$1M lobbying effort helped kill bills insurers feared

(AP) An insurance industry-financed group that didn't even exist until the final weeks of the Legislature's session plowed just shy of $1 million into an aggressive lobbying campaign.

For the upstart group, it turned out to be money well spent: Lawmakers went home without making it easier for consumers to sue insurance companies they feel wronged by.

Newly filed reports with state regulators put Minnesotans Against Fraud & Higher Insurance Costs in the top ranks of lobbying groups. Only the state teachers union, Education Minnesota, spent more.

The group didn't hit the radar of the Minnesota Campaign Finance and Public Disclosure Board until May 1, when an established insurance lobbyist registered under its label. Around the same time, it launched an advertising and mailing blitz urging defeat of the legislation the group argued would push up insurance premiums and encourage frivolous lawsuits.

Mark Kulda, a spokesman for the organization, said the stakes were so high that the industry felt compelled to run a campaign that was more visible and vocal than is normally undertaken by the allied Insurance Federation of Minnesota.

"I think our companies were very happy about the way it turned out and would probably be strong in 2008 again," Kulda said. "Nobody is questioning whether it was worth it. They all realize it was."

Kulda said the industry is open to a compromise that caps damage awards and attorneys fees.

The group spent about 250 times more than its main opposing force - the Minnesota Trial Lawyers Association. The trial lawyers group, which has since changed its name to the Minnesota Association for Justice, reported spending $3,980.

Lobbyists are required to report their spending on advertising, travel, food and beverages and preparation of materials, among other things. They operate largely on an honor system.

Timothy Adams, Minnesota Association for Justice executive director, said the large sum of money from the other side was telling.

"They are so afraid, they want to protect their right to treat consumers badly that they're willing to spend $1 million," he said. "That's exactly why we need this legislation."

Adams said he expects the issue to resurface next year and he believes advocates of the law change are only a few Senate votes shy of passage.

Being a big spender doesn't always translate into legislative success.

Education Minnesota invested heavily in lobbying, primarily through a TV ad campaign telling viewers not to stand for mediocrity in school funding. All told, the union spent about $1.1 million from Jan. 1 to May 31.

In the end, the Legislature approved more money for special education programs and modest increases in general per-student funding, but came up short of the education establishment's wishes.

"There are limitations that occur when we have a governor who won't make additional revenue available," said union president Judy Schaubach.

Even so, she said the lobbying campaign heightened awareness about the needs of schools and laid a foundation for future sessions. "What occurs in our schools isn't the result of one single legislative session," she said. "We're in this for the long term."

According to reports filed with the campaign board, spending by interests with a heavy Capitol presence included:

-Anti-smoking forces who shepherded through a bill banning smoking in bars and restaurants. ClearWay Minnesota sunk $122,902 into an effort helped along by the American Cancer Society and Blue Cross/Blue Shield of Minnesota, which spent $96,351 and $81,890 respectively.

-Contractors and builders unions pushing for more road construction dollars. Their coalition, the Minnesota Transportation Alliance, spent $326,211 in addition to smaller amounts some individual builders spent on their own.

-Umbrella groups that represent main-street businesses and large corporations. The Minnesota Chamber of Commerce led the way with $340,763 in lobbying costs, followed by $252,589 from the Minnesota Business Partnership, $167,376 from the Coalition of Minnesota Businesses and $76,569 from the Minnesota Association of Realtors. On its own, 3M Co. topped $400,000 in lobbying, but most of that was to influence action at state agencies and not bills at the Legislature.

-Other school coalitions, such as the Association of Metropolitan School Districts, which reported roughly $70,369 in spending. The Minnesota School Boards Association came in at $68,499. Ready 4 K, which wanted more preschool funding, spent $87,038.

-Organizations that lobby for municipal governments. They include the Coalition of Greater Minnesota Cities, which spent $207,404, and the League of Minnesota Cities reported about $30,503.