See this summary of our October 2004 report. Continuing Attacks on Nonprofit Speech: Death By a Thousand Cuts II Executive Summary A Report by OMB Watch October 2004 In July 2003, OMB Watch published An Attack on Nonprofit Speech: Death By a Thousand Cuts, which documented a pattern of attempts to limit the policy voice of nonprofits by the Bush administration and its conservative allies. Over the past year this trend has not only continued, but also expanded. In our newest publication, Continuing Attacks on Nonprofit Speech: Death By a Thousand Cuts II, we found:

• Retaliatory action against government grantees that engage in controversial policy discussions or active advocacy that includes points of view different from the administration's
• Aggressive application of the global gag rule, and signs of a back door “domestic gag rule” that illegally imposes government rules on private funds of grantees;
• Selective enforcement of laws against nonprofits engaged in direct action; and
• Overbroad implementation of homeland security policy that chills nonprofit action.

This report provides a number of case examples that demonstrate the government's willingness to force its point of view on nonprofits and take punitive action toward those that raise questions about those viewpoints. Taken one by one, these examples may not seem to have a broad impact beyond those directly involved. But taken together, they mean major trouble for the nonprofit sector. When nonprofits are silenced it indicates a crisis for democratic government. Most of the groups described in this report have defended their rights through litigation, advocacy and determination to stick to their principles and plans of action. This comes at great risk, often resulting in both some loss of funding and a drain on scarce resources used to defend free-speech rights. These retaliatory and chilling government tactics must end. Public discussion of issues should be based on the merits and include all those who want to be heard — without fear of retribution. Our country deserves an aggressive, sustained public debate on key issues of the day by an unbowed and engaged nonprofit sector. Retaliatory Action against Government Grantees to Limit or Stop Debate Federal agencies have used audit and other powers to take action against federal grantees that exercise their right to advocate on issues with their private funds. Government funds and resources have also been used as a wedge to limit open debate and availability of information to inform policy discussions. Some government actions have been based on ideological objectives, ignoring sound science, adding to the frustration and consternation of the nonprofit sector. Examples over the past year of how speaking out can lead to retaliation and stifle free and open debate include:

• Advocates for Youth, which has been the target of three Department of Health and Human Services audits in a year and had their funding cut after the organization criticized the administration's abstinence-only policies.
• Center for AIDS Prevention Studies which nearly lost its grant.
• Head Start grantees who first received an illegal letter from the Department of Health and Human Services saying they could not lobby with private funds on reauthorization of the Head Start program and then were required to submit an onerous survey that appeared to be an act of intimidation.
• Disability advocates, which faced loss of technical assistance contracts.
• California Rural Legal Assistance, which dealt with a politically inspired audit when it challenged new dairy products.
• Global Heath Council, which lost federal funding for its 31st annual conference because the government was unhappy with some of the conference speakers.
• Centers for Disease Control and Prevention, which imposed a new censorship rule on nonprofits requiring conference agendas be pre-approved "to make sure there are no subjects that would embarrass the Government or be an improper use of funds;"
• Removal of information from government websites including data about what is happening to American women.

Pushing the Limits of the Global Gag Rule The Global Gag Rule provides a case study of how the federal government can clamp down on the free speech of government grantees and the consequences for such actions. The Global Gag Rule bans federal family planning assistance to nongovernmental organizations (NGOs) that perform, provide counsel about, or lobby for legal abortions, even if the funding for abortion services comes from private sources. First adopted in 1984, it was suspended by President Bill Clinton in 1993 and reinstated by President George W. Bush in 2001. Overly aggressive application of the rule has threatened to chill advocacy by NGOs involved in reproductive health issues. Additionally, the rule has recently been applied to domestic programs through use of retaliatory audits and other means. Federal Speech Police? Selective Enforcement Affecting Nonprofits This report provides several examples of selective enforcement of laws against nonprofits engaged in direct action, including:

• Nonprofits Threatened with Criminal Prosecution. Two groups, the Project on Government Oversight (POGO) and Greenpeace, faced criminal prosecution in carrying out their mission. Both prosecution efforts failed.
• Policy Active Nonprofits Targeted for Audits. The IRS audits of two groups, the Land Stewardship Project and the National Education Association, raise concerns over whether the actions are politically motivated.
• Protest zones have become a standard way for the Secret Service to stifle free speech of individuals and nonprofit organizations, which have a different policy or political persuasion from the administration's positions.

Overbroad Implementation of Homeland Security Policy In November 2003, the Government Accountability Office (GAO) released a report on terrorist financing, citing charities as one among many mechanisms used to launder money for terrorist purposes. nfortunately, government has increasingly focused on nonprofits in the war on terror — a proposition that is vastly disproportionate to the dangers presented. Homeland security actions are making it more difficult for charities, especially international groups, to carry out their missions; they are putting unnecessary constraints on foundations and others that provide philanthropic support for international work; and they are creating a counterproductive chill that ultimately results in cutting back on the kind of humanitarian work that makes people less desperate and susceptible to recruitment by terrorist organizations. Here are several examples of how nonprofits are affected by changes in homeland security:

• Concerns Raised about Government Actions to Shutdown Charities The report by the independent 9/11 Commission raised “substantial civil liberty concerns” regarding the government’s 2001 shutdown of two Chicago-area Islamic charities. It also found that many suspects are denied due process and organizations have been closed without formal evidence that they actually funded al Quaeda or other terrorist groups. The report also notes the investigation revealed little compelling evidence these charities actually provided financial support to al Quaeda, at least after al Quaeda was designated a foreign terrorist organization in 1999. At the same time, the IRS has begun to implement a 2003 law, recently revoking the tax-exempt status of two related nonprofit organizations without any due process.
• Treasury Department Guidelines to Prevent Terrorist Financing Miss the Mark The Treasury Department published guidelines to prevent diversion of charitable assets to terrorism, in 2003 sought public comment on the guidelines, and is now working on final guidelines. The guidelines have been criticized because they are much broader than is necessary to prevent diversion of assets to terrorists and reach into the operations of nonprofits having nothing to do with terrorism.
• Certification and List Checking Divert Attention from Real Dangers Increasingly, foundations are checking charities against government watch lists before releasing funds, as they have begun to fear that even an unintentional or indirect link to a terror group could ruin their reputations and cause the federal government to freeze assets. Some think the need to check watch lists is mandated by the Treasury Department guidelines identified above. Additionally, thousands of charities are impacted by the Combined Federal Campaign (CFC)'s new policy requiring all charities seeking eligibility to sign a certification that they would not knowingly employ people whose names appear on several government terrorism watch lists. The lists are vague, replete with errors, and do not provide means to correct false identification. Finally, the U.S. Agency for International Development now requires its grantees to sign a certification that requires monitoring of individuals receiving assistance.
• Chilling Impact on Groups and Their Members The threat that extensive PATRIOT Act power could be used against nonprofits has had a chilling effect on the exercise of free speech and association. Some groups, particularly those serving Muslims, have reported decreases in membership activity, fundraising, and attendance at prayers and community events because of fear that the government could get the organization's records and target members for investigation. For example, the Muslim Community Association of Ann Arbor sued the Justice Department, challenging the search and seizure provisions of Section 215 of the PATRIOT Act. MCA is concerned that their advocacy activities will result in their members becoming the focus of government investigations. One of its active members was arrested, held in solitary confinement and deported, although no criminal charges were ever brought against him.