianda said, is because he hasn't been lobbying for anyone. Instead, the former ranking Democrat on the House Regulatory Reform Committee has simply been advising people in the marijuana industry who are interested in Northern Michigan, he says.

"I'm full of advice," Dianda added with a laugh.

The former Upper Peninsula lawmaker is not the only one. More Michigan lawmakers who left the Legislature because of term limits at the end of 2018 are using their skills as consultants — positions that fall outside disclosure requirements — than as lobbyists whose clients must be publicly disclosed, according to a Detroit News analysis of business filings and lobbying disclosures.

Of the 45 state lawmakers who departed because of term limits at the end of 2018, eight are registered as lobbyists. Five of the lawmakers have publicly disclosed clients, according to records filed with the Michigan Secretary of State.

At least 14 lawmakers — nearly 1 in every 3 lawmakers who left office at the end of 2018 because of term limits — have launched businesses that appear to offer consulting services, have acknowledged working as a consultant or are registered lobbyists without publicly disclosed lobbying clients.

The number of lawmakers becoming consultants or lobbyists cuts against the idea that term limits, approved by voters in 1992, would end "cozy relationships" within the Capitol, said Marjorie Sarbaugh-Thompson, a Wayne State University professor who has studied the impact of term limits.

"Relationships just are the lifeblood of the Legislature," Sarbaugh-Thompson said. "They are going to have relationships with somebody.”

Ex-lawmakers said the difference between consulting and lobbying is lobbyists communicate directly with lawmakers and high-ranking state officials to advance policy changes on behalf of groups while consultants advise groups on how to achieve their goals.

In the eyes of Michigan law, it's a critical distinction. Individuals who are paid to directly communicate with officials must register as lobbyists, and their employers must publicly disclose they've hired the individuals.

11% don't disclose clients

Former Sen. John Proos, a Republican from St. Joseph, formed a business called JP4 Government Solutions on Feb. 21, less than two months after leaving the Legislature. He registered April 16 as a lobbyist. However, he has no disclosed lobbying clients.

Proos said he's been using his experience as a state lawmaker to provide consulting services and guidance within the legislative process. But he hasn't been lobbying, he said.

"I wanted to make sure it was completely clean," Proos said of why he registered as a lobbyist.

The former state representative and senator declined to say for which groups he's been consulting. That disclosure would be up to the groups themselves, said Proos, 49, who served 14 years in the Legislature.

The Proos story is not unusual. About 11% of active lobbyists — 73 of 646 individuals — who registered within the last five years don't have disclosed clients or their only listed clients are consulting businesses, according to The News' analysis.

The requirement to disclose an individual lobbyist's employer doesn't fall on the lobbyist, said Michael Doyle, spokesman for the Michigan Secretary of State. It falls on the lobbyist's employer, he said.

Among the 73 registered lobbyists without disclosed clients are Dianda, Proos and former Senate Majority Floor Leader Mike Kowall, a Republican from White Lake, who had been hired by Oakland County, according to media reports.

Former Rep. Michael Callton, a Republican from Nashville, is another. He left the Michigan House because of term limits at the end of 2016.

Callton, who championed medical marijuana legislation, said he's been consulting for clients in the marijuana industry. He said the work has focused on the licensing process and municipal regulations, which are areas that fall outside of state lobby disclosure laws.

Callton said he knows of people who have "crossed the line" between lobbying and consulting by communicating directly with high-ranking state officials about policy changes. But he said, "I am not going to name names."

Stronger disclosure rules urged

The public deserves to know when individuals are being paid to get legislation through the Legislature or advance policy changes, said Lonnie Scott, executive director of the liberal group Progress Michigan, which has called for reforms to Michigan's lobby laws.

“The problem comes when there’s a gray area between consulting and lobbying," Scott added.

Two state senators who left office at the end of 2018 started consulting businesses, registered as lobbyists and have publicly disclosed clients.

Former Sen. Mike Green, a Republican from Mayville, has created Greens Governmental Consulting, which formed before Green even left the Senate on Dec. 18, according to state business records. The firm's lone disclosed client is The Lighthouse Inc., a rehabilitation center in Caro.

Former Sen. Goeff Hansen, a Republican from Hart, started Hansen Solutions on Dec. 26, according to state business records. Hansen is a registered lobbyist for the multi-client firm Mainstreet Legislative Consultants, according to lobbying disclosures.

But many of the term-limited lawmakers from 2018 who've gone into consulting haven't registered as lobbyists.

The individuals wouldn't be covered by a proposed cooling-off period before ex-lawmakers can become lobbyists in Michigan. That reform has been floated as an idea that could garner support for a potential ballot proposal to extend term limits, which has been discussed by lawmakers, the Michigan Chamber of Commerce and the government reform group Voters Not Politicians.

The two former leaders of the House and Senate both launched consulting businesses within a month of leaving the Legislature.

Former Senate Majority Leader Arlan Meekhof, R-West Olive, formed ARM Consulting Services on Jan. 14, according to state business records. Former House Speaker Tom Leonard, R-DeWitt, created MiStrategies nine days later on Jan. 23. Leonard's first consulting client was Quicken Loans Chairman Dan Gilbert, he voluntarily disclosed.

Former Sen. Coleman Young II, a Democrat from Detroit, has a business called Coleman Young Consulting, according to a website. The firm's offered services include "cannabis business development."

"Here at Coleman Young Consultants, we are intimately familiar with the legislation as our founder, Coleman A. Young II, was instrumental in assisting the passing of the bill in the State House," the website says.

Former Rep. Klint Kesto, a Republican from Commerce Township, also worked on medical marijuana policy while in the House. The cities of Westland and Pontiac have tapped Kesto, a lawyer by trade, to help with their municipal marijuana regulations. Kesto said his work was no bigger deal than someone doing consulting on any other topic. 

From the other side of the aisle, former Rep. Henry Yanez,  a Democrat from Sterling Heights, is helping with a campaign to get Gaylord to allow marijuana businesses under Michigan law. Yanez started a business called Campaign One in July, but the business isn't active yet, he said.

Former Rep. Tim Kelly, a Republican from Saginaw, launched a business called Shamrock Strategies on April 1. Kelly said the business is just a "shell" at this point.

Former Sen. Phil Pavlov, a Republican from St. Clair, started Grindstone Strategies on April 30, 2018. Sen. Patrick Colbeck, a Republican from Canton Township, started MI Grassroots Alliance on Nov. 14, 2018. Pavlov couldn't be reached for comment.

Colbeck said in a Tuesday email that he doesn't "make a dime" off the alliance.

The alliance's Facebook page says its mission is to "promote grassroots candidates who adhere to policy positions intended to benefit citizens-at-large not lobbyists."

Other lawmakers have taken a different route into the consulting world by joining an existing firm. Fraser Consulting, a subsidiary of Fraser Trebilcock law firm, announced the hiring of former Sen. David Robertson, a Republican from Grand Blanc, on Nov. 4. Robertson is now the firm's director of governmental affairs.

cmauger@detroitnews.com