The Internal Revenue Service (IRS) Exempt Organizations is offering a workshop in three cities for small and mid-sized 501(c)(3) exempt organizations to explain how they keep their tax-exempt status and comply with tax obligations.

Now that the comment period for the draft Form 990 is closed, the IRS has posted all comments on its website, including the comments submitted by OMB Watch (Comments September 14, Part III.)

The Hill reports that Senator John Ensign (R-NV) is holding firm in stalling S.223, insisting that there is first a vote on an amendment that would force groups that file ethics complaints to disclose their donors.

TPMMuckraker.com has a clear explanation of events. "His bill would require all non-profits that file ethics complaints against senators to disclose all donors who gave $5,000 or more. His bill, he said on the floor, was designed to 'protect individual Senators from purely politically motivated ethics complaints that come against us that sometimes we will have to run up legal bills and all kinds of other things.' Without any evident irony he added: 'transparency is the best way to do it.'"

However, if Ensign is very concerned about disclosing the contributors to nonprofits that run politically motivated ethics complaints perhaps, he should not have voted to remove the grassroots lobbying disclosure provision from S.1 in January.

The New York Times first reported that Verizon Wireless rejected a request from NARAL Pro-Choice America to use Verizon's mobile network for a text-message campaign. Verizon held that, "it had the right to block 'controversial or unsavory' text messages" while the other wireless carriers accepted the program. Text messaging is increasingly being used as a powerful tool by political candidates and various advocacy campaigns. Supporters can be informed of various updates, calls to action, or even reminders to vote. "But legal experts said private companies like Verizon probably have the legal right to decide which messages to carry. The laws that forbid common carriers from interfering with voice transmissions on ordinary phone lines do not apply to text messages."

"In turning down the program, Verizon . . . told Naral that it does not accept programs from any group 'that seeks to promote an agenda or distribute content that, in its discretion, may be seen as controversial or unsavory to any of our users.'"

Now it turns out that Verizon will allow NARAL to use its network. "The decision to not allow text messaging on an important, though sensitive, public policy issue was incorrect, and we have fixed the process that led to this isolated incident," Jeffrey Nelson, a company spokesman, said in a statement."

After Verizon reversed its policy Nancy Keenan, NARAL's president, issued a press release saying, "Let's hope Verizon has learned a lesson today: citizen participation in democracy is neither 'unsavory' nor 'controversial.'"

Bob Bauer at moresoftmoneyhardlaw.com draws together recent occasions where issue advertising has come under heavy scrutiny; the MoveOn.org ad, the Wisconsin Right to Life Supreme Court ruling, and now Verizon. "It is a question really making the rounds these days: who will be heard on an issue, or denied?"

"While Wisconsin Right to Life, other nonprofits and the unions resist government restraints on their speech, large companies with control over communications channels can influence access and volume with large consequence for the quality of debate."

And see this NPAction story on using cell phones in advocacy.

The Senate Rules Committee sent the nominations of four Federal Election Commission (FEC) commissioners to the full Senate floor, but did so without a recommendation to approve or reject the nominees after Rules Chairwoman Dianne Feinstein (D-CA) expressed concern that nominee Hans von Spakovsky was "not an unbiased individual." Von Spakovsky's confirmation hearing, in June focused on his time at the Justice Department. He has been accused of politicizing the department's voting rights section causing civil rights groups and many others to vigorously oppose his confirmation.

The Leadership Conference on Civil Rights sent a letter to Feinstein last week strongly urging against his confirmation. The letter stated; "Mr. von Spakovsky is one of the architects of the Bush Administration's voter suppression efforts targeting minority voters. From 2001 to 2005, as an official at the Justice Department's Civil Rights Division, von Spakovsky helped steer the federal government toward voting rights policies not seen before, imposing sweeping restrictions that would make it harder for poor and minority voters to cast ballots."

Read the story covered by The Hill, Washington Post, and Roll Call($$) among many others.

Legislation to require Senate campaign finance reports to be filed electronically (S.223) was blocked once again on Monday. It was Senator Dianne Feinstein's (D-CA) third attempt this year to bring up the Senate campaign electronic filing measure by unanimous consent. Currently, House and presidential candidates, PACs and party committees are required to file their reports electronically, but Senate candidates and party committees are exempt. Senator John Ensign (R-NV) said he blocked the bill because he wanted to add an amendment which would require groups that file complaints with the Senate Ethics Committee to reveal their donors.

According to the Sunlight Foundation Democratic offices were given a Unanimous Consent agreement from Senator Mitch McConnell's (R-KY) office that would have allowed the Senate to move the bill only if they agreed to take up a an amendment identical to the one introduced on Monday by Senator John Ensign.

And according to BNA ($$) Money and Politics, Russ Feingold (D-WI) said that the Senator who placed the hold was revealed thanks to the Honest Leadership and Open Government Act, which requires the disclosure of senators who place holds on Senate action.

The Supreme Court will decide whether an Indiana law requiring voters to present photo identification at polling places unfairly discriminates against poor and minority voters. Several other states have enacted various forms of voter ID legislation and the court's ruling could also affect them as well. Lawyers for the American Civil Liberties Union, the NAACP and the Indiana Democratic Party filed appeals, arguing that the photo rule would deny some citizens the right to vote. In January the U.S. Court of Appeals for the 7th Circuit upheld the voter identification law. The case will be heard in January and the justices' ruling will be due by the end of June. Their decision could have a major effect on the 2008 presidential election and on congressional races in several states. This New York Times column, "Fear but Few Facts in Debate on Voter I.D.'s" has additional background information.

Meanwhile Demos, a policy research and advocacy organization, has recently issued a new report on voter fraud.

Yesterday the Senate Judiciary Committee held a hearing titled, "Strengthening FISA: Does the Protect America Act Protect Americans' Civil Liberties and Enhance Security?" During the hearing Director of National Intelligence Michael McConnell testified and generally spoke very carefully in response to proposals to change legislation, as he did last week before House committees.

CQ ($$) reports; "Democrats made it clear Tuesday that they do not intend to be stampeded [again] into passing new legislation on the government's authority to conduct surveillance for counterterrorism purposes." With a guarded disposition, McConnell "underscored three things the administration wants to be included in the next bill: the ability to surveil, without a warrant, communications that pass through the United States between two points overseas; a provision to 'compel the private sector' to cooperate with government surveillance and provide liability protection for companies that have cooperated; and a warrant requirement for surveillance of targeted U.S. citizens located in the United States." With the same cautious nature, McConnell also appeared somewhat open to changing several key provisions of the Protect America Act.

Senator Patrick Leahy (D-VT) commented, "The Protect America Act provides no meaningful check by the FISA Court, or by the Congress, for that matter. It does not even require the government to have its own internal procedures for protecting the privacy of these Americans. As I said, it may be a spouse calling from here to a husband or wife who's overseas protecting America."

Yet the administration still has not provided the committee with legal documents about its warrantless spying activities, making updating FISA difficult. McConnell was sure to note that he is not involved in negotiations over what documents the White House will provide Congress.

And from the latest Watcher, Wiretapping Law the Focus of House Hearings.

Act Now and Stop Unlimited Wiretap Authority!

Today the House Ways and Means Subcommittee on Oversight held a hearing to consider whether charitable organizations serve the needs of diverse communities. Click here for a witness list and testimony.

The LA Times reports that All Saints Episcopal Church in Pasadena, California has announced that the Internal Revenue Service (IRS) investigation which began 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, despite the IRS determination that "the Church intervened in the 2004 Presidential election campaign." The letter the IRS sent to All Saints says; "We note this appears to be a one-time occurrence and that you have policies in place to ensure that the Church complies with the prohibition against intervention in campaigns for public office."

The church has now asked the Treasury Department to investigate if the investigation was politically motivated and whether officials from the Justice Department had become involved in the matter.

The All Saints press release states; "Synagogues, mosques, and churches across America have no more guidance about how the IRS rules now than when we started this process over two long years ago. The impact of the letter leaves a chilling effect cast over the freedom of America's pulpits to preach core moral values. We have no choice but to demand clarification on this matter with the IRS."

BNA Money and Politics ($$) describes the investigation as, "a test case for freedom of the pulpit and a focal point of the debate over free speech in churches."

BNA Money and Politics ($$) reports that Lois Lerner, director of exempt organizations for the Internal Revenue Service (IRS), predicts that the number of tax-exempt organizations that will violate IRS rules for engaging in prohibited political activities will increase during the 2008 presidential campaign. During a panel discussion at the annual meeting of the Council on Governmental Ethics Laws (COGEL), Lerner commented that she hoped the number of actual violations would decline as IRS continues to try to educate people about the law's requirements.

Despite this alarmist prediction and the increased number of complaints received from the 2006 election season, there was overall a low level of violations by 501(c)(3) organizations.

"Despite such assurances from the government officials, private attorneys involved in the discussion noted that the campaign finance laws and tax laws regulating political activity continue to be unsettled and evolving in reaction to the decisions of regulatory agencies and the courts."

The Federal Circuit upheld a rule banning "policy commentary" on land owned by the Department of Veteran Affairs (VA). The suit Preminger v. Secretary of Veterans Affairs stems from a voter registration drive at a homeless shelter and nursing home.

The VA rule bans commentary and policy discussion unless the speaker is "authorized." 38 C.F.R. 1.218 (a)(14) states; "For the purpose of the prohibition expressed in this paragraph, unauthorized demonstrations or services shall be defined as [. . .] partisan activities, i.e., those involving commentary or actions in support of, or in opposition to, or attempting to influence, any current policy of the Government of the United States, or any private group, association, or enterprise." This case challenged the VA's exclusion of nonpartisan voter registration workers.

A series of hearings are now underway intended to examine and create legislative changes to the Foreign Intelligence Surveillance Act (FISA) in light of the Protect America Act (S.1927) that was rushed through Congress and signed into law in Aug. Yesterday the House Judiciary Committee held a hearing titled, "Warrantless Surveillance and the Foreign Intelligence Surveillance Act: The Role of Checks and Balances in Protecting Americans' Privacy Rights," to follow up on part one held Sept. 5. The two witnesses were Director of National Intelligence Mike McConnell and Kenneth Wainstein, assistant attorney general for national security. McConnell told the Committee that the he doesn't know how many Americans' phone and e-mail conversations have been inadvertently overheard in the process of foreign-oriented surveillance.

The concern was also raised that the bill was written too broadly. A Congressional Research Service (CRS) report addresses the vague nature of the law, highlighting sections that may be open to different interpretations. TPMMuckraker.com also followed the events of yesterday's hearing.

During the Judiciary hearing Representative Jerrold Nadler (D-NY) gave some hard hitting opening remarks; "the power to invade people's privacy must not be exercised unchecked. As we consider how to fix the Protect America Act, we must restore the fundamental freedoms that have been lost because of our recklessness. We must focus surveillance on terrorist activity and provide meaningful court review to protect the rights of Americans who will be spied on in our country."

The House Select Intelligence Committee held a separate hearing yesterday, and will hold another hearing on FISA on Thursday hearing testimony from McConnell. According to CongressDaily, the House Intelligence Committee plans to mark up legislation Oct. 4 covering long-term changes to the FISA law.

Chairman Silvestre Reyes' (D-TX) press release stated, "The scope of the so-called 'Protect America Act' passed in early August is extremely troubling, and the witnesses before us today voiced strong concerns that it does not protect Americans' civil liberties and could authorize a broad range of warrantless surveillance. We also heard concerns that the House Intelligence Committee will not be able to conduct meaningful oversight if the Administration continues to deny access to critical documents about the NSA surveillance program."

Future hearings to look out for: On Thursday Sept.20 the House Select Intelligence Committee will hold a hearing at 9 am and on Tuesday Sept. 25 the Senate Judiciary Committee will hold a hearing 9:30 am.

The Florida branch of the National Association for the Advancement of Colored People (NAACP) and the Haitian-American Grassroots Coalition filed suit in a US District Court to have a state election law thrown out that could disenfranchise eligible citizens from registering and voting in the 2008 elections. The law prevents voters from registering if their driver's licenses or Social Security information does not match what is on the registration form. Opponents say the law wrongly prevented thousands of Florida residents from voting in 2006. Such common mistakes that can prevent someone from registering to vote include having a maiden name on a driver's license. For more information, see the Brennan Center for Justice.

The Honest Leadership and Open Government Act of 2007 (S.1) was signed into law on Friday Sept. 14. As BNA Money and Politics ($$) reports; "Bush was decidedly less enthusiastic. In a five-paragraph, written statement issued by the White House, the president said he signed the new measure despite misgivings about its overall thrust and specific problems with some key provisions." For more information on changes for nonprofits, click here, and for more background visit the OMB Watch lobbying reform and government ethics resource center.

On Sept. 14, OMB Watch submitted comments to the Internal Revenue Service (IRS) on the proposed revisions of Form 990, the required tax filing form for nonprofit organizations. Our concerns address sections that relate to civic participation through nonprofit organizations, primarily Schedule C, on political campaign and lobbying activities. OMB Watch raised a number of concerns about the revisions and offered suggestions on how to improve the form. Read coverage of OMB Watch comments in BNA Money and Politics ($$), "OMB Watch Says Service Should Drop Some Form 990 Lobbying Expense Reporting."

The Roundtable on Religion and Social Welfare Policy addressed the effects of September 11 on Muslim charities in an interview with Salam Al-Marayati, the executive director of the Muslim Public Affairs Council. Charity is especially important during the Islamic holy month of Ramadan, which begins tonight (Sept.12) at sundown. According to the interview Treasury has not had an open dialogue with Muslim charities for two or three years. Despite continued government suspicion of Muslim charities people will not stop donating to charity, but the donations will be made through informal outlets.

Al-Marayati comments during the interview; "I'm worried that a lot of money is going overseas without any regulation, without organizations accounting for those monies. In other words, maybe a lot of cash is now being transferred and so the government has, in effect, undermined its own efforts for trying to regulate charitable giving."

There are only a few Muslim-American charities left in the U.S. Before 9/11 Muslim organizations were learning how to apply for government grants, but now Muslim charities work with the government much less. According to Al-Marayati, "because of political concerns, the government is not supporting Muslim non-profits as much for fear of being attacked by the political and ideological right in America for supporting Muslim charities."

We always were concerned about the government's sledgehammer approach — if somebody from one charity does something that's questionable, they'll just go ahead and shut it down.

The Justice Department will not criminally charge former top executive and other former high-ranking officers of Chiquita Brands International over the company's payments to a Colombian organization on the State Department's list of terrorist groups. After the company pleaded guilty, three of its officers were under investigation for authorizing and approving the payments after federal prosecutors warned them that it was violating the nation's anti-terrorism laws. Chiquita argued that the three men who had disclosed the bribe payments to Justice officials continued the payments while waiting for advice that never came from then-Assistant Attorney General Michael Chertoff and then-Deputy Attorney General Larry Thompson.

In 2005 a complaint was filed with the Internal Revenue Service (IRS) charging that Focus on the Family, a 501(c)(3), violated IRS guidelines because of increased political campaign activity. Citizens for Responsibility and Ethics in Washington (CREW) alleged that Dobson violated IRS code by using Focus on the Family resources to campaign for or endorse Republican candidates. The Citizens Project in Colorado also filed a complaint against Focus on the Family due to a magazine article that used persuasive language to imply support for Bush.

The Denver Post reports that the IRS has now determined that Focus on the Family chairman James Dobson's endorsement of 2004 Republican candidates did not call for the revocation of the organization's tax-exempt status. After an audit, the IRS ruled that Dobson acted as an individual and not on behalf of the nonprofit. The IRS does not release audit findings, but audited organizations may do so. And according to the letter the IRS sent to Focus on the Family, the audit; "Revealed that Dr. Dobson's reported remarks did not occur in publications of Focus on the Family, did not occur at functions of Focus on the Family, and did not involve Dr. Dobson suggesting that he was speaking as a representative of Focus on the Family."

The Senate amended the State-Foreign Operations bill (HR 2764) to overturn existing policy, known as the "Mexico City" policy banning international aid for overseas groups that perform abortions or related services such as counseling. The underlying bill would have weakened the existing "Mexico City" policy by allowing the U.S. to provide condoms to organizations overseas, but the amendment passed with a 53-41 vote overturning the policy altogether. According to CQ ($$), in defense of the amendment Senator Boxer (D-CA) said, "You have to choose between helping the people in your country — by speaking out, by offering counseling — or American dollars."

The Federal Election Commission (FEC) has dismissed an enforcement case in which the blog Daily Kos was charged with violating campaign finance law by posting blog entries that support particular federal candidates. The FEC denied that the site should be regulated as a political committee. See this posting at Daily Kos on the case.

The unauthorized illegal wiretapping of nonprofits, amongst others, has already been made known and now, that authority has been expanded. We are calling on you to urge Congress to act now and revisit the temporary fix to the Foreign Intelligence Surveillance Act (FISA) that passed in August. The Protect America Act of 2007 (PAA), S. 1927, gives the government the power to wiretap anyone, including U.S. citizens, without any court approval as long as the "target" of the surveillance is located outside the U.S.

Two representatives of the U.S. Treasury Department's Office of Terrorist Financing and Financial Crimes met with Detroit area Muslim and Arab-Americans to discuss charitable giving in preparation for Ramadan, a Muslim holy month beginning next week. During Ramadan donations to charity are typically at their highest because of a religious requirement, zakat, a practice of giving to good causes. The meeting was organized by the U.S. Attorney's Office and Muslim leaders to address questions and concerns. During the last year FBI and other federal agencies have raided three Detroit-area Muslim charities, Life for Relief and Development, Al-Mabarrat Charitable Organization and Goodwill Charitable Organization Inc. Nobody from any of the charities has been charged with a crime, and only the Goodwill Charitable Organization has been shut down and designated. "Audience members unsuccessfully sought absolute assurances they could not be prosecuted for giving to a charity that is legal today but could be deemed a terrorist front tomorrow."

Frustrated attendees also wondered how they could help suffering friends and relatives in Gaza or southern Lebanon without working through agencies that must deal with Hamas or Hezbollah, both designated terrorist organizations by the U.S. government. Linda Mansour of the American-Arab Anti-Discrimination Committee said most donors are average citizens who want their money to go for food and medicine but now fear prosecution. Michael Rosen, a policy adviser with the Treasury Department, said the government wants to establish a safe and approved means of providing humanitarian aid but has not done so yet. Until then, "donors do have to do their due diligence," he said.

A coalition of organizations including the American Civil Liberties Union, the N.A.A.C.P., Common Cause Georgia, the League of Women Voters, and others challenged Georgia's voter ID law, but a federal judge ruled that the groups did not successfully prove that the law placed "an undue or significant burden" on the right to vote. U.S. District Judge Harold Murphy of Rome on Thursday ordered the dismissal of the lawsuit, and the ID law will be in effect for a September 18th election.

Today the Senate Judiciary Committee approved S. 453, the Deceptive Practices and Voter Intimidation Prevention Act of 2007, legislation intended to punish voter intimidation. As expected according to CQ ($$), the committee removed language that would allow private parties to bring lawsuits to block deceptive voting practices. This makes the language more alike a companion bill in the House, HR 1281 which passed in June.

Sen. Barack Obama, D-Ill., introduced the measure in January with the broad language to allow private parties rather than just the Justice Department to bring lawsuits. Such a private right of action is unusual and has generated concerns from the Justice Department. Even some civil rights groups worry that it could result in harassment lawsuits aimed at inhibiting voting, said Tanya Clay House, an attorney with the liberal group People for the American Way. In place of that broader private right of action, the bill's sponsors — who include Democrats Patrick J. Leahy of Vermont, chairman of the Judiciary Committee, and Edward M. Kennedy of Massachusetts — are expected to substitute language that would limit private parties to obtaining injunctions against the Justice Department to force compliance with the legislation's requirements.

The lobbying and ethics reform bill, S.1, was finally sent to President Bush Sept. 4, and Bush is expected to sign the measure into law early next week. This comes after the bill was withheld from the president out of concern of a possible veto. The president reportedly has concerns over the earmark provisions and the revolving door provisions.

The Federal Election Commission (FEC) reached an agreement with Citizens Club for Growth Inc., and if approved by the court, would end a lawsuit before the U.S. District Court for the District of Columbia. It would be the largest civil penalty the FEC ever collected after an enforcement case moved to litigation. Club for Growth has agreed to pay $350,000 for failing to register with the FEC as a political committee and report its contributions and expenditures.

The group spent at least $1.28 million between 2000 and 2004 expressly advocating the election or defeat of clearly identified federal candidates. The FEC found that its major purpose was to influence federal elections and met the statutory definition of a political committee, and was therefore required to register and report with the Commission.

Club for Growth issued a press release stating it is a separate legal entity from the group that will be paying the fine, Citizens Club for Growth Inc. Earlier this year Citizens Club for Growth Inc. (a 527 organization) sold its name to a new group, Club for Growth, a 501(c)4.