While ethics reform and the U.S. Supreme Court decision in FEC v. Wisconsin Right to Life were among federal developments in 2007 that strengthened citizen voices, threats to donor privacy and vague, inconsistent IRS enforcement of the ban on partisan activities by charities and religious organizations were among events that went from bad to just plain ugly. Here is a roundup: The Good The Supreme Court decision in Wisconsin Right to Life The Supreme Court heard oral arguments on April 25 in Federal Election Commission vs. Wisconsin Right to Life, Inc.. Wisconsin Right to Life (WRTL) challenged the constitutionality of the electioneering communications rule, part of the Bipartisan Campaign Reform Act of 2002 (BCRA), that prohibited corporations, including nonprofits, from funding broadcasts that mention federal candidates 60 days before a general election or 30 days before a primary. The issue before the Court was whether the law was unconstitutional as applied to the facts of WRTL's 2004 grassroots lobbying radio ads, which encouraged listeners to contact their U.S. senators on the issue of judicial filibusters. Because Sen. Russell Feingold (D-WI) was running for reelection at the time, WRTL had to discontinue the ads when the 60-day blackout period began, even though the ad was not about support or opposition to Feingold's election. OMB Watch led a group of 17 charities to file an amicus brief in the case, urging the Court to protect the right of charities to broadcast grassroots educational and lobbying communications. On June 25, the Court announced its decision, ruling 5-4 that the federal electioneering communications ban is unconstitutional when applied to genuine issue ads. The WRTL ads were found not to be the equivalent of express advocacy (which generally is considered electioneering). The decision was considered a free speech victory for nonprofit organizations and those that believe issue advocacy (taking action on public policies, but not on support or opposition to a candidate) should be permitted even in the days before an election. Ethics and lobby disclosure reform in Congress After almost nine months of frustration and disputes, President Bush signed the Honest Leadership and Open Government Act of 2007 into law on Sept.14. OMB Watch advocated for action to keep the 110th Congress true to their pledge of fundamental ethics and lobbying reform. The first step in the right direction came when the House overwhelmingly approved new gift and travel rules. After that, efforts to end the "culture of corruption" became much more problematic. Building off a theme of transparency and disclosure, the Senate passed a package of ethics reform measures, the Legislative Transparency and Accountability Act (S. 1) during the first month of the 110th Congress. Then focus turned to the House. Behind-the-scenes debate delayed introduction of a bill, but on May 24, the product was complete when the House passed the Honest Leadership and Open Government Act (H.R. 2316). The most contentious part was reconciling the differences between the House and Senate bills. As time passed, pressure mounted, but Republican senators continued to block the appointment of Senate conferees while seeking a guarantee that the conference would keep strong earmark disclosure provisions. The solution was to pass identical bills in the House and Senate to avoid a conference. After much negotiation, Congress successfully passed the Honest Leadership and Open Government Act. While not an ideal set of reforms, the new law is the most significant lobbying and ethics reform in a decade and should make important advances in increasing accountability and transparency in Washington. Publication of Seen but not Heard: Strengthening Nonprofit Advocacy The much anticipated book, Seen but not Heard: Strengthening Nonprofit Advocacy, written by Gary Bass, Kay Guinane and Matt Carter of OMB Watch, and David Arons, formerly of the Center for Lobbying in the Public Interest, was released in the fall. It offers a comprehensive analysis of advocacy by charities and provides recommendations for strengthening nonprofit policy participation. It is a vital piece of reading for any nonprofit that wants to increase their advocacy and ultimately get their issues heard. The book argues that lobbying must not be left to the well-heeled special interests. Unfortunately, many nonprofits are unaware of how much lobbying the law permits and often do not take advantage and lobby as much as they can or should. As Gary Bass reiterated in an editorial titled "Advocacy Is Not a Dirty Word," "Americans have fought wars to defend our constitutional right to lobby. The First Amendment says it is 'the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.' It is among the most cherished of democratic principles: the right to organize and advocate for policy changes." To buy a copy of the book, click here. Nonprofit Voter Registration Efforts Nonprofits have traditionally played a leadership role in working to register and mobilize voters, especially with low-income and minority populations. There have been some notable efforts in many states during the past few years to prevent nonpartisan, nonprofit organizations from conducting effective voter registration drives. The good news is that nonprofits are not standing idly by, but are challenging these voter registration laws. The. Department of Justice has been asked to reject a recently passed law in Florida that would discourage nonprofit voter registration drives by making it more difficult for third parties, including charities, to conduct such drives. And separately, a lawsuit was filed Sept. 18 challenging a requirement that all voter registration applications match Social Security or driver's license numbers. For more on nonprofits' electoral engagement, read the OMB Watch publication, How Nonprofits Helped America Vote: 2006. The Bad Grassroots Lobbying Disclosure Defeated Although a significant lobbying and ethics bill became law, there was an unfortunate defeat when grassroots lobbying disclosure was not included. During the early efforts to pass effective lobbying and ethics reform, OMB Watch diligently worked for inclusion of a federal grassroots lobbying disclosure requirement so the public could know who is behind big-dollar lobbying campaigns. Our educational efforts were met with vocal opposition from groups that felt disclosure would restrict free speech. We believed this increased transparency would help to level the political playing field and that it would not limit free speech. An amendment sponsored by Sen. Bob Bennett (R-UT) to strip grassroots lobbying disclosure from the Senate bill passed. Then, chances that grassroots lobbying disclosure would pass appeared better in the House. However, even though the House provision was slightly narrower, in the end, the same misinformation campaign continued to mislead many into believing the proposal was an effort to silence criticism of Congress. Small nonprofits cannot compete with the expensive mass media grassroots campaigns carried out by firms hired by private industry. Despite public support, grassroots lobbying disclosure was overwhelmingly defeated in 2007. Violating Donor Privacy The Federal Election Commission (FEC) decided to establish a rule to implement the Supreme Court's WRTL decision, issuing a proposal with two alternatives and a safe harbor for grassroots lobbying ads. One alternative would have required that the sponsors of the now exempt non-electoral broadcasts file disclosure reports on their funding sources to the FEC. The other approach would have amended the definition of electioneering communications to allow issue advocacy without requiring disclosure. OMB Watch submitted comments, and after considering all public comments, the FEC issued regulations that require donor disclosure for these non-electoral messages, violating donor privacy for issue advocacy unrelated to federal elections. Donor disclosure has also been used as a "poison pill" to kill a Senate bill addressing transparency of campaign contributions. The chances that the Senate Campaign Disclosure Parity Act (S. 223) will pass have been greatly hurt by an incessant effort by one senator to block the measure. The good government bill would require campaigns for the U.S. Senate to file their campaign finance reports electronically, a procedure already employed in the House. There have been repeated attempts to derail the bill. First, there were two anonymous holds, and the latest effort came in the form of an amendment from Sen. John Ensign (R-NV). It would require donor disclosure by groups that file ethics complaints, infringing on donor privacy rights. In response to this latest obstacle, a group of very diverse nonprofits sent a letter to Ensign asking that he drop his "poison pill" amendment. Ensign refuses to remove the controversial measure from the bipartisan bill, turning an effort to make Senate campaigns more transparent into one that would violate privacy guaranteed to donors by the Supreme Court long ago in NAACP v. Alabama. Barriers to Citizens E-mailing Congress Many congressional offices maintain certain barriers that prevent constituents' e-mail from getting through to their offices. The Congressional Management Foundation (CMF), a nonpartisan nonprofit organization, held a forum on communications with Congress to find ways to make it easier for citizens to effectively express their views. E-mailing Congress is a very common way for nonprofits to get people involved in a campaign and has enhanced grassroots advocacy. Unfortunately, a solution to this problem remains elusive. The Ugly Vague Rules and Laws Make Advocacy Communications Risky The vagueness in the new FEC rule on electioneering communications means the FEC will rely on past examples to help determine whether an ad is permissible. This ad hoc approach could eventually develop the same kinds of problems charities and religious organizations experience with the Internal Revenue Service's (IRS) "facts and circumstances" standard for enforcing the tax code's ban on partisan intervention in elections. This "facts and circumstances" test allows the IRS to apply its interpretation of the standard on a case-by-case basis. Since the 2004 election, the IRS has increased enforcement of the ban on partisan electoral activity by charities and religious organizations through a program called the Political Activities Compliance Initiative (PACI). In June, the IRS released a report on the 2006 PACI program and Rev. Rul. 2007-41, with further guidance to charities and religious organizations as to what is and is not permissible under the prohibition on partisan intervention. The ruling includes 21 examples with IRS commentary on why the IRS does or does not consider the situation described to constitute a violation. While the new guidance is helpful, it does not establish badly needed safe harbors or bright-line rules. On Aug. 3, OMB Watch sponsored a panel discussion to address the pros and cons of creating a bright-line rule defining what is and is not prohibited partisan intervention in elections by charities and religious organizations. Action the nonprofit sector can take to propose and promote a bright-line test was also discussed. OMB Watch released a report after the panel titled Overcaution and Confusion: The Impact of Ambiguous IRS Regulation of Political Activities by Charities and the Potential for Change. An example of this unclear standard was highlighted in the case of a church that was investigated for two years. In September, All Saints Episcopal Church in Pasadena, CA, announced that 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. However, to make the rules more confusing, the IRS concluded that the church in fact intervened in the election. This seems at odds with the IRS finding that the NAACP did not violate the ban for a very similar speech. These mixed messages from the IRS are likely to have a chilling effect on organizations and their willingness to speak up about social issues. While it is good news that All Saints did not have its tax exemption revoked, the case increases uncertainty about what is and is not allowed for charities and religious organizations. Surveillance of Nonprofits: Attempts to Suppress Dissent Continue Information on the government surveillance of nonprofit, peace, anti-war, and other groups for counterterrorism purposes grew once again in 2007. Even though the Pentagon announced in August that the Threat and Local Observation Notice (TALON) anti-terrorism database was being shut down, the damage was still done, and any long-term ramifications are unknown. The worst case scenario would be the creation of a civil society where organizations become fearful of getting involved in public policy. Some news from 2007 reported that before the 2004 Republican National Convention in New York City, surveillance was conducted nationwide on groups planning lawful protests or events. USAID Proposals: Restrictions to Grant Programs The United States Agency for International Development (USAID) and the Department of Health and Human Services (HHS) issued guidelines on July 23 for grantees that require separate "management and governance" and complete physical separation "between an affiliate which expresses views on prostitution and sex-trafficking contrary to the government's message …" and the grantee. The guidelines are even more restrictive than similar requirements for legal services programs that are the subject of a constitutional challenge. These draconian guidelines require an extraordinary amount of separation between the organization that receives federal funds and the privately funded affiliate. These regulations appear to be an attempt to ruin a constitutional challenge to a requirement that all grantees in an HIV/AIDS prevention program adopt formal policies against sex trafficking. Passed by Congress in 2003, the Global AIDS Act requires all organizations receiving funds under the act to pledge they oppose prostitution. The government's approach benefits from a February federal appeals court ruling in DKT International v. USAID, in the U.S. Circuit Court for the District of Columbia, overturning a lower court's voiding of the pledge requirement. The Impacts of the "War on Terror" on Charities During 2007, nonprofits had no rights when accused of association with terrorists. This problem has become so "ugly" that we devoted an entirely separate article to the issue. Click here to learn more.