The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“POLITICAL ADVOCACY WITH TAXPAYER DOLLARS” mentioning the U.S. Dept. of Commerce was published in the Extensions of Remarks section on pages E1388-E1390 on June 30, 1995.
The publication is reproduced in full below:
POLITICAL ADVOCACY WITH TAXPAYER DOLLARS
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HON. ERNEST J. ISTOOK, JR.
of oklahoma
in the house of representatives
Friday, June 30, 1995
Mr. ISTOOK. Mr. Speaker, please include the following remarks in the Record regarding ``Political Advocacy with Taxpayer Dollars.''
Political Advocacy With Taxpayer Dollars Violates the Rights of All
Taxpayers
(Testimony of Representative Ernest J. Istook, Jr., June 29, 1995, before the House National Economic Growth, Natural Resources and
Regulatory Affairs Subcommittee)
It is time to end taxpayer funded political advocacy! Over 40,000 organizations receive over $39 billion in Federal grant funds directly. Preliminary examination of the problem makes it apparent that grant abuse is rampant and needs to be addressed with systemic reform. Systemic reform must not be targeted at any particular group nor any particular political philosophy but must allow the U.S. Congress to perform its fiduciary responsibility to the American taxpayer. That responsibility requires the Congress to track Federal Budget dollars to their usage point.
I feel strongly that these Federal dollars represent the hard work of many Americans who deserve the assurance that when they are compelled to pay taxes, that these tax dollars are being used appropriately. Using tax dollars for political advocacy not only violates the principles of free speech and free association. Just as the U.S. Supreme Court has ruled
(Abood v. Detroit Board of Education, 1977) that compulsory union dues cannot be used to fund political activity, so, too, compulsory taxes should not be used for this purpose. The legislation several of us are working on is but one step, though a major step, in stopping some of the fraud, waste and abuse that plagues the Federal Budget.
The various attempts at addressing taxpayer-funded political advocacy problem have proven to be inadequate. Were this not the case the problem would not continue to be a significant problem. The IRS Code restrictions on many of the non-profit organizations and the Byrd amendment in 1990 have all proven to be inadequate. Though it is technically illegal to use taxpayer funds for lobbying, schemes have been created to circumvent the law. These include automatically sending a certain percentage of grant money to cover overhead for the lobbying arm, and subgranting funds to other organizations, in which case the audit trail ends. Sometimes the laws that exist are so vague and unenforceable that they are not satisfactory. An example of this is the lobby registration and reporting requirement for Congress. Lobbying is not defined in the law, so lobbyists only report time and expenses for time on Capitol Hill, not time spent in the office studying the issues, making phone calls to prepare for visits, etc. The Byrd amendment never defined appropriated funds, so funds are no longer considered appropriated after they've been deposited into the organization's checking account.
The goal is not and never should be to restrict free speech. Instead, the goal is to avoid the use of tax dollars to subsidize the private speech of those who have political connections or who rely on taxpayers' money to advocate their political views.
Upon examination of this problem, I feel the following principles must be put into law regarding the usage of Federal funds by Federal grantees:
a. The term ``lobbying'' is too narrow to be useful for this purpose. The broader term ``political advocacy'' should be used and defined under the law. This definition would extend to Federal grantees engaging in political campaigns, lobbying the legislative or executive branch agencies from the Federal to the state and local level, and engaging in efforts to influence general and specific public policy through confirmations, referendums or judicial action.
b. No federal funds should be used for political advocacy.
c. No grant funds should be used to provide support to other organizations who, in turn, conduct political advocacy.
d. No organization that receives a federal grant should, in turn, grant those funds to others, except as provided in the authorizing law that created the organization (i.e. the Institute of Peace, the Corporation for Public Broadcasting, etc.) Such
grantees should be under the same obligation as if they received the Grant directly from the Federal government. Current law does not require this. This will not include state and local governments, but would include any private entity which receives federal grant funds, passed through to them by state or local governments. e. Any Federal grantee should be subject to an audit, at the government's request, and must prove ``by clear convincing evidence'' that any funds used for political advocacy did not come from Federal funds. Grantees are expected to use ``generally accepted accounting principles''
(GAAP) in keeping records. This provision will not require any unusual accounting methods, and will deter, in fact,
``creative'' or otherwise lax accounting.
f. The federal dollar should be followed to its point of use. This will insure Congress is able to insure each taxpayer dollar is appropriately used for its intended purpose.
g. Information about all of these grants should be available to the general public.
case study: the nature conservancy
We have already heard testimony today about the Nature Conservancy's use of Federal taxpayer dollars to crush local opposition to a nature sanctuary. This action, even if it were authorized by Congress, violates the rights of the citizens of that county in Florida. The Nature Conservancy, from what we know in this case, used at least $44,000 from the Department of Commerce to National Oceanic and Atmospheric Administration (NOAA), plus $75,000 (most likely Federal funds) from other organizations' subgrants.
In the Nature Conservancy's ``NOAA Performance Report for the Quarter Ending September 30, 1993,'' they discuss 21 items, 19 of which are clearly political advocacy under the definition I expect to outline in my proposed legislation. Items included preparing testimony for people to testify before Congress and ad campaigns. Please notice their item 17, which states that they spent money for this effort:
Developed and directed plan to counter opposition's push for a county-wide referendum against the establishment of the Sanctuary. Recruited local residents to speak out against referendum at two Board of County Commissioners hearings. Organized planning conference call with members of the Center for Marine Conservation, the Wilderness Society, and the Nature Conservancy to discuss plan. Plan was successful in blocking referendum (a 3-2 vote), and generated many positive articles and editorials using many of the messages discussed in plan.
They blocked a public vote on their plan. This is raw political activity. It does not deserve a subsidy from the voters who they sought to silence.
The issue is not which organization was bigger, more organized, etc. I would be just as disturbed with any other group Federal grant dollars and using those dollars to crush local opposition to their members' goals.
We have the right to freely associate with those who espouse principles that we endorse. The key word here is
``freely.'' When tax dollars are used for political advocacy, this is not, by
any definition, a free speech or free association.
first amendment protection
Some opponents have a general misconception that it is unconstitutional to prevent organizations, especially non-profit organizations, from engaging in political advocacy with taxpayer dollars. Nothing could be further from the truth. It is, in fact, unconstitutional to permit recipients of federal funds from engaging in political advocacy with those dollars. In the case of Rob Jones University v. United States, the Supreme Court noted that, ``When the Government grants exemptions or allows deductions, all taxpayers are affected; the very fact of the exemption or the deduction for the donor means that other taxpayers can be said to be indirect and vicarious `donors'.'' In 1977, the Supreme Court ruled in Abood v. Detroit Board of Education that it was unconstitutional to require teachers to contribute to a union where the dues were used to support ideological causes the teacher opposed. The court said that taxpayers should not be required, either directly or indirectly, ``to contribute to the support of an ideological cause [they] may oppose.'' Where recipient organizations receive both a tax exemption and government funding and then use government funds to engage in political advocacy, it is clear the government, and hence the taxpayers, are both supporting the political views advocated by the recipient organization. The Supreme Court noted several years ago in First National Bank of Boston v. Bellotti that where governmental action ``suggests an attempt to give one side of a debatable public question an advantage in expressing the views to the people, the First Amendment is painfully offended.''
Thus the right of free speech also includes the right not to speak. It includes the right not to support causes or ideologies with tax dollars. No taxpayers should be compelled to support ideological causes or political points of view with which the taxpayer disagrees. This is very important because taxes compulsory, not voluntary. Thus the federal government has a special duty to protect free speech and prevent, whenever possible, the infringement of the free speech of all taxpayers.
This position is clearly supported by the Supreme Court. On May 23, 1983, the United States Supreme Court unanimously upheld the right of the Federal government not to subsidize the lobbying activities of private, nonprofit, tax-exempt organizations. In the case of Regan v. Taxation with Representation of Washington, 51 U.S.L.W. 1588 (1983), Taxation with Representation of Washington (TWR), a nonprofit corporation organized to promote what it conceived to be the
``public interest'' in the area of federal taxation, applied for tax-exempt status under Section 501(c)3 of the Internal Revenue Code. The IRS denied the application because a substantial part of the organization's activities consisted of lobbying activity. TWR sued based on First amendment and equal protection under the fifth amendment. The court rejected TWR's contention that the government may not deny their application for tax-exempt status. The Supreme Court stated:
Both tax exemptions and tax-deductibility are a form of subsidy that is administered through the tax system. A tax exemption has much the same effect as a cash grant to the organization of the amount of tax it would have to pay on its income. . . . Congress has not infringed any First Amendment rights or regulated any First Amendment activity but has simply not chosen to subsidize TWR's lobbying out of public funds. . . . A legislature's decision not to subsidize the exercise of a fundamental right does not infringe on that right and thus is not
subject to strict scrutiny. It was not irrational for Congress to decide that tax-exempt organizations such as TWR should not further benefit at the expense of taxpayers at large by obtaining a further subsidy for lobbying. . .
. We have held in several contexts that a legislature's decision not to subsidize the exercise of a fundamental right does not infringe the right. . . . It is also not irrational for Congress to decide that, even though it will not subsidize substantial lobbying by charities generally, it will subsidize lobbying by veterans' organizations. . . . Congress is not required by the First Amendment to subsidize lobbying. . . . Congress--not TWR or this Court--has the authority to determine whether the advantage the public would receive from additional lobbying by charities is worth the money the public would pay to subsidize that lobbying, and other disadvantages that might accompany that lobbying.'' (Regan v. TWR) 461 U.S. 540 (1983)
There is no attempt in our proposed legislation to suppress or limit the First Amendment rights of recipient organizations. There is no ideological classification to apply this to some groups while exempting others. That would not be right. The same standards must apply to all organizations, regardless of their place on the political spectrum. Potential federal grantees would remain free to engage or not to engage in political advocacy as they see fit. I repeat, potential federal grantees would remain free to engage or not to engage in political advocacy as they see fit. They are simply prevented from receiving a tax-paid subsidy for their political advocacy.
Our legislation also should not be compared to the anti-lobbying bill in the 103rd Congress. There is no attempt in this bill to curb or restrict grass-roots lobbying organizations. Nor is there a focus on lobbying as a whole. The touchstone, the trigger for this act, and its provisions, would specifically apply to federal grantees engaging in political advocacy, directly or indirectly, with those funds, thus violating the free association rights of U.S. taxpayers.
LIMITED PUBLIC ADVOCACY
To be sure, many individuals, organizations and businesses in this country spend some of their funds on political advocacy. This is a normal activity and should not be suppressed. After all, we live in a civil society that depends upon democratic participation in the political process. Thus, the fact that an entity engages in political advocacy should not automatically bar the receipt of federal grant money. However, government oversteps the bounds of neutrality when it begins to award grants to selected entities that have as one primary purpose the conduct of political advocacy.
The First amendment guarantees the right to petition the government for a redress of grievances. But it does not require the government to pay you for it. After careful review, I have found that a reasonable threshold is when organizations spend 5% or more of their annual expenditures to conduct political advocacy. This provision is similar to the IRS 501(h) safe-harbor provisions of the IRS Code for non-profit organizations. This code provision prohibits a wide variety of political activity over $1,000,000 in expenditures. While the 5% threshold is seemingly small, such a percentage is, in fact, quite significant: First, in this modern information age, with cheap and high-speed means of communication, a little money can go a long way; and second, because of the fungibility of cash, each federal dollar received by a grantee frees up more private dollars for political advocacy, thereby leading to a growing amount of indirect government support for political advocacy.
CONCLUSION
Provisions of the legislation we are proposing is designed to protect the First amendment rights of all Americans and, at the same time, fulfill the trust that voters in this Nation have given members of Congress. As the Supreme Court has stated, ``Congress is not required by the First Amendment to subsidize lobbying. . . . Congress--not TWR or this Court--has the authority to determine whether the advantage the public would receive from additional lobbying by charities is worth the money the public would pay to subsidize that lobbying, and other disadvantages that might accompany that lobbying.'' (Regan v. TWR) Congress is charged with insuring taxpayer funds are spent properly, for the public good. The legislation we are crafting has been carefully designed to keep the compliance burden as low as possible, while insuring that the rights of all Americans are protected.
I invite public comment on the ideas presented in my testimony and regarding our proposed legislation.
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