Lobbying bill could trigger Hill firestorm

The new lobbying reform bill could force grassroots organizations such as the Sierra Club, the National Rifle Association and NARAL Pro-Choice America to disclose large portions of their donor lists, threatening to set of a firestorm on the Hill.

Since the Honest Leadership and Open Government Act of 2007 was introduced by Democratic leaders late Tuesday, activists have been scrutinizing a section covering the disclosure of lobbying activities by coalitions and associations. They say it has been rewritten and broadened substantially since the leaders introduced it in their 2006 lobbying reform bill.

{mosads}“The new section 206 has been radically altered,” said Douglas Johnson, the legislative director of the National Right to Life Committee, one of the leading opponents of congressional efforts to require financial disclosure for public
communications campaigns.

“This new provision, unless it’s changed, is going to touch off a firestorm that even exceeds the controversy over [the] grassroots provision,” he said. “It would require every nonprofit advocacy organization to report its donors over $500.”

The grassroots provision Johnson cited is a proposal that would require lobbying firms conducting broad communications campaigns to disclose their funding sources. It is strongly opposed by a broad coalition of grassroots advocacy groups such
as the National Rifle Association (NRA).

Democratic leaders have sought to shield lawmakers, such as freshmen from conservative-leaning districts, from major controversy by omitting the grassroots lobbying measure from the final version of their lobbying reform bill. But they may set off an even bigger conflagration by including a provision that could require nonprofit groups, trade associations, and unions to name donors who have given than $500 during a three-month period.

 “This is written in a very vague manner such that it is unclear what their intent is and could be construed to require all 501(c) organizations to disclose anyone who gives more than $500 in a quarter,” said Cleta Mitchell, an election law expert with Foley Lardner who represents an array of conservative membership organizations, including the NRA and Americans for Tax Reform. Nonprofit organizations such as charities, advocacy groups, and unions are classified under section 501(c) of the tax code.

Mitchell said that a lifetime membership to the NRA costs about $700. She said the Democratic leadership’s bill could be interpreted as requiring the NRA to disclose the names of anyone who purchases a lifetime membership in the group.

A House Democratic aide familiar with the bill’s language said Johnson’s and Mitchell’s interpretation of the section was accurate. The aide did not comment on whether the effect of the provision on coalitions and associations was intentional or accidental.

Johnson said the proposed regulations affecting nonprofit groups raises alarm because of key differences between the newly drafted rules and a corresponding section in the lobbying reform bill Democratic leaders introduced last year.

Johnson said the section in last year’s bill requiring coalitions and associations to disclose their membership included a blanket exemption for 501(c) groups. In other words, advocacy groups, such as the Sierra Club and the NRA, unions and trade associations were exempted from required disclosure of their membership. In addition, last year’s bill included clear instructions that nonprofit groups would not have to disclose their membership or donor lists. Johnson said both the blanket exemption and the shielding language have been stripped from this year’s lobbying reform bill.

The House Judiciary Committee will mark up the bill today. If lawmakers fail to soften the proposed regulations on coalitions and associations, it could result in a pitched battle. The NRA, the National Right to Life Committee and membership organizations across the political spectrum would mobilize to oppose any language that would threaten their members with public disclosure.

Mitchell has forwarded questions challenging the proposed language on coalitions and associations to members of the Judiciary Committee.

 “Why are 501c3 organizations treated differently from 501c4 (grassroots organizations), 501c5 (labor unions), 501c6 (trade associations), 501c19 (veterans organizations), and all the other entities exempt from taxation under section 501c of the IRC?” Mitchell wrote in a set of talking points to be distributed to lawmakers. “Is the intent to require all other 501c organizations to reveal/disclose their membership lists of anyone who contributes more than $500 in a quarter? If that is not the intent, where is the protection against such mandatory disclosure of membership lists and names?”

Lawmakers also are expected to battle during the markup over the so-called grassroots lobbying disclosure proposal, which would require lobbyists conducting communications campaigns to reveal their funding sources. Rep. Marty Meehan (D-Mass.) is expected to offer an amendment to the lobbying reform bill that would require such disclosure. But his effort will be strongly opposed by lawmakers sympathetic to various grassroots lobbying organizations.