From "Handcuffing America's Charities." Summary of the Son of Istook Amendment Rep. Ernest Istook (R-OK) proposes to add to the lobby reform bill an amendment that is in many respects similar to the original Istook amendment, except that it uses the framework of the Simpson/Craig amendment passed by the Senate on the Continuing Resolution. Once again, there is no evidence of the need for the Istook amendment. The Inspectors General of several key federal agencies and the Office of Management and Budget have indicated that there is no pattern of nonprofit grantees using federal funds to lobby. Key elements of the amendment (based on version "ISTOOK.122" dated 11/15/95) include: 1. All grantees will be required to submit a new annual report no later than Dec. 31 of each year that provides information about the grant. For those grantees spending $25,000 or more per year on lobbying, they must also include a "good faith estimate" of how much was spent on lobbying. This information will be posted on the Internet and will be available through a free, expedited Freedom of Information Act (FOIA) process. This means that all grantees will be required to keep an extra set of books based on the definition of "lobbying" that follow. 2. Lobbying is defined very broadly. It includes all communications with legislative or executive branch employees at the local, state, or federal level that deal with attempts to influence legislation or any "program, policy, or position" of the government agency, including nominations or confirmations of individuals. There are specific exemptions, such as testimony or responding to notices in the Federal Register. The traditional exemption for nonpartisan analysis is not included as an exemption. This definition is considerably broader than the IRS definition of lobbying that applies to charities, especially with its inclusion of communications with the executive branch. It is way broader than the Simpson/Craig amendment which did not apply to communications directed to local or state governments, and limited which federal employees are considered covered when communicating with the executive branch. In some respects it is even broader than the original Istook amendment in that the scope of what is included is broader (e.g., influencing the policy of the government) with one key exception: the original Istook amendment included litigation involving the government, this one does not. 3. For grantees receiving more than $125,000 in grants, they will be prohibited from receiving federal grants if they lobby above a specified threshold. The threshold is based on the 501(h) rules from the tax code with one exception. There would be no cap: if "exempt purpose expenditures" exceed $17 million, then the entity's threshold is $1 million plus 1% of the excess. "Exempt purpose expenditures" means the total expenditures minus the amount of federal grants. The amendment states that the limitation on lobbying and the prohibition on federal grants does not apply to those who have elected 501(h) and lived under those rules for the full previous federal fiscal year. Our assumption, based on previous drafts, is that this is poor drafting and that the intent was to insure that charities have the $1 million cap on lobbying, while other entities, such as businesses, do not. (The Istook office was not available to answer our question on this point.) 4. 501(c)(4) social welfare organizations that lobby will be prohibited from receiving federal grants. The McIntosh Anti-Advocacy Amendments Rep. David McIntosh (R-IN) is prepared to offer three amendments to the lobby reform legislation being considered on November 28. These three amendments are in addition to an amendment that is expected to be offered by Rep. Ernest Istook (R-OK). Combined, these amendments far exceed the scope of any previous Istook/McIntosh/Erhlich amendment - and the combined impact would be devastating for charities throughout the country. The McIntosh amendments add enormous red tape at a time when the public is calling for less bureaucracy. They are targeted only to nonprofit organizations, despite the fact that nonprofit entities only account for 6% of all federal grant recipients. The other 94% include state and local governments, taxable organizations, and individuals. Amendment #1: "Private Citizen Enforcement Provision" This amendment creates a provision to allow bounty hunters to enforce any provision in the lobby reform law which addresses the receipt of federal grants. This is the same provision that was in the original Istook amendment, but now would apply more broadly to the other two McIntosh amendments described below and the proposed Istook amendment. Under the False Claims Act, any individual can sue a recipient of federal grants for up to ten years to allege non-compliance with the provisions in the lobby reform bill that deal with federal grants. Combined with the planned Istook amendment and the other two McIntosh amendments, this provision would have an enormously chilling impact on charities across the country. Amendment #2: "Anti-Money Laundering Provision" This provision amends the original Sen. Alan Simpson (R-WY) amendment to the lobby reform bill that prohibits all 501(c)(4) social welfare organizations that lobby from receiving federal funds. The McIntosh amendment would extend the prohibition to all "affiliated organizations." The definition of affiliate is the same wording as the Istook amendment that the Senate opposed. An affiliated organization is one where any one of the following condition are met: a) the governing instrument of one entity controls another; b) there is overlapping boards and these individuals have enough votes to cause or prevent action on advocacy by each organization; or c) the entities use the same name or trademark (or represent themselves as being affiliated), and they coordinate advocacy or lobbying activities. Amendment #3: "Disclosure of Receipt of Federal Funds" 1. This only applies to nonprofit recipients of federal funds - grants, loans, cooperative agreements, and other forms of federal assistance (probably inclusive of contracts) - not to for-profit entities. Nonprofit recipients of federal funds must include the following statement on all communications intended to promote public support or opposition to any policy of a Federal, State, or local government: "This was prepared and paid for by an organization that accepts taxpayer dollars." In addition, the nonprofit recipient must submit a new annual report disclosing to thegovernment information about: a) federal funds; b) expenditures dealing with political advocacy, attempts to influence legislation or administrative actions or decisions, payments to lobbyists, endorsements or coalitions that have lobbying as a purpose; c) campaign contributions, including in-kind contributions, through the entity or any affiliate, which is defined not only as giving to candidates and parties, but also efforts to support or oppose referenda, nominations, or reapportionment; d) the name and address of all registered lobbyists; and e) the most recent financial statement. This information will be publicly available. 2. Failure to comply will result in a civil penalty of $10,000 for first time offenders. Further failures will result in prohibition of federal funds for two years. 3. The definition of political advocacy is very broad. It covers such things as: executive and legislative branch communications at the local, state, and federal level; participating in, raising funds for, or providing monetary or in-kind contributions for any litigation except when the entity has standing to sue or intervene; contributions, dues, or "any other thing of value" to an entity that spends 5% or more of its money on advocacy; training or encouragement of advocacy; and joining, organizing, or assisting any entity (e.g., coalitions, organizations, cooperatives) which has "as one of its purposes" to engage in advocacy. This includes any action taken by any affiliate.