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In an April 17 letter, the Internal Revenue Service (IRS) announced that its enforcement program on partisan activities by charities and religious organizations will remain in effect for the 2008 election season. The IRS announcement provided some helpful information on how the agency will consider cases involving charities' websites, but it muddied the waters for organizations that publish voter guides. The announcement does little to mitigate the vagueness of the standard, a problem Rep. Adam Schiff (D-CA) addressed in a hearing where he called for a bright-line rule defining what is and is not allowed.
Court Upholds Stealth Lobbying Disclosure (04/29/2008)
The National Association of Manufacturers' (NAM) legal challenge to the stealth lobbying disclosure provisions in the 2007 lobbying and ethics reform law was rejected by the U.S. District Court for the District of Columbia on April 11. After the U.S. Court of Appeals and the U.S. Supreme Court refused to grant a stay pending appeal, NAM announced it would comply with the law while its appeal proceeds by disclosing members who contributed more than $5,000 toward lobbying in a quarter and have supervision, control, or active participation in NAM's federal lobbying efforts.
HHS Proposes Restrictive Rules for HIV/AIDS Grantees (04/29/2008)
On April 17, the Department of Health and Human Services (HHS) published a notice of proposed rulemaking that seeks public comments on special requirements for organizations that receive HIV/AIDS funding from HHS. The rule would require "legal, financial, and organizational" separation between a grantee and any affiliate organization that does not adopt mandatory language opposing prostitution and sex trafficking. This "pledge requirement" is being challenged in court by groups that say the policy might stigmatize and alienate the people in need of HIV/AIDS prevention services and violates First Amendment rights because it applies to other programs that are not federally funded. Comments on the proposed regulation are due May 19.
States Failing to Implement Critical Voting Rights Laws (04/15/2008)
On April 1, the House Committee on Administration's Subcommittee on Elections held a hearing on state-level implementation of the National Voter Registration Act (NVRA), in particular a provision that was designed to enable low-income Americans to register to vote more readily. According to testimony by witnesses at the hearing, many states are not offering voter registration at public assistance agencies and are failing to live up to the promise of the NVRA to provide more equal access to the opportunity to vote.
Robocall Regulation Debate Heats Up (04/15/2008)
Controversy over S. 2624, the Robocall Privacy Act of 2008, has increased in recent weeks following a February Senate committee hearing. Labeled as an affront to First Amendment speech rights, an unwelcome infringement upon citizen-to-citizen communication, and unconstitutionally vague and overly broad, this bill has forced political pundits, consultants, and politicians to debate what constitutes "core political speech" and how best to utilize robocalls. Some consultants in the automated call industry are seeking donations for the Legal Defense Fund of the American Association of Political Consultants (AAPC), and others are partnering with the National Political Do-Not-Contact Registry.
USAID Tells NGOs It Will Proceed with Plan to Use Secret Watch List (04/15/2008)
On April 11, the U.S. Agency for International Development (USAID) told an overflow crowd of nongovernmental organizations (NGOs) in Washington, DC, that the agency is moving forward with the widely criticized Partner Vetting System (PVS) it proposed in 2007. PVS will require USAID grantees to submit highly personal information about key personnel and leaders to be checked against a secret government watchlist. Although USAID representatives said some changes have been made based on public comments, details are not available, and there will be no further public comment period before the final rule is announced.
Oversight of Terrorist Financing Ignores Problems for Nonprofits (04/15/2008)
An April 1 Senate Finance Committee hearing continued an unfortunate pattern of insufficient congressional oversight of anti-terrorist financing programs, neglecting to address the unnecessarily harsh impacts the programs have on U.S. charities and philanthropy. Despite an OMB Watch request that the committee hear from additional witnesses, members only heard from Under Secretary for Terrorism and Financial Intelligence Stuart Levey. Both Committee Chair Max Baucus (D-MT) and Levey raised issues relating to charities that left important questions unasked and unanswered. However, committee staff has agreed to meet with nonprofit representatives.
Clara Barton Designated as Terrorist for Aiding Rebels (04/01/2008)
You're reading the special April Fools' Day, 2008, edition of The Watcher.
The Office of Foreign Assets Control (OFAC) announced its first posthumous designation of a terrorist on April 1, placing Clara Barton of Civil War fame on its list of Specially Designated Global Terrorists. The unusual action came after OFAC Internet search engines discovered that Barton had aided Confederate soldiers during the war. A press release noted, "The Confederacy was clearly a terrorist organization. And our laws prohibiting material support for terrorists must be strictly enforced. While medical supplies are exempted from the ban, medical services are not. In addition, the National Park Service has verified that Ms. Barton also provided food and water to the wounded." Barton spent three years nursing soldiers in Virginia and South Carolina, conflict areas with a high level of Confederate infiltration of the civilian population. She continued her pattern of indiscriminate humanitarian aid by forming the American Red Cross in 1881, which became associated with the infamous International Red Cross and Red Crescent movement, whose Code of Conduct "clearly violates the U.S. ban on transactions with those unfortunate enough to live in conflict areas, regions controlled by terrorists, or have a second cousin twice removed who belongs to Hamas," according to a government source.
New Rules on Protests Announced (04/01/2008)
You're reading the special April Fools' Day, 2008, edition of The Watcher.
The Department of Homeland Security's Center for Educational Nonprofit Speech Outreach and Research (CENSOR) announced a new program April 1 aimed at ensuring that public protest does not provide a public relations benefit to the administration's political opposition, terrorists, or criminal defense lawyers. Under the new rules, nonprofits that apply for permits to hold demonstrations in Washington, DC, must submit basic information on all their members, including name, address, e-mail, Social Security number, date of birth, political party affiliation, and blood type, to be checked against the terrorist watch lists. If any potential matches are found, the permit application will be denied. Demonstrators entering the protest zone will be required to sign a waiver of privacy and constitutional rights. Civil liberties groups attempted to object, but all their websites and e-mail systems mysteriously crashed simultaneously.
Unusual Alliance Calls for Banning All Campaign Contributions; Vote Buying to be Legalized (04/01/2008)
You're reading the special April Fools' Day, 2008, edition of The Watcher.
Presidential candidates Sens. John McCain (R-AZ), Hillary Clinton (D-NY), and Barack Obama (D-IL) joined forces today, April 1, on what they call "groundbreaking legislation" to do away with special interest money in federal elections. The bill would ban all campaign contributions to candidates, political parties, 527 groups, and any other entity. Instead, the bill legalizes vote buying, which the three presidential candidates said could provide an important stimulus for the faltering economy. In a joint statement, the three senators said, "Research indicates vote buying is a free market activity. Vote buying in the cultural context of a world without campaign contributions empowers the citizen consumer." In response to critics that claim the proposal would mean only the wealthy could run for office, the three co-sponsors suggested surrogate vote buying would also be permitted. The National Distillers' Association issued a statement of support for the bill: "It is the American way to pay people to vote a certain way with a bottle of whisky or spirit of choice."
After Long Delays, House Creates Independent Ethics Panel (03/18/2008)
On March 11, the House voted to create an Office of Congressional Ethics (OCE). The six-member independent panel will have the power to begin formal investigations into allegations of ethics violations of House members and either dismiss the claims or refer them to the House Ethics Committee. OCE members will be appointed jointly by the Speaker of the House and the Minority Leader. The debate over the panel was intense, and Democratic leaders were forced to pull the proposal from the floor twice before the vote. The vote ends a process that took more than a year to resolve.
Senate Looks at Claims that Voter Fraud Justifies Photo ID Requirements (03/18/2008)
The Senate Committee on Rules and Administration held a hearing March 12 on the controversial tactics states and the federal government have used and proposed in response to claims of voter fraud. Senators who testified were sharply divided along partisan lines. Democrats argued that voter fraud is a false pretence used to justify laws that disenfranchise poor, minority, and elderly voters, but Republicans asserted that the problem is real and needs to be addressed. Nonpartisan witnesses cautioned lawmakers against exaggerating the extent of any election fraud.
Investigation of United Church of Christ Shows IRS Rules Need Fixing (03/04/2008)
On Feb. 20, the Internal Revenue Service (IRS) sent the United Church of Christ (UCC) national office a letter announcing the agency has launched an investigation because there is "reasonable belief" that the church violated the ban on partisan electioneering, based on a June 23, 2007, speech by Sen. Barack Obama (D-IL) at the church's 50th General Synod. The investigation has generated strong reactions, and as details emerge, it is clear that this case highlights the inherent weakness of the IRS's facts and circumstances test as a regulatory standard defining what is and is not partisan electioneering.
House Committee Hearing Highlights Lax Enforcement of Voting Rights (03/04/2008)
The House Judiciary Subcommittee on the Constitution, Civil Rights and Civil Liberties held a hearing on Feb. 26 to examine the problems of voter suppression and poor enforcement of voting rights. The hearing largely focused on the U.S. Department of Justice's (DOJ) lax enforcement of voting rights mandates in the National Voter Registration Act (NVRA). Evidence of tactics to prevent people from voting (voter suppression) was also presented.
Senate Bill Would Regulate Robocalls during Election Campaigns (02/20/2008)
On Feb. 12, Senate Rules Committee Chair Dianne Feinstein (D-CA) and Sen. Arlen Specter (R-PA) introduced S. 2624, the Robocall Privacy Act of 2008. The bill would place restrictions on how and when prerecorded messages, known as robocalls, can be made 30 days before a primary and 60 days before a general election. The bill would only affect prerecorded calls, not calls made by volunteers at phone banks.
SpeechNow Challenges FEC Contribution Limits for Independent Political Groups (02/20/2008)
SpeechNow.org, an independent organization whose stated mission is to advocate for the election of federal candidates who favor free political speech, has filed a lawsuit challenging federal campaign finance laws that prohibit contributions of more than $5,000 per year to political committees as an unconstitutional violation of free speech and association rights.
Ohio Restrictions on Voter Registration Drives Overturned (02/20/2008)
On Feb. 11, a federal judge in Ohio issued a permanent injunction blocking enforcement of a state law restricting voter registration activities. The Ohio law in question in Project Vote v. Blackwell limited the ability of third parties such as nonprofits to register citizens to vote in the state. Voting rights advocates hailed the decision as a victory for minority, disabled, and low-income voters who often rely on nonprofits to help with registration.
More Blurry Lines: IRS Warns on Web Links, Primaries Continue to Generate Complaints to Agency (02/05/2008)
The Internal Revenue Service (IRS) has warned that links from 501(c)(3) organization websites to other sites may be considered partisan if the facts and circumstances of the link indicate support or opposition for candidates. In addition, Americans United for Separation of Church and State (AU) lodged new complaints about possible partisan intervention in elections, which involve voter guides and the content of a newsletter.
Charity Charged with Violating Economic Sanctions in Grants to Orphanage (02/05/2008)
The Islamic American Relief Agency (IARA-USA) and five of its leaders have been charged with engaging in prohibited transactions with Gulbuddin Hekmatyar, an Afghan rebel leader who was designated as a terrorist in 2003. IARA-USA, which was shut down in October 2004, was funding an orphanage in the Shamshatu Refugee Camp in Pakistan that is located on land belonging to Hekmatyar. The defendants are not charged with supporting terrorism. The leaders, along with a former member of Congress, Mark J. Siljander, have also been charged with misappropriating funds from a federal grant to pay for Siljander to lobby for IARA-USA's removal from a Senate list of organizations suspected of supporting terrorism. The trial is scheduled for November.
Supreme Court Asked to Hear Challenge to New FEC Rule on Issue Ads (01/23/2008)
In December 2007, Citizens United, a 501(c)(4) organization, filed a lawsuit against the Federal Election Commission (FEC) in the U.S. District Court for the District of Columbia claiming that television ads for its film, Hillary: The Movie, should not be subject to donor disclosure requirements under FEC rules. On Jan. 15, a three-judge panel ruled against the group. The organization has since asked the U.S. Supreme Court to consider its case. The suit is a response to the FEC's new rule implementing the Supreme Court's Wisconsin Right to Life (WRTL) decision that allows genuine issue broadcasts to air in the period before federal elections.
Primary Season Generates Complaints about Church Engagement in Partisan Activities (01/23/2008)
The 2008 presidential campaign is in full swing, and so is the debate over what charities and religious organizations can say or do without violating the tax code's ban on partisan electoral activity. The Internal Revenue Service (IRS), which enforces the law through its Political Activities Compliance Initiative (PACI) program, has already received numerous requests for investigations, and one church has challenged it to investigate a 2006 sermon. The controversy reflects a healthy interest in public affairs within the nonprofit sector, as well as an unhealthy uncertainty about what is allowed in many election-related activities.
Convictions Based on Publications Raise New Questions for Nonprofits (01/23/2008)
On Jan. 11, three former leaders of an Islamic charity based in Boston were convicted of tax fraud and making false statements because they did not include a description of their newsletter and its content in their tax-exempt status application and annual Internal Revenue Service (IRS) Form 990 filings. The prosecution argued that the now-defunct group, Care International, supported jihadist movements in articles in its newsletter and postings on its website. The defense argued that no funds went to jihadist groups and that the leaders were being prosecuted for expressing unpopular political views. The convictions, which could result in prison terms of up to five years, are being appealed. The circumstances of the case, combined with public statements of the prosecutors, raise questions about the free expression rights of nonprofits and the level of detail required when reporting to the IRS.
Parts of Patriot Act Definition of Support for Terrorism Held Unconstitutional (01/08/2008)
On Dec. 10, 2007, the U.S. Court of Appeals for the Ninth Circuit ruled several provisions of the Patriot Act unconstitutional. The portions of the 2001 law in question criminalized any support for nonviolent activities of groups deemed by the Bush administration to be "terrorist organizations."
IRS Issues Final Version of New Form 990 (01/08/2008)
On Dec. 20, 2007, the Internal Revenue Service (IRS) released the final version of its updated Form 990, the informational return for public charities and other tax-exempt organizations. The new form marked the first revision since 1979 and will be used for the 2008 tax year (returns filed in 2009). The IRS expects to release draft instructions for the 2008 Form 990 later in January. Although the new Form 990 incorporated many suggestions made in public comments on the draft version, the IRS did not make key changes to clarify and simplify reporting of advocacy-related activities.
Court Says Evidence Must Tie Charities to Terrorist Attack, Overturns $156 Million Judgment (01/08/2008)
On Dec. 28, 2007, the U.S. Court of Appeals for the Seventh Circuit overturned a $156 million judgment against several U.S.-based charities accused of supporting terrorism. The court ruled that the 2004 award against several charities that required payment of damages to the family of David Boim, who was shot to death in the West Bank in 1996 in an attack attributed to Hamas, must be based on evidence that the charities were directly connected to the murder. The case was sent back to the lower court where there may be a new trial. The case could have a significant impact on the long-term fate of charitable funds seized by the government as part of its financial war on terror.
The Good, the Bad and the Ugly for Nonprofit Speech Rights (12/18/2007)
While ethics reform and the U.S. Supreme Court decision in FEC v. Wisconsin Right to Life were among federal developments in 2007 that strengthened citizen voices, threats to donor privacy and vague, inconsistent IRS enforcement of the ban on partisan activities by charities and religious organizations were among events that went from bad to just plain ugly. Here is a roundup:
Charities and National Security: Growing Awareness of Need for Reform (12/18/2007)
In 2007, the effects of the ineffective and counterproductive legal regime governing counterterrorism programs and charities demonstrated that the current system, based on a short-term emergency response to the 9/11 attacks, needs to be reassessed and reformed for the long term.
FEC Approves Rule Exempting Issue Advocacy from Broadcast Ban (12/04/2007)
The Federal Election Commission (FEC) approved a final rule exempting some issue-related broadcasts from the electioneering communications rule. The old rule banned corporations — including nonprofits — and unions from paying for such ads within 60 days of a federal general election or 30 days of a primary, if the ads referred to a federal candidate. The new rule is the FEC's response to the U.S. Supreme Court's decision in the FEC v. Wisconsin Right to Life case, which struck down the ban as applied to grassroots lobbying. The new rule does not provide a specific standard. Instead, there is a safe harbor for some grassroots lobbying broadcasts, and the rest of the rule lists criteria for the FEC to decide if a communication is allowable on a case-by-case basis. It also requires donor disclosure for these non-electoral messages.
Study Commission or Thought Police? (12/04/2007)
A bill that would create a commission and research center on "violent radicalization" and "extremist belief systems" that can lead to homegrown terrorism has been quietly making its way through Congress, passing the House on Oct. 23. The American Civil Liberties Union (ACLU) and other groups are raising concerns that its vague definitions, broad mandate and minimal oversight could lead to ethnic profiling and censorship based on personal beliefs. The bill now moves to the Senate, although the Homeland Security and Governmental Affairs Committee has not yet scheduled a hearing.
Tamil Rehabilitation Organization and its U.S. Branch Shut Down (12/04/2007)
On Nov. 15, the U.S. Department of the Treasury designated the Tamil Rehabilitation Organization, Inc. (TRO) as a supporter of the group Liberation Tigers of Tamil Eelam (LTTE) in Sri Lanka, charging that TRO was a fundraising front. TRO's offices in 18 countries, including one in Cumberland, MD, were also designated. The designations, authorized by Executive Order 13224, prohibit Americans from engaging in financial transactions with designated groups and freeze any assets the groups may have under U.S. jurisdiction. TRO says that the freeze on its assets will prevent 300,000 people from receiving assistance, terribly impacting the Tamil people, and will cause further suffering to vulnerable populations. Meanwhile, any efforts to have its U.S. designation removed are unlikely to be successful, since to date, the courts have upheld Treasury's authority to designate other groups even when the designation is based on secret evidence and where the group is not afforded due process.
Nonprofits Object to Poison Pill Amendment in Senate Campaign Finance Disclosure Bill (11/20/2007)
A long-standing effort to require campaigns for the U.S. Senate to file their campaign finance reports electronically has hit a new roadblock. An amendment offered by Sen. John Ensign (R-NV) would infringe on contributor privacy rights by requiring donor disclosure by groups that file Senate ethics complaints. An ideologically diverse group of nonprofits sent a letter to Senate leadership voicing opposition to this proposal, saying the amendment's clear intent is "to discourage organizations from taking action to keep government accountable."
Scrutiny of Anti-Terrorism Watchlists Increases (11/20/2007)
Stirring up controversy and resentment, the United Nation's terrorist watchlist has led to the release of a critical report from Europe's leading human rights watchdog organization. U.S. watchlists have also caused controversy, including the massive no-fly list and the Specially Designated Nationals (SDN) list used to shut down charities. A recent hearing in the House Homeland Security Committee examined the extent to which U.S. watchlists infringe on the rights of innocent persons by maintaining inaccurate records and not addressing current security vulnerabilities.
Lobbying and Ethics Reforms Being Implemented (11/06/2007)
President Bush signed the Honest Leadership and Open Government Act of 2007 (HLOGA), S.1, on Sept. 14; revised House ethics rules took effect in March. The focus of these reforms has now shifted to implementation of the changes. Congressional officials have started developing the new forms and guidance that will be used by lobbyists to comply with the law. The Federal Election Commission (FEC) has proposed new regulations to implement campaign contribution bundling disclosure requirements. From lobbyists to lawyers, nonprofits, and members of Congress themselves, all parties in Washington have begun preparing for these and other adjustments to their current practices.
Senate Committee Hears GAO Testimony on New Report on Terrorist Watchlist (11/06/2007)
An October 2007 report from the Government Accountability Office (GAO) addresses lingering weaknesses in the Terrorist Screening Center (TSC) watchlist. GAO's report provides insight into what further actions can be taken by government agencies to enhance the accuracy of anti-terrorism screening efforts. The GAO report was released just as the Senate Homeland Security and Governmental Affairs Committee held a hearing on the reliability of the Terrorist Screening System.
Short Colbert Campaign Stirs Election Law Debate (11/06/2007)
On Oct. 16, Comedy Central comedian Stephen Colbert used his nightly television show to announce that he was running for President of the United States and would file to get on both the Democratic and Republican primary ballots in his home state of South Carolina. The campaign was cut short on Nov. 1 when the South Carolina Democratic Party Executive Committee voted 13-3 to reject his application to get on the ballot. Colbert did not file to run as a Republican because of the party's $35,000 filing fee. The short-lived campaign gave both Colbert and election law experts a chance to examine the ins and outs of federal election law, with Colbert winning the laughs.
No Conviction, Mistrial for Holy Land Foundation (10/23/2007)
On Oct. 22, a federal jury in Texas deadlocked on all charges against the Holy Land Foundation (HLF) and most of the charges against five of its leaders. All were accused of supporting terrorism. The former board chair and endowment director, Mohammed el-Mezain, was acquitted of 31 of 32 charges against him, with the jury deadlocking on the remaining charge. The government has indicated that it will retry the case. It will face the same problems it faced in this trial: secret evidence that unraveled when subjected to scrutiny and the fact that none of the charities HLF was accused of funding are on government lists of terrorist organizations.
Whistleblower Case Reveals Possible Political Campaign Intervention (10/23/2007)
Three former Oral Roberts University (ORU) professors filed a lawsuit on Oct. 2 in Tulsa, OK, against the university, alleging they were wrongfully fired after they reported the private school's involvement in a local political race. They claim that ORU President Richard Roberts directed former government professor Tim Brooker to use his students and resources to support the 2005 mayoral campaign of Tulsa County Commissioner Randi Miller. This use of university resources would violate the institution's tax-exempt status. Roberts has denied wrongdoing but was granted a leave of absence on Oct.17. The Internal Revenue Service (IRS) has notified ORU that it is conducting an investigation into the matter.
Nonprofits Briefed on Myths and Facts of the Financial War on Terror (10/23/2007)
Nonprofits concerned with the impact of counterterrorism programs on charities were briefed on the larger context of the "financial war on terror" by Professor Ibrahim Warde, author of the new book The Price of Fear, at an Oct. 19 luncheon in Washington, DC. Warde argued that the series of financial crackdowns initiated by the U.S. government since the attacks of Sept. 11, 2001, have had virtually no impact on terrorism because they are based on a fundamental misconception of how terrorism works. He proposed reforms that would avoid collateral damage, including the negative impact on charitable programs.
Conference Focuses on E-mail Frustration Felt by Congress and Advocacy Groups (10/10/2007)
On Oct.1, the Congressional Management Foundation (CMF), a nonpartisan nonprofit organization working to improve the effectiveness of Congress, held a forum on constituent communications with Congress. The goal of the conference was to "identify ways to make it easier for citizens to express their views to Congress in an effective way and for congressional offices to manage and get value from the communications they receive." The massive amount of e-mail Congress receives from constituents was the main topic of discussion. Both nonprofit advocacy groups and congressional staffers agreed that the current approach to e-mail communications works for neither side, but they were unable to find common ground on solutions. CMF will release a draft report in early 2008 on the conference and its research on the topic, with the goal of fostering a new model of constituent communications with Congress.
Nonprofits File Comments on Proposed Electioneering Communications Rule (10/10/2007)
On Oct. 1, comments were due to the Federal Election Commission (FEC) on its proposed new rules to make the agency's regulations consistent with the U.S. Supreme Court decision in FEC v. Wisconsin Right to Life (WRTL II). That case held that paid broadcasts that cannot be reasonably interpreted as appeals to vote for or against a federal candidate must be allowed to air in the period before federal elections. These broadcasts were restricted by law. The FEC will hold a hearing on Oct. 17, and it plans to vote on a final rule by the end of November, in time for the presidential primaries.
Congress Misses Oversight Opportunity on Charities and Anti-Terrorist Financing Laws (10/10/2007)
Both houses of Congress have now approved S. 1612, a bill that expands penalties for violations of economic sanctions against countries like Iran and designated terrorist organizations. The bill also expands the scope of prohibited activity to include vaguely defined conspiracy and aiding and abetting language that could lead to unpredictable results for the unwary. While penalty increases were needed to address violations by companies like Chiquita, which paid a designated terrorist organization for protection in Colombia, passage of the bill without review of how the economic sanctions laws negatively impact humanitarian aid, development and human rights programs could prolong what is seen as a bad situation. OMB Watch is among the nonprofits that are calling for congressional oversight of the difficulties charities face.
Lobby and Ethics Reform Bill Becomes Law (09/25/2007)
On Sept. 14, President Bush signed into law the Honest Leadership and Open Government Act, S. 1. The new law amends some provisions of the federal Lobbying Disclosure Act (LDA) to make the relationship between lobbyists and lawmakers more transparent by requiring increased public disclosure of funds spent by lobbyists and of the actions of members of Congress. Because of rumors that President Bush would veto the measure, it was sent to him after Labor Day to avoid a veto while Congress was in recess.
IRS Ends Two-Year Probe of California Church's Anti-War Sermon (09/25/2007)
All Saints Episcopal Church in Pasadena, CA, recently announced that the Internal Revenue Service (IRS) investigation which began in June 2005 has now been closed. The IRS will not revoke the church's tax-exempt status because of a 2004 anti-war, anti-poverty sermon delivered by its former pastor Rev. George F. Regas on the Sunday before the 2004 presidential election. However, the IRS concluded that the church in fact intervened in the election. While churches and other tax-exempt organizations are prohibited from endorsing or opposing political candidates, the 2004 sermon did not urge anyone to support either President Bush or Sen. John Kerry (D-MA).
Nonprofits Challenge Two Florida Laws Regulating Voter Registration (09/25/2007)
Nonprofit groups have launched two separate efforts to challenge voter registration laws passed by the Florida legislature that would suppress voting, especially among minority populations. First, the U.S. Department of Justice has been asked to reject a recently passed law that would discourage nonprofit voter registration drives by making it difficult to collect and submit completed registration forms in batches. Second, a lawsuit was filed Sept. 18 challenging a requirement that all voter registration applications match Social Security or driver's license numbers. When spelling errors or other glitches occur, voters are required to go through a complicated process that discourages voting.
Holy Land Jury Deliberates When Aid is Support for Terrorism (09/25/2007)
On Sept. 20, a Texas jury began deliberations on criminal charges of supporting terrorism brought against the Holy Land Foundation (HLF) and five of its leaders, nearly six years after the charity was shut down and its assets seized by the U.S. Department of Treasury. The two-month long trial was the first opportunity the charity had to hear the evidence against it and present evidence in its own defense. The government did not claim HLF provided direct support of Hamas or a terrorist group. Instead, it argued that charitable aid that provides a public relations benefit to Hamas is a crime, even though the local charities involved are not on any government lists of terrorist organizations. A conviction on these facts will leave many international aid organizations in the impossible position of guessing about the political beliefs of their grantees and the potential political impact of their programs.
Comments Urge IRS to Take Time with Form 990 Revisions (09/25/2007)
On Sept. 14, the Internal Revenue Service (IRS) closed comment on its proposed revisions to Form 990, the annual information return filed by nonprofits. A host of organizations have weighed in with extensive recommendations, and many are calling on the IRS to delay implementation until a second draft can be published for further comment and nonprofits have time to adjust their recordkeeping systems to track the new information that will be required. OMB Watch's comments focused on flaws in proposals for reporting advocacy-related activities. Other organizations, such as the Alliance for Justice, addressed problems with proposed collection of governance information that is beyond the IRS' regulatory authority. The IRS is expected to act on the comments by the end of 2007.
FEC Proposes Rulemaking on Elections and Issue Advocacy (09/11/2007)
On Aug. 23, the Federal Election Commission (FEC) issued a Notice of Proposed Rulemaking (NPRM) stating the agency's intent to make its regulations consistent with the recent U.S. Supreme Court decision in FEC v. Wisconsin Right to Life (WRTL II). The FEC seeks public comment on two alternative proposals by Oct. 1. The FEC will hold a hearing on Oct. 17, and it plans to vote on a final rule by the end of November, in time for the presidential primaries. The difference between the alternative proposals is that one would require sponsors of grassroots, non-electoral broadcasts to file disclosure reports on their funding sources to the FEC; the other approach amends the definition of electioneering communications to allow issue advocacy and would not require disclosure to the FEC.
USAID Temporarily Delays Implementation of Partner Vetting System (09/11/2007)
The U.S. Agency for International Development (USAID) has agreed to temporarily delay implementation of a new database, called the Partner Vetting System (PVS), that would "[ensure] that neither USAID funds nor USAID-funded activities inadvertently or otherwise provide support to entities or individuals associated with terrorism." Under the plan, initially announced on July 17, all nonprofits that apply for grants, contracts or other financial partnership with USAID would have to provide the government with highly detailed personal information about employees, executives, trustees, subcontractors and others associated with the organization. On July 20, USAID also proposed to exempt portions of the PVS database from the Privacy Act. USAID is accepting comment on the Privacy Act exemption until Sept. 18. Charities are actively objecting to this burdensome and unwarranted program in which thousands of nonprofit workers would have to be screened. USAID is moving forward with a pilot program for aid recipients working in the West Bank and the Gaza Strip before expanding it globally as first intended.
Agencies Extend Legal Services Restriction to HIV/AIDS Grants (08/21/2007)
In an apparent attempt to derail a constitutional challenge to a requirement that all grantees in an HIV/AIDS prevention program adopt formal policies against sex trafficking, the United States Agency for International Development (USAID) and the Department of Health and Human Services (HHS) have issued guidelines for grantees that allow affiliations with groups that do not adopt such pledges. The guidelines, issued July 23, are even more restrictive than similar requirements for legal services programs that are also the subject of a constitutional challenge. They require separate "management and governance" and complete physical separation "between an affiliate which expresses views on prostitution and sex-trafficking contrary to the government's message…" and the grantee. Four leaders in the House have written to USAID urging it to adopt the less restrictive standards that allow faith-based organizations to keep religious and government funded activity separate in time and place without the need for a separate affiliate. Although the guidance is already effective, HHS intends to publish the rule for public comment.
Panel Debates Pros and Cons of Allowing Charities to Become Partisan (08/21/2007)
On Aug. 9, the Hudson Institute's Bradley Center for Philanthropy and Civic Renewal hosted a forum titled "Should Nonprofit Organizations Play an Active Role in Election Campaigns?". The debate was inspired by separate opinion pieces in The Chronicle of Philanthropy, one by Robert Egger of the DC Central Kitchen, titled "Charities Must Challenge Politicians," and one by Pablo Eisenberg of Georgetown University, titled "Charities Should Remain Nonpolitical". Egger fiercely defended his argument that charities and religious organizations should be directly involved in partisan politics, while Eisenberg warned that such participation would taint the sector.
Senate Bill Bans States from Limiting Nonprofit Voter Registration Drives (08/07/2007)
On July 25, the Senate Rules Committee held a hearing on an election reform bill that includes a provision that would prevent states from placing undue restrictions on voter registration drives by nonprofits. During the last several years, there has been an increase in the number of voters registered through voter registration drives conducted by charities and other third parties, such as the League of Women Voters and ACORN. Discussion of the bill before the committee — the Ballot Integrity Act of 2007 (S. 1487) — largely focused, however, on provisions that mandate paper records for all electronic voting machines.
Panel Discussion Focuses on Need for Clear Rules for 501(c)(3) Groups at Election Time (08/07/2007)
On Aug. 3, OMB Watch sponsored a panel discussion to address the pros and cons of creating a bright line rule defining what is and is not prohibited partisan intervention in elections by charities and religious organizations. The panelists addressed problems created by the current "facts and circumstances" test, which allows the Internal Revenue Service (IRS) to apply its interpretation of the standard on a case by case basis. They also discussed action the nonprofit sector can take to propose and promote a bright line test.
House Hearing on Nonprofits Sees the Positive (08/07/2007)
The House Ways and Means Subcommittee on Oversight, led by Chairman John Lewis (D-GA), held a hearing July 24 on tax-exempt charitable organizations. Lewis praised charities and foundations, acknowledging they "make up the very fabric of our communities. They know the deepest human needs of our friends and neighbors and they know the solutions that work." Other members spoke positively about the work of nonprofits, referencing successful groups in their districts. The opening remarks of Rep. Bill Pascrell (D-NJ) challenged the Department of Treasury's assertion that charities are a "significant source of terrorist funding," observing that Treasury seems to be "painting the sector with a wide brush." Committee members focused on what could be done to promote charitable giving and increase volunteerism.
FBI Raids Two U.S. Muslim Charities on Eve of Holy Land Trial (08/07/2007)
On July 24, the Goodwill Charitable Organization (GCO) of Dearborn, MI, was added to the Department of Treasury's Specially Designated Nationals (SDN) list for alleged ties to Hezbollah. As a result, the group's assets have been frozen and U.S. citizens are barred from conducting any transactions with the organization. The office of Al-Mabarrat Charitable Organization was also searched and files removed, but the organization was not designated as a supporter of terrorism and continues to operate. The designation and raids occurred the same day as opening arguments in a high profile criminal trial involving a Muslim charity, the Holy Land Foundation. It appears the government relied on information from a former Treasury official whose credibility has been challenged in at least two instances.
Pressure to Pass Lobby Reform Grows (07/24/2007)
No one is certain when Congress will leave for its summer recess. Senate Majority Leader Harry Reid (D-NV) has said the Senate will recess only when it has passed several high profile bills, including lobby reform. Progress on this legislation has stalled because Sen. Jim DeMint (R-SC) has used parliamentary procedure to stop Reid from appointing the Senate conferees. One solution to the problem may be that the House and Senate pass identical bills to avoid a conference. However, reform groups have raised concerns about this process, since it may result in weakened legislation.
New Executive Order on Iraq Expands Problems for Charities (07/24/2007)
President Bush issued an executive order on July 16 that expands the government's authority to block the U.S.-based financial assets of individuals or groups in Iraq beyond those it designates as supporters of terrorism, to include those who act, or assist those who act, against peace and stability in Iraq. The order, titled Blocking Property of Certain Persons Who Threaten Stabilization Efforts in Iraq, directs the U.S. Treasury Department to freeze assets of those who impede "efforts to promote economic reconstruction and political reform in Iraq or to provide humanitarian assistance to the Iraqi people." Experts both in and out of the charitable sector have expressed concern about the potential impact on civil liberties and provision of aid in the region. As the Washington Post warns, "Be careful what you say and whom you help -- especially when it comes to the Iraq war and the Iraqi government."
FEC Will Draft Rule Allowing Issue Advocacy Broadcasts (07/24/2007)
Following the June U.S. Supreme Court ruling in Federal Election Commission vs. Wisconsin Right to Life, Inc., which found the federal electioneering communications ban unconstitutional when applied to genuine issue ads, there has been a fast-paced effort to tie up loose ends in related cases and set the stage for the 2008 election. The Federal Election Commission (FEC) announced that it will issue a proposed rule in August to incorporate the decision into its regulations. In two related court cases, the FEC conceded that certain ads in question were genuine issue ads, including one that was critical of a senator's position on a bill. The "electioneering communications" provision of the Bipartisan Campaign Reform Act of 2002 (BCRA) prohibits corporations, including nonprofits, from paying for broadcasts that refer to a candidate for federal office within 30 days of a primary and 60 days of a general election.
Trial Testing Humanitarian Aid Standards Begins (07/24/2007)
The jury has been sworn in for the criminal trial of the Holy Land Foundation (HLF) and five of its leaders, who are charged with indirectly aiding Hamas by providing charitable aid to grassroots organizations in the West Bank and Gaza. The case is focusing public attention on two issues important to the charitable sector. First, some of the secret evidence used to shut down HLF and freeze its assets in 2001 will come to light, and its reliability and veracity will be challenged. Secondly, the case raises the question of whether it is a crime to provide humanitarian aid through organizations that are not designated as supporters of terrorism. The trial in the U.S. District Court in Dallas, TX, is expected to take three to five months.
Stalled Lobby Reform Bills to be Resolved Before August Recess (07/10/2007)
The House and Senate have now overwhelmingly passed their respective pieces of lobbying and ethics reform legislation, but a partisan impasse in the Senate has stalled progress. Before the Independence Day recess, Senate Majority Leader Harry Reid (D-NV) was unable to reach an agreement with Republicans to go to conference. The House and Senate bills both increase current disclosure requirements for paid lobbying activities under the Lobbying Disclosure Act, but a few discrepancies between the two have to be worked out in conference. Reid promised to complete work on the lobbying and ethics bill before the August recess.
Aftermath of Supreme Court's Ruling Exempting Grassroots Lobbying from Campaign Finance Restrictions (07/10/2007)
Reactions to the U.S. Supreme Court's ruling in Federal Election Commission v. Wisconsin Right to Life (WRTL) include dire predictions of massive amounts of soft money spent on sham issue ads before the 2008 elections, and even the end of the entire campaign finance regulatory regime. But the actual impact of the decision, which exempts grassroots lobbying broadcasts from the "electioneering communications" ban on corporate funded broadcasts that refer to federal candidates within 60 days of a general election or 30 days of a primary, is likely to be much more limited. The Federal Election Commission (FEC) must decide whether or not it will establish a rule implementing the decision, while a similar case has been sent back to a lower court for a ruling consistent with the Supreme Court's opinion.
U.S. Attorney Firings Expose Political Nature of Attack on ACORN's Voter Mobilization Efforts (07/10/2007)
Current congressional investigations into the Bush administration's 2006 firing of nine U.S. attorneys have revealed that one motivation behind the firings may have been the attorneys' refusal to pursue allegations of voter fraud as aggressively as the administration would have liked. Unfortunately, the attorneys were not the only casualty of the hunt for voter fraud. ACORN — an organization dedicated to empowering low-income communities across the country — also became a victim in what appears to be a politically motivated assault on its voter registration efforts.
States Failing to Implement National Voter Registration Act (07/10/2007)
In its biennial report to Congress on the status of the National Voter Registration Act (NVRA), the Election Assistance Commission (EAC) provided data showing that states have failed to fully implement the 1993 law.
Supreme Court Upholds Right to Run Genuine Issue Ads during Elections (06/26/2007)
On June 25, the U.S. Supreme Court announced its decision in Federal Election Commission vs. Wisconsin Right to Life, Inc., ruling 5-4 that the federal electioneering communications ban is unconstitutional when applied to genuine issue ads. The case challenged a provision in the Bipartisan Campaign Reform Act of 2002 (BCRA) that bars corporations, including nonprofits, from paying for broadcasts that mention federal candidates 60 days before a general election or 30 days before a primary (known as the blackout period). Though the Court ruled in favor of groups that run issue ads during elections, the debate will likely continue throughout the upcoming presidential election and beyond.
Americans United Calls on IRS to Investigate Rhode Island Catholic Diocese (06/26/2007)
The Internal Revenue Service (IRS) has cautioned that it will closely watch the partisan political activities of charities as the 2008 election approaches. This enforcement may address new complaints about alleged political intervention, including a June 13 Americans United for Separation of Church and State (AU) letter to the IRS asking for an investigation into the Roman Catholic Diocese of Providence, RI, for possibly violating its tax-exempt status.
Grantmakers Without Borders Challenges Treasury's Senate Testimony (06/26/2007)
On June 20, Grantmakers Without Borders (Gw/oB), a philanthropic network of 130 organizations, sent a letter to the leaders of the Senate Homeland Security and Governmental Affairs Committee objecting to the Department of the Treasury's portrayal of the agency's relationship with the charitable sector as an alliance on counter terrorism issues. The letter states, "Ironically, Treasury's anti-terrorism policies often chill the valuable work of international grantmakers, including Gw/oB's member organizations. Thus, philanthropic money that funds, for example, farming projects or support for tsunami victims is too often delayed or discontinued."
IRS Seeks Comments on Proposed Revisions to Annual Filing by Nonprofits (06/26/2007)
For the first time since 1979, the Internal Revenue Service (IRS) has proposed major revisions to Form 990, the annual information return filed by tax-exempt organizations. The draft form, supplementary schedules and instructions are available on the IRS website. The changes include a new Schedule C for all 501(c) organizations to report information on lobbying efforts and activities that support or oppose candidates for public office. Public comments can be filed electronically or mailed to the IRS by Sept. 14.
Senate Committee Considers Bill to Criminalize Deceptive Election Practices (06/12/2007)
The Senate Judiciary Committee held a hearing June 7 on a bill that would criminalize deceptive election practices. The Deceptive Practices and Voter Intimidation Act of 2007 (S. 453) is cosponsored by Sens. Barack Obama (D-IL) and Charles Schumer (D-NY). It would make it illegal to purposefully misinform or confuse voters about an upcoming election. The House Judiciary Committee already approved a companion bill (H.R. 1281) in March. The bill, should it become law, would give nonprofit organizations that monitor elections new tools to combat voter suppression and intimidation.
Charities Respond to Treasury's Overbroad Allegations of Terrorist Ties (06/12/2007)
On June 8, charities wrote to the Secretary of the Department of Treasury, Henry Paulson, to express their concern about continuing statements from Treasury that allege charities are a significant source of terrorist financing. The letter was sparked by a report from the Treasury Inspector General for Tax Administration (TIGTA) published in late May that claimed charities are a "significant source of alleged terrorist activities." The charities' letter calls upon Treasury to retract this claim, saying, "Treasury needs to recognize that charities are part of the solution and not part of the problem."
IRS Reports on 2006 Political Activities Enforcement Program, Releases Guidance (06/12/2007)
On June 8, the Internal Revenue Service (IRS) released a report on the initial results of its 2006 program enforcing the ban on partisan electioneering by charities and religious organizations. The same day, it also released Revenue Ruling 2007-41, which provides guidance nonprofits can rely on in planning permissible voter education and mobilization activity. The results of the enforcement program to date show a continued low level of violations.
New Complaints to the IRS about Political Intervention (06/12/2007)
In late May, news surfaced of an Internal Revenue Service (IRS) inquiry into a Wichita, KS, church, Spirit One Christian Center. Another new complaint, against Bill Keller Ministries, also was made public. Both cases involve statements about candidates that are alleged to indicate opposition to their election.
Lobby Reform Bill Passes House without Grassroots Lobbying Disclosure (05/30/2007)
By a vote of 396-22, the House approved new lobbying reform legislation on May 24 when it passed the Honest Leadership and Open Government Act of 2007 (H.R. 2316). The bill increases the reporting requirements for registered lobbyists, establishes a new electronic disclosure system, imposes new penalties for violating lobbying laws, and includes the controversial proposal to require registered lobbyists to report their bundled campaign contributions (H.R. 2317). The bill will now go to conference committee with a similar Senate bill that was passed in January.
IRS Urged to Use Terror Watch Lists to Check Nonprofits (05/30/2007)
When it comes to the effectiveness of using watch lists to identify terrorist threats, theory and reality yield very different results. On May 21, the Treasury Inspector General for Tax Administration (TIGTA) issued a report criticizing the Internal Revenue Service (IRS) for not using the FBI's Terrorist Screening Center's (TSC) consolidated watch lists to check nonprofit tax filings for possible matches to suspected terrorists. At the same time, non-governmental groups have criticized the watch lists as being riddled with errors and said no clear reason exists as to why some people or groups are put on the lists. Additionally, a 2005 Justice Department Inspector General report confirmed many deficiencies with the TSC.
House Lobby Reform Bill Expected to Move Soon (05/15/2007)
The leadership in the House has been working on its legislation to reform lobbying disclosure and ethics practices and is expected to unveil the plan today, May 15, or tomorrow, May 16, with a mark-up of the bill in the Judiciary Committee expected May 17. Despite repeated statements that a bill will be filed soon, controversy over grassroots lobbying disclosure, limits on bundling of campaign contributions by registered lobbyists and expansion of the cooling off period before ex-members of Congress can lobby have stalled progress. Rumors abound that the Democratic leadership bill will address the revolving door issue by doubling the cooling off period to two years. But the other two issues — grassroots lobbying disclosure and bundling of campaign contributions — are not likely to be addressed, although the leadership seems willing to have them offered as amendments or separate bills.
Muslim Charity Files Libel Suit over Allegations of Terrorist Ties (05/15/2007)
KinderUSA, a U.S. charity that provides humanitarian aid to children in war zones, including Palestine, filed suit April 26 against the author and publishers of a book that ties the group to terrorist organizations. The libel suit, which seeks $500,000 in damages and other relief, was filed in Los Angeles Superior Court after the publishers refused a request to discontinue distribution.
Head Start Reauthorization Passes House without Faith-based Discrimination Language (05/15/2007)
On May 2, the Improving Head Start Act of 2007 (H.R. 1429) passed the House without a provision that would have allowed grantees to discriminate on the basis of religion when hiring for positions funded by Head Start. The 365-48 vote followed the defeat of an amendment sponsored by Rep. Howard McKeon (R-CA) that would have permitted the religion-based hiring decisions. The long battle over Head Start reauthorization will now move forward as the Senate considers Sen. Ted Kennedy's (D-MA) Head Start for School Readiness Act (S.556), which does not include a religious preference measure. In addition, neither bill contains controversial limitations on use of private funds for voter registration by Head Start agencies.
Supreme Court Hears Oral Argument in Grassroots Lobbying Case (05/01/2007)
The U.S. Supreme Court heard oral argument on April 25 in Wisconsin Right to Life's (WRTL) challenge to the constitutionality of a campaign finance law that limits certain broadcasts, including grassroots lobbying messages, during federal campaigns. The issue before the Court is whether the law is unconstitutional as applied to the facts of WRTL's 2004 grassroots lobbying radio ads. Much of the argument addressed what standard should be used to define "genuine issue ads" entitled to constitutional protection. For nonprofits, much depends on whether the Court sets a clear standard for the 2008 election year. A decision is expected during the summer, which allows enough time for Congress or the Federal Election Commission (FEC) to establish rules that comply with the Court's decision.
House Bill Seeks Accountability for Anti-Terrorist Financing Programs (05/01/2007)
Legislation was recently introduced in the House that would require the Departments of State and Treasury to adopt recommendations of an October 2005 Government Accountability Office (GAO) report, which addressed the effectiveness of the U.S. government's efforts to assist other countries in the war on terrorism. Among other things, the bill would require the Treasury Department to submit in an annual report to Congress more complete information on how the agency tracks and blocks terrorist assets. Although the bill does not include all the GAO recommendations, it opens the door to discussions on the effectiveness of Treasury's strategy, including how it deals with charities, especially since the strategy is inconsistent with the State Department's December 2006 "Guiding Principles on Non-Governmental Organizations".
New Complaints of Partisan Electioneering Go to IRS, FEC (04/17/2007)
November 2008 may seem to be a long way off, but in the current reality of political campaigns, the presidential election is right around the corner, and the campaigns are not the only entities actively involved. Recent complaints filed with the Internal Revenue Service (IRS) and the Federal Election Commission (FEC) challenge the activities of two nonprofits, Priests for Life and Americans for Job Security.
Government Manipulates Research Again, This Time on Voter Fraud (04/17/2007)
Documents released as a result of oversight hearings in the House have revealed that the Election Assistance Commission (EAC), the bipartisan body charged with implementing the Help America Vote Act, has rejected or altered research on voter fraud and intimidation and the impact of voter identification laws. This marks another instance in which the government has been accused of manipulating information.
Treasury Posts Risk Matrix for Charities (04/17/2007)
In March, without public announcement or comment, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) published a Risk Matrix for the Charitable Sector on its website. The Introduction of the publication says the matrix is meant to help charities comply with U.S. sanctions programs that prohibit transactions with designated terrorists or certain countries. In 2006, Treasury said it was working on a draft of the matrix, and in June 2006, a group of nonprofits wrote Treasury asking for a public comment period. Treasury did not respond. Despite the unannounced posting, representatives of the nonprofit sector are likely to comment on the matrix and suggest improvements.
New York Police Watched Nonprofits before 2004 GOP Convention (04/03/2007)
A March 25 story in the New York Times revealed that the New York City Police Department (NYPD) conducted a covert surveillance program in 14 states, Canada and Europe that collected information on groups planning lawful protests or events at the 2004 Republican National Convention. The information became public as a result of two lawsuits brought against the city by seven of the 1,806 people arrested during the convention. However, the city has asked a federal court to keep detailed records of this surveillance secret, fearing they will be "misinterpreted." The vast scope of the surveillance has become public knowledge at the same time that Congress is investigating Federal Bureau of Investigation (FBI) abuse of Patriot Act powers to collect information.
Double Standard: Chiquita Banana Fined, Not Shut Down, for Transactions with Designated Terrorists (04/03/2007)
In a plea agreement with the U.S. Department of Justice (DOJ), on March 14 Chiquita Brands International agreed to pay a $25 million fine after admitting it paid terrorists for protection in a dangerous region of Colombia. The payments, made between 1997 and 2004, continued despite the company's knowledge that they were illegal. The company was allowed to continue profitable production during the investigation. The U.S. government's action is inconsistent with standards and procedure used against charities, which have had their assets seized and frozen while investigations are pending. Six U.S. charities have been shut down on the basis of much less evidence than the direct payments to which Chiquita admitted. The Chiquita fine is unlikely to affect its operations, as the company has annual revenues of approximately $4.5 billion.
Charities File Friend of Court Brief Supporting Grassroots Lobbying Rights (04/03/2007)
A group of 17 charities filed an amicus brief in the U.S. Supreme Court case Wisconsin Right to Life v. Federal Election Commission on March 23, urging the Court to protect the right of charities to broadcast grassroots educational and lobbying communications. Multiple amicus briefs have been filed on both sides of the case, which challenges the constitutionality of the "electioneering communications" rule in the Bipartisan Campaign Reform Act of 2002 (BCRA). The rule bans broadcasts that refer to federal candidates and are funded by corporations, including charities, 60 days before a general election and 30 days before a primary. The Court will hold oral argument on April 25, and a decision is expected in the summer or early fall, in time to clarify the law before the 2008 elections.
House Proposal for Grassroots Lobbying Disclosure Due Soon (03/20/2007)
While House Speaker Nancy Pelosi's (D-CA) office is still working on the details of grassroots lobbying disclosure as part of a package of Lobbying Disclosure Act (LDA) reforms, both supporters and opponents have continued to debate the merits of the idea.
Committee Votes Down Faith-Based Hiring Amendment to Head Start Bill (03/20/2007)
On March 14, the House Education and Labor Committee approved the Improving Head Start Act of 2007 (H.R.1429) after defeating an amendment that would have allowed faith-based organizations to hire teachers for the Head Start program based on religion. Attempts to insert such language into Head Start were unsuccessful in the past. This is the first time the issue has come up in the 110th Congress. The controversial provision was defeated 26-19 on a party line vote, and the overall bill passed 42-1. However, the amendment could be brought up again when the bill is considered on the House floor, which may occur before Congress' April recess.
Appeals Court Upholds USAID Pledge Requirement for HIV/AIDS Grantees (03/20/2007)
On Feb. 27, a three-judge panel of the U.S. Circuit Court for the District of Columbia overturned a lower court ruling that voided a USAID requirement that grantees under an HIV/AIDS program adopt certain policies on prostitution. The ruling in DKT International v. USAID is the first decision in two cases in separate federal appeals courts that involve the same issue. DKT expects to seek a re-hearing before the entire Circuit Court. An appeal from another lower court ruling that overturned the same requirement is pending in the U.S. Court of Appeals for the Second Circuit in New York. Conflicting rulings in the two appeals courts could increase the likelihood the issue will reach the Supreme Court.
Senate Votes Down Effort to Expand Definition of Material Support (03/20/2007)
The Senate bill designed to implement recommendations of the 9/11 Commission, S. 4, had almost 200 amendments and took over two months to complete. One amendment, introduced by Sen. Jon Kyl (R-AZ), could have potentially weakened humanitarian work of U.S. charities overseas but was defeated as part of a package of amendments that did not pass.
House Starts Moving on Lobbying and Ethics Reform (03/06/2007)
Lobbying and ethics rules changes are rapidly becoming a focal point of the 110th Congress. Since the Senate passed the Legislative Transparency and Accountability Act of 2007, the action has moved to the House, where a bill on executive branch lobbying recently passed the Oversight and Government Reform Committee, and a Judiciary subcommittee addressed possible changes to the Senate bill.
Justice Department Refers Kinder USA's Harassment Complaint against FBI to FBI (03/06/2007)
For nearly three years, according to Kinder USA, the U.S. relief organization based in Dallas, TX, has endured harassment and surveillance of its board, staff and volunteers by the FBI and the U.S. Attorney's office in Dallas. In December 2006, Board Chair Dr. Laila Al-Marayati sent a letter to the Department of Justice Office of Inspector General (IG) detailing the problem and asking for an independent investigation. She asked the IG to "take steps to terminate the wasteful and illegal governmental activities directed against a lawful charity managed and operated by United States citizens for needy children in areas of conflict." A month later, the IG's office wrote back saying the complaint had been referred to the FBI Inspection Division.
Patriot Act Drives Banking Problems for U.S. Muslim Charity (03/06/2007)
After a September 2006 raid by the federal Joint Terrorism Task Force, Life for Relief and Development (Life) of Michigan has had ongoing problems getting service from banks, even though at the time of the raid, the Federal Bureau of Investigation (FBI) said the investigation was not related to terrorism, and no charges have been filed. The only bank that will allow the humanitarian aid organization to make international wire transfers has required the group to comply with the Treasury Department's Voluntary Anti-Terrorist Financing Guidelines, which are supposed to be voluntary and flexible. However, Life officials say banks are reacting to the threat of litigation under unconstitutional provisions of the Patriot Act. Corrections filed March 7, 2007, indicated in italics.
Grassroots Lobbying Survey Results Demonstrate Strong Support for Disclosure (02/21/2007)
In early February, OMB Watch conducted a week-long Internet survey on federal grassroots lobbying disclosure that asked respondents to express their support or opposition to a variety of disclosure principles. Over 1,100 people responded to the survey, and the results were clear: strong support exists for federal grassroots lobbying disclosure.
Court Upholds Islamic American Relief Agency Asset Freeze (02/21/2007)
On Feb.13, the U.S. Court of Appeals for the District of Columbia upheld a lower court decision that allowed the Treasury Department's Office of Foreign Assets Control (OFAC) to freeze the assets of the Missouri-based Islamic American Relief Agency. The court said the asset seizure was lawful because the court found the organization is an affiliate of a Sudanese group that was designated as a terrorist organization in 2004, making this the first case to allow such designation based solely on an alleged branch relationship. There was no finding that the U.S. group used funds to support terrorist activities, and no criminal charges have been filed.
Bills to Regulate Independent 527s Reintroduced (02/21/2007)
Sponsors of the Bipartisan Campaign Reform Act (BCRA) have reintroduced legislation they pushed in 2005 and 2006 to subject independent section 527 political organizations to the same contribution limits and regulation as federal campaigns and political parties, with identical bills in the House (H.R.420) and Senate (S.463).
FEC Tells Court that Case-by-Case Regulation of Independent PACs Works (02/06/2007)
On Feb. 1, the Federal Election Commission (FEC) published new guidance for its 2004 rule defining when independent political committees are subject to federal campaign finance rules and contribution limits. The document responds to a court order seeking stricter regulation of 527 groups. In the guidance, the FEC cites its 2006 enforcement action against six groups as proof that its case-by-case approach — used to determine whether a group's "major purpose" is to influence federal elections — is workable. It remains to be seen whether the court will accept this approach, which moves the FEC toward a vague standard similar to the "facts and circumstances" test used by the Internal Revenue Service (IRS) to define prohibited partisan activity by charities and religious organizations.
Courts Defining When Government Funds Cannot Support Faith-Based Programs (02/06/2007)
The U.S. Supreme Court will soon hear oral arguments about whether taxpayers have the right to challenge the constitutionality of government funding for conferences supported by the White House Office of Faith-Based and Community Initiatives that are alleged to promote religious groups over secular ones. Meanwhile, several recent court decisions involving separation of government-funded and religious programs provide some clarity to vague federal regulations.
Senate Passes Ethics and Lobbying Reform Bill (01/23/2007)
On Jan. 18, the Senate passed its first major piece of legislation, S. 1, the Legislative Transparency and Accountability Act of 2007. The sweeping measure covers congressional travel, gifts, and lobbying activity and increases disclosure. However, senators rejected proposals to create an independent ethics panel and to require big dollar grassroots lobbying campaigns to disclose their spending. Grassroots lobbying disclosure and other proposals now move to the House, which has passed its own ethics rules, but has yet to act on amending the Lobbying Disclosure Act.
Misinformation Campaign Defeats Grassroots Lobbying Disclosure in Senate (01/23/2007)
When the Senate passed S. 1, the Legislative Transparency and Accountability Act of 2007, on Jan. 18, it left out a provision that would have required big dollar federal grassroots lobbying campaigns to disclose their spending and the identity of their clients. The provision was taken out after an intensive campaign by opponents that was primarily based on inaccurate information or interpretations that were at odds with the stated intentions of the sponsors. Supporters of the provision, including OMB Watch, have promised to pursue it when the House considers its amendments to the Lobbying Disclosure Act (LDA). OMB Watch has proposed clarifications to the language that are intended to eliminate contradictory interpretations and ensure that the disclosure requirements are limited to big dollar campaigns. In the meantime, misinformation spread by some conservative groups and advertising firms have scuttled an effort to prevent corruption in Congress by bringing greater transparency to the lawmaking process.
Supreme Court to Hear Challenge to Ban on Broadcasts (Again) (01/23/2007)
The long-running debate over whether grassroots lobbying broadcasts should be exempt from the federal ban on "electioneering communications" may finally be resolved in 2007. On Jan. 19, the Supreme Court agreed to hear Federal Election Commission v. Wisconsin Right to Life during its current term, making a final decision before the 2008 elections likely. The case challenges the McCain-Feingold campaign finance rule barring corporations, including nonprofits, from paying for broadcasts that mention federal candidates 60 days before a general election or 30 days before a primary. The Supreme Court decision is likely to determine how the Federal Election Commission (FEC) uses its power to create exemptions to the rule and may generate action in Congress as well.
House Imposes New Ethics Rules (01/09/2007)
On Jan. 4, even before debate began on the Democrats' promised first 100 hours agenda, the House, by a 430-1 vote, approved rules changes aimed at ending the "culture of corruption" of the past Congress. The changes address relations between lobbyists and members of the House and are meant to curb abuses revealed in last year's scandals involving convicted lobbyist Jack Abramoff and several members of the House. On the next day, the House approved additional rules changes.
Court Upholds Wisconsin Group's Right to Air Grassroots Lobbying Ads (01/09/2007)
On Dec. 21, 2006, in a victory for grassroots lobbying rights, a federal court ruled that three radio ads Wisconsin Right to Life (WRTL) wished to broadcast in the months before the 2004 election should have been allowed because they did not expressly advocate election or defeat of a federal candidate. The 2-1 decision held that a campaign finance rule banning broadcasts referring to a federal candidate aired during the campaign is unconstitutional as applied to WRTL's lobbying ads, but limited its ruling to the facts of this case. The Federal Election Commission (FEC) and sponsors of the Bipartisan Campaign Reform Act of 2002 (BCRA) appealed to the U.S. Supreme Court and joined in WRTL's request to expedite the case.
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