Lobby Reform Update: Shays, Meehan Introduce Bill, as Senate Reports on Charities Misuse

While the conference committee to reconcile House and Senate versions of lobby reform legislation remains in limbo, two House members have introduced a new, stronger lobby reform bill, and a Senate committee has called for an investigation into misuse of charities by Abramoff and others. New Shays-Meehan Bill On June 22, Reps. Christopher Shays (R-CT) and Martin Meehan (D-MA) introduced H.R. 5677, the Ethics and Lobbying Reform Act. The bill, an amalgamation of provisions supported by reformers that were left out of the House and Senate-passed bills, includes:
  • Grassroots Lobbying Disclosure, which requires the disclosure of expenditures over specified thresholds by lobbying firms and nonprofits;
  • Creation of an Office of Public Integrity, which creates an independent office to monitor and enforce ethics violations;
  • Disclosure of Campaign Fundraising by Lobbyists, that requires registered lobbyists to disclose campaign contributions; and
  • Revolving Door, which increases the ban on lobbying by former public officials from one year to two years.
The Senate appointed conferees on the lobbying bills weeks ago, but House Speaker Dennis Hastert (R-IL) has yet to name the House conferees. Shays and Meehan introduced their bill as Republican congressional leaders and their staff continue to attempt to hammer out the discrepancies between the House and Senate lobby reform bills before the conference committee meets. Shays and Meehan sent a letter, joined by Sens. John McCain (R-AZ) and Russ Feingold (D-WI), to the Senate conferees and House leadership urging them to adopt strong lobbying reform measures similar to those in the Shays, Meehan bill. However, the conferees and leadership have been slow to move toward a resolution. A sticking point continues to be a provision in the House-passed bill designed to rein in independent 527 organizations. Senate Rules and Administration Committee Chairman Trent Lott (R-MS), who is also one of the Senate conferees, has said that he opposed putting the 527 provision in this bill. Conversely, House Majority Whip Roy Blunt (R-MO) has stated, "My view is it's an essential part of the lobbying bill." In the Senate: A Call for More Scrutiny of Nonprofits and Lobbying A report by the Senate Committee on Indian Affairs, released the day that the Shays-Meehan bill was introduced, may put pressure on Congress to act on lobby reform legislation and provide more scrutiny of nonprofit activities. The report, which examined former lobbyist Jack Abramoff's relationship with six Indian tribes involved in gaming operations, notes that the tribes provided millions of dollars to Abramoff and to nonprofits at the suggestion of Abramoff and his partner, Michael Scanlon. The report also examined the abuse of nonprofits by Abramoff and Scanlon for their personal financial gain. It cites numerous examples of Abramoff funneling money through nonprofit organizations such as the Abramoff-created Capital Athletic Foundation, or Grover Norquist's Americans for Tax Reform, leading the committee to question whether current Internal Revenue Service regulations regarding nonprofit organizations are sufficient. The Committee, whose oversight is strictly focused on Indian Affairs, recommended that the Senate Finance Committee take up this issue. "The [Indian Affairs] Committee believes that the evidence it uncovered raises serious issues involving nonprofit organizations, not only with regard to compliance with existing federal revenue laws, but also with regard to whether existing federal revenue laws should be altered to prevent or discourage such activity," the report detailed. Whether the Senate Finance Committee will take up the issue remains to be seen. Senate Finance Committee Chairman Charles Grassley (R-IA) has been conducting a broad probe of nonprofits and foundations, examining whether nonprofits have abused their tax-exempt status for political gains. This has included an examination of charities with link to Abramoff. The Indian Affairs Committee has sent over 100 pages of documents to Grassley that related to Abramoff-affiliated charities. According to Sen. Max Baucus (D-MT), the ranking Democrat on the Finance Committee, "The Finance Committee continues to review documents provided by the Committee on Indian Affairs and related to non-profit groups with links to Jack Abramoff. This is being done as part of an ongoing, broad-scale look at whether tax-exempt groups are misused for financial or political gain. I expect that Finance Committee will act as our findings warrant."
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