On Aug. 31 the National Association for the Advancement of Colored People (NAACP) announced that, after an investigation lasting nearly two years, the Internal Revenue Service (IRS) found the group did not violate the ban on partisan electioneering in 2004. The group will thus retain its tax-exempt status. The case raised questions about the right of charities and religious organizations to criticize elected officials' policies, the role of partisan politics in IRS investigations, and the legality of the new IRS enforcement program.

A Sept. 8 Senate Finance Committee hearing demonstrated that a 1993 tax code reform has failed to curb the growth of extravagant CEO compensation packages. In fact, the reform created loopholes that have opened the door for outrageous salaries and bonuses, and unscrupulous behavior by company executives and boards of directors. Senate Finance Committee Chairman Chuck Grassley (R-IA) vehemently denounced the loopholes in the tax code created by the 1993 reforms.

After a month of secret holds, back-room maneuvering, stall tactics and butting of heads, the Senate quietly passed the Federal Funding Accountability and Transparency Act (S. 2590) on Thursday, Sept. 7 by unanimous consent. The bill will dramatically increase government accountability and public access to federal spending data, by creating a free, public, searchable website of all federal spending, including government contracts and grants. The House is expected to amend the bill slightly before passing it this week.

On Sept. 1, the Department of Homeland Security (DHS) issued a final rule for procedures for handling information about critical infrastructure. The rule amends the interim rule issued in February 2004, for which OMB Watch submitted comments. Unfortunately, DHS ignored OMB Watch's suggested modifications, and the final rule opens the door to misuse by the private sector, allowing companies to restrict public access to information that is vital to protecting public health and safety.