From the middle of January to the first days of April, the House Economic Matters Committee was the scene of a daily tug-of-war between the interests of the consumer and the interests of the business world.
It was a one-sided contest from beginning to end.
This one committee in the Maryland General Assembly voted on about 300 bills during those three months. Nearly every one of them had a direct impact on the profit ledgers of corporations and the day-to-day lives of all state residents-the price and quality of their homes and cars and gasoline and liquor and television sets and bank loans and every kind of insurance.
The business interests, represented by knowledgeable and well-paid lobbyists including one who shares an apartment with the committee's vice chairman, got their way on nearly 8 of every 10 bills they were concerned about, with the committee passing 7 of every 10 bills the special interests supported and killing a resounding 9 of every 10 measures they opposed.
The consumers, on the other hand, were represented only rarely at the committee hearings, and a scorecard compiled by The Washington Post showed that only 2 of every 10 of the relative handful of bills that could be construed as consumer-oriented were approved by the panel.
The very process used this year by House Economic Matters gave consumer bills little chance to survive. Rather than attempt to correct problems, the committee often summarily killed consumer measures if they had the slightest technical faults.
While seven subcommittees were set up to work out problems with special interest bills, only two were established for bills that could be viewed as consumer-oriented. If amendments were added to consumer bills, they were sometimes aimed at weakening-or in the parlance of the legislature, gutting-the measures.
To some members of the committee, this process was entirely satisfactory. "Now don't identify me on this, but we didn't do diddly for the so-called consumer this year, and I'm glad we didn't," one committee veteran said.
To others, however, the committee action was distressing. Said Del. Ida Ruben, a self-styled consumer advocate from Montgomery County: "I'd say our committee at this point is to the right of Attila the Hun as far as all consumer legislation is concerned."
Committee Chairman Frederick Rummage, a burly, no-nonsense delegate from Prince George's County, said he was "darn proud" of his committee's achievements this year. When asked to list some of the consumer-oriented bills the committee approved, Rummage could recite only two before pausing, bouncing out of his chair and searching for an aide to refresh his memory.
The list of measures that special interests pushed through House Economic Matters was lengthy and diverse.
For the banking and credit lobby, there were bills lifting the home mortgage interest rate ceiling and increasing the interest rate on short-term loans. For the oil lobby, there were measures extending the deadline for oil companies to divest their retail gasoline outlets and exempting some firms from the divestiture law. For the liquor lobby, there were bills retaining the virtual monopoly that small package goods stores have in the retail wine and beer market and protecting Maryland wholesale beer distributors from out-of-state competition.
For the consumers, the only long and diverse list was the one that showed the bills they lost. The committee killed measures requiring the use of plain language in consumer contracts, regulating the automobile, television and radio repair industries, banning geographic discrimination in the insurance industry, preventing merchants from promoting phony "sales" to attract customers, setting up a people's counsel for insurance, requiring the labeling of food products in translucent containers and dozens of similar bills.
The few consumer-oriented bills approved by the committee were narrow in scope. They included three bills strengthening the state building code to accommodate the handicapped, two measures making it easier for cooperative housing projects to obtain loans, one requiring car dealers to provide functional spare tires with new cars, and another directing insurance companies to cover the cost of car windshields damaged in accidents.
The distinction between consumer and special interest legislation often blurs, of course. Many bills help or hurt both consumers and businesses.
It can be argued, for instance, that the measure lifting the home mortgage interest rate ceiling-the most important bill considered by the committee all year-helps homebuyers seeking mortgage money in a tight market as well as the banks and savings and loan institutions that will now make more money on their loans. And some consumer bills were so poorly drafted and confusing that they would not have done what the sponsors actually intended.
Still, within the confines of the House Economic Matters Committee, the distinction is clear. The record for the past 90 days shows that this important regulatory panel displayed little support for consumer-oriented legislation, instead focusing its energies on special interest bills that usually go on to win the support of the entire General Assembly.
The reasons are rooted in the political philosophies of the 23 committee members, their business backgrounds, and the strength of the special interest lobby that last year supplied about one-fourth of all campaign contributions raised by committee members.
The greatest advantage the business lobbyists have is that they are always around, always accessible. They rarely miss a committee hearing where they courteously present their arguments and sit together on the right side of the room, like a covey of staff advisers, ready to answer questions or draft amendments or light cigarettes for committee members during breaks.
As Chairman Rummage readily acknowledged in a recent interview: "The committee is swayed by the testimony that is given. Don't be unfair to the lobbyist. They serve a useful purpose. They usually are the most knowledgable people there."
The accessibility of the lobbyists does not stop with the end of the day's business. After hours, they exchange stories with committee members in the offices or buy them dinner at the Maryland Inn or clink glasses at the Skipper's Pub. One lobbyist for many years supplied members with a bottle of whiskey to lighten up their free time.
Few lobbyists have more contact with committee members than Jay Schwartz, who represents insurance companies. Schwartz spends much of his day camped out in the committee's inner offices and pacing the hallways outside the hearing room. At night, he returns to a $475-a-month apartment he shares with the committee's vice-chairman, Casper Taylor.
Taylor a relaxed and imperturbable politician from Western Maryland who rarely opposes his apartment-mate in committee, said the lobbyist has already paid the entire rent for the 90-day session but will be reimbursed for Taylor's half after the session ends.
"We have a standing joke on maid costs," said Taylor. "I pay for it- $18 a week."
This living arrangement has cemented a close friendship between the two men, who both graduated from Norte Dame, but Taylor said it does not influence his official actions. "Sure, he can lobby me a lot more than somebody else," said the delegate. "Whether it does any good or not is another question. I vote with him if I think he's right and I vote against him when I think he's wrong."
The interaction of special interest lobbyists and committee members is an integral part of life in Annapolis during the three months when laws are made. But the influence of lobbyists does not disappear during the rest of the year-especially in the years of elections.
Last summer was just such a time, and most of the legislators who now make up House Economic Matters saw the lobbyists at a different political forum-the fund raiser. For months leading up to November's election, industry representatives were sought out to sell tickets for the candidates.
The committee members' campaign spending reports read like a business directory of every corporate interest regulated by the panel-real estate firms, bankers, insurance companies, doctors, auto scrappers, food dealers, liquor interests, service stations and savings and loan companies. In many cases, the special interests formed political action groups, allowing them to bypass contribution limits set for individuals.
For their election-year support, most lobbyists say, they expect no more than courtesy and a fair opportunity to press their cause before the panel that has significant control over their clients. That was the very least lobbyist Jack Sargeant received a few weeks ago.
Sargeant, who represents the powerful Maryland medical society, discovered that the committee was on the verge of passing legislation requiring health insurers to offer coverage for treatment by nurse practitioners-a bill state health department officials said would result in lower medical costs for patients.
On the morning of the vote, Sargeant strolled into the committee room and handed vice chairman Taylor a batch of amendments, including one that completely reversed the intent of the bill. Where the original bill would have encouraged patients to seek treatment from less expensive nurses, the proposed amendment suddenly would have required that patients go to a physician first-thereby reducing or eliminating any savings.
Taylor had the committee counsel work with Sargeant to draw up the amendments in acceptable form and then submitted them to the full panel. Several committee members who supported the original draft said they were led to believe the changes were approved by the bill's sponsor. The amended version passed.
"I came into the room to tell Cas (Taylor) that I didn't like the amendments, but they were already voting on them," recalled Del. Marilyn Goldwater, the sponsor. "They completely gutted the bill. The nurses are better off without it. This was just a case of the doctors feeling threatened by competition from nurses and playing games."
The practice of attaching seemingly harmless amendments onto sometimes unrelated bills is not uncommon on Rummage's committee. In the most dramatic instance, the panel inserted a clause that would have allowed several major oil companies to all but bypass the state law requiring them to sell their retail service stations.
When State Comptroller Louis L. Goldstein spotted the amendment and issued a harsh press release branding it as "a snake," - legislative jargon for a bill that looks innocuous, but has a dramatic effect on one industry-Rummage convened an extraordinary meeting of his committee in the House lounge and came up with another version that failed to get through the legislature.
One of the reasons House Economic Matters so often accepts the arguments of special interest lobbyists is that time after time, when the panel holds hearings, the only witnesses are the eloquent, well-prepared lobbyists.
The committee also hears from many state officials who are paid to regulate special interests, but some of these bureaucrats end up on the same side of the issue as the industries they are supposed to oversee. The effect often is to strengthen the credibility and influence of the lobbyists.
Take the case of W. H. Holden Gibbs, the state bank commissioner, who was appointed to his regulatory role last year at the recommendation of the state banking community.Gibbs and his deputy have testified before Economic Matters 11 times on the same side of an issue as William Weaver, the bank lobbyist, prevailing eight times. Three times, Gibbs opposed Weaver, and the lobbyist won all three bills.
Lobbyists such as Weaver are so much a part of the committee's fabric-the silver-haired bank lobbyist is known as "the 24th member" of Economic Matters-that they obscure the very limited role of consumer spokesmen who occasionally appear before the committee.
John Wolfgang, the former committee chairman, recited by name a long list of special interest lobbyists he saw during his time on the panel, but when asked who was there for the consumers, he paused for a minute. "Well," he finally said. "There was that curly-haired guy from Baltimore."
The curly-haired fellow Wolfgang was referring to was H. Robert Erwin Jr., who has testified before the committee for years-first as a legal-aid lawyer and now as chief of the attorney general's consumer protection division. Sometimes joining Erwin in the thin-ranked consumer brigade are representatives of the Montgomery County consumer protection office and the Legal Aid Bureau.
The few times these consumer representatives came before the committee this year-they testified on 17 bills compared to 150 for the special interest lobbyists-they were courteously treated, if not always with the same attentiveness as their counterparts from the corporate world receive.
The different degrees of responsiveness were evident at a hearing on legislation designed to stop merchants from advertising "sale" items that were never available when the shopper arrived. The committee members sat quietly, showing little reaction as consumer groups testified for the bill.
Then Ted McNeal, a lobbyist for Maryland Retail Merchants Association, took his seat at the witness table and quickly changed the mood. "As soon as he started cracking jokes, I knew it was all over," said the bill's sponsor, Del. Paula Hollinger. "They were all going, 'Ha, ha'-and I knew there was no chance."
Chairman Rummage said he understood the disparity between the constant presence of special interest lobbyists and limited role of consumer advocates."I wish there was some way to rectify that," he said. "But you know the committee represents the consumers in the sense that we're fairly representative of all walks of life."
Indeed, the actions of House Economic Matters can in part be explained by the backgrounds of the 23 members. More than half of them are employed in industries the committee regulates. Three own liquor stores, three are insurance agents, three hold real estate licenses and three are small-business men.
Many of these delegates are careful to avoid even the appearance of a conflict of interest. The three insurance agents on the committee-Frank Conaway, Frank Santangelo and Isaiah Dixon-particpated in debates but refrained from voting on many insurance bills, as did Dennis McCoy, an attorney for the Maryland Automobile Insurance Fund.
But the three legislators involved in the liquor industry seldom abstained from voting on measures that would help them. Del. Louis Morsberger, a tavern owner, led a fight against a measure that would allow food and drug chain stores to expand their retail beer and wine operations-something that might lead to lower prices for customers but would clearly create tough competition for package goods store owners such as Morsberger.
The Baltimore County delegate was assisted in his effort to kill the measure by another liquor store owner on the committee, Patrick Scannello of Anne Arundel County. "I guess you might construe it as looking out for myself," said Scannello."But really it's just looking out for the little guy and the free enterprise system."
That phrase-"the free enterprise system" is repeated as often in the House Economic Matters Committee as on the floor of any Chamber of Commerce convention. There is a strong conservative bloc in the committee that consistently opposes attempts to regulate the business world. As one member of this faction. Del. Charles Smith, who runs an air conditioning firm in Brunswick, explained: "There are very few so-called consumer bills that I regret killing. The way the regulations are now, there's a fine balance between consumer and business interest, and every damn bill we pass for the consumer tips that balance out of whack."
To Smith's pleasure, the probusiness delegates have assumed a more dominant position in the committee than they had last session. Two of the panel's strongest consumer advocates-Charles Docter and John Ward-were defeated in the last election and their places on the committee were taken by free enterprise proponents.
Rummage has exerted more control over the committee than his predecessor, John Wolfgang, who sometimes had a difficult time stemming the flow of proconsumer legislation. In a recent interview, Wolfgang acknowledged that the committee's proconsumer faction on several occasions cleverly traded votes with other members of the panel and thus put together a winning majority for bills the chairman opposed.
"There were times when I was embarrassed by bills that got out," said Wolfgang. "I wasn't always successful because of the bargaining. There were times when I'd go up to one of the guys I thought I could count on and say: 'God, you're not going to vote for the piece of trash.' And they'd say: 'Sorry, John, but I'm already committed to vote for it in return for a bill of mine.'"
Rummage has had more success in that regard. The chairman said in a recent interview that there have been only two bills that got out of his committee that he did not want to defend on the House floor. Rummage is not a member of the free enterprise bloc-he has worked as a labor lobbyist most of his career-but he has relied heavily on that faction to kill measures that he believed could not pass the entire House.
"I'm always gonna do my darndest not to take a bill out there that I know is gonna fail," he said. "You don't like to lose bills."
Rummage said he thinks of his committee "as a board of directors," and he likes to run it that way. "Everyone has a say, but I keep a firm hand on decorum." Over the course of these last three months, Rummage has probably banged his gavel more times and offered more stern glares than any chairman in Annapolis.
Most members of his committee say Rummage is firm but fair. Others, particularly the consumer advocates, limit it to firm. Ida Ruben, who considers herself a lonely progressive voice on the committee now that Doctor and Ward have gone, complained that Rummage disposed of bills he did not like with undue dispatch.
"Someone calls for an unfavorable report before we even have a chance to move the page," said Ruben, "Bing, it's over. When you get there, it's too late. You just say: 'Mr. Chairman, record me as opposed'."
There were times when Rummage's impatient style did not go over so well when he defended committee bills on the House floor. There was one unforgettable scene in late March when Rummage was trying to kill a floor amendment that would make oil companies give up their retail gas outlets within three months instead of six, as he wanted.
Del. Thomas Mooney: "Wasn't this amendment offered in your committee?"
Rummage: "Yeah, I guess so. In subcommittee."
Mooney: "And what was the vote?" Rummage: "I don't know. It was very lopsided."
William Rush, a member of the subcommittee: "There were five people who voted and the vote was three to two."
Rummage: "Like I said-lopsided."
Rummage appeared more at home within the committee. He usually knew how a majority of the committee felt about each bill because he sought out a handful of veterans with whom he discussed most measures before each voting session. Usually, these veterans were part of the probusiness faction.
Without Doctor and Ward around this year, the dynamics of the committee were such that there was subtle pressure on new members of the panel to go along with the majority. One small incident neatly symbolized this pressure.
For the first few weeks of the session, Patricia Sher, a freshman delegate from Montgomery County sat on the same side of the room as Ruben, who was constantly on the losing side. Finally, Morsberger walked up to Sher, put his huge arm around her, and said: "Honey, why don't you come over to our side and sit with the winning majority?"
The next day, Sher was sitting on the other side. CAPTION: Picture 1, DEL. IDA RUBEN; Picture 2, FREDERICK RUMMAGE