Common Cause Files Complaints on Activity Surrounding Niobium Bill

Written by Joanne Young on May 8, 2015


Common Cause Nebraska filed a complaint Thursday on a former senator and a serving senator over what the watchdog agency said was their negligence in filing required lobbying and conflict of interest forms.

The complaints were filed with the Nebraska Accountability and Disclosure Commission against former Lincoln Sen. Tony Fulton and Sen. Al Davis of Hyannis regarding a bill (LB201) that was introduced this session and then withdrawn.

The complaint against Fulton was for failing to register as a lobbyist on behalf of Niocorp Developments Ltd., a company in the early stages of developing a niobium mining operation in Elk Creek. Niobium is a rare, soft metal primarily used in the production of high grade steel making it stronger, lighter in weight and resistant to corrosion.

Fulton has been a member of the Niocorp Board of Directors since November, and before that was on its advisory board, he said. He is also heavily invested in the company as a shareholder.

Common Cause filed a complaint against Davis for failing to file a conflict of interest statement before and after he introduced a bill that would add niobium to a law requiring severance taxes for minerals and elements brought out of the ground in Nebraska.

Davis introduced the bill on Jan. 13 and withdrew it 10 days later. 

When he served on a water task force last year, the group made a list of 20 things that could be taxed -- bottled water, ethanol, fertilizer -- to raise money for the state, Davis said. But the industries involved were adamantly opposed and said they would fight any attempts to put a tax in place. 

"So I thought, well, maybe this (Niocorp) business isn't up and running so we could maybe put a tax in place at this point, so that when they get up and running, the tax will already be there," he said. 

Davis said he thought that if he was putting a bill in place that could negatively impact his stock, that was not a conflict of interest. He withdrew the bill, he said, only after he had a letter from the company assuring him it was not opposed to a reasonable severance tax once it had its operation in place.

On the lobbying complaint, Fulton said shareholders contacted him about Davis' bill and so he made an appointment with Davis, not as an official representative of the company.

They had a 20-minute conversation about the bill, he said, in which Fulton told Davis the timing was bad for the company and could hurt its attempt to raise the millions needed.

Davis asked him if he would like him to pull the bill, he said, and Fulton told him yes. "And that was it," he said. 

Elk Creek has the largest -- and maybe the only -- known niobium deposit in the United States. The company has been conducting tests for several years and has not yet started mining.

Common Cause lobbyist Jack Gould said there's no question Davis should have filed a conflict of interest, which he did not. And Fulton was lobbying on behalf of the company.

Lobbying rules say anyone who engages in lobbying activity on behalf of another must register as a lobbyist prior to that contact. That's the case even if a person is not compensated for it. A non-compensated lobbyist pays a registration fee of $15 per principal.

Filing a conflict of interest statement does not affect a senator's ability to introduce or vote on a bill.

Several senators besides Davis own stock in the company, according to Accountability and Disclosure financial statement forms. There could be others who also own stock in the company but who don't list it on their statements, or just list the stockbroker and don't detail the individual stocks, Gould said. 

"They should all be listing the stocks. That's required by law. And they don't," Gould said. "And they should be declaring their conflicts of interest, and there are some who are very good about it over the years, but most of them, they don't think they have to." 

About 20 percent of senators file conflict of interest statements in any given two-year session.

Davis said it comes down to how far senators have to go with conflicts of interest. If he owns stock in railroads, does he have to file that for any railroad related bill? Or if he pays property taxes, does he have to declare a conflict for property tax related bills?

For more, check out the Lincoln Journal Star.

Office: Common Cause Nebraska

Issues: Ethics, Ethics

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