Oregon Politics

 http://www.oregonlive.com/politics/index.ssf/2011/03/business_lobby_at_oregon_legis.html

SALEM -- Over box lunches from a nearby sandwich shop, about 40 business lobbyists gather in a downtown Salem conference room to share the latest intelligence from the legislative session taking place at the nearby Capitol.

Jim Craven, a lobbyist for the high-tech industry, talks disparagingly about legislation to trim business tax credits. Tom Gallagher, another veteran lobbyist whose clients run from Schnitzer Steel to the Oregon Newspaper Publishers Association, analyzes the members of the House Revenue Committee.

State Sen. Bruce Starr, R-Hillsboro, an emissary from the Senate Republican leadership, listens quietly. In February, Gov. John Kitzhaber came by to plead for help passing his budget.

Welcome to the weekly lunch of the Oregon Committee, a new coalition of business lobbyists that has become one of the major new power centers at the Legislature. Stung by their loss in the battle over taxes during the 2009 legislative session and resulting special election, business lobbyists have unified as never before.

After the defeat on Measures 66 and 67, which increased taxes on the well-to-do and on corporations, the lobbyists joined forces later in the year to target contributions to a handful of legislative races. Their goal: destroy the Democratic supermajority. They helped the Republicans pick up six seats in the House and two in the Senate, greatly changing the politics of the Legislature.

Now, during the session, the Oregon Committee is quietly flexing its muscle. The group's most public success came earlier this month when it helped block an effort by House Democrats to hold up $93 million in depreciation tax breaks for business. Several Democrats joined Republicans in the evenly divided House to approve the tax breaks, and the governor and Democrat-led Senate quickly fell in line.

"Over the last 20 years I've been here, I've never seen the business lobby get its act together more than it has now," says lawyer-lobbyist John DiLorenzo, one of few willing to stop and chat after the meeting. Most of the lobbyists rushed out of the conference room promptly at 12:45 to get back to the Capitol for the afternoon round of committees.

While business lobbyists typically agree on lower taxes and less government regulation, Oregon's business lobby has had its own rivalries.factions. Two of the largest trade associations, the Oregon Business Association and Associated Oregon Industries, have competed for members and clout. The Oregon Business Council, an elite group of about 40 of the state's top business executives, has tended to shy away from lobbying and focus more on policy research.

But this year, all of those groups are at the table, joined by an alphabet soup of industry groups, ranging from the Oregon Restaurant and Lodging Association to Associated General Contractors. One lobbyist involved in the group described it as an "oligopoly" where they each maintain their own power base and work together voluntarily.

The principal architect of the Oregon Committee is Mark Nelson, a contract lobbyist whose long client list includes the R.J. Reynolds tobacco company, beer maker Anheuser-Busch, Koch Industries, and retired public employees.

Nelson also managed the losing campaign against the Measure 66 and 67 tax measures. He says it was "out of the ashes" of that defeat that the Oregon Committee came together, first during the campaign and now in the session.

Nelson veers between describing himself as someone who merely chairs the meetings and a leader who cracks the whip.

"You're not going to very often see an Oregon Committee position," he says, explaining that mostly the lobbyists are trading information as they pursue their individual agendas. But when the Oregon Committee does take a position on something -- such as the business depreciation tax break -- Nelson says he expects everyone to get on board or leave the group.

Has anyone left under such circumstances?

"No," he says. "I'd break somebody's kneecaps if they did."

From his deadpan tone, it's not entirely clear he's joking.

For the most part, the business lobby's additional clout this session comes from having more Republicans in the Legislature. Republicans tend to be just as vigorous as the business lobby in arguing that the state should focus on reducing taxes and government regulations.

The Oregon Committee's "presence and their participation is welcome," says Senate Minority Leader Ted Ferrioli, R-John Day, "and we'd like to have more of it."

Some critics question whether the committee is merely coasting on the coattails of the strong Republican trend nationally in 2010 election and trying to claim more influence than it really has.

Scott Moore of Our Oregon, which represents several unions and other progressive groups, derisively refers to the group as "Mark Nelson's new self-marketing scam."

"They're attempting to amplify the perception of their impact," says Moore, arguing that the Oregon Committee has tried to sell the story that the state's economy was hurt by the tax measures. Instead, he says, Oregon still ranks low on overall business taxes and has not seen any major business defections since voters ratified the tax increases in January of 2010.

House Democratic Leader Dave Hunt of Gladstone describes the group as a "few corporate lobbyists living in the past and completely focused on taxes." And he insists Democrats continue to work productively with several business groups.

Nelson and Hunt are not friends. Last year, Nelson accused Hunt of trying to drive away his clients in retaliation for his leadership of the anti-tax campaign -- a charge Hunt denies.

Nelson says it's not surprising that Democrats could be worried about the Oregon Committee. "By its very nature, it's business oriented," he says, "which means you're going to be more oriented to R's than to D's."

--Jeff Mapes