Accountable Strategies blog

A blog about accountability issues in the public, private, and nonprofit sectors

Lobbying and ethics bill ends up with big loophole

Posted by David Kassel on August 8, 2007

 Last week, The House and Senate overwhelmingly approved a landmark bill that would tighten ethics and lobbying rules for Congress.  But among the political compromises that led up to its passage was the removal of a measure that would have shone some needed light on nonprofit organizations that are being used more and more frequently to hide the lobbying activities of corporations, industry associations and others.

While the new lobbying bill will require lawmakers to disclose “bundled” campaign contributions from lobbyists and require lobbyists to detail their own campaign contributions, missing from the bill is a provision that would have imposed some minimal disclsure requirements on organizations that engage in so-called “Astroturf lobbying.” 

Public Citizen’s Clean Up Washington website describes Astroturf lobbying as involving the creation of organizations that appear to be grassroots coalitions with populist-sounding names to lobby Congress.  These groups, however, are not grassroots organizations at all, but are often bankrolled by large corporations, industry trade associations or wealthy individuals.

The disclosure measure appears to have succumbed to groundless claims made by opponents in persuading members of both parties in Congress to sink it.

“It’s a setback,” said Craig Holman of Public Citizen, which spent two years with other disclosure advocacy organizations in refining the Astroturf disclosure measure in order to respond to the continuing objections.   “We couldn’t overcome the alarmist talk.”  Conservative activists had begun spreading the false claim that all nonprofit organizations that are engaged in legislative advocacy in Washington would have to register as lobbyists under the measure.

But as Democracy21.org noted, the dropped provision would actually have required only professional Astroturf lobbying firms to register and report the amounts they receive to conduct Astroturf lobbying campaigns, and would have required lobbying organizations already registered to report the amount they spend on Astroturf lobbying efforts, if the amount is more than $25,000 per quarter.  According to Holman, the measure would not even have required those organizations to disclose their contributors, which would seem to be an important way to distinguish between true grassroots and Astroturf organizations.

Public Citizen has identified 12 organizations, which falsely represented themselves as grassroots entities and spent millions of dollars in recent years to persuade Americans to pressure legislators to support controversial legislative measures such as national energy policy, the estate tax and Medicare prescription drug legislation.   Among the organizations were Americans for Tax Reform and United Seniors Association, Inc. or USA.   According to Public Citizen, USA spent millions of dollars in 2002 in favor of candidates in House races who supported prescription drug legislation desired by the Pharmaceutical Research Manufacturers of America, the trade association for the pharmaceutical industry.

USA’s latest IRS tax filing for 2005 indicates that the organization’s financial heyday may be over, however.  The filing noted that USA, which is based in Purcellville, VA, received $678,406 in contributions that year, yet the organization ran a $1.14 million deficit.  The contributors were not disclosed on the tax filing.  Among the expenses were $503,874 in unidentified professional fees and outside services.  The filing also noted that the organization received a $42,001 personal loan from Charles Jarvis, the organization’s president, who was paid a salary and other compensation totaling $113,141.

USA’s website, which lists Art Linkletter as the group’s national chairman, portrays the organization as a grass-roots alternative to the American Association for Retired Persons.  But the website appears to be somewhat out of date, bolstering the charge that USA was never more than a front group.  The most recent news postings on the website appear to date from 2005.  The  website attacks the AARP and supports the now defunct proposal for privatized Social Security accounts (again all from 2005).  Many of the links are no longer working, such as one in which the organization claimed to have “filed a private attorney general action against tobacco companies on behalf of Medicare and Taxpayers.”   Nine members of the USA Board of Directors were listed on the organization’s IRS 2005 tax filing.  Linkletter was not listed.

Public Citizen charges that Americans for Tax Reform (ATR) served as a conduit through which money from special interest organizations was funneled on its way to other groups.  One of the relationships in which ATR acted as a conduit was coordinated by now-convicted lobbyist Jack Abramoff.  

ATR’s  website highlights its no-tax pledge, which the organization claims to provide to all candidates for state and federal public office to sign.  The website also claims that ATR serves as  a “national clearinghouse for the grassroots taxpayers’ movement…”

ATR’s 2005 IRS filing shows that the group took in $3.1 million in contributions that year.  The organization’s president, Grover Norquist, was paid $279,821.  The organization listed contributions totaling $3,171,076, ranging from from $5,000 to $445,000; and like, USA, did not disclose the names of the contributors.  The group also listed $795,300 in grants and allocations it had given out, including $200,000 to the National Alliance for Worker and Employer Rights, in Fairfax, Va.   The National Alliance for Worker and Employer Rights’ website states that that organization opposes unions and union-backed labor laws and opposes amnesty or guest worker programs for illegal immigrants. 

U.S. Rep. Martin Meehan (D-MA) made a last-ditch effort in May to offer the Astroturf lobbying disclosure provision as an amendment to the ethics and lobbying bill in the Judiciary Committee.   Accordng to OMB Watch , Meehan decried “distortions” that had been made about the provision.   But opposition by both Democratic and Republican lawmakers led to the rejection of the amendment by the committee.

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