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10/25/99
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Most Anti-Advocacy Language Removed from VA-HUD Appropriations Bill
Update on VA-HUD Appropriations Conference:
Both the Administrative Provision and Section 428 (formerly Section 430) are no longer problems. In addition, the five year penalty and separate bank account requirements have been dropped in Section 426 (formerly Section 425). We have heard from Senate staff that your calls, faxes and letters made a crucial difference on this issue - give yourself a pat on the back!
In the conference committee, new language was inserted into 426 that is unclear and may go beyond current law to impose new restrictions on nonprofits. The rider was rewritten to state that federal funds cannot be used to lobby Congress or litigate against the U.S. government -- prohibitions that currently exist. However, it appeared that the provision would have required a new certification process to verify that federal funds were not used for these purposes.
Section 426 also created a new restriction prohibiting grantees funded under the bill from using federal funds to pay for lobbying or litigation in adjudicatory proceedings funded in the bill. A number of nonprofits wrote us stating that they didn't know what the provision meant, and feared the worst. We sought an explanation from the Clinton Administration, Bond's office, and other VA-HUD conferees, but could not get one.
However, on Friday, October 15, Sen. Frank Lautenberg had a colloquy with Sen. Bond as the bill was on the floor of the Senate to clarify any questions raised about the ambiguous parts of Section 426. The colloquy (below) demonstrates that the provision is not intended to create any new restrictions on nonprofits. More specifically, the colloquy makes clear that signing of grant letters/documents will meet the certification requirements. And that the signature can be the CEO or his/her delegate. Additionally, the language on adjudicatory proceedings should not affect federal programs that fund representation of clients in adjudicatory proceedings or any other current procedures.
Here is the final outcome.
Section 428 (formerly Sec. 430): They adopted language used in past Treasury, Postal Service approps bills. It makes clear that it is a prohibition on federal agency explicit grassroots lobbying activities. It does not affect grantees. The language is as follows:
SEC. 428. No part of any funds appropriated in this Act shall be used by an agency of the executive branch, other than for normal and recognized executive-legislative relationships, for publicity or propaganda purposes, and for the preparation, distribution or use of any kit, pamphlet, booklet, publication, radio, television or film presentation designed to support or defeat legislation pending before the Congress, except in presentation to the Congress itself.
EPA Administrative Provision: It was dropped.
Section 426 (formerly Section 425): This was one of four or so outstanding issues left unresolved. Bond tabled the discussion on Sec. 426 to give time to work out a deal. At that point, Bond's staff gave Lautenberg's staff alternative language. That language could have restricted grantees from use of federal funds from lobbying (even at the local level), involvement in regulatory proceedings (e.g., commenting on rulemakings), and litigating on adjudicatory matters. Lautenberg's staff made every effort to narrow the language. The Bond staff left the room. When they returned, it was announced by Sen. Mikulski that the Administration had agreed to the following language which was then accepted:
SEC. 426. Except in the case of entities that are funded solely with Federal funds or any natural persons that are funded under this Act, none of the funds in this Act shall be used for the planning or execution of any program to pay the expenses of, or otherwise compensate, non-Federal parties to lobby or litigate in respect to adjudicatory proceedings funded in this Act. A chief executive officer of any entity receiving funds under this Act shall certify that none of these funds have been used to engage in the lobbying of the Federal Government or in litigation against the United States unless authorized under existing law.
Colloquy
DEPARTMENT OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT, AND INDEPENDENT AGENCIES APPROPRIATIONS ACT, 2000--CONFERENCE REPORT (Senate - October 14, 1999)
Mr. LAUTENBERG. Chairman Bond, I understand that section 425 of the Department of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 2000 is not intended to impede federal grantees or contractors from implementing responsibilities permitted under grant agreements.
OMB Circular A-122, Cost Principles of Non-Profit Organizations, makes clear that federal funds cannot be used to lobby Congress or initiate litigation against the U.S. government unless specifically authorized by statute to do so. Similar language exists in other cost principles, as well as Federal Acquisition Regulations affecting contractors. Section 425 is intended to be consistent with these prohibitions.
When an organization endorses the terms and conditions of a grant or contract, that organization also certifies its compliance with the lobbying and litigation prohibitions in the cost principles. Section 425 makes clear that the signatory agreeing to the grant, contract, or other award is to be that of a chief executive officer (CEO) and will serve as meeting the requirements of section 425. Once a CEO (or his or her delegate) signs the grant, contract or other award, the terms and conditions become binding when an audit is conducted to verify that no funds have been used to lobby Congress or initiate litigation against the U.S. government unless specifically authorized otherwise.
Additionally, it is my understanding that the language in section 425 prohibiting the use of federal funds awarded to grantees and contractors from being used for lobbying and litigating on adjudicatory matters is consistent with current rules that restrict the use of these funds for such purposes. This section is not intended to supercede any statute that specifically authorizes the use of federal funds to compensate parties for legal expenses such as the Equal Access to Justice law that allows small businesses and others that sue federal agencies for violating the law to recover their legal expenses when the agency's action is judged to be unfounded.
Section 425 also does not change current practices where federal grantees may be representing low-income or disadvantaged tenants or other individuals, such as veterans, in adjudicatory proceedings. For example, under the Housing Counseling program, HUD reimburses federal grantees for representing tenants. This is something that Congress strongly supports and section 425 is not intended to limit or restrict such programs.
Finally, section 425 is not intended to add new restrictions on membership fees or contributions that an individual whose sole income comes from federal benefits appropriated under this bill gives to organizations that may use a portion of the fee or contribution for lobbying, representing individuals in adjudicatory proceedings, or litigating. For example, the membership fee that a veteran, who has no other source of income other than federal support through this bill, gives to a veterans service organization should not restrict the VSO from representing the veteran in a manner that is any different than current rules.
Let me restate that nothing in section 425 precludes affected entities from enforcing rights under federal law, including, but not necessarily limited to the Administrative Procedure Act and the Constitution of the United States. Its intent is limited to ensuring that current grant and contract prohibitions are followed, not to impede participation in administrative actions.
Mr. BOND. The Senator is correct in his understanding of section 425.