[House Hearing, 107 Congress]
[From the U.S. Government Printing Office]





                    REVIEW OF INTERNAL REVENUE CODE

                   SECTION 501(c)(3) REQUIREMENTS FOR

                        RELIGIOUS ORGANIZATIONS

=======================================================================

                                HEARING

                               before the

                       SUBCOMMITTEE ON OVERSIGHT

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 14, 2002

                               __________

                           Serial No. 107-69

                               __________

         Printed for the use of the Committee on Ways and Means

80-331              U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2002
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                      COMMITTEE ON WAYS AND MEANS

                   BILL THOMAS, California, Chairman

PHILIP M. CRANE, Illinois            CHARLES B. RANGEL, New York
E. CLAY SHAW, Jr., Florida           FORTNEY PETE STARK, California
NANCY L. JOHNSON, Connecticut        ROBERT T. MATSUI, California
AMO HOUGHTON, New York               WILLIAM J. COYNE, Pennsylvania
WALLY HERGER, California             SANDER M. LEVIN, Michigan
JIM McCRERY, Louisiana               BENJAMIN L. CARDIN, Maryland
DAVE CAMP, Michigan                  JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota               GERALD D. KLECZKA, Wisconsin
JIM NUSSLE, Iowa                     JOHN LEWIS, Georgia
SAM JOHNSON, Texas                   RICHARD E. NEAL, Massachusetts
JENNIFER DUNN, Washington            MICHAEL R. McNULTY, New York
MAC COLLINS, Georgia                 WILLIAM J. JEFFERSON, Louisiana
ROB PORTMAN, Ohio                    JOHN S. TANNER, Tennessee
PHIL ENGLISH, Pennsylvania           XAVIER BECERRA, California
WES WATKINS, Oklahoma                KAREN L. THURMAN, Florida
J.D. HAYWORTH, Arizona               LLOYD DOGGETT, Texas
JERRY WELLER, Illinois               EARL POMEROY, North Dakota
KENNY C. HULSHOF, Missouri
SCOTT McINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin

                     Allison Giles, Chief of Staff

                  Janice Mays, Minority Chief Counsel

                                 ______

                       Subcommittee on Oversight

                    AMO HOUGHTON, New York, Chairman

ROB PORTMAN, Ohio                    WILLIAM J. COYNE, Pennsylvania
JERRY WELLER, Illinois               MICHAEL R. McNULTY, New York
KENNY C. HULSHOF, Missouri           JOHN LEWIS, Georgia
SCOTT McINNIS, Colorado              KAREN L. THURMAN, Florida
MARK FOLEY, Florida                  EARL POMEROY, North Dakota
SAM JOHNSON, Texas
JENNIFER DUNN, Washington

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Ways and Means are also published 
in electronic form. The printed hearing record remains the official 
version. Because electronic submissions are used to prepare both 
printed and electronic versions of the hearing record, the process of 
converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.


                            C O N T E N T S

                               __________
                                                                   Page
Advisory of May 7, 2002, announcing the hearing..................     2

                               WITNESSES

Internal Revenue Service, Steven T. Miller, Director, Exempt 
  Organizations..................................................     6

                                 ______

Americans United for Separation of Church and State, Reverend 
  Barry W. Lynn..................................................    47
American Center for Law & Justice, Colby M. May..................    23
Coral Ridge Ministries, D. James Kennedy.........................    53
Hopkins, Bruce R., Polsinelli, Shalton & Welte...................    12
Interfaith Alliance, Reverend C. Welton Gaddy....................    38
National Council of Churches of Christ in the USA, Brenda Girton-
  Mitchell.......................................................    56
New Bethel Baptist Church, Hon. Reverend Walter E. Fauntroy......    43

                       SUBMISSIONS FOR THE RECORD

Alliance for Justice, Nan Aron, letter...........................    85
American Jewish Committee, statement.............................    86
American Jewish Congress, statement..............................    86
Anti-Defamation League, New York, NY, statement..................    92
Baptist Joint Committee, J. Brent Walker, and K. Hollyn Hollman, 
  letter and attachment..........................................    93
Bopp, James, Jr., Bopp, Coleson & Bostrom, Terre Haute, IN, 
  statement......................................................    94
Edwards, Hon. Chet, a Representative in Congress from the State 
  of Texas, statement............................................   100
Islamic Supreme Council of America, statement....................   101
Jones, Hon. Walter B., a Representative in Congress from the 
  State of North Carolina, statement.............................   102
Maryland Bible Society, Reverend Raymond T. Moreland, letter.....   103
National Council of Nonprofit Associations, Audrey R. Alvarado, 
  letter.........................................................   103
OMB Watch, Kay Guinance, statement...............................   104
People for the American Way, Ralph G. Neas, and Stephenie Foster, 
  letter.........................................................   106
Religious Freedom Coalition, William J. Murray, statement........   106
Rutkowski, Robert E., Topeka, KS, letter.........................   107
Soka Gakkai International-USA Buddhist Association, Bill Aiken, 
  letter.........................................................   109
Union of Orthodox Jewish Congregations of America, Harvey Blitz, 
  Richard B. Stone, Rabbi T. Hersh Weinreb, and Nathan J. 
  Diament, letter................................................   109
Wood, William, Charlotte, NC, statement..........................   110
Aiken, Bill, Soka Gakkai International-USA Buddhist Association, 
  letter.........................................................   109
Alvarado, Audrey R., National Council of Nonprofit Associations, 
  letter.........................................................   103
Aron, Nan, Alliance for Justice, letter..........................    85
Blitz, Harvey, Union of Orthodox Jewish Congregations of America, 
  letter.........................................................   109
Diament, Nathan J., Union of Orthodox Jewish Congregations of 
  America, letter................................................   109
Foster, Stephenie, People for the American Way, letter...........   106
Guinance, Kay, OMB Watch, statement..............................   104
Hollman, K. Hollyn, Baptist Joint Committee, letter and 
  attachment.....................................................    93
Murray, William J., Religious Freedom Coalition, statement.......   106
Neas, Ralph G., People for the American Way, letter..............   106
Stone, Richard B., Union of Orthodox Jewish Congregations of 
  America, letter................................................   109
Walker, J. Brent, Baptist Joint Committee, letter and attachment.    93
Weinreb, Rabbi T. Hersh, Union of Orthodox Jewish Congregations 
  of America, letter.............................................   109

 
  REVIEW OF INTERNAL REVENUE CODE SECTION 501(c)(3) REQUIREMENTS FOR 
                        RELIGIOUS ORGANIZATIONS

                              ----------                              


                         TUESDAY, MAY 14, 2002

                  House of Representatives,
                       Committee on Ways and Means,
                                 Subcommittee on Oversight,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:00 p.m., in 
room 1100 Longworth House Office Building, Hon. Amo Houghton 
(Chairman of the Subcommittee) presiding.
    [The advisory announcing the hearing follows:]

ADVISORY FROM THE COMMITTEE ON WAYS AND MEANS

                       SUBCOMMITTEE ON OVERSIGHT

                                                Contact: (202) 225-7601
FOR IMMEDIATE RELEASE
May 7, 2002
No. OV-12

                Houghton Announces Hearing on the Review
               of Internal Revenue Code Section 501(c)(3)
                Requirements for Religious Organizations

    Congressman Amo Houghton (R-NY), Chairman, Subcommittee on 
Oversight of the Committee on Ways and Means, today announced that the 
Subcommittee will hold a hearing to review Internal Revenue Code 
(I.R.C.) Section 501(c)(3) requirements for religious organizations. 
The hearing will take place on Tuesday, May 14, 2002, in room 1100 
Longworth House Office Building, beginning at 2:00 p.m.
      
    In view of the limited time to hear witnesses, oral testimony at 
this hearing will be from invited witnesses only. However, any 
individual or organization not scheduled for an oral appearance may 
submit a written statement for consideration by the Subcommittee and 
for inclusion in the printed record of the hearing.
      

BACKGROUND:

      
    I.R.C. Sec. 501(c)(3) organizations--such as religious, charitable, 
educational, scientific, and literary organizations--enjoy certain 
benefits because of their tax-exempt status:
      
   Being exempt from Federal income taxation under I.R.C. 
    Sec. 501(a), and
   Allowing contributors to take tax deductions under I.R.C. 
    Sec. 170(a) for charitable contributions.
      
    However, Sec. 501(c)(3) organizations also have certain 
restrictions and limitations imposed on their allowable activities, 
including lobbying and political activity.
      
    All Sec. 501(c)(3) organizations may attempt to influence 
legislation as long as it does not constitute a ``substantial part'' of 
the organizations' overall activities. In addition, Sec. 501(c)(3) 
organizations can elect to use an alternative I.R.C. Sec. 501(h) safe-
harbor ``expenditure test,'' in which the I.R.C. outlines specific 
expenditure limits in I.R.C. Sec. 4911 that may be spent on lobbying 
activities. However, churches, along with church-related organizations 
outlined in I.R.C. Sec. 501(h)(5), were excluded from this 
``expenditure test'' election at their own request.
      
    All Sec. 501(c)(3) organizations must not ``participate in, or 
intervene in (including the publishing or distributing of statements), 
any political campaign on behalf of (or in opposition to) any candidate 
for public office.'' Violation of this political activity prohibition, 
which has been in existence since 1954, can result in the organization 
losing its tax-exempt status and the imposition of certain excise 
taxes.
      
    The Internal Revenue Service (IRS) has revoked one Sec. 501(c)(3) 
church's tax-exempt status for violation of this political activity 
prohibition. In 1992, the Church at Pierce Creek purchased a full-page 
advertisement in two newspapers that attacked the views of then-
Governor Bill Clinton. The bottom of the advertisement stated that 
``[t]ax-deductible donations for this advertisement gladly accepted.'' 
The IRS found that the newspaper advertisement was prohibited 
intervention in a political campaign.
      
    In announcing the hearing, Chairman Houghton stated, ``This is a 
very complex issue, and I look forward to a careful review of this 
section of the tax code.''
      

FOCUS OF THE HEARING:

      
    The focus of the hearing is to review the history of and current 
requirements for I.R.C. Sec. 501(c)(3) organizations. In addition, the 
Subcommittee will hear testimony on two bills, H.R. 2357, the Houses of 
Worship Political Speech Protection Act, and H.R. 2931, the Bright-Line 
Act of 2001, that are intended to revise current tax law for religious 
organizations so as to then permit certain activities that presently 
are prohibited (political campaigns) and limited (lobbying) by I.R.C. 
Sec. 501(c)(3) organizations.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Due to the change in House mail policy, any person or 
organization wishing to submit a written statement for the printed 
record of the hearing should send it electronically to 
[email protected], along with a fax copy to 
(202) 225-2610, by the close of business, Tuesday, May 28, 2002. Those 
filing written statements who wish to have their statements distributed 
to the press and interested public at the hearing should deliver their 
200 copies to the Subcommittee on Oversight in room 1136 Longworth 
House Office Building, in an open and searchable package 48 hours 
before the hearing. The U.S. Capitol Police will refuse sealed-packaged 
deliveries to all House Office Buildings.
      

FORMATTING REQUIREMENTS:

      
    Each statement presented for printing to the Committee by a 
witness, any written statement or exhibit submitted for the printed 
record or any written comments in response to a request for written 
comments must conform to the guidelines listed below. Any statement or 
exhibit not in compliance with these guidelines will not be printed, 
but will be maintained in the Committee files for review and use by the 
Committee.
      
    1. Due to the change in House mail policy, all statements and any 
accompanying exhibits for printing must be submitted electronically to 
[email protected], along with a fax copy to 
(202) 225-2610, in Word Perfect or MS Word format and MUST NOT exceed a 
total of 10 pages including attachments. Witnesses are advised that the 
Committee will rely on electronic submissions for printing the official 
hearing record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.
      
    3. Any statements must include a list of all clients, persons, or 
organizations on whose behalf the witness appears. A supplemental sheet 
must accompany each statement listing the name, company, address, 
telephone and fax numbers of each witness.
      
    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://waysandmeans.house.gov/.

    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call (202) 225-1721 or (202) 226-3411 TTD/TTY in advance of the event 
(four business days notice is requested). Questions with regard to 
special accommodation needs in general (including availability of 
Committee materials in alternative formats) may be directed to the 
Committee as noted above.

                               

    Chairman HOUGHTON. Good afternoon, ladies and gentlemen. We 
are delighted you are here. This ought to be a very interesting 
session.
    I would like to make a few remarks, and I would like to 
suggest that Mr. Coyne make remarks if he wants to. Anybody 
else who would like to say something to begin the session, 
fine; and then we will turn it over to Mr. Miller and Mr. 
Hopkins.
    So we are here today, as most of you know, to talk about an 
important issue, which is the proper role of religious groups 
in politics and lobbying. section 501(c)(3) of the Tax Code 
establishes requirements for charities, such as the United Way, 
museums, nonprofit hospitals, animal shelters, as well as 
churches, mosques, synagogues, and other religious groups. 
These groups are tax exempt. Donors who make contributions to 
these worthwhile organizations receive the benefit of having 
the contribution tax deductible.
    Two Members of Congress, my good friend, Mr. Philip Crane, 
a Member of the Committee on Ways and Means, and Representative 
Walter Jones have introduced legislation to change the Tax 
Code. It would allow churches to engage in greater activity 
than is now currently permitted.
    We will hear from the Internal Revenue Service (IRS) and 
one of the leading experts of tax-exempt organizations in a 
minute on what the law now requires and how it is enforced. 
Then we are going to hear from interested parties who represent 
a variety of different backgrounds and points of view on this 
issue.
    The key issue at the moment is the right balance, and how 
does that balance measure with the Constitution. In other 
words, what activity should be permitted through one's place of 
worship.
    I also look forward to what I am sure will be an important 
and enlightening discussion from the Members of the panel.
    So I am pleased now to yield to my great friend and Ranking 
Democrat, Mr. Coyne.
    [The opening statement of Chairman Houghton follows:]
    Opening Statement of the Hon. Amo Houghton, a Representative in 
  Congress from the State of New York, and Chairman, Subcommittee on 
                               Oversight
    Good afternoon. We are here today to talk about an important 
issue--what is the proper role of religious groups in politics and 
lobbying. Section 501(c)(3) of the tax code establishes requirements 
for charities such as the United Way, museums, non-profit hospitals, 
animal shelters, as well as churches, mosques, synagogues, and other 
religious groups. These groups are tax-exempt. Donors who make 
contributions to these worthwhile organizations receive the benefit of 
having the contribution tax-deductible.
    Two Members of Congress, my good friend Rep. Phil Crane, a Member 
of the Ways and Means Committee, and Rep. Walter Jones, have introduced 
legislation to change the tax code. It would allow churches to engage 
in greater activity than is currently allowed.
    We will hear from the IRS and one of leading experts in exempt 
organizations on what the law now requires and how it is enforced. 
Then, we will hear from interested parties who represent a variety of 
different backgrounds and points of view on the issue.
    The key issue is the right balance--and how does that balance 
measure with the Constitution. In other words, what activities should 
be permitted through one's place of worship? I look forward to what I 
am sure will be an important and enlightening discussion.

                               

    Mr. COYNE. Thank you, Mr. Chairman, and welcome.
    Today's hearing will provide a hearing record on the 
current law as it applies to political and lobbying activities 
by churches and charities. Specifically, we would review 
legislation that would change the current tax law in this 
particular area.
    Two versions of this legislation have been proposed in this 
current Congress. The Tax Code prohibits section 501(c)(3) 
organizations from engaging in any political campaign 
activities. The law also limits the amount of lobbying 
activities that these organizations can conduct. These tax 
rules have been in place for 25 years and have been 
substantially modified during this time.
    I look forward to the witnesses' statements about the 
public interest served in restricting the activities of 
organizations receiving charitable donations as well as the 
concerns of churches about this policy.
    The Oversight Subcommittee has a long tradition of 
reviewing tax-exempt issues and organizations and their issues. 
As we evaluate the issues before us this afternoon, I look 
forward to continued bipartisanship in this particular area.
    Thank you, Mr. Chairman.
    [The opening statement of Mr. Coyne follows:]
  Opening Statement of the Hon. William J. Coyne, a Representative in 
                Congress from the State of Pennsylvania
    Today's hearing will provide a hearing record on the current law 
rules applicable to political and lobbying activities by churches and 
charities. Specifically, we will review legislation to change the 
current tax law rules for churches, as proposed by Congressman Walter 
Jones and Congressman Crane.
    The tax code prohibits section 501(c)(3) organizations from 
engaging in any political campaign activities. The law also limits the 
amount of lobbying activities these organizations can conduct. These 
tax rules have been in place for over twenty five years and have been 
substantially modified during this time. I look forward to the 
witnesses' statements about the public policy served in restricting the 
activities of organizations receiving charitable donations, as well as 
the concerns of churches in speaking freely from the pulpit.
    The Oversight Subcommittee has a long tradition of reviewing the 
tax-exempt organization issues. As we evaluate the issues before us 
this afternoon, I look forward to continued bipartisanship in this 
area. Thank you.

                               

    Chairman HOUGHTON. All right. I, too, Mr. Coyne. Thank you 
very much. Mr. Crane, would you like to make a statement?
    Mr. CRANE. I simply want to express my appreciation to you, 
Mr. Chairman, for permitting me, not a Member of this 
Subcommittee, to be here and to participate in this very 
important hearing.
    I have introduced legislation on this subject going back 
several years, and it is something that we continue to push 
toward answering some of the questions, but this kind of a 
hearing is vitally important in doing that. So I just want to 
congratulate you for what you have done, and I look forward to 
today's hearing.
    Chairman HOUGHTON. Thanks very much.
    Mr. Weller, do you have a comment? No. Mr. Lewis?
    Mr. LEWIS. Thank you, Mr. Chairman. I just want to thank 
you for holding this hearing. I look forward to hearing from 
the witnesses.
    Chairman HOUGHTON. Thanks, Mr. Lewis. Ms. Dunn, would you 
like to make an opening statement? All right, gentlemen, you 
are on.
    Mr. Miller, will you lead off?

STATEMENT OF STEVEN T. MILLER, DIRECTOR, EXEMPT ORGANIZATIONS, 
                    INTERNAL REVENUE SERVICE

    Mr. MILLER. Thank you, Mr. Chairman.
    In the time available, I will concentrate on the 
requirements for tax exemption as the rules apply to churches. 
I will also touch on our experience in administering this area.
    I request that my written testimony be made a part of the 
record of this hearing.
    Section 501(c)(3) of the Internal Revenue Code provides for 
tax exemption of certain organizations. It does not 
specifically mention churches. However, they qualify as 
entities organized and operated for religious purposes. While 
there are special rules applicable to churches under the 
Internal Revenue Code, the lobbying and campaign intervention 
rules apply not only to churches but to all section 501(c)(3) 
organizations.
    Let me spend a moment on lobbying restrictions. No 
substantial part of a section 501(c)(3) organization's 
activities can be carrying on propaganda or otherwise 
attempting to influence legislation. Lobbying includes direct 
communications to Members of legislatures, as well as indirect 
communications that are made through the general public.
    Section 501(c)(3) restricts lobbying. It does not prohibit 
it. Churches are subject to the restriction although, unlike 
other section 501(c)(3) organizations, they are not eligible to 
file the election under section 501 (h). Section 501 (h) allows 
an organization to have its lobbying activity measured by 
expenditures.
    Since some lobbying is acceptable under the law, it is fair 
to say that the IRS has not often identified situations in 
which information shows or even suggests that a church is 
engaged in sufficient lobbying to justify revocation of its 
status.
    Let me move to the prohibition on political activity. 
Section 501(c)(3) does not prohibit all activity that might be 
described as political within the common meaning of that term. 
Rather, it prohibits an exempt organization from directly or 
indirectly participating in or intervening in any political 
campaign on behalf of or in opposition to any candidate for 
public office.
    On the other hand, unlike lobbying, when the section 
501(c)(3) limit on political campaign intervention applies, it 
is absolute. Like any other section 501(c)(3) organization, a 
church not only jeopardizes its tax-exempt status for 
participating in a political campaign, it also becomes subject 
to excise tax under section 4955 on its political expenditures. 
This excise tax may be imposed in addition to or in lieu of 
revocation.
    I would like to touch on one rule applicable only to 
churches. Under section 7611, the IRS is required to follow 
special procedures, both before and during the audit of an 
organization claiming to be a church.
    First and foremost, the IRS may begin a church tax inquiry, 
the initial step of the church audit, only when a high-level 
official has a reasonable belief that the church may not be tax 
exempt or may have other certain liabilities under the Code. 
There are various other protections under section 7611 that are 
outlined in my written testimony.
    Let me take a moment to highlight our outreach efforts in 
this area, because we take the approach that the most efficient 
means of assuring compliance is to educate the taxpayer.
    We have made the church community aware of the tax law 
rules. We have disseminated to the church community and to the 
public a publication containing a discussion of the rules in 
this area. This publication has been widely available and 
widely discussed since it was issued in July 1994. We also 
remind churches and all other section 501(c)(3) organizations 
each election cycle of their responsibilities in this area 
through news releases. Finally, we share information with 
leaders of the church community and persons who provide tax 
advice to churches through various outreach opportunities.
    In the coming weeks, we will release a revised version of 
the above-referenced publication entitled Tax Guide for 
Churches and Other Religious Organizations. We will have an 
expanded discussion of the prohibition on political campaign 
activity. We are also considering what other guidance may be 
necessary in the area.
    Moving on to a discussion of our experience in 
Administration, I would first note that we fully recognize the 
sensitive nature of the area. Our primary purpose here is to 
influence individuals and organizations to voluntarily comply 
with the law. We try to enhance voluntary compliance in as 
unobtrusive a manner as possible, recognizing that the less 
entanglement between the religious community and the Internal 
Revenue Service the better. Such an approach is in the best 
interest of both parties and is in keeping with the competing 
constitutional interests in this area.
    Our experience in this area indicates that the issue of 
political intervention occurs infrequently in our examination 
program and does not often justify the revocation of a church's 
tax-exempt status.
    From time to time, we find well-meaning individuals who act 
out of faith but not in conformance with the law. When we come 
upon this situation, we normally prefer to pursue the excise 
tax, if available, and correction rather than revocation. 
Correction means that the organization attempts, to the extent 
possible, to undo the error and creates and adheres to 
procedural safeguards to prevent the recurrence.
    However, in rare and appropriate circumstances, the IRS has 
and will revoke the exempt status of a church or other 
organization for political activities. This is a challenging 
area for us to administer, made even more so because of issues 
specific to churches.
    The Joint Committee on Taxation staff has commented upon 
the church tax procedures under section 7611 by stating that, 
while they provide important safeguards to the church 
community, they may result in unintended consequences. For 
example, in the church area we are most often left to use 
third-party referrals of information about potential 
noncompliance. In addition, there is a lack of information 
available to the IRS and the public in this area. Churches do 
not need to apply for a determination letter from the Internal 
Revenue Service, and they don't have to file annual reports 
either.
    Other issues in administering the political campaign 
intervention prohibition exist not just for churches but for 
all section 501(c)(3) organizations. These include determining 
whether the action of an individual may be attributed to the 
organization and whether a given pronouncement constitutes 
prohibited political campaign intervention.
    Finally, the section 4955 excise tax on political 
activities available to us in lieu of revocation may not be 
effective in certain circumstances. That is because the tax is 
based on expenditures, and certain political activities are not 
readily measurable in that context.
    Mr. CRANE. Mr. Chairman, could Mr. Miller use that mike to 
the right of him? Obviously, that one he has is not functioning 
properly.
    Chairman HOUGHTON. It cuts in and out. Yes. Try that. Yes.
    Mr. MILLER. All right.
    Mr. CRANE. Thank you.
    Mr. MILLER. A little better. Although timing is everything, 
I would just want to----
    Chairman HOUGHTON. You take as much time as you want now.
    Mr. MILLER. As I said, for the most part, churches are 
faced with the same requirements for exemption as other section 
501(c)(3) organizations, including the prohibition on campaign 
intervention. They are, however, afforded additional 
protections under section 7611 and have fewer public reporting 
requirements. It is a challenging area for us to administer.
    Thank you, and I am available for comments.
    [The prepared statement of Mr. Miller follows:]

   STATEMENT OF STEVEN T. MILLER, DIRECTOR, EXEMPTION ORGANIZATIONS, 
                        INTERNAL REVENUE SERVICE

    Thank you Mr. Chairman, for the opportunity to provide this 
Subcommittee with general background on the requirements for tax 
exemption, particularly as they relate to the prohibition on political 
activities. I will also discuss how these rules apply to churches, the 
Internal Revenue Service's experience with these issues, and the 
numerous challenges we confront in administering this law.
General Requirements for Tax Exemption

    Section 501(c)(3) of the Internal Revenue Code provides for the 
exemption from federal income taxation of organizations organized and 
operated exclusively for religious, charitable, scientific, 
educational, and certain other purposes. Section 501(c)(3) imposes a 
number of conditions to exempt status:

           No part of the organization's net earnings may 
        inure to the benefit of any private shareholder or individual.
           No substantial part of the organization's 
        activities may be attempts to influence legislation (lobbying 
        restriction).
           The organization may not intervene in any political 
        campaign on behalf of or in opposition to any candidate for 
        public office (political campaign prohibition).

    Section 501(c)(3) does not specifically mention churches. They 
qualify as entities organized and operated for religious purposes. 
Thus, the above-referenced conditions apply to churches as well as all 
other section 501(c)(3) entities. In addition, there are rules 
specifically applicable to churches that I will outline in my 
testimony.
Restriction on lobbying

    One condition of exemption under section 501(c)(3) is that no 
substantial part of an organization's activities can be carrying on 
propaganda, or otherwise attempting to influence legislation (commonly 
known as lobbying). Lobbying includes direct communications to members 
of a legislature, indirect communications through the electorate or 
general public (``grass roots'' lobbying), and advocating adoption or 
rejection of legislation on an issue, even if specific legislation is 
not pending. Whether a communication on an issue constitutes lobbying 
depends on the facts and circumstances of the communication.
    Section 501(c)(3) restricts lobbying; it does not prohibit it. 
Churches are subject to the restriction, but unlike other section 
501(c)(3) organizations, are not eligible to file the election provided 
under section 501(h) of the Code to have lobbying measured by 
expenditures. Although the ``no substantial part'' test is less 
precise--courts have generally rejected using a percentage test as the 
sole test of whether the activity is a substantial part of an 
organization's activities--it is fair to say that the IRS has not 
identified situations in which we received information showing, or even 
suggesting, that a church was engaged in lobbying as a substantial part 
of its activities.

Prohibition on Political Campaign Intervention

    Section 501(c)(3) does not prohibit all activity that might be 
described as ``political'' within the common meaning of that term. 
Rather, it prohibits an organization seeking to be exempt from directly 
or indirectlyparticipating in, or intervening in, any political 
campaign on behalf of (or in opposition to) any candidate for elective 
public office. Contributions to political campaign funds or public 
statements of position (verbal or written) made by or on behalf of the 
organization in favor of or in opposition to any candidate for public 
office violate the prohibition against political campaign intervention.
    The section 501(c)(3) limit on political campaign intervention is 
absolute. Violation of this prohibition may result in denial or 
revocation of tax-exempt status and the imposition of certain excise 
taxes.
    Section 1.501(c)(3)-1(c)(3)(iii) of the Income Tax Regulations 
refines the prohibition on campaign intervention by defining 
``candidate for public office'' as an ``individual who offers himself 
or herself, or is proposed by others, as a contestant for elective 
public office''. The regulation also provides that prohibited political 
campaign intervention includes, but is not limited to, publishing or 
distributing written or printed statements or making oral statements on 
behalf of or in opposition to such a candidate. Since a candidate must 
be a contestant for elective public office, section 501(c)(3) only 
prohibits organizations from participating or intervening in election 
campaigns.
    It has been argued that the prohibition on campaign intervention 
does not apply to churches. Courts have considered and rejected this 
argument. In Branch Ministries, Inc. v. Rossotti, 211 F.3d 137 (D.C. 
Cir. 2000), aff'g 40 F. Supp. 15 (D.D.C. 1999), the Court of Appeals 
upheld the IRS's revocation of the section 501(c)(3) exempt status of 
the Church at Pierce Creek. The District Court had granted summary 
judgment to the IRS on its claim the organization violated the 
statutory prohibition on political campaign intervention when it placed 
full-page advertisements in two newspapers. The content of the 
advertisement was in opposition to a candidate. The Court of Appeals 
rejected the church's claims that the revocation violated the church's 
right to free exercise of religion under the Constitution and the 
Religious Freedom Restoration Act, and that it was the victim of 
selective prosecution.

Rules Relating to Specific Issues in the Area of Political Intervention 
        in Campaigns

    Certain activities or expenditures may or may not constitute 
campaign intervention. For example, certain voter education activities 
(including the presentation of public forums and the publication of 
voter education guides) conducted in a non-partisan manner do not 
constitute prohibited political campaign activity. On the other hand, 
voter education activities that show a bias for one candidate over 
another will constitute prohibited political campaign intervention. Two 
examples are described below to better explain the rules in this area 
and our administration.
Voter guides

    Like other section 501(c)(3) organizations, some churches undertake 
voter education activities by publishing voter guides. Voter guides, in 
general, provide information on how candidates stand on various issues. 
These guides may be distributed with the stated purpose of educating 
voters. A careful review of the following may help determine whether or 
not a church's publication or distribution of voter guides constitutes 
prohibited political campaign activity:

           Whether the guide provides information with respect 
        to all candidates for an office;
           Whether the guide contains editorial opinion or 
        remarks, or otherwise indicates approval or disapproval of 
        candidate or their records;
           Whether the guide is disseminated in close 
        proximity to an election;
           Whether the guide covers a wide variety of issues; 
        and
           For a candidate questionnaire, whether the 
        organization asks the same neutral questions of all candidates, 
        or indicates a bias toward the organization's preferred 
        responses, whether the guide is based on responses to a 
        questionnaire sent to all candidates, and whether the guide is 
        made generally available to the public.

``Get out the vote'' activities

    Questions are raised about the use of church assets or funds in 
``get out the vote'' activities. In this regard, whether these 
activities violate the campaign prohibition depends on whether a 
church's activities favor or oppose a candidate for public office. 
Thus, the church's financial resources, facilities, or personnel may 
not be used in get out the vote activities that favor one candidate 
over another (as by only helping individuals get to the polls if they 
favor a particular candidate). Of course, this does not mean that 
church members may not conduct these activities independent of the 
church.
Consequences of Political Campaign Intervention

    Like any other section 501(c)(3) organization, a church not only 
jeopardizes its tax exempt status under section 501(c)(3) for 
participating in political campaign activities, it also becomes subject 
to an excise tax under section 4955 on its political expenditures. This 
excise tax may be imposed in addition to revocation, although in 
certain situations it may be imposed instead of revocation. Also, the 
church or religious organization must correct the violation to avoid 
the second-tier tax under section 4955.
    Section 4955 imposes an initial tax on an organization at the rate 
of 10 percent of the political expenditures. It also imposes an initial 
tax at the rate of 2.5 percent of the expenditures on any of the 
organization's managers (jointly and severally) who, without reasonable 
cause, agreed to the expenditures knowing they were political 
expenditures. The initial tax on management may not exceed $5,000. In 
any case in which an initial tax is imposed against an organization, 
and the expenditures are not corrected within the period allowed by 
law, an additional tax equal to 100 percent of the expenditures is 
imposed against the organization. In that case, an additional tax is 
also imposed against any of the organization's managers (jointly and 
severally) who refused to agree to make the correction. The additional 
tax on management is equal to 50 percent of the expenditures and may 
not exceed $10,000 with respect to any one expenditure. Correction of a 
political expenditure requires the recovery of the expenditure, to the 
extent possible, and establishment of safeguards to prevent future 
political expenditures.
Rules Applicable to Churches under the Internal Revenue Code

    Congress has enacted tax laws applicable to churches in recognition 
of their unique status in American society and of rights guaranteed 
them under the First Amendment of the Constitution of the United 
States. The Internal Revenue Code includes several provisions relevant 
for a discussion of the treatment of churches by the Internal Revenue 
Service. These provisions generally serve the purpose of preventing 
needless entanglement between churches and the IRS. For example, unlike 
almost any other section 501(c)(3) organization, a church need not 
apply for recognition from the IRS to obtain tax-exempt status. Nor do 
churches ordinarily have to file an annual information return (the Form 
990) with the IRS. However, Congress recognized the need for the IRS to 
ensure that churches follow the requirements for tax exemption. In this 
regard, it enacted section 7611 of the Internal Revenue Code.
    Section 7611 requires that the IRS follow several procedures when 
auditing an organization claiming to be a church. First, a church tax 
inquiry requires the approval of a high level official of the Internal 
Revenue Service (the Director of Examinations for Exempt 
Organizations); that is, the IRS may begin a church tax inquiry only 
when a high level official believes, on the basis of facts and 
circumstances recorded in writing, that the organization: may not 
qualify for tax exemption as a church; may be carrying on an unrelated 
trade or business; or may otherwise be engaged in an activity subject 
to tax.
    Under section 7611, notice to the church is required before 
beginning an examination, and must include the following elements: an 
explanation of the concerns that give rise to the inquiry and the 
general subject matter of the inquiry in sufficient detail to allow the 
church to understand which specific activity is at issue; a general 
explanation of the Internal Revenue Code provision(s) that authorize 
the inquiry and that may otherwise be involved; and a general 
explanation of applicable administrative and constitutional provisions 
involved, including the right to a conference before examination. Other 
rights guaranteed under the statute and implementing regulations 
include an offer of pre-examination conference, completion of any audit 
tax liabilities within two years after the date on which the notice of 
examination is supplied to the church, limitations on the IRS's ability 
to revoke a church's tax-exempt status, limitations on the period of 
assessment, limitations on additional inquiries and examinations, 
required coordination with IRS counsel at various stages, and remedies 
for IRS violation of the procedures.

Outreach Efforts to the Church Community by the Internal Revenue 
        Service

    The IRS takes the approach that an educated taxpayer is generally a 
compliant taxpayer. As a result, we have attempted to make the church 
community aware of the tax law rules relating to political campaign 
intervention. The IRS has (1) disseminated to the church community and 
the public for comment, a publication (Tax Guide For Churches and Other 
Religious Organizations (Draft 7/26/94)); (2) periodically reminds 
churches (and all section 501(c)(3) organizations) of their 
responsibilities in the area of political campaign intervention (see, 
e.g., News Release 2000-47 (July 5, 2000)); and (3) shared information 
with individual church leaders and persons who provide tax advice to 
churches.
    In the coming weeks, we will release a revised version of the Tax 
Guide for Churches and Other Religious Organizations. It will have an 
expanded discussion of the prohibition on political campaign activity, 
including practical guidance.

Administrative Issues and Internal Revenue Service Experience in this 
Area of Political Campaign Activity

    The IRS is appreciative of the sensitive nature of this area. Our 
mission and our hope are to influence individuals to voluntarily comply 
with existing rules. Thus, we try to enhance voluntary compliance in as 
unobtrusive a manner as possible recognizing that the less entanglement 
the better between the religious community and the IRS. Such an 
approach is in the best interests of both parties and is in keeping 
with the competing Constitutional interests in this area. 
Unfortunately, from time to time, we find well-meaning individuals 
acting out of faith but not acting in conformance with the rules. As a 
result, when we find an issue in this area, we normally prefer to 
pursue correction rather than revocation. Correction means that the 
organization attempts to undo the error, and creates and adheres to 
procedural safeguards to prevent a recurrence.
    Our experience in this area indicates that this issue occurs 
infrequently in our examinations and does not often result in 
revocation of tax-exempt status. However, as indicated by the Branch 
Ministries case discussed above, the IRS will revoke the exempt status 
of an organization for political activities in appropriate 
circumstances.
    This is a challenging area for the IRS to administer. This is not 
the first time that Congress has reviewed our activities in this area. 
This was the subject of congressional review in the 1980's, and as 
recently as March of 2000, when the Joint Committee on Taxation 
reported on our handling of tax-exempt organization matters. In Report 
of Investigation of Allegations Relating to Internal Revenue Service 
Handling of Tax-Exempt Organization Matters (JCS-3-00), the staff 
looked at numerous cases, including certain church tax inquiries and 
examinations. The Joint Committee staff found no credible evidence of 
political motivation in the manner in which we carry out our 
responsibilities.
    Our administration is made more challenging in part because of 
issues specific to churches. For example, at page 22 of the Joint 
Committee report, staff commented upon the church tax procedures:

          The Joint Committee staff found that the church audit 
        procedures provide important safeguards against the IRS 
        engaging in unnecessary examinations of churches. However, the 
        procedures also have the effect of (1) making it more difficult 
        for the IRS to initiate an examination of a church even where 
        there is clear evidence of impermissible activity on the part 
        of the church and (2) hampering IRS efforts to educate churches 
        with respect to actions that are not permissible, such as what 
        constitutes impermissible political campaign intervention.

    Similarly, the lack of information available from churches (e.g., 
the fact that churches do not need to apply for a determination letter 
and are not required to file an annual information return) has an 
impact on our ability to determine compliance with requirements for tax 
exemption. This in turn leads us to more frequent use of third-party 
referrals of information about potential non-compliance in the church 
area.
    Other issues in this area exist not just for churches, but also for 
all organizations prohibited from participating in political activity. 
First, we have the issue of attribution. Was an individual making a 
pronouncement in his or her individual capacity, or can the 
pronouncement be attributed to the tax-exempt organization? In the 
church area, the IRS is sometimes asked to consider whether campaign 
advocacy by a minister or other church official may be attributed to 
the church with which he or she is associated. The prohibition on 
political campaign activities applies only to section 501(c)(3) 
organizations, not to the activities of individuals acting in their 
private capacities. Accordingly, the prohibition does not prevent a 
church's minister from being involved in a political campaign, so long 
as the minister does not use the church's financial resources, 
facilities, or personnel, and clearly indicates that his or her actions 
or statements are his or her own, and not those of the organization.
    A second difficult issue we face is whether a given pronouncement 
constitutes prohibited political campaign intervention. In this area 
specifically, the IRS is faced with reviewing both the content and 
circumstances surrounding the distribution of voter guides during 
worship services or on church property.
    A third issue common to churches and other non-profits is that the 
sanction in this area is often misdirected. Candidates, political 
fundraisers or other outsiders sometimes request churches or other 
section 501(c)(3) organizations to make their resources available for 
political purposes either because the outsider does not know the rules 
or simply does not care. The sanction for such action is on the church 
and its managers, not on the outsider.
    Finally, the section 4955 excise tax that can be used in lieu of 
revocation may not be effective in certain instances. The tax is based 
on expenditures. Yet there are times when this excise tax does not 
correspond to the prohibited intervention. For example, what is the 
expenditure related to an endorsement of a candidate during a sermon 
from the pulpit?
    The IRS takes all these considerations into account when it 
enforces or educates, but taken together they do make the area more 
challenging to regulate. Thank you for your time and I am available for 
any questions.

                               

    Chairman HOUGHTON. All right. Thank you very much. I forgot 
to mention earlier that Mr. Miller is the Director of Exempt 
Organizations of the Internal Revenue Service.
    I would like to introduce Mr. Hopkins, who is----
    Ms. DUNN. Now yours is doing the same thing.
    Chairman HOUGHTON. Is mine doing the same thing? Let me 
keep trying. Is it all right now? If I scream, is that all 
right? Okay.
    But, anyway, Mr. Hopkins is of Counsel with Polsinelli, 
Shalton & Welte, Kansas City, Missouri. Mr. Hopkins, we are 
delighted to have you here. Let's see if your mike works any 
better than ours.

STATEMENT OF BRUCE R. HOPKINS, OF COUNSEL, POLSINELLI, SHALTON 
                 & WELTE, KANSAS CITY, MISSOURI

    Mr. HOPKINS. Well, let me try.
    Thank you, Mr. Chairman, and other Members of the 
Subcommittee. I appreciate the opportunity to be here today.
    I am a lawyer in private practice. I have been practicing 
in the exempt organizations field for 33 years now. I have 
taught the course in two law schools and have written some 
books on the subject.
    Mr. CRANE. Could you swap mikes?
    Mr. HOPKINS. Does that help? Apparently, it does.
    I have been asked to review the history of and the current 
requirements for tax exemption for public charities, with 
particular attention to churches. Mr. Miller has summarized the 
law in this area, making the distinctions between the rules 
concerning lobbying and the rules concerning political campaign 
activities, and so I will not repeat what he has said. Let me 
add some comments that I have in connection with this matter.
    In the lobbying area, as Mr. Miller mentioned, there is a 
special set of rules, section 501(h), that public charities are 
allowed to elect to measure permissible lobbying. This 
particular election is not available to churches and certain 
other religious organizations.
    In addition to the tax law, of course, first amendment 
considerations affect this analysis, and government may not be 
involved in the establishment of religion. The U.S. Supreme 
Court has held that tax exemption for public charities is 
constitutional, even if exemption is extended to religious 
organizations. The Court has also ruled, however, that a tax 
exemption that is only for religious organizations is not 
constitutionally permissible.
    The Supreme Court has further held that Congress has broad 
latitude in creating classifications and distinctions in tax 
statutes. This principle has been applied in the tax-exempt 
organization's context.
    Congress has over the years enacted exempt organization 
rules uniquely beneficial only to churches and other religious 
organizations. Three of these are particularly notable. Mr. 
Miller mentioned a couple of these.
    Churches and other religious organizations can be tax 
exempt without having to file an application for recognition of 
exemption with the Internal Revenue Service. Churches and other 
religious organizations are not required to file annual 
information returns with the Internal Revenue Service. As you 
mentioned, churches have been provided special rules by which 
audit of them is more difficult for the IRS.
    In my view, Congress has the authority under the 
Constitution to permit political campaign activity by churches. 
I say this as a matter of classification for income tax 
exemption. Put another way, if this proposal is 
unconstitutional, then so, too, must be the other tax law 
benefits Congress has accorded churches.
    I would like to make some comments about the pending bills. 
The Houses of Worship Political Speech Protection Act would 
introduce the standard of substantiality into the political 
area. This is the same standard that is used today in the 
lobbying context. All of the uncertainties as to what this word 
means would be imported into the political area. Pressure would 
mount for the equivalent of a section 501 (h) election in this 
context.
    More importantly, in my view, a new approach to defining 
substantiality is required. Traditional definitions in terms of 
time or expenditures are no longer working. How does one value 
a clergyperson's endorsement of a candidate from the pulpit or 
a Web site communication? There may have to be a new 
definition, some sort of a facts and circumstances test, to 
capture this factor of influence.
    Likewise, the Bright-Line Act does not address this 
problem. This is because it focuses only on expenditures. An 
expenditure for a political act may be minuscule but exert 
enormous influence. Also, political activities by volunteers 
would be disregarded.
    I am also concerned about the section 4955 tax that Mr. 
Miller has referenced. The two bills address the matter of 
income tax exemption but not the political expenditures tax. If 
churches only were exempted from this tax, I believe that would 
amount to an unconstitutional sponsorship by the Federal 
Government of religion.
    Mr. Chairman and Members of the Subcommittee, I would be 
pleased to answer any questions that you may have.
    [The prepared statement of Mr. Hopkins follows:]

STATEMENT OF BRUCE R. HOPKINS, OF COUNSEL, POLSINELLI, SHALTON & WELTE, 
                         KANSAS CITY, MISSOURI

    Mr. Chairman and other Members of the House Subcommittee on 
Oversight, thank you for the opportunity to appear before the 
Subcommittee today.
    Attached is a description of the federal income tax rules 
concerning legislative and political campaign activities by churches, 
other religious organizations, and public charities (IRC Sec. 501(c)(3) 
entities) in general.
    I have been asked to review the history of and current requirements 
for tax exemption for these organizations.
    As to legislative activities:

           Public charities can engage in attempts to 
        influence legislation, without endangering tax-exempt status, 
        as long as these efforts are not substantial.
           The term substantial remains undefined.
           There is a safe-harbor exception, which must be 
        elected, using a mechanical test for measuring allowable 
        lobbying (IRC Sec. 501(h)).
           Churches and other religious organizations may not 
        make this election.
           There are taxes on excess legislative expenditures 
        (IRC Sec. Sec. 4911, 4912).

    As to political campaign activities:

           Public charities cannot engage in political 
        campaign activities.
           Some of these activities are considered educational 
        and thus are permissible.
           There is a tax on political campaign expenditures 
        (IRC Sec. 4955).

    Other points:

           The federal tax law contains several provisions 
        creating special advantages and benefits for churches and other 
        religious organizations.
           Tax exemption for all public charities is 
        constitutional, even though religious organizations are 
        benefited.
           Tax exemption only for religious organizations is 
        unconstitutional.
           The bills that are the subject of this hearing pass 
        constitutional law muster, unless it is intended that one or 
        more tax exemptions only for religious organizations are to be 
        created.

    [The attachment is being retained in the Committee files.]

                               

    Chairman HOUGHTON. Thank you very much, Mr. Hopkins.
    I am going to ask you and also Mr. Miller a question, and 
then I will turn this thing over to Mr. Coyne, and we will go 
on to the other participants.
    What I am really interested in is what is the practical 
effect of passage of either the Jones or the Crane bills?
    Mr. HOPKINS. Well, the practical impact of passage of the 
bill would be basically to engraft into the area of political 
campaign activities the type of law that is in the law today 
concerning lobbying. In other words, the limitation on a 
political campaign activity for churches and other public 
charities today is absolute. It is not permissible. In a 
lobbying context, there is a standard of insubstantiality. That 
standard in the lobbying setting would be imported into the 
political arena to allow a certain amount of political activity 
by churches.
    Chairman HOUGHTON. Is that the practical impact or the 
technical impact?
    Mr. HOPKINS. Well, maybe I misunderstood what you meant by 
the terms. I guess maybe that is more of a technical impact.
    I suspect the practical impact would be twofold, if I 
understand what you mean by the word ``practical.'' One, as we 
know, there are churches engaged in political activity today, 
so it would legitimize practices that are going on in any 
event. Second, it would probably generate more political 
campaign activity by churches than we have today.
    Chairman HOUGHTON. Mr. Miller.
    Mr. MILLER. I am somewhat limited in what I can say about 
the pending legislation, but I would echo Mr. Hopkins--it is 
clear there are instances out there of pulpit comments and 
things of that nature that would seem to fall within the rules 
that are being discussed in the bills.
    Chairman HOUGHTON. Well, but this is a hypothetical 
situation. It doesn't have anything to do with what Mr. Crane 
or Mr. Jones--it is just a hypothetical.
    Seriously, what do you think from the standpoint of the IRS 
the practical impact of this would be?
    Mr. MILLER. Of the bills?
    Chairman HOUGHTON. Yes.
    Mr. MILLER. The only thing that I would point to in my 
testimony is we have outlined what our administrative impact is 
in the lobbying area; and because of the rules of section 7611 
and the substantiality rules, we have a very limited 
enforcement role in lobbying with respect to churches.
    Chairman HOUGHTON. All right. Thank you. Mr. Coyne.
    Mr. COYNE. Thank you, Mr. Chairman.
    Mr. Miller, why is it improper to finance political 
campaign activities with tax-deductible charitable donations in 
the judgment of the IRS?
    Mr. MILLER. On that issue actually I would defer to 
Congress. But there is an issue as to why you would be able to 
deduct something with a charitable deduction where you were not 
allowed otherwise to, so it would create some disparity.
    Mr. COYNE. Well, are you saying that you judge it to be or 
you rule it to be improper as a result of the actions of 
Congress? Is that what you are saying?
    Mr. MILLER. In some respects, yes. There is a line of rules 
in the Tax Code and in our regulations that talks about the 
earmarking of donations. A donation to a charitable 
organization that is used or earmarked for political purposes 
is not deductible under current law.
    Mr. COYNE. Basically, it is the action of Congress that you 
respond to. Is that it?
    Mr. MILLER. It certainly is.
    Mr. COYNE. How many times have you revoked the tax-exempt 
status of a church for political activities?
    Mr. MILLER. Let me preface my answer. Churches have a 
specific status under the Tax Code and a specific definition. 
According to our information, we have the exempt revoked status 
of two churches. We have revoked religious organizations or 
religious-affiliated organizations four or five times in the 
last 20 years.
    Mr. COYNE. Last 20 years?
    Mr. MILLER. It probably goes farther back than that, 
since--the first one would be, I guess, Christian Echoes, which 
is a 1980 case. So farther back than that.
    Mr. COYNE. How many times has the IRS imposed excise taxes 
on churches for political activities?
    Mr. MILLER. I will go back and check our records on that. I 
am personally aware of at least twice that we have done that.
    Mr. COYNE. Current law does not require churches to apply 
for tax-exempt status nor to file form(s) 990, the annual 
information returns, with the IRS. The documents are required 
for all other section 501(c)(3) charities and are disclosable 
to the public. If the law was changed to allow churches to 
engage in political activities, isn't it correct that neither 
the IRS nor the public would have any information about the 
church's political activity--that is, who funded the political 
campaign effort and how much money was spent?
    Mr. MILLER. We would have the same information that is 
available today, which is we do not have an exemption 
application from churches, and they are not required to file 
annual returns.
    Mr. COYNE. So you would have no information?
    Mr. MILLER. We would have limited information.
    Mr. COYNE. Wouldn't allowing political activities by 
churches create a large campaign finance loophole?
    Mr. MILLER. I don't know about a large loophole. It 
certainly would create an additional player in the political 
arena.
    Mr. COYNE. So it would be involving the churches and 
religious institutions in the political arena even more so than 
they currently are?
    Mr. MILLER. Potentially.
    Mr. COYNE. Thank you.
    Chairman HOUGHTON. Thanks very much. Mr. Crane.
    Mr. CRANE. Thank you, Mr. Chairman.
    Mr. Miller, is there a statutory or regulatory definition 
of the word ``substantial'' as it relates to the amount of 
activity a religious organization may engage in?
    Mr. MILLER. I don't believe there is a--and Bruce can 
correct me if I am wrong on this. I don't believe there is a 
statutory rule and probably not in the regulations either. 
There are revenue rulings, and there is some case law out 
there. Some of these do not involve religious organizations. 
Because the substantiality test applies across the board to all 
section 501(c)(3) organizations, you can look to those cases as 
well. There is some guidance out there.
    Mr. CRANE. Well, since this term remains undefined, are 
religious organizations simply supposed to wait until some 
enforcement action is taken by the IRS to find that line?
    Mr. MILLER. Again, if we are talking about lobbying and the 
substantiality rules, we have not done a lot of enforcement in 
that area. We do not have information that would indicate that 
we should be more involved in this area.
    Mr. CRANE. Well, could it be that there are so few 
enforcement actions that--because churches totally refrain from 
political activity because they are afraid of running afoul of 
the IRS?
    Mr. MILLER. I am not sure how to answer that one.
    Again, substantiality applies only in the lobbying context, 
and there is an absolute bar in the political context. So the 
definition of substantiality would not flow over into political 
intervention unless your bill became law.
    Mr. CRANE. What is the average cost for defending against 
an IRS enforcement action in court?
    Mr. MILLER. That I do not have.
    Mr. CRANE. Thank you, Mr. Chairman. I yield back.
    Chairman HOUGHTON. Thank you. Mr. Lewis.
    Mr. LEWIS. Thank you, Mr. Chairman.
    Mr. Miller, is it conceivable that, with the campaign 
finance reform, that if you change the law, is it conceivable 
that the churches could become a conduit, that you would have 
individuals making large contributions to churches and then the 
churches engage in political activity? Is there some way the 
IRS can monitor that?
    Mr. MILLER. That is, of course, a possibility. It is a 
possibility now as well.
    Again, I don't believe the law that is being suggested 
would change the fact that earmarking of moneys going into 
churches is not deductible or should not be deductible on a 
charitable basis. That is existing law, and there has been no 
suggestion that this would change. Again, as I have said, 
clearly, if the bill is passed, I think that you would have 
another player in the political arena that doesn't necessarily 
exist today, although to some extent obviously they do.
    Mr. LEWIS. Let me come another way. As a rule, do you 
monitor the activities of churches during the political season?
    Mr. MILLER. We do monitor churches. We are limited in how 
we do that by reason of section 7611 and because of the lack of 
information in the area because there is no annual filing. So 
our monitoring is mostly receipt of information from third 
parties who are looking.
    Mr. LEWIS. But if you have a minister speaking from the 
pulpit on Sunday morning, maybe a rabbi from the synagogue or 
the temple, saying that he had been told by God about somebody, 
that somebody should be elected, somebody should be defeated, 
is that political activity?
    Mr. MILLER. That would constitute political activity.
    Again, most of these are based on facts and circumstances. 
It would be difficult for me to find circumstances in which 
that wouldn't be found to be a political campaign intervention. 
But, again, whether we would know about that would really 
depend on who was in the audience.
    Mr. LEWIS. Do you have the ability or the capacity as an 
agency to monitor the activities of churches and other 
religious institutions?
    Mr. MILLER. The only thing we can rely upon, again, is who 
would be in that audience to report it, and that presumably 
would continue under----
    Mr. LEWIS. So you wait for someone to file a complaint 
against the institution or against the minister or against the 
rabbi or whoever?
    Mr. MILLER. Again, as I mentioned, obviously, we do not 
have reporting from churches, and under section 7611 we cannot 
go out and survey churches. We cannot do audits unless we have 
a reasonable belief that there is an exemption or other tax 
issue out there. So there are some limitations.
    Mr. LEWIS. Thank you, Mr. Chairman.
    Chairman HOUGHTON. Let me just ask you a quick question. 
Even if you did have reporting for the churches, would you 
still be able to determine whether somebody got up at a pulpit 
and suggested that a candidate be elected?
    Mr. MILLER. In all likelihood, we would not. There is a 
question on the form 990 asking whether you engaged in 
political activities. Even assuming that they would check that 
box, that would obviously not be contemporaneous with the 
action.
    Chairman HOUGHTON. Thank you. Mr. Weller.
    Mr. WELLER. Thank you, Mr. Chairman. First I want to 
commend you for conducting this hearing today. I also want to 
commend my colleagues, Mr. Jones and Mr. Crane, for their 
leadership on this issue.
    There are millions of Americans, because of their 
involvement and their strong religious faith, for them their 
temple, their synagogue, their church, their mosque is their 
center of community. They seek the opportunity to be involved, 
and they believe through their central community that they 
should have the opportunity to be more involved politically.
    The question I have and I would like to direct to Mr. 
Miller is, just try and get a little more specific here and 
follow up on some of the questioning that the Chair and others 
have asked here. Mr. Miller, is the IRS--are you proactive in 
communicating with churches and other religious organizations 
regarding political activity?
    Mr. MILLER. We have tried, Congressman, and we will 
continue to try. I think we could do a better job.
    One thing that we are doing in the coming weeks, we will 
reissue our church publication with a little more practical 
guidance in this particular area, and we will do additional 
outreach, I think.
    Mr. WELLER. Do you work with any third party or private 
groups to communicate limitations on political involvement in 
churches or religious organizations?
    Mr. MILLER. We certainly do outreach to whoever comes to 
us, and we do have a network of individuals from the religious 
community that we talk to.
    One person on our advisory Committee is, in fact, a 
representative of the religious community. We do have an 
outside advisory Committee that speaks to us, and we bounce 
things off of and----
    Mr. WELLER. Who is that?
    Mr. MILLER. That is Deirdre Dessingue of the Catholic 
Conference.
    Mr. WELLER. Let me ask some specific examples of activity 
that may or may not have occurred at churches and temples and 
synagogues and mosques, other religious institutions. But under 
current law can a church or a synagogue or a temple or a 
mosque, can they conduct a voter registration drive sponsored 
by the institution or on the institution's property?
    Mr. MILLER. Yes. The short answer is, yes, provided they do 
not bias their registration activities toward one candidate 
over another. There is no prohibition.
    Mr. WELLER. And can they offer a candidate debates or 
forums, invite candidates to come in and present themselves?
    Mr. MILLER. The same general rules would apply.
    Mr. WELLER. And what about paid political advertising in a 
church bulletin or a publication at the mosque or temple?
    Mr. MILLER. There is no prohibition, provided that it is 
done on a fair market basis and that it is made available to 
whoever wants to use that space. So it has to be equally 
available to the candidate base.
    Mr. WELLER. And can the minister say the following from the 
pulpit and not be in violation of the tax status, that 
candidate X is pro-life or candidate Y is pro-choice?
    Mr. MILLER. That becomes more problematic, Congressman. The 
pastor, the minister, the rabbi can speak to issues of the day, 
but to the extent they start tying it to particular candidates 
and to a particular election, it begins to look more and more 
like either opposition to a particular candidate or favoring a 
particular candidate.
    Mr. WELLER. And would the Crane and Jones legislation 
allow--clarify the law to allow for that type of statement?
    Mr. MILLER. I believe so. But Bruce might be able to answer 
that better than I.
    Mr. WELLER. Mr. Hopkins, can you answer that?
    Mr. HOPKINS. Most of the examples that you provided would 
not be political activity in the first place, as Steve 
indicated, so the legislation would not be needed. But if it 
were to go beyond that, say statements made by a Member of the 
clergy from the pulpit and they were deemed to be political 
statements, which would be prohibited under current law, the 
two bills, within certain parameters, would allow that kind of 
activity to occur without the church losing its exemption.
    Mr. WELLER. So just to follow up on that, say you have a 
candidate who is a guest speaker, was in a church speaking from 
the pulpit, concludes his or her remarks, and the minister 
walks up, puts his or her arm around that particular candidate 
and says, this is the right candidate. I urge you to support 
this candidate. That would be--is that allowable under current 
law?
    Mr. HOPKINS. No, that would not be allowable under current 
law. That would clearly be political campaign activity. It 
would be protected, however, under the two bills that are the 
specific subject of the hearing.
    But as I said in my opening statement, the problem is in 
terms of computing how you stay within the boundaries, either 
of the 5 percent rule under one bill or the insubstantiality 
test under the other bill. That is, what monetary value do you 
assign to that kind of activity?
    Mr. WELLER. Just a last question. You know, also on 
Election Day sometimes it is alleged that churches or 
synagogues, temples or mosques may use what we call the church 
bus to transport voters to the polls. Is that allowable under 
current law?
    Mr. MILLER. That is. It is allowable, again, with the 
restriction that they cannot bias toward one candidate versus 
another, but get out the vote is a permissible activity of 
churches.
    Mr. WELLER. Okay. Thank you, Mr. Chairman. I see my time is 
expired. Thank you.
    Chairman HOUGHTON. Thank you, Mr. Weller. Mrs. Thurman?
    Mrs. THURMAN. Thank you, Mr. Chairman.
    In the same idea, what about handing out voting guides? Is 
that considered to be a political activity, and--either in the 
church or is it different if it is outside of the church?
    Mr. MILLER. The voter guide issue is one that we are 
presented with often. There is nothing per se wrong with 
voter's guides if they are done in a way that includes all 
candidates in a fair and impartial manner, and, includes a wide 
array of issues.
    Mrs. THURMAN. One other question, and I--or a couple of 
other questions. It is my understanding that today under the 
churches and being organized under a section 501(c)(3), they 
cannot do any kind of political issue campaigning. Is that 
correct?
    Mr. MILLER. They cannot do specific advocacy of a 
particular candidate or advocating the defeat of another 
candidate.
    Mrs. THURMAN. Okay. Is there--and it is my understanding 
there is a way for them, in fact, to be involved in political 
campaigns by setting up a section 501(c)(4), is that correct?
    Mr. MILLER. They can have affiliated organizations, 
provided that the resources of the church don't find their way 
there and are not used for improper purposes. We do see the 
ability--and perhaps, Bruce, you want to speak to this as 
well--of an organization creating a section 501(c)(4). Again, 
any section 501(c)(3) organization, could create a section 
501(c)(4) organization. For that matter, a political action 
Committee could be attached to that section 501(c)(4) 
organization.
    Mrs. THURMAN. So they are not then being--I mean, they have 
an ability to do that if they choose. Are their churches, 
synagogues, mosques, others that do that today?
    Mr. MILLER. I am not familiar with any, but I am not sure I 
would be.
    Mrs. THURMAN. Mr. Hopkins.
    Mr. HOPKINS. Well, first of all, let me say, as to your 
first question, the problem--and Steve indicated this--is not 
just a matter of setting up a related entity. It is a question 
of getting it funded, and that often is a problem. Because, as 
he said, the church resources can't flow over to the section 
501(c)(4). So the section 501(c)(4) has got to find independent 
funding, and often that is difficult because contributions to 
them are not deductible. But, aside from that, it is not, in my 
experience, terribly common for a church to have a related 
section 501(c)(4). It is far more common for other types of 
religious organizations to do that. I have seen churches do it, 
but, in my experience, it is quite uncommon and in large part 
because of this funding aspect.
    Mrs. THURMAN. I guess my point is that there is a legal way 
for them to be involved in the political activities if they 
choose to do that.
    Aside from their--you know, issue that you bring up as 
funding, if a church and its parishioners wanted to be involved 
and used that church and/or--for the ability to persuade their 
congregation, they have an ability to do that?
    Mr. HOPKINS. That is true, although I would point out that 
while social welfare organizations--these are section 
501(c)(4)s--are not limited as to lobbying, they are limited as 
to political campaign activity. They can only expend an 
insubstantial part of their funding on political campaign 
activities. So that outlet is of limited utility in the 
political campaign activity context.
    Mrs. THURMAN. But you bring up a good point, because that 
means that there is a lot of these organizations out there 
other than just in the religious area that would have the same 
restrictions unless they did some very similar things that--and 
I don't know if in this piece of legislation are those also 
being considered, or is it just religious organizations? I 
mean, do we say to one, you have a freedom, but the others you 
don't unless you abide by the rules that are already set in 
place?
    Mr. HOPKINS. Well, it is very common to have the section 
501(c)(3), section 501(c)(4) in-tandem relationship across the 
public charities spectrum, very common. I confess to having set 
those up many times over the course of my practice.
    Mrs. THURMAN. But didn't you just say they were limited in 
what they could do?
    Mr. HOPKINS. As far as political activity.
    Mrs. THURMAN. Even the section 501(c)(4)----
    Mr. HOPKINS. But they are unlimited as to lobbying 
activity.
    Mr. COYNE. Would the gentlewoman yield?
    Mrs. THURMAN. I would yield to Mr. Coyne.
    Mr. COYNE. Just to follow up on Mrs. Thurman's question as 
about the section 501(c)(4) and section 501(c)(3), it is your 
experience that people are willing to contribute to the church 
under the section 501(c)(3), but they are not willing--not very 
willing, anyway, to take up the section 501(c)(4) option? Is 
that it? Is that your experience?
    Mr. HOPKINS. Are you speaking to me?
    Mr. COYNE. Yes.
    Mr. HOPKINS. Yes, it is. Donors are reluctant to donate if 
they do not receive a charitable contribution deduction. It 
does occur, but it is uncommon.
    Mr. COYNE. Thank you.
    Chairman HOUGHTON. Mr. Foley.
    Mr. FOLEY. Thank you very much, Mr. Chairman; and let me 
join Mr. Weller in commending our colleagues, Mr. Jones and Mr. 
Crane, and such stalwarts as Lee Sheldon for their leadership 
in this issue. This has been a very complicated issue, and I 
think one that desperately needs clarity.
    It is interesting, in the schools, you can't have a Bible 
study, but you can have any number of other groups. In the 
churches, you can invite a candidate. A preacher may be able to 
invoke that that particular person, be it the President of the 
United States, is a phenomenal leader and deserves to return to 
office. Yet a small church who may not be able to accord the 
arrival or the visit of a President has a small-town local 
elected official, and somehow they are in jeopardy of losing 
tax status or, in fact, could be crippled, if you will, by the 
IRS.
    Mr. Miller, you suggested, which is interesting, that this 
was a recent area that the Christian Coalition found themselves 
in on voter's guides. And the voter's guides you suggested 
would be okay if they provide a wide-array discussion. So, if 
you could, could you define for me what a wide array would be 
considered? Is it 10 issues, 20 issues, five candidates?
    Mr. MILLER. Mr. Foley, I apologize, but we are in 
litigation with the Christian Coalition over that very issue, 
and I don't think I am authorized to speak in great detail on 
that one.
    Mr. FOLEY. Okay. Hence the confusion. Okay.
    The other question I have, while I enjoy both of these 
bills and I think they would bring some clarity, my concern 
always is, when government gets more meddlesome and more 
involved by staking out percentages or other issues, will the 
IRS need the churches to maintain more detailed records such as 
direct expenses, logs or tapes of political campaigns, time 
sheets, overhead and administrative allocation? Would these 
bills actually invite more government and IRS interference?
    Mr. MILLER. Once again, I would point to our experience in 
the lobbying area. Again, because of section 7611, our 
involvement would be limited because we need a reasonable 
belief that exemption is an issue. And if you have the typical 
example of a pulpit pronouncement, that generally might not be 
sufficient to initiate a church inquiry under section 7611. If 
we were auditing the organization, then, yes, it is conceivable 
that we would require recordkeeping, as we would with other 
section 501(c)(3) organizations.
    Mr. FOLEY. I guess the question always for me has been the 
churches, synagogues have long been the mainstay of American 
society, and many of the works that they pronounce from the 
pulpits are works that government is involved in--feeding and 
clothing the poor, cleaning up inner-city neighborhoods, 
dealing with spousal problems and spousal abuse. It seems to me 
if the minister or rabbi wants to continue and make that a 
cause for their church to expand those opportunities, engaged 
in a dialog with their parishioners whose parishioners attend 
voluntarily, if they were to advocate for someone who, in fact, 
espoused those same virtues or were at least on the same 
thought pattern, it seems that it restricts the churches from a 
continuation of their good work, and I guess I don't understand 
where the politics comes in.
    If--Dr. Kennedy is here from Fort Lauderdale--and I am 
delighted he is here--he will preach about the things necessary 
to bring a community together, to bring it whole and holistic, 
if you will. Yet if he treads slightly over to suggesting that 
some of those individuals who may in fact bring those changes 
to government, then he could be in serious jeopardy and 
conflict with the IRS, which seems to me a difficult standard.
    Mr. MILLER. I guess I would respond in a couple of 
fashions.
    First, I think that there is nothing in the statute that 
prevents the clergy from speaking to the issues of the day. It 
is when they tie those issues to a particular election campaign 
that there is even an issue.
    As I mentioned in our testimony, our experience is where 
there has been the kind of foot fault that you are speaking of, 
we have talked to the church to ensure that they understand 
what the rules are. We have not revoked generally. We have 
spoken to them about what the rules are and gotten their 
agreement that they understand the rules and will establish 
some procedures as to how they will operate so that we don't 
have to come back and intervene again.
    Mr. FOLEY. Thank you. Thank you, Mr. Chairman.
    Chairman HOUGHTON. Thank you very much. Unless there are 
any other questions, we appreciate very much your being here. 
You have helped us a great deal.
    Now we will move on to the second panel. What I would like 
to do is to call the second panel, Mr. Colby May, Senior 
Counsel for the American Center for Law and Justice in 
Alexandria, Virginia; the Reverend Dr. C. Welton Gaddy, Ph.D., 
Executive Director of the Interfaith Alliance; the Honorable 
Reverend Walter Fauntroy--Walter, great to have you back here--
Pastor of the Bethel Baptist Church; the Reverend Barry Lynn, 
Executive Director, Americans United for Separation of Church 
and State; Brenda Girton-Mitchell, Associate General Secretary 
for Public Policy with the National Council of Churches (NCC).
    And Mr. Foley is going to introduce Dr. Kennedy.
    Mr. FOLEY. Thank you very much, Mr. Chairman. I want to 
thank you again for holding the hearing.
    However opinions may vary, this issue is critically 
important to the countless religious institutions across our 
country, and I appreciate the Chairman's decision to allow us 
to consider it.
    I also want to--I appreciate all the witnesses for being 
here today. In particular, I would like to recognize among our 
panelists today Dr. James Kennedy of my home State of Florida. 
Dr. Kennedy's Coral Ridge Presbyterian Church is located in 
Fort Lauderdale, Florida, near my district and that of the 
district of our colleague on the Committee on Ways and Means, 
Clay Shaw, and has a Membership of nearly 10,000 Members. 
Moreover, his Coral Ridge ministries is a vibrant television, 
radio, and print outreach ministry that reaches millions both 
here and abroad.
    I know the Chairman has an abundance of people who all 
wanted to testify here, so I am pleased that Dr. Kennedy was 
able to join the panel. We need to look at this issue clearly, 
and again I applaud and welcome Dr. Kennedy to our hearing 
today.
    Chairman HOUGHTON. Thanks very much, Mr. Foley.
    Well, ladies and gentlemen, I think we should proceed. Mr. 
May, will you take the first cut at this?

STATEMENT OF COLBY M. MAY, DIRECTOR, AMERICAN CENTER FOR LAW & 
                 JUSTICE, ALEXANDRIA, VIRGINIA

    Mr. MAY. Thank you, Mr. Chairman. How is this mike working? 
Is it okay?
    Mr. Chairman and Members of the Subcommittee, thank you for 
extending to me the invitation to be here today. I am and was 
Legal Counsel for the Church at Pierce Creek in Binghamton, New 
York, which in 1992 had its exemption revoked for a single 
violation of this portion of the Tax Code.
    Until 1954, all houses of worship were afforded the full 
and clear opportunity to act and speak as their conscience and 
leadership may direct, even in the political area. Today, 
houses of worship do not, however, enjoy that freedom because 
of the Johnson amendment which was inserted into the Tax Code 
in 1954 without a debate or a hearing. Then-Senator Johnson was 
angry because two Texas charitable organizations had taken a 
position contrary to him during his then-current primary bid.
    The law under the Johnson amendment now provides that 
churches and exempt organizations may engage in an 
insubstantial amount of lobbying activities, as you have heard 
from the IRS panel, but they are banned from doing anything 
that may be regarded as participating or intervening in a 
political campaign. Now the law is so intrusive and 
incomprehensible that the IRS has actually taken the position--
and I was curious to note that they did not mention this during 
their testimony, but they have taken the position that there is 
coded language that may be used which would violate the 
political prohibition.
    In its publication, Election Year Issues, the IRS explains 
that the concerns that an exempt organization may support or 
oppose a particular candidate without specifically naming the 
candidate by using code words to substitute for the candidate's 
name and its message--code words such as conservative or 
liberal, pro-life or pro-choice or anti-choice, or even 
Republican or Democrat.
    Now, making matters worse, the IRS doesn't know whether the 
intent behind the message matters. Did the organization intend 
to actually endorse or not?
    Adding further inscrutability, the IRS has also said the 
same message can be both permissible for an exempt organization 
to make if it is an educational or religious message, but it 
may nevertheless violate the political intervention ban.
    Now, what a Catch-22. Code language violates the ban, but 
maybe it doesn't. Intent matters, but it doesn't. And the same 
message is okay, but it isn't.
    Now, those opposing the bill have insisted that replacing 
the absolute ban on political intervention with the no 
substantial part test currently used in the lobbying context 
would create a loophole in the Nation's campaign finance 
system. Such an assertion, however, is unfounded. Under the new 
bipartisan Campaign Finance Reform Act of 2002 which amends the 
Nation's Federal election campaign laws, all corporations, and 
including tax-exempt nonprofit corporations, are barred from 
making hard money contributions or any direct or indirect 
disbursements for electioneering communications.
    In the Act, the phrase ``electioneering communications'' 
means any communication by means of any broadcast, cable or 
satellite communication, newspaper or magazine, outdoor 
advertising facility, mass mailing, telephone banks to the 
general public or any other form of general public policy 
advertising. These restrictions apply right now and will 
continue to apply regardless of any changes that you may make 
to the Tax Code with passage of either of the bills that are 
before you today.
    Since the beginning of the Tax Code, churches and houses of 
worship have been exempt from income taxes because they provide 
services and promote the general welfare, saving those costs to 
the government. That fundamental relationship will not change 
if you abandon the absolute political intervention ban and 
replace it with a no substantial part test as you currently 
have in the lobbying area.
    The passage of H.R. 2357, for example, the House of Worship 
Political Free Speech Act, will not require houses of worship 
to affirmatively do anything or fundamentally change their 
functions. Houses of worship will continue to serve the basic 
needs of their congregations and their local communities, 
preserving the historic balance between church and State and 
fulfilling the purpose for tax exemption, even if they 
incidentally or occasionally speak out concerning candidates 
and issues.
    Now, you have heard also from the IRS panel that they 
believe it is constitutional because there isn't a great 
disparity in its application between groups of exempt 
organizations.
    I would just note that in the 1983 Supreme Court decision 
of Reagan versus Taxation With Representation, the courts 
upheld Congress's constitutional powers to treat different 
speakers differently in the context of the Tax Code. In the 
Reagan case, the lobbying limits for exempt organizations are 
upheld against a constitutional challenge as to the lobbying 
limits, even though there were different standards for 
different types of exempt organizations.
    Now, I conclude my introductory remarks by simply noting 
that, whatever this standard is, it certainly isn't applied in 
a very consistent or even-handed manner. I hold up for the 
Subcommittee's consideration a recent front page from the 
Montgomery Advertiser in Montgomery, Alabama, noting that a 
Democratic senatorial candidate has put on his staff a clergy 
coordinator for the sole and exclusive purpose to make sure he 
gets around to all the churches in the area to receive the 
appropriate endorsements.
    Now, Members of the Subcommittee, I think that is okay. I 
frankly believe it should be appropriate for churches to be 
able to take a stand. I believe when Reverend Walter Fauntroy 
speaks, he will also speak to that issue from his life's 
experience in this matter.
    I end with the irony that if this were 1953, we would not 
need this hearing, because churches were able to do this 
without concern or fear that the Federal Government was going 
to come and revoke their tax exemption. Can you imagine if you 
are the pastor of a church where your whole mission is to serve 
the needy, feed the hungry, and take care of the widows and 
children? Well, if you think there is any ambiguity and 
confusion in this area, I don't believe for 1 minute you would 
speak out on an issue that you may otherwise believe is 
important for your congregation to hear about. Why? Because 
your real primary mission will be shut down by the IRS, because 
they do not know exactly what it means to violate the absolute 
ban on political speech. They will take you out of business. 
Take it from me. I represented the Church at Pierce Creek, and 
they lost their tax exemption.
    If there are any questions, I would be glad to talk about 
them later.
    Chairman HOUGHTON. Thanks very much, Mr. May.
    [The prepared statement of Mr. May follows:]

STATEMENT OF COLBY M. MAY, DIRECTOR, AMERICAN CENTER FOR LAW & JUSTICE, 
                          ALEXANDRIA, VIRGINIA

    Mr. Chairman and members of the Subcommittee on Oversight, thank 
you for extending the invitation to appear before the Subcommittee to 
testify in support of H.R. 2357, the ``Houses of Worship Political 
Speech Protection Act,'' a measure designed to advance free speech and 
to curb the unbridled discretion of the IRS.
    I respectfully request that the entirety of my prepared statement 
be made a part of the record of today's hearing. The following is an 
overview of my testimony:

                              I. OVERVIEW

First, replacing the absolute ban on political intervention with the 
``no substantial part of the activities'' test currently used in the 
lobbying context would not create a loophole in the nation's campaign 
finance system.

    Some critics contend that HR 2357 would open a loophole in the 
nation's campaign finance system. Such criticism, however, is unfounded 
since all corporations, including tax-exempt nonprofit corporations, 
are barred from making ``hard money'' contributions, or any direct or 
indirect disbursements for ``electioneering communications'' under the 
new Bipartisan Campaign Finance Reform Act of 2002, which amends the 
Federal Election Campaign Act, 2 U.S.C. Sec. 431, et seq. The phrase 
``electioneering communications'' boils down to a communication by 
``means of any broadcast, cable, or satellite communication, newspaper, 
magazine, outdoor advertising facility, mass mailing, or telephone bank 
to the general public, or any other form of general public political 
advertising.'' BCFRA Sec. Sec. 101(a); 102(b); FECA Sec. Sec. 431(22); 
441b(b)(2). These restrictions apply right now, and will continue to 
apply regardless of any changes to the tax code which may be made by 
the passage of the ``Houses of Worship Political Speech Protection 
Act.''

Second, because there is no clarity on what is a violation of the 
political intervention ban, having an absolute, one-strike-your-out ban 
is inherently unjust and unworkable.

    The IRS has taken the position that ``coded language'' violates the 
political prohibition. TAM 9117001. In the publication ``Election Year 
Issues,'' it explains that ``[t]he concern is that [an exempt] 
organization may support or oppose a particular candidate without 
specifically naming the candidate by using code words to substitute for 
the candidates name in its message, such as ``conservative,'' 
``liberal,'' ``pro-life,'' ``pro-choice,'' ``anti-choice,'' 
``Republican,'' or ``Democrat,'' etc. . . .'' Exempt Organizations 
Continuing Education Technical Instruction Program for FY 2002 at 345 
(``2002 CETIP''). In a footnote following the text, the IRS notes that 
it is the ``intent'' of the party making the communication which will 
determine whether these ``coded words'' are to be treated as violations 
of the political campaign intervention ban:

          ``[a] finding of political campaign intervention from the use 
        of coded words is consistent with the word ``candidate''--the 
        words are not tantamount to advocating support for or 
        opposition to an entire political party, such as 
        ``Republican,'' or a vague and unidentifiable group of 
        candidates, such as ``conservative'' because the sender of the 
        message does not intend the recipient to interpret them that 
        way. Coded words, in this context, are used with the intent of 
        conjuring favorable or unfavorable images--they have pejorative 
        or commendatory connotations. [So,] the voter in Vermont, 
        hearing an exhortation regarding ``liberal'' candidates, may 
        not know who fits that label in Kansas, but presumably he knows 
        who stands for what in Vermont, which is why the coded word is 
        used in the first place.'' id. at 345, n. 10 (underlining 
        added).

    As if just dealing with the uncertainty of losing one's tax 
exemption because ``code words'' were used wasn't bad enough, the 
problem is compounded because the IRS here says ``intent'' is 
determinative. That position, however, directly contradicts previous 
statements by the IRS that ``intent'' or ``purpose'' is irrelevant in 
determining whether the political campaign ban has been violated. In 
its 1993 version of ``Election Year Issues'' the IRS stated ``the 
motivation of an organization is irrelevant when determining whether 
the political campaign prohibition has been violated.'' 1993 CETIP at 
414-15. Then, as if this inconsistency over ``intent'' was not enough 
confusion on the matter, in its 2002 version the IRS stated:

          ``Therefore, the resolution of the `bad motive' issue depends 
        upon the way the activity is conducted (the facts and 
        circumstances) [--intent doesn't matter--] and upon any [sic] 
        inquiry into the state of mind of the organization [--intent 
        matters].''

    2002 CETIP at 351. The only thing that is clear is that the IRS 
wants the unrestricted discretion to decide it either way. Because a 
single violation of the political intervention ban requires revocation 
of exemption, due process and fairness require replacement of the 
absolute ban with the ``no substantial part'' standard.(1)
---------------------------------------------------------------------------
    \(1)\ The courts have repeatedly held that when a regulatory agency 
has conflicting interpretations or applications of its rules and 
regulations, due process is violated because no clear or fair notice of 
what is required for compliance has been given. Satellite Broadcasting 
Co., Inc. v. FCC, 262 U.S. App. D.C. 274, 824 F.2d 1 (D.C. Cir. 1987); 
General Elec. Co. v. EPA, 311 U.S. App. D.C. 360, 53 F.3d 1324, 1327 
(D.C. Cir. 1995); United States v. Chrysler Corp., 332 U.S. App. D.C. 
444, 158 F.3d 1350, 1354-57 (D.C. Cir. 1998) (holding that agency 
failed to provide fair notice of specific requirements of compliance 
and therefore could not move to enforce its regulations); Rollins 
Envtl. Svcs. (NJ) Inc. v. EPA, 290 U.S. App. D.C. 331, 937 F.2d 649, 
653 (D.C. Cir. 1991) (rescinding fine assessed by EPA because 
regulation was ambiguous); Gates & Fox Co., Inc. v. OSHRC, 252 U.S. 
App. D.C. 332, 790 F.2d 154, 156 (D.C. Cir. 1986) (holding that agency 
failure to give fair notice of its interpretation of its regulations 
precluded enforcement); Trinity Broadcasting of Florida, Inc., et al. 
v. FCC, 211 F3d 618, 2000 U.S. App. LEXIS 8918 (D.C. Cir. 2000) (same).

Third, since the beginning of the tax code churches and houses of 
worship have been exempt from income taxes because they provide 
services and promote the general welfare, saving the government the 
costs of having to do so. That fundamental relationship will not be 
changed by abandoning the absolute political intervention ban and 
---------------------------------------------------------------------------
replacing it with the ``no substantial part'' test.

    Following passage of the Sixteenth Amendment allowing the federal 
government to directly tax personal income, churches and houses of 
worship have been exempt from income taxes. Tariff Act of 1913. 
Congress has always recognized that they are tax-exempt because ``the 
government is compensated for the loss of revenue by its relief from 
financial burden which would otherwise have to be met by appropriations 
from public funds, and by the benefits resulting from the promotion of 
the general welfare.'' The occasional or incidental, intentional or 
unintentional, participation by a church, synagogue or mosque in 
activities that may be regarded as political campaign involvement will 
not change this relationship. Passage of HR 2357 will not require 
houses of worship to affirmatively do anything, or fundamentally change 
their functions. Houses of worship will continue to serve the basic 
needs of their congregations and their local communities, preserving 
the historic balance between church and state, and fulfilling the 
purpose for tax-exemption.

Fourth, given the vague and contradictory positions of the IRS that the 
same activity can be both permissible for an exempt organization and 
still violate the political intervention ban, modification of the 
absolute ban is necessary.

    The ``Houses of Worship Political Speech Protection Act'' will both 
alleviate and obviate the confusion and fear surrounding the 
requirements for compliance with the political intervention ban. In 
``Election Year Issues,'' the tome relied upon by most practitioners in 
this area as an indicator of the IRS's approach to political campaign 
activities by exempt organizations, the IRS has taken the view that 
educational or religious activities which otherwise qualify as exempt 
activities can nevertheless constitute prohibited political activity:

          ``The most common question that arises in determining whether 
        an IRC 501(c)(3) organization has violated the political 
        campaign intervention prohibition is whether the activities 
        constitute political intervention or whether they are 
        educational [or religious], purposes for which an IRC 501(c)(3) 
        organization may be formed . . . Sometimes, however, the answer 
        is that the activity is both--it is educational [or religious], 
        but it also constitutes intervention in a political campaign.''

    2002 CETIP at 349. In a 1989 ruling the Service stated that 
``[e]ducating the public is not inherently inconsistent with the 
activity of impermissibly intervening in a political campaign.'' TAM 
8936002. Then in a 1999 Tax Advice Memorandum, 199907021, the IRS went 
on to say ``[e]ven if the organization's advocacy is educational, the 
organization must still meet all other requirements for exemption. . 
.''. In short, the IRS says you can do it, but you can't. The ``Houses 
of Worship Political Speech Protection Act'' will alleviate the deep 
chill caused by such IRS double speak since whatever the IRS standard 
is, a one time step over the line would not result in revocation.

Fifth, modifying the political intervention ban applicable to houses of 
worship to conform with the ``no substantial part'' test currently 
applicable for lobbying activities passes constitutional muster.

    In analyzing the constitutionality of a Congressional enactment in 
the Establishment Clause area, the courts continue to use the three 
part test articulated in Lemon v. Kurtzman, 403 U.S. 602 (1971). See 
Lamb's Chapel v. Center Moriches Sch. Dist., 508 U.S. 384 (1993) 
(noting that despite heavy criticism of the Lemon test, Lemon has not 
been overruled). See also Jager v. Douglas County Sch. Dist., 862 F.2d 
824, 828-29 (11th Cir.), cert. denied, 490 U.S. 1090 (1989) (discussing 
appropriateness of using Lemon test).
    Under the Lemon test, ``first, the statute must have a secular 
legislative purpose; second, its principal or primary effect must be 
one that neither advances nor inhibits religion. . . ; finally, the 
statute must not foster 'an excessive government entanglement with 
religion.''' Lemon, 403 U.S. at 612-13 (citations omitted). Allowing 
Congress to determine the application and reach of the tax code 
fulfills the ``secular purpose'' element of the Lemon test since only 
Congress has power under Article I of the constitution to make and levy 
taxes. As upheld in Regan v. Taxation With Representation, 461 U.S. 
540, 544 (1983), Congress may constitutionally permit certain speakers 
to be treated differently than others in the context of the tax 
statute. In Reagan the lobbying limits for exempt organizations were 
upheld against a constitutional challenge even though different tax-
exempt organizations were not subject to the same limitations. As 
stated in Rosenberger v. Rector and Visitors of Univ. Of Va., 515 U.S. 
819, 825 (1995):

        Regan relied on a distinction based on preferential treatment 
        of certain speakers--veterans organizations--and not a 
        distinction based on the content or messages of those groups.

    Accordingly, allowing Congress to determine the application of the 
tax code does not violate the secular purpose of the legislation.
    Under the second prong of the Lemon test, legislation will only 
violate the Establishment Clause if its primary effect is to advance or 
inhibit religion. The effects prong of the Lemon test ``'asks whether, 
irrespective of [the] government's actual purpose, the practice under 
review in fact conveys a message of endorsement or disapproval''' of 
religion. Wallace v. Jaffree, 472 U.S. 38, 56 n.42 (quoting Lynch v. 
Donnelly, 465 U.S. at 690 (O'Connor, J., concurring)). Modifying the 
absolute ban on political intervention to conform to the 
``insubstantiality'' test now used in the lobbying test conveys no such 
endorsement.
    Moreover, HR-2357 avoids the excessive entanglement of the 
government with religious institutions, in conformance with the third 
Lemon requirement ``The First Amendment does not prohibit practices 
which by any realistic measure create none of the dangers which it is 
designed to prevent and which do not so directly or substantially 
involve the state in religious exercises or in the favoring of religion 
as to have meaningful and practical impact.'' Lee v. Weisman, 505 U.S. 
577, 598 (quoting Schempp, 374 U.S. at 308 (Goldberg, J., concurring)). 
In addition, the U.S. Supreme Court has previously upheld the tax 
exemption for all religious organizations as required in order to avoid 
the excessive entanglement of the government in to the affairs of the 
church. Walz v. Tax Commission, 397 U.S. 664, 671 (1970).(2) 
It is for all these reasons that ``The Houses of Worship Political 
Speech Protection Act'' is constitutional, and a legally appropriate 
act for Members of Congress to support.
---------------------------------------------------------------------------
    \(2)\ The concern over entanglement is also why churches and houses 
of worship, pursuant to IRC 6033(a)(2), need not file annual 
informational tax returns (IRS Form 990), while all other exempt 
organizations must.
---------------------------------------------------------------------------

                            II. CURRENT LAW

    The phrase ``no substantial part of the activities'' is found in 
the current version of the Internal Revenue Code, section 501(c)(3), 
and it relates to the limit of how much ``lobbying,'' or legislative 
activity a church or exempt organization may conduct. The Houses of 
Worship Political Speech Protection Act (HR-2357) uses that same phrase 
to loosen the absolute ban now applying to any ``political activity'' 
(speech or association) by a house of worship.(3)
---------------------------------------------------------------------------
    \(3)\ Section 501(c)(3) of the Internal Revenue Code has been 
interpreted by courts to prevent even a single activity which might be 
regarded as Aparticipating in, or intervening [email protected] a political campaign 
on behalf of or in opposition to a candidate for public office. 
Association of the Bar of the City of New York v. Commissioner, 858 
F.2d 876 (2nd Cir, 1988); Branch Ministries v. Rossotti, 40 
F. Supp. 2d 15 (D.D.C. 1999); aff'd, 211 F.3d 1137 (D.C. Cir. 2000).
---------------------------------------------------------------------------
    As a rough rule-of-thumb, the phrase ``no substantial part of the 
activities'' has generally come to mean no more than five percent (5%) 
of an organization's overall expenditures of time, money and personnel. 
The five percent (5%) limit also follows the objective expenditure 
allowances (but a much lower rate) permitted for tax-exempt 
organizations, but not churches or houses of worship, in IRC 501(h), 
the so-called safe-harbor for lobbying activities.
    The ``Houses of Worship Political Speech Protection Act'' 
recognizes that no house of worship should be penalized for an 
occasional or inadvertent statement or action that may be regarded as 
``political intervention.''

III. THE NEED FOR THE HOUSES OF WORSHIP POLITICAL SPEECH PROTECTION ACT

    Congressional hearings over the last few years have served to 
highlight the abuses of the IRS in the name of tax code enforcement. In 
addition, the IRS has conducted tax or compliance audits of ``the 
Heritage Foundation, Citizens for a Sound Economy, the Christian 
Coalition, The National Rifle Association, Freedom Alliance, the 
Western Journalism Center, the National Center for Public Policy, and 
National Review.'' The Washington Times (January 8, 1998 at A.7). These 
and other conservative organizations have been audited as well, while 
their counterparts in the liberal establishment have gone unscathed.
    This type of selective federal investigation and enforcement 
highlights the need for regulatory reform and deregulation. The point 
is that no church or house of worship should be penalized for simply 
speaking out on the issues, candidates, or public leaders, occasionally 
or inadvertently engaging in activity that may be regarded as 
political, or accurately providing the voting records and issue stances 
of elected officials and candidates. Federal agencies such as the IRS 
cannot become so highly politicized that they become federal arbiters 
of political thought and permissible speech. The current federal tax 
code allows the IRS the unbridled leeway and discretion to conduct such 
politically motivated audits under the guise of regulatory enforcement, 
and it is using this unbridled discretion in a partisan and selective 
fashion.
    To reign in the IRS's unbridled discretion and bring balance and 
fairness back to the system the time has come to change the ``Johnson 
Amendment.'' This amendment was highly partisan and political and was 
specifically designed in 1954 by then Senator Lyndon Johnson to ``deny 
tax-exempt status to not only those people who influence legislation 
but also those who intervene in any political campaign on behalf of any 
candidate for any political office.''(4) Senator Johnson was 
angry that two non-profit Texas groups had supported his primary 
opponent, so he rammed his amendment through the Congress as a floor 
amendment without any benefit of a congressional hearing or 
debate.(5)
---------------------------------------------------------------------------
    \(4)\ 100 Cong. Rec. 9604 (1954).
    \(5)\ See, Hopkins, The Law of Tax-Exempt Organizations at 327 (6th 
ed. 1992)(herein ``Hopkins'').
---------------------------------------------------------------------------
    The rule has become so intrusive, and so significant a threat to 
the First Amendment rights of all churches, synagogues, mosques and 
houses of worship, that total removal of tax exemption can be imposed 
if a candidate for office addressing a religious body is favorably 
introduced, or is supported from the pulpit. Under the law as written, 
a one hour political strategy meeting held on the premises of a church 
or charity, without paying a market rental, could trigger the complete 
destruction of the institution by the IRS. A priest who speaks on the 
moral issues of abortion or capital punishment during a campaign season 
runs the risk of triggering an IRS investigation or violating the 
``coded words'' restriction. As written, the rule of '501(c)(3) is akin 
to a highway in which traffic to 65 mph is permissible, but if a 
motorist goes even 1 mph over the speed limit, the police can arrest 
the motorist who would then be subject to the death penalty; and absurd 
situation. This is not only manifestly unfair, but an intolerable 
infringement by the IRS of the fundamental rights of free speech, and 
the free exercise of religion. It also intrusively entangles the 
government in religious matters.
    The solution is simple. Under current tax law, tax exempt 
organizations may carry on lobbying if their efforts constitute ``no 
substantial'' amount of their activities. IRC 501(c)(3). While the term 
``substantial'' is not defined for those entities not making the safe-
harbor election permitted under IRC 501(h), such as 
churches,(6) for over 40 years courts have generally 
determined that if no more than five percent (5%) of the time and 
effort of the organization is devoted to lobbying, the lobbying was not 
``substantial.'' See, Seasongood v. Commissioner, 227 F.2d 907, 912 
(6th Cir. 1955); World Family Corp. v. Commissioner, 81 T.C. 958 
(1983)(exempt organization's lobbying activities which were less than 
ten percent (10%)--but more than 5%--of its total efforts was 
``insubstantial.'' Indeed, Marcus Owen, the former head of Exempt 
Organizations for the IRS, has been quoted as saying that ``the law in 
this area needs to be clarified since anything from five percent to 
fifteen percent of total expenditures has been permitted for 
[l]egislative activity.'' Washington Times, December 2, 1997, p. A5. 
From this line of cases, and comments, it appears that as long as an 
organization expends only five percent (5%) or so of its overall 
expenditures on legislative activity such activity will be regarded as 
``insubstantial'' and not result in a loss of exemption. Adopting a 
similar standard for political activity, and amending IRC '501(c)(3) as 
proposed in the House of Worship Political Speech Protection Act, does 
precisely that.
---------------------------------------------------------------------------
    \(6)\ Churches are not permitted to make the election for lobbying 
activities pursuant to IRC '501(h)(5). This exclusion means that the 
lobbying activities of churches is governed by the'' substantial part 
test,'' which is a facts and circumstances evaluation. IRS Reg. 
'1(a)(4); Kentucky Bar Foundation, Inc. v. Comm'r, 78 T.C. 971 
(1982)(the issue of ``[]substantial[ity]'' is a question of facts and 
circumstances). Moreover, for the same reason that churches need not 
file an annual tax return (IRC '6033(a)(2))--to avoid government 
entanglement--so too churches may not make the IRC '501(h) election.
---------------------------------------------------------------------------

   IV. TAX EXEMPTION IS LINKED TO SOCIAL POLICY, WHICH LEADS TO THE 
    INEVITABLE RESULT OF REVOCATION OF TAX EXEMPTION FOR RELIGIOUS 
                INSTITUTIONS AND RELIGIOUS ORGANIZATIONS

    Ever increasing inroads have been made into the tax exempt status 
of religious organizations and churches. Both the IRS and atheist 
groups have been seeking the revocation of tax exempt status for 
religious institutions for some time. See, e.g., Walz v. Tax 
Commission, 397 U.S. 664 (1969). Religious institutional doctrine has 
historically been at odds with social mores which are in vogue. To 
condition tax exemption on a religious institution's willingness to 
conform to fashionable ideals (e.g., ordination of homosexuals, same 
sex marriages) unavoidably leads to the demise of tax exemption for 
houses of worship. To avoid this egregious result, it is necessary to 
modify the tax code, and allow a wider berth for houses of worship to 
generally engage in political speech.

   The Threat to Free Speech and Free Exercise is Real Since the IRS

 Sanctions for Using ``Coded Language'' and is Contradictory on Whether

                         ``Intent'' Is Relevant

    The Service has taken the position that ``coded language'' violates 
the political prohibition. 2002 CETIP at 344-45. It explains that 
``[t]he concern is that [an exempt] organization may support or oppose 
a particular candidate without specifically naming the candidate by 
using code words to substitute for the candidates name in its message, 
such as ``conservative,'' ``liberal,'' ``pro-life,'' ``pro-choice,'' 
``anti-choice,'' ``Republican,'' or ``Democrat,'' etc. . . .'' 2002 
CETIP at 345. Then in a footnote, it contradicts its admonition not to 
use these very ``coded words'' and states that:

          ``[a] finding of political campaign intervention from the use 
        of coded words is consistent with the word ``candidate''--the 
        words are not tantamount to advocating support for or 
        opposition to an entire political party, such as 
        ``Republican,'' or a vague and unidentifiable group of 
        candidates, such as ``conservative'' because the sender of the 
        message does not intend the recipient to interpret them that 
        way. Coded words, in this context, are used with the intent of 
        conjuring favorable or unfavorable images--they have pejorative 
        or commendatory connotations. [So,] the voter in Vermont, 
        hearing an exhortation regarding ``liberal'' candidates, may 
        not know who fits that label in Kansas, but presumably he knows 
        who stands for what in Vermont, which is why the coded word is 
        used in the first place.'' id. at 345, n. 10 (underlining 
        added).

    The confusion and fear surrounding the requirements for compliance 
with the political intervention ban in section 501(c)(3) are quite 
real. One need look no further than the guidance pronouncements of the 
IRS and others in this area. For example, in ``Election Year Issues,'' 
(7) the tome relied upon by most practitioners in this area 
as an indicator of the Service's approach to political campaign 
activities by exempt organizations, the Service has taken the view that 
educational or religious activities which otherwise qualify as exempt 
activities can nevertheless constitute prohibited political activity:
---------------------------------------------------------------------------
    \(7)\ Judith Kindell and John F. Reilly, ``Election Year Issues,'' 
Exempt Organizations Continuing Education Technical Instruction 
Program, www.irs.gov (``2002 CETIP Text'').

          ``The most common question that arises in determining whether 
        an IRC 501(c)(3) organization has violated the political 
        campaign intervention prohibition is whether the activities 
        constitute political intervention or whether they are 
        educational [or religious], purposes for which an IRC 501(c)(3) 
        organization may be formed . . . Sometimes, however, the answer 
        is that the activity is both--it is educational [or religious], 
---------------------------------------------------------------------------
        but it also constitutes intervention in a political campaign.''

    2002 CETIP at 349. In a 1989 ruling the Service stated that 
``[e]ducating the public is not inherently inconsistent with the 
activity of impermissibly intervening in a political campaign.'' TAM 
8936002. Then in a 1999 Tax Advice Memorandum, 199907021, the IRS went 
on to say ``[e]ven if the organization's advocacy is educational, the 
organization must still meet all other requirements for exemption. . 
.''. So, the IRS says you can do it, but you can't.
    There is also considerable uncertainty over whether one's 
``intent'' or ``purpose'' in making the communication matters. In its 
1993 version of ``Election Year Issues'' the IRS stated ``the 
motivation of an organization is irrelevant when determining whether 
the political campaign prohibition has been violated.'' 1993 CETIP at 
414-15. However, in its 2002 version the IRS, discussing the debate its 
1993 statement generated, stated:
          ``Therefore, the resolution of the 'bad motive' issue depends 
        upon the way the activity is conducted (the facts and 
        circumstances) and upon any [sic] inquiry into the state of 
        mind of the organization.''

2002 CETIP at 351. It's clear, the IRS cares about motive or purpose, 
but then again it doesn't.(8)
---------------------------------------------------------------------------
    \(8)\ The courts have repeatedly held that when a regulatory agency 
has conflicting interpretations or applications of its rules and 
regulations, due process is violated because no clear or fair notice of 
what is required for compliance has been given. Satellite Broadcasting 
Co., Inc. v. FCC, 262 U.S. App. D.C. 274, 824 F.2d 1 (D.C. Cir. 1987); 
General Elec. Co. v. EPA, 311 U.S. App. D.C. 360, 53 F.3d 1324, 1327 
(D.C. Cir. 1995); United States v. Chrysler Corp., 332 U.S. App. D.C. 
444, 158 F.3d 1350, 1354-57 (D.C. Cir. 1998) (holding that agency 
failed to provide fair notice of specific requirements of compliance 
and therefore could not move to enforce its regulations); Rollins 
Envtl. Svcs. (NJ) Inc. v. EPA, 290 U.S. App. D.C. 331, 937 F.2d 649, 
653 (D.C. Cir. 1991) (rescinding fine assessed by EPA because 
regulation was ambiguous); Gates & Fox Co., Inc. v. OSHRC, 252 U.S. 
App. D.C. 332, 790 F.2d 154, 156 (D.C. Cir. 1986) (holding that agency 
failure to give fair notice of its interpretation of its regulations 
precluded enforcement); Trinity Broadcasting of Florida, Inc., et al. 
v. FCC, 211 F3d 618, 2000 U.S. App. LEXIS 8918 (D.C. Cir. 2000) (same).
---------------------------------------------------------------------------

   V. THE ORIGINAL PURPOSE OF IRC 501(C)(3) WAS TO PREVENT POLITICAL 
   ACTIVISM OF NON-PROFIT GROUPS IN TEXAS DURING THE 1954 SENATORIAL 
                           CAMPAIGN OF L.B.J.

    Tax exemption under IRC 501(c)(3) requires four basic 
criteria.(9) The chief prohibition amongst these is that 
nonprofit organizations, including houses of worship, must ``not 
participate in, or intervene in'' political campaigns. IRC '501(c)(3). 
As noted above, this provision was added to the federal tax law in 
1954, without benefit of congressional hearings, in the form of a floor 
amendment in the Senate, 100 Cong. Rec.9604 (1954). During 
consideration of the legislation that was to become the Revenue Act of 
1954, Senator Lyndon B. Johnson of Texas forced the amendment out of 
his anger that local two Texas non-profit groups had supported his 
primary opponent. Hopkins, ``The Law of Tax-Exempt Organizations,'' 327 
(6th ed. 1992) (hereinafter ``Hopkins'').
---------------------------------------------------------------------------
    \(9)\ That is, organizations described in IRC 170(c)(2)(B), 
501(c)(3), 2055(a)(2), 2106(a)(2)(A)(ii) & (iii), and 2522(a)(2) and 
(b)(2).
---------------------------------------------------------------------------
    The tax exemptions contained in IRC 501(c)(3) originated as a part 
of the Tariff Act of 1894. The provision stated that ``nothing herein 
contained shall apply to. . . corporations, companies, or associations 
organized and conducted solely for charitable, religious, or 
educational purposes'' (ie., houses of worship) After ratification of 
the Sixteenth Amendment, Congress enacted the Tariff Act of 1913, 
exempting from the federal income tax ``any corporation or association 
organized and operated exclusively for religious, charitable, 
scientific, or educational purposes, no part of the net income of which 
inure to the benefit of any private shareholder or individual.''
    In the Revenue Act of 1918, the enumeration of tax-exempt 
organizations was expanded to include those organized ``for the 
prevention of cruelty to children or animals.'' The Revenue Act of 1921 
expanded the statute to exempt ``any community chest, fund, or 
foundation'' and added ``literary'' groups to the list of exempt 
entities. The Revenue Act of 1924, 1926, 1928, and 1932 did not provide 
for any changes in the law of tax-exempt organizations.
    The Revenue Act of 1934 carried forward the exemption requirements 
as stated in the prior revenue measures and added the rule that ``no 
substantial part'' of the activities of an exempt organization can 
involve the carrying on of ``propaganda'' or ``attempting to influence 
legislation.'' The Revenue Acts of 1936 and 1938 brought forward these 
same rules, as did the Internal Revenue Code of 1939. The current IRC 
'501(c)(3) language follows the ``Johnson Amendment'' and came into 
being upon enactment of the Internal Revenue Code in 1954. 68A Stat. 
163 (ch. 736).

  VI. THE SUBSEQUENT INTERPRETATIONS OF IRC 501(C)(3) BY THE IRS AND 
  COURTS MAKES IT CLEAR THAT THIS PORTION OF THE TAX CODE IS MEANT TO 
             REPRESS PARTICIPATION IN THE POLITICAL PROCESS

    The requirement that a church or charitable organization not engage 
in political campaign activities has been expanded to prohibit even 
remotely partisan involvement. In Christian Echoes National Ministry 
Inc. v U.S., 470 F2d 849 (10th Cir 197. cert. den. 414 U.S. 864 (1973), 
a federal appeals court denied tax exempt status to a religious 
organization for backing a conservative political agenda. The 
organization, by means of publications and broadcasts, expressed its 
opposition to candidates and incumbents considered too liberal and 
endorsed conservative officeholders. The Tenth Circuit summarized the 
unforgivable offense: ``These attempts to elect or defeat certain 
political leaders reflected. . . [the organization's] objective to 
change the composition of the federal government.'' Christian Echoes, 
470 F2d at 856. See also Monsky v. Comm., 36 T.C.M. 1046 (1977); 
Giordano v Comm., 36 T.C.M. 430 (1977). This flat ban on religious 
involvement in politics is not limited to active campaigning, however. 
In 1978 the IRS issued a ruling that confined ``voter education'' 
activities to those that are nonpartisan in nature. Rev. Rul. 78-248, 
1978--1 C.B. 154.(10)
---------------------------------------------------------------------------
    \(10)\ This ruling was a reversal of a prior ruling wherein the IRS 
stated that the prohibitions against involvement in political campaigns 
``do not refer only to participation or intervention with a partisan 
motive, but to any participation or intervention which affects voter 
acceptance or rejection of a candidate.'' Consequently, the IRS 
determined that ``the organization's solicitation and publication of 
candidates' views on topics of concerns to the organization can 
reasonably be expected to influence voters to accept or reject 
candidates.'' Rev Rul.78--I 60. 1978--1 C.B. at 154 (emphasis added). 
This flat ban on all First Amendment activity relating to politics 
engendered a public outcry and a rare reversal by the IRS. Hopkins at 
332.
---------------------------------------------------------------------------
    In a later ruling the IRS specified the following factors as 
demonstrating the absence of prohibited campaign activity by a church 
or nonprofit organization:

        1. Lthe voting records of all incumbents will be presented;
        2. Lcandidates for reelection will not be identified;
        3. Lno comment will be made on an individual's overall 
        qualifications for public office;
        4. Lno statements expressly or impliedly endorsing or rejecting 
        any incumbent as a candidate for public office will be made;
        5. Lno comparison of incumbents with other candidates will be 
        made;
        6. Lthe organization will point out the inherent limitations of 
        judging the qualifications of an incumbent on the basis of 
        certain selected votes, by stating the need to consider such 
        unrecorded matters as performance on subcommittees and 
        constituent service;
        7. Lthe organization will not widely distribute its compilation 
        of incumbents' voting records;
        8. Lthe publication will be distributed to the organization's 
        normal readership only; and
        9. Lno attempt will be made to target the publication toward 
        particular areas in which elections are occurring nor to time 
        the date of publication to coincide with an election campaign.

Rev. Rul. 80-282, 1980-2 C.B. 178. The IRS' application of IRC 
501(c)(3) then, is to limit any preferential expression for a political 
candidate. There is no compelling governmental reason to so limit the 
First Amendment activities of churches and houses of worship. This 
restriction should thus be modified to track the ``insubstantial'' 
standard regarding lobbying, and apply that standard to political 
activity as well.

VII. THE IRS APPLICATION OF THE LIMITATION ON CHURCHES PARTICIPATING IN 
      THE POLITICAL PROCESS IS EXPANDING, INTRUSIVE AND SELECTIVE

    Under the First Amendment, the government lacks the license to make 
determinations about whether a ``creed'' or ``form of worship'' is 
sufficiently ``recognized,'' and whether the church has an adequate 
organizational structure (i.e., properly ordained ministers, a 
literature ``of its own,'' etc.) to prevent IRS intrusion and 
inspection. If ``it is not within the judicial ken to question the 
centrality of particular beliefs or practices of faith'' and the 
``courts must not presume to determine the place of a particular belief 
in a religion or the plausibility of a religious claim,'' Employment 
Division v. Smith, 494 U.S. 872, 878 (1990) (citations omitted), it 
stands to reason that the other branches of the federal government are 
constitutionally unfit to make those judgments as well. Many 
independent small churches do not meet regularly, do not have an 
independent existence, do not have ordained ministers, do not have a 
formal doctrinal code, and yet nonetheless are churches warranting tax 
exemption.(11)
---------------------------------------------------------------------------
    \(11)\ Indeed, by the standards the IRS applies today, Jesus and 
the Apostles would not qualify for ``church'' status. See, Internal 
Revenue Service Manual '321.3 (outlining the 14 point test used by the 
IRS to determine ``church'' status).
---------------------------------------------------------------------------
    Similarly, Treasury regulations describe a church as an 
organization the duties of which include the ``ministration of 
sacerdotal functions and the conduct of religious worship.'' Reg. I.51 
I-2(a)(3)(ii). This definition begs the question, because it requires 
Treasury officials to exercise their own judgment in determining what 
is a priestly function, and what is sufficient ``religious worship'' to 
qualify for ``church'' status.
    Governmental judgments of this kind are not only unworkable, they 
are dangerous and unconstitutional. The Supreme court has reiterated 
the oft repeated principle that ``religious freedom encompasses the 
power of religious bodies to decide for themselves, free from state 
interference, matters of church government as well as those of faith 
and doctrine. Serbian Orthodox Diocese v. Milivojevich, 426 U.S. 696, 
722 (1976) (emphasis added); Kedroffy St. Nicholas Cathedral, 344 U.S. 
94, 116 (1952). In Corp. of Presiding Bishops v. Amos, 483 U.S. 327, 
341 (1987), Justice Brennan noted: ``religious organizations have an 
interest in autonomy in ordering their internal affairs, so that they 
may be free to: ``Select their own leaders, define their own doctrines, 
and run their own institutions.'' (citations and internal quotation 
marks omitted, emphasis added). Given the weight of constitutional 
precedent in this area, it defies rationality for the government to 
empower its tax collecting arm with the ability to invade the religious 
autonomy of churches while other branches of the government are 
constitutionally forbidden from doing so.
    This is of even greater concern because conservative or orthodox 
and liberal or reform church organizations are treated quite 
differently by the IRS. For example, a conservative evangelical church 
in upstate New York, the Church at Pierce Creek, had its tax exemption 
revoked in 1995 for impermissible ``political'' activity. The offending 
activity involved its published moral and religious stand in the 
newspaper calling abortions on demand, homosexuality, and premarital 
sex ``sins.'' ``Christians'' were admonished to oppose such ``sins'' 
and not vote for then Governor Clinton.(12) Historically, 
currently, and at the time the Church at Pierce Creek was having its 
tax exempt status revoked, numerous churches engaged in similar or more 
egregious violations, as follows:
---------------------------------------------------------------------------
    \(12)\ Branch Ministries v. Rossotti, 40 F. Supp. 2d 15 (D.D.C. 
1999); aff'd, 211 F.3d 1137 (D.C. Cir. 2000).
---------------------------------------------------------------------------

                           Historical Context

    1. Since the campaign of Thomas Jefferson, religious and political 
controversy has been prominent in approximately one of every three 
campaigns for the presidency. B. Dulce & E. Richter, Religion and the 
Presidency v, 1-11 (1962). See also H. Foote, The Religion of Thomas 
Jefferson 45 (1960) (electioneering pamphlets written and distributed 
by clergymen accused Jefferson of atheism and thus ``too dangerous an 
enemy of Christianity to be president'').
    2. ``During the 1980 election year, a number of religious groups 
participated in energetic presidential and congressional campaign 
activities to promote the election of politicians who share their 
beliefs.'' Note, ``Religion and Political Campaigns: a Proposal to 
Revise Section 501(c)(3) of the Internal Revenue Code,'' 49 Fordham L. 
Rev. at 537 (1981) (footnotes omitted).

Political Activity by Churches Where No Sanctions Have Been Levied, But 
     for Which Other Churches Have Had Their Tax Exemptions Revoked

    3. ``[T]he Reverend Jesse Jackson . . . campaigned from pulpits of 
black churches across the nation in his pursuit of the Democratic 
nomination'' for President in 1984. Reichley, Religion in American 
Public Life (The Brookings Institution, Wash., D.C. 1985). See also 
Rosenthal, ``Prelates and Politics: Current Views on the Prohibition 
Against Campaign Activity,'' Tax Notes 1122 (1991); and Chisolm, 
``Politics and Charity: A Proposal for Peaceful Coexistence.'' 58 Geo. 
Wash. L. Rev. (No. 2) 308 (1990); Tesdahl, ``Intervention in Political 
Campaigns by Religious Organizations After the Pickle Hearings--A 
Proposal for the 1990s,'' 4 Exempt Org. Tax Rev. (No. 9) 1165 (1991).
    4. The IRS Chief Counsel's office ``reluctantly'' concluded in 1989 
that an organization ``probably'' did not intervene in a political 
campaign on behalf of or in opposition to a candidate for public 
office, even though the organization ran a political advertising 
program that (1) was, in the words of the IRS, ``mostly broadcast 
during a two week period around the Reagan/Mondale foreign and defense 
policy debate on October 21, 1984,'' (2) contained statements that 
``could be viewed as demonstrating a preference for one of the 
political candidates'' [Mondale], (3) ``could be viewed'' as having 
content such that ``individuals listening to the ads would generally 
understand them to support or oppose a candidate in an election 
campaign,'' (4) involved statements that were released so close to the 
November vote as to be ``troublesome.'' IRS Technical Advice Memorandum 
8936002. Even though these campaign broadcasts were in clear violation 
of the IRS' voter education rules, see e.g., Rev. Rul. 86-95, 1986-1 
C.B. 332, the IRS nonetheless took no action against this charitable 
organization for this campaign activity.
    5. 9/25/94 (13)--then-Governor of New York Mario Cuomo, 
President Clinton, and New York Mayor Rudolf Gulliani all campaigned on 
behalf of Governor Cuomo from the pulpit of the Bethel A.M.E. Church in 
Harlem, New York.
---------------------------------------------------------------------------
    \(13)\ The cited dates are the dates of articles about the church 
campaign events, not necessarily the dates of the events themselves.
---------------------------------------------------------------------------
    6. 10/23/94--Senator Charles Robb and Governor Wilder campaigned on 
behalf of Senator Robb from the pulpit of the Trinity Baptist Church in 
Richmond, Virginia.
    7. 10/11/94--California Democratic gubernatorial candidate Kathleen 
Brown campaigned in five different Los Angeles churches: Bethel A.M.E. 
Church, the Mount Tabor Missionary Baptist Church, the First A.M.E. 
Church, and the West Los Angeles Church of God in Christ.
    8. 11/21/92--Vice President Al Gore campaigned from the pulpit of 
three different Savannah, Georgia churches on behalf of Democratic run-
off candidate Wyche Fowler.
    9. 4/5/92--Presidential candidate Bill Clinton campaigned from the 
pulpit of the Bridge Street A.M.E. church in Harlem, New York.
    10. 1/27/92--Democratic presidential candidate Tom Harkin 
campaigned from the pulpit of the Heritage United Church of Christ, 
located in Baltimore, Maryland.
    11. 8/14/90--District of Columbia Mayor Marion Barry campaigned 
from the pulpit of the Israel Baptist Church.
    12. 4/30/90--New York Democratic congressional candidate Charles 
Shumer campaigned at St. John's Church in New York, speaking with 30 
black ministers.
    13. 4/98--Democratic congressional candidate contenders Ohio State 
Senator Jeffrey D. Johnson and Cuyahoga County Prosecutor Stephanie 
Tubbs Jones campaigned at the Starlight Baptist Church in Cleveland 
``for an endorsement interview by a black ministers group.'' Johnson 
spends his Sundays campaigning at black churches.
    14. 4/8/98--Florida Republican gubernatorial candidate campaigned 
at Faith Memorial Baptist Church in Liberty City.
    15. 3/31/98--Detroit Democratic gubernatorial candidate Doug Ross 
``announced a 19-member Executive Board of Clergy United for Ross'' 
which was ``expected to include 250 ministers by May.''
    16. 3/8/98--Chicago Democratic gubernatorial candidate Roland 
Burris campaigned at Chicago churches.
    17. 2/22/98--Chicago Democratic gubernatorial candidate Jim Burns 
``preached his crime-fighting message to South Side parishioners at a 
storefront church called the House of Refuge.''
    18. 2/14/98--Democratic congressional candidate Irma Cohen ``is 
relying on Operation Big Vote, the church-based alliance set up by 
Florida Democrats in 1994 to bring out the black vote. 'The one thing 
we have going for us is the church network,' Kennedy said. 'Rightly or 
wrongly, 90 percent of the people in the church do what the minister 
says.''
    19. 1/6/98--Former Democrat Congressman Rev. Floyd Flake, endorsed 
the congressional candidacy of New York Democratic Assemblyman Gregory 
Meeks, during services at Flakes' Church, the Allen African Methodist 
Episcopal Church in Jamaica, Queens.
    20. 11/13/97, 10/24/97--New Jersey Democratic gubernatorial 
candidate Jim McGreevy during the course of his campaign, campaigned in 
more than 100 churches, and made 104 campaign visits to African-
American churches.
    21. 11/3/97--Both Virginia Democratic gubernatorial candidate 
Donald S. Beyer, Jr. and Virginia Republican candidate James S. 
Gilmore, III campaigned in churches across the State of Virginia.
    22. 11/2/97--Roman Catholic Bishop Frank J. Rodimer endorsed New 
Jersey Democratic gubernatorial candidate Jim McGreevy in his Sunday 
service homily at St. John's Cathedral in Paterson.
    23. 11/1/97, 10/29/97--Executive Director of the Black Ministers 
Council of New Jersey, Rev. Reginald Jackson, endorsed Republican 
Governor Christie Whitman, while 24 African-American ministers 
representing more than 600 churches statewide endorsed Democratic 
gubernatorial candidate Jim McGreevey.
    24. 10/20/97--Rev. Al Sharpton endorsed the candidacy of New York 
Democratic mayoral candidate Ruth Messinger during Sunday worship 
services at the Bethel A.M.E. Church in Harlem, and at the New 
Jerusalem Baptist Church in Queens.
    25. 10/4/97--Washington Governor Gary Locke made four campaign 
visits to a Redmond Buddhist Temple, where he was offered sizable 
campaign donations.
    26. 10/4/97--Muslim Amatullah Yamini campaigned in Christian 
churches in the Onondaga County, New York, State legislative district 
Democratic primary.
    27. 10/2/97--Houston, Texas Democratic mayoral candidate Lee P. 
Brown campaigned at the Green Grove Missionary Church.
    28. 10/1/97--New York Democratic mayoral candidate Ruth Messinger 
campaigned at ``the Christian Life Center, a 7000-member 
nondenominational ministry in Brownsville, Brooklyn.''
    29. 5/15/97--The Black Clergy of Philadelphia, representing 450 
churches, announced their choices for judicial candidates at the Vine 
Memorial Baptist Church. The clergy members were joined by many of the 
candidates they were endorsing.
    30. 12/9/96--At the Houston, Texas, Windsor Village United 
Methodist Church: ``The message to God came just after U.S. Rep. 
Richard Gephardt of Missouri, the Democratic leader of the U.S. House, 
asked the audience to support the reelection of Democratic U.S. Rep. 
Ken Bentsen.'' Rep. Gephardt and Rep. Bentsen then proceeded to 
campaign at a Chinese Baptist church and several African American 
churches in Houston.
    31. 11/11/96--As the Denver Post plainly put it: ``Don't try to 
tell a black minister about the separation of church and state. Not 
when the state comes striding into the sanctuary nearly every Sunday, 
begging for votes. . . . Other political and religious leaders in 
Denver say far more candidates than Webb owe their elections to 
northeast Denver and the political work of black churches there. They 
say Tim Wirth and Gary Hart could not have won their U.S. Senate races 
without an all-out effort from the church congregations.''
    32. 11/5/96--U.S. Senator Paul Simon campaigned at the Grace United 
Methodist Church in Springfield, Illinois, on behalf of Democratic 
congressional candidate Dick Durbin.
    33. 11/5/96--Rev. Jesse Jackson campaigned on behalf of Rhode 
Island Democratic candidates at the Pond Street Baptist Church in 
Providence.
    34. 11/4/96--President Clinton campaigned at the St. Paul AME 
Church in Tampa, Florida.
    35. 11/4/96--Democratic Rep. Martin Frost ``made campaign stops at 
four African-American churches [during Sunday services] in southeast 
Fort Worth, Texas.''
    36. 11/4/96--Louisiana Democratic Senatorial Candidate Mary 
Landrieu ``visited African-American churches Sunday, including Asia 
Baptist Church, where she received an enthusiastic endorsement from the 
Rev. Zebadee Bridges.''
    37. 11/4/96--North Carolina Democratic ``Senate Candidate Harvey 
Gantt visited five black Charlotte congregations on Sunday, mounting 
the pulpit in three . . . `There comes a time in a campaign when you 
have to trust the voters to do the right thing,' he said from the 
pulpit, `I'm not going to beat up on Senator Helms . . . All I'm going 
to say is, he's been there 24 years. That's enough time.' ''
    38. 11/4/96--Pastor Joe Fuiten of the Cedar Park Assembly of God 
Church in Seattle, Washington urged his congregants to vote for 
Republican candidates, while across town at the Mount Zion Baptist 
Church, Rev. Samuel B. McKinney urged his church members to vote the 
Democratic ticket.
    39. 11/4/96--Democratic Senatorial candidate Mark Warner campaigned 
in African American churches across the State of Virginia.
    40. 11/3/96--Democratic Memphis Mayor Herenton endorsed Democratic 
congressional candidate Harold Ford, Jr. at the Greater Imani Church, 
in Memphis, Tennessee.
    41. 10/28/96--The Northeast Ministers Alliance, an organization of 
60 mostly African American churches located in Houston Texas, endorsed 
a slate of Democratic Candidates running for various state-level 
offices, and one Republican running for local sheriff.
    42. 10/21/96--President Clinton campaigned at the New Hope Baptist 
Church in Newark, New Jersey.
    43. 9/17/96--``The Greater Denver Ministerial Alliance, 
representing more than 100 black churches and 20,000 Denver voters, 
endorsed Bill Clinton for president, Al Gore for vice president, 
Democrat Ted Strickland for the Senate and Republican Joe Rogers for 
the House.''
    44. 9/13/96--Reverend Acen Phillips endorsed the candidacy of 
Republican congressional African American candidate Joe Rogers, at the 
Mount Gilead Baptist Church, in Denver, Colorado.
    45. 8/26/96--Vice President Al Gore campaigned with the Rev. Jesse 
Jackson at the Fellowship Baptist Church in Charleston, North Carolina. 
The Rev. Jackson is co-minister of the church.
    46. 11/8/95--U.S. Democratic Rep. Cleo Fields campaigned for 
governor at a New Orleans church.
    47. 9/15/95--Several Orthodox Rabbis spoke from the pulpit in favor 
of Baltimore Democratic mayoral primary candidates.
    48. 8/12/95--``the influential and powerful United Ministerial 
Coalition of Baltimore threw their thousands of affiliated church 
members behind the re-election effort of [Baltimore] Mayor Kurt L. 
Shmoke.''
    49. 5/18/95--Gubernatorial candidate Kentucky Senate President John 
``Eck'' Rose campaigned at the Canaan Missionary Baptist church in 
Louisville, Kentucky.
    50. 2/28/95--Philadelphia Mayor Edward G. Rendell picked up a re-
election endorsement from the Black Clergy of Philadelphia & Vicinity, 
representing more than 400 churches and ministries. The endorsement 
``was formally announced at a press conference in the basement of the 
Vine Memorial Baptist Church in West Philadelphia.''
    51. 2/6/95--Chicago Democratic primary mayoral candidate Joe 
Gardner campaigned at the St. Stephen's African Methodist Episcopal 
Church, on Chicago's west side.
    52. 11/7/94--Rev. Jesse Jackson campaigned on behalf of Democratic 
candidates at the New Hope Church of God in Christ, in Norfolk, 
Virginia.
    53. 11/6/94--Republican Senatorial Candidate Ollie North and 
Democratic Senatorial incumbent Charles Robb both campaigned at 
Virginia churches.
    54. 11/3/94--President Clinton campaigned for Democratic candidates 
at the Antioch Baptist Church in Cleveland, Ohio.
    55. 10/31/94--New Jersey Democratic Senator Frank Lautenberg 
campaigned at the Salem Baptist Church in Jersey City.
    56. 10/24/94--Former Virginia Gov. Douglas Wilder campaigned for 
Virginia Senator Charles Robb at the Trinity Baptist Church.
    57. 10/13/94--New Jersey Democratic Senator Frank Lautenberg was 
endorsed by a group of 30 ministers at a news conference held at the 
Zion AME Church in Brunswick, New Jersey.
    58. 7/19/94--Democratic Rep. Maxine Waters campaigned at Detroit's 
Dexter Avenue Baptist Church on behalf of Michigan Democratic 
gubernatorial candidate Howard Wolpe.
    59. 6/2/94--Democratic Governor Mario Cuomo campaigned at the St. 
John Baptist Church in Buffalo, New York.
    60. 5/13/94--Democratic Governor Mario Cuomo campaigned at ``the 
Hillcreat Jewish Center in Queens, a Conservative shul, to Temple 
Emmanuel on Fifth Avenue, a Reform synagogue, and wrapped up his 
evening at the Orthodox Union dinner at the Grand Hyatt Hotel.''

           VIII. THE IRS SHOULD NOT HAVE UNBRIDLED DISCRETION

    Clearly, churches and houses of worship engage in ``political 
activity.'' However, the IRS uses its authority selectively to only 
target those it wishes to silence or threaten. Today it may be orthodox 
and conservative views, but tomorrow it could be liberal or 
unconventional views. Such unbridled discretion not only creates 
constitutional concerns, but illustrates why Congress needs to reign-in 
the IRS to insure constitutional compliance and lift the sword of 
Damocles hanging over churches. The Supreme Court has ``previously 
identified two major First Amendment risks associated with unbridled 
licensing schemes: self-censorship by speakers in order to avoid being 
denied a license to speak [or having one withdrawn]; and the difficulty 
of effectively detecting, reviewing and correcting content-based 
censorship as applied without standards by which to measure the 
licensor's action.'' City of Lakewood v. Plain Dealer Publishing 
Company, 108 S. Ct. 2138, 2145 (1988).
    In Shuttlesworth v. City of Birmingham, 394 U.S. 147, 153 (1969), 
the court also explained: ``[w]e have consistently condemned licensing 
[or regulatory] schemes which vest in administrative officials 
discretion to grant or withhold a permit upon broad criteria.'' This is 
the heart of the problem which has been created due to the IRS' 
discretion and selective application of the law. It is precisely the 
absence of sufficient clear and specific standards by which to gage the 
qualifications and conduct of houses of worship in the political 
activities area which needs to be corrected. Otherwise, government 
officials may unconstitutionally ``pursue their personal 
predilections.''

   IX. A SIMPLE REVISION TO THE TAX CODE WILL ALLEVIATE THIS PROBLEM

    The IRS' enforcement and regulation of the ``political'' activities 
of houses of worship is discriminatory and improperly based upon its 
``predilections'' of the moment: one church is permitted to say 
something another is not, one's activity is appropriate, but same 
activity by another not, etc. To avoid this type of arbitrary or 
capricious enforcement, and remove the dramatic chilling impact the 
IRS' selective enforcement has, the Houses of Worship Political Speech 
Protection Act proposes a substantiality test for this type of 
``political activity,'' as is currently the case with regard to 
legislative or lobbying activity by churches and houses of worship.

                   Present Language of IRC 501(c)(3):

    The following organizations are [exempt from taxation under this 
subtitle. . .]

          Corporations, and any community chest, fund, or foundation, 
        organized and operated exclusively for religious charitable, 
        scientific, testing for public safety, literary, or educational 
        purposes, or to foster national or international amateur sports 
        competition (but only if not part of its activities involve the 
        provision of athletic facilities or equipment), or for the 
        prevention of cruelty to children or animals, no part of the 
        net earnings of which inures to the benefit of any private 
        shareholder or individual, no substantial part of the 
        activities of which is carrying on propaganda, or otherwise 
        attempting, to influence legislation (except as otherwise 
        provided in subsection (h)), and which does not participate in, 
        or intervene in (including the publishing and distribution of 
        statements), any political campaign on behalf of (or in 
        opposition to) any candidate for public office.

  Proposed Change to IRC 501(c)(3) in the Houses of Worship Political 
                         Speech Protection Act:

    The following organizations are [exempt from taxation under this 
subtitle. . .]

          Corporations, and any community chest, fund, or foundation, 
        organized and operated exclusively for religious charitable, 
        scientific, testing for public safety, literary, or educational 
        purposes, or to foster national or international amateur sports 
        competition (but only if not part of its activities involve the 
        provision of athletic facilities or equipment), or for the 
        prevention of cruelty to children or animals, no part of the 
        net earnings of which inures to the benefit of any private 
        shareholder or individual, no substantial part of the 
        activities of which is carrying on propaganda, or otherwise 
        attempting to influence legislation (except as otherwise 
        provided in subsection (h)), and except in the case of an 
        organization described in section 508(c)(1)(A) (relating to 
        churches), which does not participate in, or intervene in 
        (including the publishing and distribution of statements), any 
        political campaign on behalf of (or in opposition to) any 
        candidate for public office and, in the case of an organization 
        described in section 508(c)(1)(A), no substantial part of the 
        activities of which is participating in, or intervening in 
        (including the publishing or distributing of statements), any 
        political campaign on behalf of (or in opposition to) any 
        candidate for public office.

                             X. CONCLUSION

    Given the historic and critically necessary role churches and 
houses of worship have played in speaking to the issues of the day, and 
with the continuing desire of many religious people in the United 
States to speak out collectively on matters of moral importance, the 
time has come to rectify a nearly 50-year old injustice and to change 
IRC 501(c)(3), as proposed in the Houses of Worship Political Speech 
Protection Act.

                               

    Chairman HOUGHTON. Dr. Gaddy?

    STATEMENT OF REVEREND C. WELTON GADDY, PH.D., EXECUTIVE 
                 DIRECTOR, INTERFAITH ALLIANCE

    Reverend GADDY. Yes. Thank you, Chairman Houghton and 
Members of the Subcommittee on Oversight. I appreciate the 
opportunity to share with you concerns about the two bills 
pending before this Committee.
    My name is C. Welton Gaddy. I serve as Executive Director 
of the Interfaith Alliance, a faith-based, nonpartisan, 
grassroots organization dedicated to promoting the positive and 
healing role of religion in public life, and challenging those 
who employ religion to promote intolerance. The Interfaith 
Alliance is supported by more than 150,000 Members drawn from 
over 50 different religious traditions, local alliances in 38 
States, and a national network of religious leaders.
    I also serve as Pastor for preaching and worship at 
Northminster Baptist Church in Monroe, Louisiana.
    Profound constitutional issues are at stake in these two 
legislative proposals. Adoption of this legislation would alter 
the whole landscape of church-State relations in this Nation. 
Current law protects the integrity of houses of worship and 
prevents government entanglement in the affairs of houses of 
worship. With the lifting of the absolute prohibition on 
political activities comes an invitation to the government to 
regulate the practices and affairs of a house of worship.
    However, even if, by some stretch of the imagination, one 
could conceive that the bills before this Subcommittee today 
present no constitutional problems, I would oppose them. I 
would oppose them as a pastor who has worked in congregational 
ministry for more than 40 years, as well as the Executive 
Director of a national interfaith organization that values the 
importance of religious congregations. I can think of few ways 
to compromise the integrity of religious congregations and to 
blunt the vitality of religion in our land more than by the 
passage of either one of these bills.
    First of all, neither the Houses of Worship Political 
Speech Protection Act nor the Bright-Line Act of 2001 is wanted 
or needed by most religious people in this land. A recent 
Gallup/Interfaith Alliance foundation poll of religious leaders 
found that 77 percent of clergy believe they should not endorse 
political candidates. Of those participating in this poll, 59 
percent identified themselves as evangelicals. It is ironic 
that these results show that the very people whom these bills 
are supposedly intended to empower are people who adamantly 
resist even the premise on which the bills are based.
    Second, these bills have the potential to compromise 
religious leaders' ministries of compassion and even to silence 
the prophetic voice of communities of faith in this land. 
Passage of either of these bills would turn pastors, imams, 
rabbis, and other would-be prophets into political operatives 
to be lobbied by candidates for public office and used as 
endorsers of partisan campaigns.
    To saddle religious leaders with the skepticism commonly 
associated with politics would erode the reverence accorded to 
religious offices and leave congregations devoid of clergy 
functioning with an authority rooted in spirituality. When 
pulpits, bimahs, and other sacred desks from which the 
Scriptures and oral traditions of various religions are read 
and interpreted become stumps on which ministers stand to 
deliver political speeches and hand out political endorsements, 
the prophetic voice of the religious community, arguably 
religion's most important contribution to this Nation, will be 
silenced.
    I also have grave concerns about the health of religious 
congregations. Lifting the absolute ban on politicking is sure 
to create a rift between the leadership of a house of worship 
and the congregants. A religious leader in a congregation must 
be able to serve all of the people in that congregation.
    More than once in a single day, I have conducted funerals 
for people of competing political persuasions and blessed 
babies born to parents who wanted nothing to do with the 
political process. In each instance the families involved 
sought the ministry of a clergyperson, not a politician. Taking 
on the role of a political power broker would jeopardize beyond 
measure the acceptance and effectiveness of a minister within a 
congregation, who must be able to serve all members of that 
congregation.
    Then there is the issue of money. When people of faith give 
money to their congregations as an act of devotion to God, they 
should not have to worry about a portion of that money going to 
politicians. To turn offerings given in the name of God as acts 
of worship into political contributions devoted to the support 
of partisan politicians is a sacrilege.
    Needless to say, people of faith are not monolithic in 
their political ideology. Passage of this legislation will 
divide religious communities dramatically and literally 
reconfigure congregational life in this Nation.
    Supporters of these two bills call for their support under 
the guise of assuring freedom for houses of worship. Make no 
mistake about it, at this very moment houses of worship are 
free to endorse candidates for political offices and to give 
moneys to those candidates' campaigns. They just cannot do that 
politicking with funding that is tax-deductible. Every house of 
worship is free to forfeit the privacy of its identity as a 
spiritual body and to function as a political entity governed 
by all of the IRS regulations and State and Federal laws that 
apply to political institutions.
    Mr. Chairman, I hope that each of these proposed pieces of 
legislation, which represents as serious a threat to the 
integrity and vitality of religion in this Nation as it does to 
the continuation of religious liberties guaranteed by the 
Constitution, will be stopped at this moment in this Committee. 
Thank you.
    [The prepared statement of Reverend Gaddy follows:]
   Statement of Reverend C. Welton Gaddy, Ph.D., Executive Director, 
                          Interfaith Alliance
    Good afternoon Chairman Houghton and members of the Subcommittee on 
Oversight. I appreciate the opportunity to share with you my concerns 
about two bills pending before this committee, H.R. 2357, the Houses of 
Worship Political Speech Protection Act and H.R. 2931, the Bright-Line 
Act of 2001.
    Mr. Chairman, I consider myself fortunate to have had the pleasure 
of working with you on issues of mutual concern over your long career 
of service to this nation. I would be remiss if I did not also 
acknowledge Congressman John Lewis, who has been a good friend to The 
Interfaith Alliance Foundation through his work of many years on our 
Walter Cronkite Faith and Freedom Award Selection Committee.
    For those on the Oversight committee whom I have not met, I am the 
Rev. Dr. C. Welton Gaddy, and I serve as the executive director of The 
Interfaith Alliance. The Interfaith Alliance is a faith-based, non-
partisan, grassroots organization dedicated to promoting the positive 
and healing role of religion in the life of our nation and challenging 
those who employ religion to promote intolerance. With more than 
150,000 members drawn from over 50 faith traditions, local Alliances in 
38 states, and a national network of religious leaders, The Interfaith 
Alliance promotes compassion, civility and mutual respect for human 
dignity in our increasingly diverse society.
    In addition to my role at the Alliance, I also serve as Pastor for 
Preaching and Worship at Northminster (Baptist) Church in Monroe, 
Louisiana.
    Mr. Chairman and members of the Committee, The Interfaith Alliance 
has very serious concerns about H.R. 2357 and H.R. 2931. Indeed, we are 
fundamentally opposed to both of these bills that are before you today.
    Our analysis of H.R. 2357, the Houses of Worship Political Speech 
Protection Act, is in accord with the Congressional Research Service, 
which has stated that this bill ``would amend IRC Section 501(c)(3) to 
exempt churches and church auxiliaries from the absolute prohibition on 
participation or intervention in a political campaign and add language, 
which would measure churches by the same test that is used for all 
501(c)(3) organizations; i.e., no substantial part of their activities 
would be participating in, or intervening in any political campaign on 
behalf of any candidate for public office.''\1\
---------------------------------------------------------------------------
    \1\ Marie B. Morris, ``Bills to Permit Churches to Engage in 
Campaign Activities,'' Congressional Research Service, 15 Nov. 2001.
---------------------------------------------------------------------------
    In other words, despite the unique place that houses of worship 
hold in our current tax code, this bill seeks to dismantle the absolute 
ban on partisan politicking and allows houses of worship to engage in 
the mechanisms of partisan politics while retaining their tax-exempt 
status and receiving tax-deductible contributions.
    H.R. 2931, the Bright-Line Act of 2001, is similar to H.R. 2357 in 
intent, except that it would ``add a new subsection to IRC, section 
501, applicable to churches, church auxiliaries and members of an 
affiliated group of organizations. The proposed subsection would deny 
tax exemption to a church or church auxiliary if the organization 
normally spent more than 20% of its gross revenues in a year on 
activities to influence legislation or, normally spent more than 5% of 
its gross revenues on political campaign activities.'' \2\
---------------------------------------------------------------------------
    \2\ Ibid.
---------------------------------------------------------------------------
    Thus, while H.R. 2357 lifts the ban on absolute prohibition of 
partisan politicking while leaving the ``no substantial part'' test up 
to interpretation, H.R. 2931 lifts the ban but provides a benchmark for 
``no substantial part'' and specifically includes lobbying activities.
    Mr. Chairman, profound constitutional issues are at stake in these 
two bills. As a religious leader with a national constituency and as an 
active Baptist pastor from Louisiana, I oppose these legislative 
proposals. Adoption of this legislation would alter the whole legal 
landscape of church-state relations in this nation. When I speak about 
the possible consequences of these bills, my passion is deep, and my 
concern about their negative impact on religion's prophetic voice in 
our nation is real.
    Even if by some stretch of the imagination one could conceive that 
the bills before this committee today presented no constitutional 
problems, I would oppose them. As a pastor who has worked in 
congregational ministry for more than 40 years as well as the executive 
director of a national interfaith organization that values the 
importance of religious congregations, I shudder to think of the 
devastation that would be visited upon the religious community and its 
leaders were these bills to become law.
    Indeed, I can think of few ways to compromise the integrity of 
religious congregations and to blunt the vitality of religion in our 
land more than by the passage of either one of these bills.

           First, neither the House of Worship Political 
        Speech Protection Act, nor the Bright-Line Act of 2001 is 
        wanted or needed among most religious people in this land and 
        the clergy who lead them. Any claim by supporters of these 
        bills that there is a mainstream movement among this nation's 
        clergy to rewrite the tax code to allow houses of worship to 
        engage in partisan politicking is simply without foundation.

    As a matter of fact, it is far more accurate to say that clergy 
appreciate the firewall that 501(c)(3) status provides between the 
inner-sanctuaries of houses of worship and what has unfortunately 
become the ``anything goes'' culture of a modern day political 
campaign.
    This assertion is backed by a recent national Gallup/Interfaith 
Alliance Foundation poll of religious leaders, which found that 77% of 
clergy believe that they should not endorse political candidates. Of 
those participating in the poll, 59% identified themselves as 
Evangelicals. It is ironic that these polling results show that the 
very people whom these bills are supposedly intended to empower 
adamantly resist even the premise on which the bills are based.
    I am not suggesting that The Interfaith Alliance believes that 
clergy and houses of worship do not have an important role to play in 
the political process. We believe that clergy have an absolute right 
and further, a moral obligation, to address the crucial issues of the 
day and to serve the nation as a prophetic voice in times of calm and 
crisis.
    But clergy do not need a change in the current law to be faithful 
to this important responsibility. The ability of clergy to educate 
their congregations about important issues of the day is unambiguously 
legal. The only activities that tax-exempt houses of worship may not 
engage in are endorsing or opposing candidates, or using their tax-
exempt donations to contribute to partisan campaigns.
    Since the introduction of these bills last year, supporters of 
these measures have argued their merit under the guise of assuring 
freedom for houses of worship. Make no mistake about it, at this very 
moment houses of worship are free to endorse candidates for political 
offices and to give money to those candidates' campaigns. However, such 
politicking cannot be done with funding that is tax deductible. Every 
house of worship is free to forfeit the primacy of its identity as a 
spiritual body and to function as a political entity governed by all of 
the IRS regulations and state and federal laws that apply to political 
institutions.

           Second, these bills have the potential to 
        compromise religious leaders' ministries of compassion and even 
        to silence the prophetic voice of communities of faith in this 
        land.

    Throughout the history of our nation, religious leaders have 
provided a perspective of integrity and independence when they speak 
about the moral issues. Whether it was the civil rights movement of the 
1960's or the importance of forgiving third world debt in 2000, 
religious leaders have spoken conscientiously, often in the face of 
negative influences and political pressure.
    Passage of either of these bills would turn pastors, imams, rabbis 
and other would-be prophets into potential political operatives to be 
lobbied by candidates for public office and used as endorsers of 
partisan campaigns. To saddle religious leaders with the controversy 
and skepticism commonly associated with politics would erode the 
reverence accorded to religious offices and leave congregations devoid 
of clergy functioning with an authority rooted in spirituality. When 
pulpits, beemas, and other sacred desks from which the scriptures and 
oral traditions of various religions are read and interpreted become 
stumps on which ministers stand to deliver political speeches and hand 
out political endorsements, the prophetic voice of the religious 
leaders community--arguably religion's most important contribution to 
the nation--will be silenced.
    This view is shared by Deirdre Dessingue, associate general counsel 
of the National Conference of Catholic Bishops who wrote in a July 2001 
article that, ``as the church pursues its religious mission, it is 
guided by its own unique vision of the way our society should be. As a 
God-given vision, it admits of no compromise. Yet since compromise is 
the essence of politics, choosing involvement in electoral politics, 
risks compromise, co-option, and collusion.'' She concludes by saying, 
``a religious message without integrity is no message at all.'' \3\ I 
could not agree with her more.
---------------------------------------------------------------------------
    \3\ Dessingue, Deirdre, Prohibition in Search of a Rationale: What 
the Tax Code Prohibits; Why; to What End?, 42 B.C.L. Rev 903 (2001).
---------------------------------------------------------------------------
    Lifting the ban on politicking is also sure to create a rift 
between the leadership of a house of worship and the congregants. A 
religious leader in a congregation must be able to serve all of the 
people in that congregation. More than once, in a single day, I have 
conducted funerals for people of competing political persuasions and 
blessed babies born to parents who wanted nothing to do with the 
political process. In each instance, the families involved sought the 
ministry of a clergyperson not the assistance of a politician. Taking 
on the role of a political power broker would jeopardize beyond measure 
the acceptance and effectiveness of a minister within a congregation.
    Knowing well the schismatic passions related to partisan politics, 
you easily can imagine a congregant, even in a time of need, refusing 
to turn for help from a minister whose identity has been shaped by the 
political endorsements that have become a part of his or her leadership 
in a congregation. Passage of either one of these bills threatens the 
effectiveness of ministers of compassion in religious congregations.

           Third, current law protects the integrity of houses 
        of worship and prevents government entanglement in the affairs 
        of houses of worship. Churches, synagogues, temples and mosques 
        should not be used as partisan political rally halls or as 
        venues for partisan political fundraising activities.

    With the lifting of the absolute prohibition on political 
activities comes an invitation to the government to regulate the 
practices and affairs of a house of worship. Surely there will be 
different interpretations of what constitutes a ``substantial'' 
activity, a ``normal year'' or even, what constitutes an actual 
partisan activity. Churches should not be in the business of defending 
their denominational or financial affairs to the government, and 
indeed, this is precisely the situation the framers of our Constitution 
sought to avoid.

           Fourth, when people of faith give money to their 
        congregations as an act of devotion to God, they should not 
        have to worry about a portion of that money going to 
        politicians. The fact is that members of religious 
        congregations will not make financial contributions to a 
        congregational budget knowing that a part of their financial 
        support for the ministries of that house of worship will end up 
        in the campaign war chest of a political candidate seeking help 
        in winning an election. To turn offerings given in the name of 
        God as acts of worship into political contributions devoted to 
        the support of partisan politicians is a sacrilege.

    People of faith are not monolithic in their political ideology. 
Passage of this legislation will divide religious communities 
dramatically and literally reconfigure congregational life in this 
nation. Religious people will realign themselves in congregations that 
reflect their respective political positions. What conscientious 
religious person would want to be a faithful member of a congregation 
that supports a candidate for office that the person opposes on the 
basis of conscience?

We do not want to see houses of worship identified more by the 
political parties that they support than by the theology or the moral 
values that they proclaim.

    In the 2000 election, specifically in South Carolina, Michigan, and 
Washington, we saw the sad spectacle of candidates for public office 
highlighting theological differences between congregations in an 
attempt to divide congregations for the purpose of dividing the 
electorate and propelling voters to the polls. In Washington, Senator 
John McCain's campaign took responsibility for sending the following 
statement to primary voters by telephone:

          ``This is a Catholic Voter Alert. Gov. George Bush, Jr. has 
        campaigned against Sen. John McCain by seeking the support of 
        Southern Fundamentalists who have expressed anti-Catholic 
        views. Several weeks ago Gov. Bush spoke at Bob Jones 
        University in South Carolina. That's the same Bob Jones who 
        said the Pope was ``the antichrist'' and called the Church `a 
        satanic cult.' Sen. John McCain has strongly criticized this 
        anti-Catholic bigotry, while Gov. Bush stayed silent while 
        gaining the support of Bob Jones University. For this reason, 
        many Washington Catholics now support John McCain for 
        President. Please vote for John McCain. Thank you.'' \4\
---------------------------------------------------------------------------
    \4\ ``Religion Rules as Primaries Approach,'' Associated Press 3 
March 2000.

    Not to be outdone, then Christian Coalition President Pat Robertson 
sponsored automated phone calls to voters prior to the Michigan 
Republican primary in support of then Governor Bush criticizing Senator 
McCain's record on abortion, and calling his campaign chairman, Senator 
Warren Rudman, a ``bigot'' for criticizing Christian conservatives. In 
this scenario, religion was used as a political football, and it truly 
---------------------------------------------------------------------------
was unfortunate.

           Finally, passage of these bills would open a 
        dramatic new loophole in the campaign finance laws just passed 
        by this Congress. Donations to houses of worship are tax-
        deductible because the government assumes that their much-
        needed work is contributing to the common good of society, not 
        a political party or a partisan campaign.

    Contributions to churches are tax deductible while donations to 
political candidates and parties are not. Therefore, these bills would 
create an exemption in our national campaign finance laws. Political 
contributions that legally could not be made to candidates or their 
parties could legally be channeled through the offerings of a house of 
worship. Houses of worship will find themselves giving tax-deductible 
dollars to politicians at the expense of the general public. All of 
this will happen under the banner of faith. This is just not right.
    Mr. Chairman and members of the committee, I must be honest with 
you. When I first heard of legislative proposals that would blatantly 
politicize houses of worship, I couldn't believe my ears and thought 
someone was playing a practical joke on me. 114 co-sponsors later, I 
now know better. Each of these proposed pieces of legislation 
represents as serious a threat to the integrity and vitality of 
religion in this nation as it does to the continuation of religious 
liberty as guaranteed by the constitution. The bills are no joke. And I 
am not laughing. I come here today to plead with members of this 
committee to not allow these bills to go any further.

                               

    Chairman HOUGHTON. Thank you very much, Dr. Gaddy. Chairman 
Houghton. Reverend Fauntroy.

  STATEMENT OF HON. REVEREND WALTER E. FAUNTROY, PASTOR, NEW 
      BETHEL BAPTIST CHURCH, AND FORMER MEMBER OF CONGRESS

    Reverend FAUNTROY. Chairman Houghton and Members of the 
Subcommittee, my name is Walter Fauntroy. I am an experienced 
politician and a well-trained Minister. I am in my 43rd year as 
Pastor of New Bethel Baptist Church here in our Nation's 
Capital. Over the course of those years, I have had the 
privilege of being at the core of every major change in public 
policy affecting people of African descent in this country.
    In the decade of the sixties, I served as Director of the 
Washington Bureau of Dr. Martin Luther King, Jr.'s Southern 
Christian Leadership Conference, and in that capacity I 
coordinated our activities for both the historic march on 
Washington in 1963 and the voting rights march from Selma-
Montgomery in 1965.
    I was Dr. King's chief lobbyist for the passage of the 
Civil Rights Act of 1964 and the Voting Rights Act 1965. In the 
decades of the seventies and eighties, I served as a Member of 
this august body as the District of Columbia's first Delegate 
to the Congress in 200 years, and during my 20-year tenure as a 
Member of the House Banking, Finance, and Urban Affairs 
Committee of the House, I had the privilege of being Chairman 
of the Subcommittee on Domestic Monetary Policy, which oversaw 
our participation through the Federal Reserve, the quasi-public 
Federal Reserve Board, on the distribution and management of 
money in the country. Then I served as Subcommittee Chairman on 
the Subcommittee on International Development, Finance, Trade, 
and Monetary Policy.
    I do not want you to think as a Minister I believe money is 
everything, but I have learned it is so far ahead of whatever 
is second best when it comes to declaring good news to the 
least of these that we have to manage to see to it that it 
happens.
    What I have learned as a Pastor, as a civil rights 
activist, and as a Member of Congress over these years has led 
me to appear before you today in support of H.R. 2357, the 
Houses of Worship Political action Protection Act. In the 5 
minutes allowed me, I want to share with you two definitions of 
politics upon which I have acted over these years as Pastor, as 
a civil rights activist, and as a Member of Congress.
    The first definition is that politics is the means by which 
we in a democracy translate what we believe into public policy 
and practice. That is, we go to the polls and vote for people 
who, if elected, promise to translate what we believe into 
public policy and practice.
    That right to vote is so precious to me because, as an 
African American, I am painfully aware of how racist white 
voters in the Southland, by denying my people the right to 
vote, were able to translate what they believed into public 
policy and practice. They believed that black people, for 
example, should not be allowed to drink water from the same 
public fountains used by white people, and they translated that 
into public policy and practice.
    Now, the second definition of politics upon which I have 
always relied is that politics is the process of determining 
who gets how much of what, when, and where, in five areas: Who 
gets how much income, who gets how much education, who gets how 
much health care, housing, and justice?
    In fact, during my 20-year tenure in this Congress, I 
became thoroughly conversant with our Nation's 14 Cabinet-level 
agencies and their counterparts in the standing Committees of 
the U.S. House and Senate that determined who gets how much of 
what, when, and where in agriculture, in commerce, in labor, in 
housing, in health and human services. That is what I have 
learned as a politician.
    Let me tell you what I have learned as a thoroughly trained 
Pastor. I have learned from the prophet Isaiah that the basic 
tenet of our Judeo-Christian-Muslim heritage is that we are 
``anointed of God to declare good news to the poor, to bind up 
the broken-hearted, and to set at liberty them that are 
bound.''
    You can understand, therefore, that as a citizen who has a 
right to vote, to translate what he believes into public policy 
and practice, and as a man of faith who is anointed to declare 
good news in terms of access to income, education, health care, 
housing, and justice to the least of these, I have never and I 
will never allow anyone to deny me the right to vote my beliefs 
at the polls. I have not and I will not allow anyone to deny me 
the right to try to persuade as many people as I can to vote 
good news for the poor.
    We enter our houses to worship, and we depart to serve. If 
we are to serve, the question will not be whether you are 
Baptist or white or black or Muslim or Jew or atheist. The 
question is, when I was hungry, did you feed me?
    In my view, therefore, there is no election, local, State, 
or national, where I think the plight of the least of these is 
at stake that I do not endorse a candidate of my choice to the 
Members of my church and try to influence them to vote the 
values that we embrace as serious people of faith. That is my 
right, both as a citizen and as a man of faith, and I will 
defend that right, even for those people of faith with whom I 
vehemently disagree on how income, education, health care, and 
housing should be distributed.
    Now, I must tell you that it is not in my best interests 
nor is it in the interests of the people I serve that certain 
people who call themselves religious benefit from the passage 
of this bill. That is because it has been my experience that 
people often use religion and race as an excuse to deny others 
the income, education, health care, and housing and justice 
that they covet for themselves. And that is what we define as 
sin, the arrogance and self-seeking of many. Mr. Chairman, take 
it from someone who knows: People who call themselves 
religious, when it comes to their greed and opportunism, will 
often talk east and walk west on matters of public policies. 
They say one thing and do another. Jesus called such people 
false prophets who come to you in sheep's clothing, and yet in 
their hearts are ravenous wolves.
    Ku Klux Klansmen are false prophets who use Christianity as 
an excuse to deny black people and other minorities access to 
those five things. Muslim extremists, like Osama bin Laden, are 
false prophets who use Islam as an excuse to kill other people, 
to deny them access to those five things, and in the process, 
they distort Islam, and they blaspheme Allah. Jewish extremists 
are false prophets who use Judaism as an excuse to take from 
others what they have coveted for themselves. They all come up 
with cute excuses for their ungodly actions, but they are not 
correct. They may appear to be sincere, but they are sincerely 
wrong.
    The right thing for all Jews, all Christians, all Muslims, 
and all people who are of good will in this country to do is 
recorded in Micah, the Sixth chapter, and all agree with it 
because it is in their literature: He hath shown thee, O man, 
what is good; and what doth the Lord require of thee, but to do 
three things, to do justice, and to love mercy, and to walk 
humbly with thy God. Don't just talk the talk, walk the walk to 
the polls.
    Mr. Chairman, I know it is not in my interest nor the 
people whom I serve that everybody who calls themselves 
religious be able to do what I do in my pulpit. But like 
Voltaire, I may disagree with them vehemently, but I will 
defend to the death their right to be wrong and their right to 
participate in an orderly effort that democracy afforced us to 
translate what we believe into public policy and practice.
    I support this because I must not be selfish and, 
therefore, sinful. I must not demand for myself what I would 
deny others. I believe that he who would save his life shall 
lose it, and he that will lose his life for my sake will find 
it. That is why I support this bill.
    [The prepared statement of Reverend Fauntroy follows:]
 Statement of the Hon. Reverend Walter E. Fauntroy, Pastor, New Bethel 
             Baptist Church, and Former Member of Congress
    Chairman Houghton and members of committee, my name Walter E. 
Fauntroy. I am in my forty-third (43rd) year as pastor of 
the New Bethel Baptist Church here in our nation's capital. Over the 
course of those years, I have had the privilege of being at the core of 
nearly every major change in public policy in this country affecting 
people of African descent.
    In the decade of the 1960s I served as Director of the Washington 
Bureau of Dr. Martin Luther King, Jr.'s Southern Christian Leadership 
Conference. In that capacity I coordinated our activities for both the 
Historic March on Washington in 1963 and the Selma-To-Montgomery Voting 
Rights March of 1965. I was Dr. King's chief lobbyist for passage of 
the Civil Rights Act of 1964 and the Voting Rights Act of 1965.
    In the decades of the 1970s and '80s I served as a member of this 
august body as the District of Columbia's first Delegate to the U.S. 
House of Representatives in 100 years. During my twenty year tenure as 
a member of the House Banking, Finance, and Urban Affairs Committee, I 
had the great privilege of being chairman of the subcommittee on 
Domestic Monetary Policy and then the subcommittee on International 
Development, Finance, Trade and Monetary Policy.
    What I have learned as a pastor, civil rights activist and member 
of congress over these years has led me to appear before you today in 
support of H.R. 2357, the Houses of Worship Political Speech Protection 
Act. In the five minutes allowed me, I want to share with you two 
definitions of ``politics'' upon which I have acted over these years as 
a pastor, as a civil rights activist and as a politician that inform my 
decision to support this legislation.
    The first definition is this: ``Politics is the means by which we 
in a democracy translate what we believe into public policy and 
practice;'' that is, we go to the polls to vote for people who, when 
elected, promise to translate what we believe into public policy and 
practice. That right to vote is so precious to me because, as an 
African American, I am painfully aware how racist white voters in the 
Southland, by denying my people the right to vote, were able to 
translate into public policy and practice what they believed. They 
believed that black people, for example, should not be allowed to drink 
water from the same public fountains used by white people; and with 
their votes, they translated that into public policy and practice.
    A second definition of politics upon which I have always acted is 
that ``Politics in the process by which we determine who gets how much 
of what, when and where in five areas: income, education, healthcare, 
housing and justice.'' In fact, during my twenty year tenure in this 
congress, I became thoroughly conversant with our nation's fourteen 
cabinet level agencies and their counterparts in the standing 
committees of the U.S. House and Senate, agencies and committees that 
determine who gets how much and what, when and where in agriculture, in 
commerce, in labor and housing and health and human services, for 
example. That's what I have learned as a politician.
    Let me tell you what I have learned as a thoroughly trained pastor. 
I have learned from the Prophet Isaiah that the basic tenet of my 
Judeo-Christian-Muslim heritage is that we are all ``anointed of God to 
declare good news to the poor, to bind up the broken hearted and to set 
at liberty them that are bound'' (Isaiah 61:1). You can understand, 
therefore, that as a citizen who has a right to vote to translate what 
he believes into public policy and practice and as a man whose faith 
dictates that he seek to provide ``the least of these'' access to 
adequate income, education, healthcare, housing and justice, I never 
have and I never will allow any one to deny me that right to vote my 
beliefs at the polls. I have not and I will not allow any one deny me 
my right to try to persuade as many fellow citizens as I can reach to 
vote as I do.
    There is, therefore, no election--local, state or national--where I 
think that the plight of the ``least of these'' is at stake that I do 
not endorse a candidate of my choice in an effort to influence the 
members of my congregation and any one else who I think values my 
opinion on matters of public policy. That is my right both as a citizen 
and a man of faith, and I will defend that right even for those people 
of faith with whom I vehemently disagree as to how income, education, 
healthcare, housing and justice should be distributed in our society.
    Now I must also tell you that it is not in my interest nor is it in 
the interest of the people whom I serve that certain people who call 
themselves ``religious'' benefit from the passage of HR 2357. That's 
because it has been my experience that people often use religion and 
race as excuses for denying to others the income, education, 
healthcare, housing and justice that they covet for themselves. In our 
Judeo-Christian-Muslim heritage we call that ``sin'' which, defined, is 
the arrogance and self-seeking of man.
    Mr. Chairman and members of the committee, take it from someone who 
knows, people who call themselves religious, when it comes to their 
greed and opportunism, will often talk East and walk West on you in the 
arena of public policy. They say one thing and they do another. Jesus 
called such people ``false prophets who come to you in sheep's 
clothing, but inwardly they are ravening wolves'' (Matt. 7:15). Ku Klux 
Klansmen are false prophets who use Christianity as an excuse to deny 
black people access to income, education, healthcare, housing and 
justice. Muslim extremists like Osama Bin Laden are false prophets who 
use Islam as an excuse to kill other people to deny them access to 
income, education, health care housing and justice. In so doing, they 
distort Islam and blaspheme the name of Allah. Zionists extremist are 
false prophets who use Judaism as an excuse to take from others what 
they covet for themselves: income, education, healthcare, housing, and 
justice.
    They all come up with cute excuses for their ungodly actions but 
they are not correct. They appear to be sincere but they are sincerely 
wrong. The right thing for all Jews, all Christians and all Muslims to 
do is recorded in their own holy writ in the words of Micah 6:8--``He 
hath shown thee O man, what is good; and what doth the Lord require of 
thee, but to do justly, and to love mercy, and to walk humbly with thy 
God?''
    So, Mr. Chairman, I know that it is not in my interest or that of 
the people whom I serve that certain people who are self-centered 
hypocrites when it comes to the basic tenets of their religions 
exercise their right to be wrong. But like Voltaire, I may disagree 
with them vehemently, but I will defend to the death their right to be 
wrong and their right to participate in an orderly effort to 
``translate what they believe into public policy and practice.'' I must 
not be selfish and, therefore, sinful; I must not demand for myself 
what I would deny others. I believe that he who would ``save his life, 
shall lose it; and he that loses his life for my sake shall find 
it.''(Matthew 10:39)
    I support the passage of H.R. 2357. Thank you.

                               

    Chairman HOUGHTON. Thank you very much, Walter. Great to 
have you here. Reverend Lynn?

   STATEMENT OF REVEREND BARRY W. LYNN, EXECUTIVE DIRECTOR, 
      AMERICANS UNITED FOR SEPARATION OF CHURCH AND STATE

    Reverend LYNN. Thank you very much.
    Mr. Chairman and Members of the Subcommittee, my name is 
Barry Lynn. I serve as the Executive Director of Americans 
United for Separation of Church and State. I am also an 
ordained Minister in the United Church of Christ, and an 
attorney, and I have had a long interest in the issues that we 
are discussing here today.
    America's policy of separating religion and government has 
given us here in the United States more religious freedom than 
any Nation in the history of the world. When it comes to the 
relationship between houses of worship and politics, we had 
struck, in our view, precisely the right balance, creating an 
environment that works to the benefit of all religious 
organizations, their Members, and our democracy. We change it 
at our peril.
    The bills before you would scrap a time-tested system and 
substitute a reckless experiment in mixing religion with 
partisan politics. Make no mistake, these bills are not about 
free speech; instead, they would promote the corruption of the 
church and the corruption of the political process.
    No freedom of speech of any American pastor, priest, imam, 
or rabbi is endangered today by the United States Tax Code. 
Religious leaders are as free today as any time in American 
history to expose moral evils, to propose ethical solutions, 
and to hold our leaders to the highest standards. In fact, the 
only thing that our tax laws prohibit is use of resources or 
personnel of a tax-exempt group to promote the campaigns of 
specific candidates for public office. Frankly, this is a small 
price to pay for the enormous dual benefit of an organizational 
tax exemption and the right of contributors to gain a tax 
deduction for their contributions.
    Pastors are not gagged, churches are not shuttered by the 
fear of the IRS. This is a nonsensical caricature by those who 
are trying to scare religious leaders by misrepresenting 
current law.
    So if these proposals are not about free speech, and 
America's religious leaders already enjoy the right to speak 
out on the moral issues of the day, then what precisely are 
these bills about? Let me be blunt. I believe it is simple. 
There are television preachers and special interest groups who 
would like to turn America's churches into a powerful political 
machine. They would also like to undermine the principles of 
separation of church and State.
    Lawyers for Pat Robertson are out here, including on this 
panel, pushing this legislation. Dr. D. James Kennedy, also 
here today to express support for the bill, has repeatedly said 
that he believes church-State separation is, in his words, a 
lie, and that he wants to reclaim America for Christ. If these 
activists are politically successful, in part by passing these 
bills, the consequences would be devastating for the Nation's 
tradition of religious pluralism and genuine religious freedom.
    For example, these bills would allow money to go straight 
from the collection plate of a church to buying campaign bumper 
stickers or attack ads for someone's favorite politician. That 
is a vision that is to me as morally repugnant as it is 
politically unhealthy.
    Moreover, these bills would actually create an unlevel 
playingfield in which religious groups get special rights to 
endorse candidates while thousands of secular charities, from 
the American Cancer Society to the Red Cross to the local 
birdwatching group, are still denied that power. Such a special 
privilege for religious groups over secular ones is, without 
question, an unconstitutional promotion of religion under the 
first amendment to the Constitution.
    But the legislation does more. It opens a Pandora's box of 
new opportunities for mischief through abuse of the Nation's 
campaign finance system. Supporters of a candidate could make 
tax-deductible contributions to a church, and the church could 
then use an equivalent amount on behalf of that donor's 
favorite candidate.
    The motive could be crass, an effort to curry favor with 
politicians for future gain, or it might well be quite noble, a 
well-intentioned effort to fund those leaders who are deemed 
morally superior. But frankly, either way, this amounts to 
nothing short of clerical money-laundering, and it is wrong to 
introduce it into this system.
    According to a poll this year, 70 percent of Americans 
disapprove of the idea of churches endorsing political 
candidates, and little wonder. Most parishioners want the 
church board to debate expenditures on aid to the homeless and 
hungry in their communities, not wrangle over which politicians 
will be favored with the grace of 5 percent or 10 percent of 
the revenues from the collection plate. Few pastors themselves 
even want to serve their flocks as both a spiritual leader and 
a political boss.
    The practical magnitude of these bills is staggering. They 
would permit some denominations to spend literally $1 million a 
year or more on electioneering. We should not try to add 
churches to the dazzling array of other organizations that can 
be formed to campaign for political leaders.
    The moral authority of the church has always been highest 
when it played no partisan favorites and spoke its truth to 
government without fear of reprisal or the specter of special 
privilege. A taint, a deep taint, grows on that prophetic voice 
when there is even the appearance of buying favor with 
political leaders by any mechanism, from a sermon endorsement 
to a cash transfer.
    Ultimately, these proposals to change Federal tax law offer 
a solution to a problem that does not exist. These bills would 
create a so-called ``benefit'' that America's religious 
community does not need, does not want, and has not even 
requested. I therefore urge this Subcommittee to reject both of 
these proposals.
    [The prepared statement of Reverend Lynn follows:]
  Statement of Reverend Barry W. Lynn, Executive Director, Americans 
               United for Separation of Church and State
    Mr. Chairman and Members of the Subcommittee On Oversight:
    My name is Barry W. Lynn. I serve as executive director of 
Americans United for Separation of Church and State, a 53-year-old 
watchdog organization created to protect religious liberty. The 
organization is concerned about protecting the twin guarantees of 
religious freedom in the First Amendment: prohibiting governments from 
encroaching on the free exercise of religion and prohibiting government 
promotion of some religions over others or of religion over non-
religion. I am an ordained minister in the United Church of Christ as 
well as an attorney.
    I appear today in strong opposition to several proposals to allow 
tax-exempt religious organizations to engage in partisan political 
activities. In my view, both H.R. 2357 (``Houses of Worship Political 
Speech Protection Act'') and H.R. 2931 (``Bright-Line Act'') run afoul 
of sound public policy and the United States Constitution. Far from 
merely clarifying the rights of religious institutions, these bills 
would grant special rights to certain religious groups not given to 
similarly situated secular groups and would deeply politicize America's 
churches, synagogues, temples and mosques.
    Current tax law exempts certain organizations from taxation, 
including those organized and operated for religious purposes, provided 
that they do not ``participate in, or intervene in (including the 
publishing or distributing of statements), any political campaign on 
behalf of (or in opposition to) any candidate for public office.'' 26 
U.S.C. Sec. 501 (a), (c)(3) (1994). This levelheaded policy works 
perfectly for all concerned: Tax-exempt religious institutions are not 
used or manipulated for partisan political purposes, and religious 
leaders remain free to speak out on moral and ethical issues of the 
day.
    This harmony would be dramatically altered by enactment of either 
of the aforementioned bills. H.R. 2357 would allow institutions 
described in section 508 (c)(1)(a) [``churches, integrated auxiliaries, 
and conventions or association of churches''] to engage in partisan 
activities so long as ``no substantial part'' of their activities would 
constitute intervention in political campaigns. H.R. 2931 would permit 
intervention in campaigns so long as the expenditures did not exceed 
five percent of the organization's gross revenues for the year.
    The prohibition against partisan political intervention which 
exists today applies equally to both churches and other secular 
charities that claim tax-exempt status. There is absolutely no Supreme 
Court authority under either the ``free exercise of religion'' or 
``free speech'' provisions of the First Amendment that even remotely 
suggests that churches are entitled to exemption from tax law 
requirements that apply to all similarly situated groups. Therefore, 
both pieces of legislation raise important constitutional questions of 
equal protection of the law and violation of the Establishment Clause, 
that principle of constitutional jurisprudence that holds that 
government cannot favor religion over non-religion.
    Perhaps the closest analogy to the kind of policy embraced in the 
proposals is the Supreme Court decision in Texas Monthly, Inc. v. 
Bullock, 489 U.S. 1 (1989). There, the state of Texas had created an 
exemption for sales tax on religious publications, including 
periodicals and books containing sacred texts. The publishers of Texas 
Monthly, a secular magazine, challenged this disparate treatment 
favoring religion and prevailed. The Court noted: ``It is difficult to 
view Texas' narrow exception as anything but state sponsorship of 
religious belief. . .'' Id. at 15.
    Accordingly, should either proposal before you be enacted, any non-
religious 501(c)(3) organization, still required to maintain a position 
of no endorsement of candidates, would be able to allege that the 
special treatment of religious groups violated the Establishment 
Clause. Giving preferential treatment to churches, a status not 
accorded the scores of other charitable, non-profit groups is a giant 
step in the wrong direction.
    Just one year after the Texas Monthly decision, the Supreme Court 
made clear that a state can decline to exempt churches from a 
generally-applicable sales tax, because religious activity is not 
``being singled out for special and burdensome treatment.'' Jimmy 
Swaggart Ministries v. California Board of Equalization, 493 U.S. 378 
(1990). In Christian Echoes National Ministry v. United States, 470 
F.2d 849 (10th Cir. 1972), cert. denied, 414 U.S. 864 
(1973), the appeals court ruled that Section 501(c)(3)'s prohibition 
against political activities may be applied to churches in the same 
manner as to other charities. Indeed, an appeals court upheld the 
revocation of tax exemption for a New York church's participation in a 
political campaign to defeat Bill Clinton finding no significant burden 
on the right to freely exercise the religious beliefs proscribed by the 
faith. Branch Ministries v. Rossotti, 211 F.3d 137 (D.C. Cir. 2000). 
Taken together, these cases demonstrate there is no serious 
constitutional claim that taxing authorities must, or can, treat 
religious groups differently from other charities.
    The practical implications of these bills would be staggering. 
Anywhere from 5% to 20% of a church's revenues could go for partisan 
activities. There are many churches and related organizations with 
multi-million dollar budgets. A typical so-called ``mega-church'' with 
a $2 million budget under H.R. 2931 could contribute $100,000 to 
partisan campaigns. Under H.R. 2357, that same church could send 
$225,000 to favored politicians. * If the Southern Baptist Convention 
or the Unification Church's entire budget was taken into account, such 
entities could spend over $1 million dollars on electioneering.
---------------------------------------------------------------------------
    * Current law permits most charities (churches were omitted at 
their request) to choose between not spending a ``substantial'' amount 
of their revenues on lobbying or spending no more than 20% of their 
first $500,000 in revenue and a declining percentage of additional 
revenue up to a total expenditure of $1,000,000 on lobbying (the latter 
is referred to as the ``[h] election''). The ``[h] election'' is often 
referred to as a ``safe harbor'', a guarantee that a charity does not 
risk its tax exemption if it spends no more than the articulated 
limits. The risk of non-election is that the Internal Revenue Service 
could reach its own decision on what constitutes an amount of lobbying 
so ``substantial'' that it could lead to revocation of tax-exempt 
status. See, for example, Haswell v. United States, 500 F.2d 1133 (Ct. 
Cl. 1974)(allocation of 20.5% of total expenditures for influencing 
legislation was ``substantial'', but that ``a percentage test is not 
determinative of substantiality'' but is ``one measure of the relative 
significance'' of an activity); Seasongood v. Commissioner of Internal 
Revenue, 227F.2d 907 (6th Cir. 1955) (5% of organization's 
time devoted to influencing legislation found not substantial). Under 
H.R. 2357, a church could reasonably argue that 20% or less of 
expenditures is no ``substantial''.
---------------------------------------------------------------------------
    It is also worth noting that the Congress passed, and President 
Bush recently signed, a major overhaul of the campaign finance system. 
Although some have questioned the constitutionality of that proposal, 
enactment of the bills under consideration here would open another 
enormous loophole in a system already viewed as Byzantine and 
inequitable.
    Houses of worship are awarded tax-exempt status because the 
government assumes that their work is charitable and educational, not 
political. To undo the restriction on church electioneering--allowing 
religious groups to act as political operatives while maintaining their 
tax-exempt status--creates a loophole that would allow contributors to 
make tax-exempt contributions to a church with knowledge that the money 
would benefit a favored candidate.
    Throughout the nation, neither church leaders nor their 
parishioners are clamoring for this bill. A recent survey by the Pew 
Forum on Religion and Public Life found that 70 percent of respondents 
said churches should not endorse political candidates, while only 22 
percent backed church involvement in campaigns.
    A closer look at the Pew Forum's results show that church 
politicking was unpopular among all tested demographic groups. For 
example, the report indicates that Catholics and mainline Protestants--
regardless of their level of religious commitment--disapproved of 
church political endorsements by more than a three-to-one margin.
    Similarly, pastors are not seeking the ``help'' these bills offer. 
Most clergy now strictly adhere to the law as it is written regarding 
candidate activity in their church and are not interested in turning 
their religious institutions into cogs in someone's political machine. 
This is a bad move for the church and for the integrity of the 
political process.
    Many persons with whom I have only rare agreement have nevertheless 
expressed strong reservations on the proposals before you. Cal Thomas, 
the most widely syndicated columnist in the country, wrote in 
questioning these bills that ``more politicians would be free to come 
to churches, taking time away from preaching about a kingdom not of 
this world in favor of earthly salvation.''
    Fox News Channel host Bill O'Reilly told me on air that he agreed 
with me and informed Rep. Walter Jones several nights later that: ``I 
don't want the churches involved in the political process.'' It is 
little wonder. The moral authority of the church has always been 
highest when it played no partisan favorites and spoke its truth to the 
governing order without the fear of reprisal or the specter of special 
privilege from the powerful.
    That taint grows whenever there is even the appearance of 
``buying'' favor with political figures with the financial resources of 
the church: whether that is a sermon endorsement or an elaborate 
transfer of cash from church treasury to a party or a candidate fund.
    I am not naive enough to ignore the fact that these bills are 
directly related to one of the highly visible projects of Americans 
United for Separation of Church and State, an effort we call ``Project 
Fair Play.'' Our program is a strictly non-partisan citizen effort 
educate about existing legal strictures against partisan activity by 
any institutions that are tax-exempt under Section 501(c)(3) of the 
Internal Revenue Code.
    ``Project Fair Play'' consists of several activities. First, we 
have produced, or have retained outside counsel to produce, a number of 
legal and practical memoranda and pamphlets to let churches know of the 
current law regarding participation in political activities. Although 
these documents do warn of violating prohibitions against intervention 
in campaigns, they also frequently detail the large number of perfectly 
permissible ``political'' activities that churches can engage in that 
inform community members about important issues and candidates seeking 
political office, but that fall short of utilizing the resources of the 
church to promote some specific candidates over others. For example, a 
church may host a ``candidate forum'' in their facility so long as they 
invite all candidates to appear. It is not the church's fault if some 
choose not to do so. Churches can also discuss the vital moral issues 
of the day and even endorse or oppose legislation, subject only to the 
far less restrictive language regarding lobbying contained in the Tax 
Code.
    Second, though, when flagrant violations of the principle of non-
participation in political campaigns are brought to our attention, we 
have (on 38 occasions) sent a letter to the Internal Revenue Service 
detailing our reasons for believing that a church has violated the 
provision prohibiting intervention in campaigns and should be 
investigated and penalized where appropriate. These letters are 
generally accompanied by additional evidence, from affidavits of church 
members to newspaper accounts, to demonstrate why we believe the entity 
has crossed a forbidden line. The activities we have reported have 
ranged from a $44,000 church-sponsored advertisement in a major 
newspaper urging the defeat of a Presidential candidate, distribution 
of highly slanted ``voter guides'' by political party members in 
church, direct pulpit endorsements, and collection of funds in Buddhist 
temples. In a few cases, we know that the complaints have led to 
enforcement actions by the Internal Revenue Service. However, unless an 
institution challenges a penalty in court or discusses it in the media, 
we do not know, nor are we entitled to know, the disposition of these 
complaints.
    According to the chief sponsor of H.R. 2357, Representative Walter 
Jones of North Carolina, his legislation was born from anger over a 
letter we sent to nearly 300,000 houses of worship nationwide in 2000 
outlining federal tax law and urging that churches seek their own legal 
counsel before passing out materials such as ``voters' guides'' of the 
Christian Coalition. Apparently a copy of this letter went to ``a 
fundamentalist Baptist minister'' in his district who was ``stunned--
that he could lose his status by just saying, `Bush is pro-life, Gore 
is pro-choice.' '' (Actually, it is not clear that any church could 
lose its tax exemption based on that statement alone.)
    These comments obviously do not reflect the only reasons sponsors 
have for wanting to enact legislation on this matter. However, the 
comments about our work are based on two completely erroneous and 
unsubstantiated claims that have been repeated in dozens of press 
conferences and media appearances. I would like to set the record 
straight.
    First, these bills are not necessary because pastors feel unable to 
speak to the moral issues of the day. It is a ``red herring'' of 
considerable dimension to allege that pastors, priests, rabbis, or 
imams are having their speech ``stifled.'' Regrettably, this is the 
kind of misleading position staked out by Congressman Jones in a recent 
letter to the Washington Times (2/24/2002): ``Houses of worship have 
always, since the Founding, spoken out on issues of the day. Simply 
because politicians also debate those issues--from abortion to the 
death penalty--churches are now required to be quiet because to speak 
out during an election cycle threatens government sanction and the loss 
of tax exemption.'' In fact, speaking out on issues is virtually 
unregulated by the Tax Code. No church has ever been penalized under 
the lobbying restriction in the Code for making moral statements on any 
topic. In fact, to suggest otherwise is to create the very chilling 
effect our letters supposedly generate. It is quite easy to talk about 
issues, stake out ethical positions, ask your congregation to seek out 
political leaders who adhere to those positions--all without endorsing 
a specific party or candidate with the resources of your church. The 
one and only thing the valuable tax exemption requires you to give up 
is the right to endorse candidates; it is no different from the 
requirements that any 501(c)(3), religious or secular, would have to 
follow. The church on the corner is no different from the Red Cross or 
Americans United for Separation of Church and State.
    The proponents of this legislation also continue to perpetuate the 
myth that either Americans United or the Internal Revenue Service or 
both of us is only concerned about the activities of conservative 
churches and religious institutions. This is demonstrably false. Indeed 
our first interest in this matter was the effort of the Reverend Jesse 
Jackson to hold a ``Super Sunday'' fundraising effort for his 1988 
presidential bid by having African-American congregations take up 
collections for his primary bid right during church services. We 
alerted the IRS to this planned activity and through the help of an 
``open letter'' generated a spate of adverse activity that caused Mr. 
Jackson to back off. In other significant cases, we have reported the 
alleged fundraising in the Hsi Lai Buddhist Temple on behalf of the 
Democratic Party and Al Gore, the Democratic Primary endorsement of the 
candidacy of Al Gore over Bill Bradley by the Reverend Floyd Flake of 
New York (which he conceded led to an agreement with the IRS not to 
engage in similar activity in the future), and most recently the in-
church electioneering permitted on behalf of a Democratic candidate for 
sheriff in Wake County, North Carolina.
    Obviously, we have also pointed out the potentially unlawful 
conduct of churches seeking to provide aid to Republican candidates, 
including the pulpit endorsement immediately before an election of a 
former Congresswoman from Idaho was, among other things, extolled as 
``a prophet for our nation,'' the distribution of Christian Coalition 
voter guides in Idaho by the chairman of the local Republican Party 
(who was either very benevolent in passing out a wholly ``objective'' 
document or was seeking to promote the candidacies of the Republican 
candidates all obviously favored in the ``voter guide''), and a pastor, 
speaking on behalf of his Philadelphia congregation, who endorsed GOP 
presidential candidate George W. Bush from his pulpit, while being 
broadcast via satellite to the Republican National Convention. 
Independent candidacies have also been the subject of complaints. We 
submitted material regarding what we considered the endorsement of 
Howard Philips of the U.S. Taxpayer Party in the presidential race of 
1996 by a religious anti-abortion group called the American Life 
League, as well as a Pennsylvania's church endorsement of specific 
candidates in a non-partisan school board race.
    When all is said and done, as a matter of tax policy and 
constitutional law, I believe it will be a sad day in America when her 
houses of worship begin to descend into the political fundraising 
world. Of course, some argue that if the church is uneasy with partisan 
politicking, it can just forego it. That may be easier said than done. 
If parishioners see the church across the street doling out dollars for 
politicians and then (quid pro quo or merely the appearance thereof) 
getting money under programs like the president's ``faith based 
initiative,'' there will be strong pressure on church leaders to craft 
similar ``arrangements.'' Churchgoers should be able to assume that 
their $20 bill in the collection plate will be used for the ministry 
and not shunted off to attack ads or political bumper stickers. If not, 
they might just let the collection plate pass by empty.
    In all candor, the bills before you are unconstitutional, 
unnecessary, and unhealthy for both the church and the political 
process. I urge that they be rejected. Thank you for this opportunity 
to be included in this hearing.
                                 ______
                                 

                                ADDENDUM

    I am writing to expand on some of the statements in my written 
testimony of May 14, 2002 concerning the interaction of Rep. Walter 
Jones' H.R. 2357 and Rep. Phil Crane's H.R. 2931 with the campaign 
finance laws, especially the Bipartisan Campaign Reform Act of 2002, 
which will go into effect after the upcoming election cycle.
    There are several ways in which the contributions of church 
parishioners could be used for political activity. The most direct way 
would be for a church to open a political action committee (PAC) bank 
account for contributions, and follow relevant individual contribution 
caps and FEC reporting requirements for PACs. When soliciting political 
funds, the church would have to make clear to individual congregants 
contributing to the collection plate that a specific portion of their 
contribution will go to the PAC fund for political activity. The church 
would not be able to simply transfer money from the general treasury to 
the PAC bank account--the church must ensure that all PAC money came 
from individual contributions, and not from the church bake sale or 
spaghetti dinner. The church should also instruct congregants not to 
treat contributions that may be used for political purposes as tax 
deductible, because the IRS will likely treat these church PAC accounts 
as Sec. 527 accounts, contributions to which cannot be tax deductible. 
However, the church will retain its tax-exempt status for other 
activities.
    Allowing 501(c)(3) religious organizations to operate PAC 
operations is just one of many ways that the Jones and Crane bills open 
new loopholes in the nation's campaign finance system.
    In addition to diverting collection plate funds to candidates, the 
PAC funds of unincorporated houses of worship could be used for other 
express advocacy activities, such as print and broadcast attack ads 
against candidates sponsored by the church PAC account. And it is clear 
that H.R. 2357 and H.R. 2931 would open the door to houses of worship 
engaging in partisan political activity through slanted ``issue 
advocacy'' advertisements. An example of an ``issue advocacy'' ad would 
be a negative message targeted at Congressman X followed by a request 
to ``call Congressman X'' and tell him you are outraged by his record. 
In addition to print and broadcast advertisements, the Jones and Crane 
bills would allow houses of worship to engage in direct mail, push 
polling and voter guides with the same negative partisan political 
message. However, assuming the new campaign finance law takes effect, 
these messages may be restricted 30 days before a primary and 60 days 
before a general election.
    The bottom line is that the Jones and Crane bills would open 
outrageous new loopholes in the campaign finance system. And more 
disturbingly, H.R. 2357 and H.R. 2931 would be a corrupting influence 
on our nation's houses of worship.

                               

    Chairman HOUGHTON. Thanks very much, Reverend Lynn. Dr. 
Kennedy.

 STATEMENT OF D. JAMES KENNEDY, PH.D., PRESIDENT, CORAL RIDGE 
              MINISTRIES, FORT LAUDERDALE, FLORIDA

    Reverend KENNEDY. Thank you. Mr. Chairman, and ladies and 
gentlemen, it is a pleasure for me to be here to have an 
opportunity to speak to you, especially after what I have just 
been listening to. I hardly recognized the Nation that we are 
talking about in a previous discussion. It is certainly nothing 
that I would be in favor of.
    May we simply remind ourselves of the history of this 
matter. Up until July 2, 1954, when this Nation and its 
churches had been active for 334 years with the kind of freedom 
that this bill would grant, it did not create the kind of 
monstrosity that we just heard about, nor do I believe it would 
in the future.
    What is new and what is radical is this bill, which, as you 
know, was introduced on the floor on July 2 as Members were 
leaving for summer by LBJ, by Lyndon Baines Johnson, who was 
very upset that a couple of anti-Communist groups in Texas had 
been giving him a very difficult time in the election, and he 
decided to do what often has been decided to be done by people 
in power that did not like the things that had been said about 
them. He decided to silence them, so he added on the floor, 
without debate, the amendment that took away from churches and 
ministers what they had enjoyed for 334 years; that is, the 
right to say whatever they felt their consciences and the 
Scriptures were teaching them, and that they did not need to be 
afraid of what the government would do if they said certain 
things that the government disallowed.
    I have traveled all through this Nation. I have talked to 
thousands, over 100,000 ministers on this subject. I have 
noticed several things. One of them, if you ask any 100 of them 
what this says, we probably would get almost 100 different 
answers. It is very confusing. I think that was seen when we 
heard the experts talk about it earlier today. It is not 
something that is easily understood, and I have talked to many 
ministers who would not say anything on any moral issue or any 
other issue that might be perceived as being unacceptable 
because they were afraid that the IRS would come down upon 
them, open a new file on their church, and that they would 
experience repercussions because of that. Therefore, they have 
abstained from saying anything.
    Most people in America today believe that anything that is 
legal is right, and anything that is illegal by definition is 
wrong. Therefore, they feel that it is wrong to speak on these 
issues today, especially if there is any kind of election that 
is forthcoming in the near future, because they believe that 
this is illegal.
    They are not sure what it is that is illegal, because it 
is, indeed, confusing and obscure, in many aspects. And when 
you question them about that, it is very clear that they do not 
know exactly what is or what is not legal for them to say and 
when they can say it.
    I think this needs to be done away with, and I have talked, 
again, to a great many Christians who believe that their 
pastors do not say anything about these issues simply because 
of the fact that they are afraid of the consequences. This is 
what the people believe is the motivation behind that, rightly 
or wrongly, but I have heard this said numbers of times.
    I believe that what we have in this country here is 
something that has contributed in the freedom we had for 334 
years, has contributed markedly to the moral and spiritual 
advantage of this country, and if we selectively silence those 
who have the greatest vested interest in trying to maintain the 
moral law of God, we are inevitably going to see a decline in 
the moral status of the Nation. And what have we seen in the 
last 48 years other than just precisely that, indeed?
    And, therefore, I think that this unfair and ill-understood 
concept needs to be abandoned, and we should go back not to 
some advanced radical new view that somebody might come up with 
now, but rather we should go back to what the founders of this 
country and Americans in general for over 300 years believed 
was the proper thing to do.
    It was said by a great historian in the 19th century that 
the moral force of this country came from the Puritan pulpits 
of New England, and without that, we probably never would even 
have obtained our freedom. And what would the IRS have to say 
about things like what Martin Luther King did, or those that 
fought against slavery? Would these be construed to be 
political matters if they were spoken of shortly before an 
election? I believe they would. What would have been the result 
in our Nation if that were true?
    I believe, ladies and gentlemen, that it is time for us to 
get rid of this inequitable, unfair, and ambiguous law that was 
attached without any debate. I thank God that 48 years later, 
finally, the Congress is getting that debate.
    Thank you for your time.
    [The prepared statement of Dr. Kennedy follows:]
     Statement of D. James Kennedy, Ph.D., President, Coral Ridge 
                  Ministries, Fort Lauderdale, Florida
    Good afternoon, Mr. Chairman. Thank you for the opportunity to be 
here. On behalf of the thousands of people who have signed petitions 
asking Congress to pass the Houses of Worship Political Speech 
Protections Act--some of which you see stacked on the table before me--
I am pleased to have this opportunity to address the subcommittee.
    In the summer of 1954, Lyndon B. Johnson had a problem: What to do 
about powerful anti-Communist organizations threatening his Senate 
reelection. The answer proved amazingly simple. Just like Congress this 
past spring, Johnson figured out that the best way to deal with these 
``special interests'' was to silence them.
    So, on July 2, 1954, as the Senate considered a major tax code 
revision, Johnson offered a floor amendment to ban all nonprofit 
501(C)(3) groups from engaging in political activity. Without hearings 
or public debate, his amendment passed the Senate on a voice vote. 
Johnson's revision to the federal tax code was targeted at the 
nonprofit groups contesting his seat, but churches were caught up in 
the ban. In just minutes and without debate, churches, for reasons that 
had nothing to do with the separation of church and state, were 
stripped of their liberty to participate in America's political life.
    That will change if ``The Houses of Worship Political Speech 
Protection Act,'' introduced by Rep. Walter Jones, and cosponsored by 
114 other Members, becomes law. Jones' bill will reverse Johnson's ban 
and return the protection of the First Amendment to America's churches, 
synagogues, and mosques. Today, the hearing that never took place 48 
years ago is convening as the House Ways and Means Oversight 
Subcommittee considers this bill.
    This legislation is a vitally important step in reversing a long-
standing injustice whereby free speech seems to be protected everywhere 
except in the pulpits of our churches and other houses of worship. It 
will restore to churches a freedom and role that dates to America's 
infancy. Nineteenth century historian John Wingate Thornton said that 
``in a very great degree, To the pulpit, the PURITAN Pulpit, we owe the 
moral force which won our independence.''
    The British would agree. Disgusted at the black-robed clergy's 
prominent role in stirring the colonies to fight, the Redcoats called 
them the ``Black Regiment.'' And Prime Minister Horace Walpole declared 
in Parliament that ``Cousin America has run off with a Presbyterian 
parson.'' Walpole was most likely referring to John Witherspoon, who 
was a Presbyterian minister, president of Princeton and a signer of the 
Declaration of Independence. Witherspoon, who was accused of turning 
his college into a ``seminary of sedition,'' was the most important 
``political parson'' of the Revolutionary period, according to the 
Library of Congress.
    During the Revolutionary era, it was graduates of Yale and Harvard, 
serving in churches across New England, who laid out the theology of 
resistance that made war with Britain inevitable. One of the most 
provocative and influential sermons preached was Jonathan Mayhew's 1750 
``Discourse Concerning Unlimited Submission and Non-Resistance to the 
Higher Powers.'' His message, quickly printed and read on both sides of 
the Atlantic, justified political and military resistance to tyrants 
and has been called ``The Morning Gun of the American Revolution.''
    When British General Thomas Gage attempted to silence the 
incendiary messages being preached by New England's Black Regiment, one 
clergyman, William Gordon, declared in defiance that ``There are 
special times and seasons when [the minister] may treat of politics.'' 
To do otherwise was not possible for New England's ministers, who had 
been faithfully applying God's Word to every area of life since the 
first generation arrived in Massachusetts.
    In the mid-nineteenth century, evangelical Christians were primary 
agents in shaping American political culture, according to Richard 
Carwardine, author of Evangelicals and Politics in Antebellum America. 
``Political sermons, triumphalist and doom laden, redolent with 
biblical imagery and theological terminology, were a feature of the 
age,'' he writes.
    For example, one minister distilled the question before voters in 
the 1856 election as a contest pitting ``truth and falsehood, liberty 
and tyranny, light and darkness, holiness and sin--the two great armies 
of the battlefield of the universe, each contending for victory.''
    Language like that today might earn a visit from the Internal 
Revenue Service. It did in 1992 after the Church at Pierce Creek in 
Vestal, New York, placed a newspaper ad warning Christians not to vote 
for Bill Clinton for president. Such a vote, the ad warned in rhetoric 
echoing 1856, would be to commit a sin. The IRS took notice and three 
years later revoked the church's tax exemption.
    Aggressive toward Pierce Creek, the IRS has, at other times, looked 
the other way. In 1994, for example, New York governor Mario Cuomo 
campaigned for reelection on a Sunday morning at the Bethel African 
Methodist Episcopal Church in Harlem. ``Cuomo was rewarded with a long, 
loud round of applause and an unequivocal endorsement from the 
pastor,'' according to a Newsday report. The American Center for Law 
and Justice, which represented the Church at Pierce Creek, uncovered 
evidence at trial that the IRS knew of more than 500 instances where 
candidates appeared before churches, as happened with Gov. Cuomo and 
Bethel A.M.E., but took no action to revoke these church's tax-exempt 
status.
    The unequal enforcement of the existing law is just one of several 
reasons why scrapping the political activity ban altogether is a good 
idea. The political activity restriction is a blatant violation of the 
First Amendment, is vague and burdensome, and marginalizes churches at 
a time when America most needs a moral compass.
    The First Amendment states that ``Congress shall make no law 
respecting an establishment of religion, or prohibiting the free 
exercise thereof; or abridging the freedom of speech--.'' Yet that is 
exactly what the Congress has done by silencing churches.
    Nor is the political activity ban easy to obey. Not just 
endorsements, but voter education activities, such as voter guides that 
compare office-seekers on issues, may violate the ban if they are 
perceived as partisan. Even addressing moral concerns, such as 
abortion, from the pulpit during an election campaign may violate the 
IRS rule if abortion, for example, is under debate in the campaign.
    With so much uncertainty and so much at risk, silence is, 
regrettably, the only option for the minister who wants to ensure that 
the IRS does not open a file on his church. But when Caesar's demand 
for silence confronts the message of God's Word, ministers are forced 
into hard choices. That's what happened in Nazi Germany a generation 
ago. Many pastors submitted, and were silent. Others were not, and paid 
the price.
    If, as has been asserted, we owe our liberties to the ``moral 
force'' of the pulpit, the censorship of that voice--for reasons that 
have everything to do with partisan politics and nothing to do with the 
separation of church and state--is a monumental mistake that should be 
quickly corrected. In a culture like ours, which sometimes seems on 
moral life support, the voice of the Church and her message of 
reconciliation, virtue, and hope must not be silenced.

                               

    Chairman HOUGHTON. Thank you, Dr. Kennedy. Ms. Girton-
Mitchell.

    STATEMENT OF BRENDA GIRTON-MITCHELL, ASSOCIATE GENERAL 
 SECRETARY FOR PUBLIC POLICY, AND DIRECTOR, WASHINGTON OFFICE, 
       NATIONAL COUNCIL OF CHURCHES OF CHRIST IN THE USA

    Ms. GIRTON-MITCHELL. Thank you, Mr. Chairman and Members of 
the Subcommittee. My name is Brenda Girton-Mitchell. I am 
Associate General Secretary for Public Policy and Director of 
the Washington office for the National Council of Churches of 
Christ in the USA. For the record, I am also the Chair of the 
Board of trustees of the Metropolitan Baptist Church here in 
the Nation's Capital, a divinity student at Wesley Theological 
Seminary, and a former staff of the other body.
    Thank you for the opportunity to present testimony on 
behalf of the National Council of Churches, which is the 
Nation's leading organization in the movement for Christian 
unity. The council brings together 36 Protestant, Anglican, and 
Orthodox communions, which have an average Membership of some 
50 million U.S. Christians and more than 140,000 congregations 
in communities across the Nation. A list of our Member 
communions/denominations is attached for the record.
    While I cannot presume to speak for all of those 
individuals I represent, I do speak for the general assembly of 
the National Council of Churches. The assembly is a 
representative body of some 270 persons chosen by the Member 
communions, which sets policy for the council and commends 
policy to the churches.
    Since our founding in 1950, the council has a long and 
proud record of witnessing for the religious freedom of all 
Americans. My predecessors on the council staff have often 
found themselves where I find myself today, testifying before a 
congressional Committee regarding our deep conviction about the 
religious and civil liberties that we and all Americans 
treasure.
    We are not bashful about speaking out on public policy, 
because we are bound by our sense of mission and our obedience 
to God. God requires us to speak out on issues that are 
designed to help the common good. We welcomed Dr. Martin Luther 
King as our keynote speaker to the council in 1957. We sent a 
youth director by the name of Andrew Young to work with Dr. 
King, and he later became a Member of this body. We and our 
Members have preached, written, marched, applauded, protested, 
and even prayed for Congress and for legislation, and have 
found that this current legal system serves us well.
    It is against this backdrop of a proud heritage and with a 
continuing concern for religious liberty that I come to you 
today to say that while H.R. 2357 and H.R. 2931 are purported 
to protect the political speech of churches, they are, in fact, 
unnecessary, they are unwise, and they are unwanted by our 
Member communions of the National Council of Churches and many 
other faith groups that have been represented today.
    These bills are unnecessary because the views of the church 
have not been muzzled. Houses of worship already enjoy the 
right and the responsibility to speak out on any and all 
political issues. The system is not broken. We believe that 
separation of church and State, which has served our Nation so 
well for more than two centuries, applies to the institutions 
of church and State. However, the separation of church and 
State does not mean that religion and politics will never 
intersect. Everything that affects the well-being of human 
beings is of direct interest to churches, and churches are 
compelled to proclaim what they believe to be right and moral 
forces for this whole society, not just for the church and its 
Members.
    My pastor often says, for a religion to truly be relevant, 
a preacher must come to the pulpit with his Bible, his or her 
Bible in one hand, and the newspaper in the other. We know what 
we are called to do as we heed the words of Amos: to establish 
justice in the gate.
    This legislation is unwise because the measures in these 
bills would corrupt our prophetic voices. Pastors know what 
their callings require and are free to speak on any issue. 
Churches are already allowed to engage in citizen education, 
voter registration, nonpartisan political forums. However, the 
National Council of Churches believes that to allow churches to 
explicitly endorse and support political candidates crosses the 
line that has served us well and puts us in dangerous 
territory.
    The churches could not effectively play this role if they 
were to become enmeshed in partisan politics. By encouraging 
churches to do so, these bills pose a great threat to the free 
and prophetic voice of churches. A church that backs a 
particular candidate for office and that promotes one political 
party over another has forfeited the critical distance that 
allows the church to critique the stands taken by the candidate 
and the party.
    This legislation is unwanted. It threatens the church in 
ways that have been noted today. Allowing churches to use tax-
deductible dollars to support or oppose candidates for public 
office often will damage our system of government in yet 
another way. We are deeply concerned that, if enacted, these 
bills will undermine the progress we have made as a nation in 
the area of campaign finance reform. The NCC strongly supports 
campaign finance reform as a way to level the playingfield, 
maintain fairness, and build confidence in our political 
system.
    In closing, I would like to share a quote with you from our 
former counsel for religious liberty, the Reverend Oliver 
Thomas, who was trained as a Baptist Minister and a lawyer. The 
wisdom he shared with the congregation sums up many of our 
objections to these bills. He said, and I quote, ``even if 
there were no prohibition on electioneering in the Tax Code, 
churches would do well to avoid such partisan political 
activity. Rarely, if ever, can a particular candidate or party 
be identified as God's choice. The misguided use of Christ's 
church for secular and political purposes not only creates 
dissension within the household of faith, but also, inevitably, 
diminishes the churches' witness and credibility on moral 
concerns. In most cases, good theology and good tax advice go 
hand in hand.''
    Thank you.
    [The prepared statement of Ms. Girton-Mitchell follows:]

 STATEMENT OF BRENDA GIRTON-MITCHELL, ASSOCIATE GENERAL SECRETARY FOR 
PUBLIC POLICY, AND DIRECTOR, WASHINGTON OFFICE, NATIONAL COUNCIL OF THE 
                     CHURCHES OF CHRIST IN THE USA

    My name is Brenda Girton-Mitchell. I am an Associate General 
Secretary for Public Policy and Director, of the Washington Office 
National Council of the Churches of Christ in the USA and Director of 
the Council's Washington Office. For the record I am also Chair of the 
Board of Trustees of the Metropolitan Baptist Church, a divinity 
student at Wesley Theological Seminary and a former staff in ``the 
other body.''
    I thank you for this opportunity to present testimony on behalf of 
the National Council of Churches, which is the nation's leading 
organization in the movement for Christian unity. The Council brings 
together 36 Protestant, Anglican and Orthodox communions, which have an 
aggregate membership of some 50 million U.S. Christians in more than 
140,000 congregations in communities across the nation. (A list of our 
member communions is attached.)
    While I cannot presume to speak for all of those individuals, I do 
speak for the General Assembly of the National Council of Churches. The 
Assembly is a representative body of some 270 persons chosen by the 
member communions, which sets policy for the Council and commends 
policy to the churches.
    The National Council of Churches has a long and proud record of 
witnessing for religious freedom of all Americans. Since our founding 
in 1950, we have filed countless friend-of-the-court briefs in cases 
where important principles of religious liberty were at stake. We have 
helped to convene faith-based coalitions for religious liberty that 
were so large and so diverse that practically the only thing its 
participants had in common was a dedication to preserving our religious 
freedoms. And my predecessors on the Council's staff have often found 
themselves where I am today--testifying before a congressional 
committee regarding our deep convictions about the religious and civil 
liberties that we and all Americans treasure.
    Nor are we bashful about speaking out on public policy. We welcomed 
Dr. Martin Luther King, Jr. as our keynote speaker in 1957. We sent our 
Youth Director, a young minister named Rev. Andrew Young to work with 
Dr. King in 1961. We and our members have preached, written, marched, 
applauded, protested and above all prayed for Congress and for 
legislation and have found the current legal structure serves us 
perfectly well.

                                Summary

    It is against the backdrop of this proud heritage and with a 
continuing concern for religious liberty that I come before you today. 
I come to say that while HR 2357 and HR 2931 are purported to protect 
the political speech of churches, they are in fact unnecessary, they 
are unwise, and they are unwanted by the member denominations of the 
National Council of Churches and by many other faith groups.

                              Unnecessary

    The full and free participation of the nation's churches in public 
policy debates both before and after 1954--the year that provisions of 
the tax code were adopted prohibiting churches from taking part in 
partisan political activity demonstrates that these bills are 
unnecessary. The views of churches have not been muzzled, as some have 
claimed; houses of worship already enjoy the right and the 
responsibility to speak on any and all political issues. The system is 
not broke.
    Put another way, the National Council of Churches holds that 
separation of church and state, which has served our nation so well for 
more than two centuries, applies to the institutions of church and 
state. However, separation of church and state does not mean that 
religion and politics will never intersect. In fact, churches 
contribute much to the moral thinking and public policy in our nation 
and that role has been widely valued and is likely to grow.
    Many congregations belonging to our member denominations have 
opposed official government policies and actions that they believe are 
harmful, and we have not feared reprisals. Many of these congregations 
have vigorously advocated for policies that in their view will make for 
peace and justice and they have not shied away from controversial 
subjects. Indeed, churches have weighed in on issues of war and peace, 
health care, the rights of women, Civil Rights and most of the hottest 
issues that have come before this body. In some cases, our advocacy has 
enjoyed a measure of success. In other cases our views have not 
prevailed, but we have never been prevented from advancing our views.

                                 Unwise

    Pastors can use the church as a bully pulpit on any issue and the 
law already allows churches to devote a portion of their budget to 
advocacy, and to engage in citizen education, voter registration and 
non-partisan political forums, the ability to speak out, debate and 
express differing opinions is an essential part of the freedom that we 
have as Americans. To allow churches to explicitly endorse and support 
political candidates, however, crosses a line that has served us well 
and puts us in dangerous territory.
    I can vouch for the extent and vitality of church activity on 
public policy issues from my vantage point as director for the 
Washington Office of the National Council of Churches. My office works 
closely with the Washington staff of our member denominations, with 
state and local ecumenical and interfaith organizations nationwide and 
with congregations across the country. The range of issues that we have 
tackled over the course of 52 years is extraordinarily wide, and the 
passion with which churches approach these issues is extraordinarily 
deep.
    For half a century we have brought an ethical and moral perspective 
to the great issues of the day, from civil rights to the war in 
Vietnam, from international debt to domestic welfare legislation, from 
campaign finance reform to gun violence and everything in between. To 
say that churches have been muzzled in the political arena is simply 
not true. Every day, churches across the nation generate an abundance 
of evidence that speaks to their role in holding government accountable 
and in publicly advancing their vision of the common good--in the 
pulpit, in other communications and through education and advocacy on 
public issues.
    But churches could not effectively play this role if they were to 
become enmeshed in partisan politics. By encouraging churches to do so, 
HR 2357 and HR 2931 actually pose a great threat to the free and 
prophetic voice of the churches. A church that backs a particular 
candidate for office and that promotes one political party has 
forfeited the critical distance that allows the church to critique the 
stands taken by that candidate or that party. The measures in these 
bills would corrupt our prophetic voices.
    Furthermore, churches that back a political candidate run the risk 
that their choice for office might very well claim divine sanction for 
his or her party and its stances--thus jeopardizing the credibility of 
religious voices. The church must speak to worldly issues from the deep 
places of faith, but must not lend the voice of faith to temporal 
interests.

                                Unwanted

    The proposed legislation threatens churches in the ways I have 
noted and it also poses risks to the wider society. Legislation that in 
essence allows churches to become integral parts of political parties 
and to engage in the heat of political campaigns opens the door to the 
kind of religious strife that has devastated other countries--from 
Ireland to Indonesia and from Benares to Beirut--strife from which our 
nation largely has been spared by the wisdom of our country's founders 
and the continuing vigilance of Congress. As the United States becomes 
ever more religiously diverse, the possible permutations for such 
conflict also increase.
    Allowing churches to use tax-deductible dollars to support or 
oppose candidates for public office damages our system of government in 
yet another way. We are deeply concerned that, if enacted, these bills 
will undermine the progress that we have made as a nation in the area 
of campaign finance reform. The NCC strongly supports campaign finance 
reform as a way to level the political playing field, maintaining 
fairness and building confidence in our political system. As gifts to 
churches are tax deductible and gifts to political parties and 
candidates are not, how fair is it then to allow political partisans to 
channel support for their candidates through churches? We say, not fair 
at all--to churches or to taxpayers.
    For all these reasons, the National Council of Churches, along with 
many other faith groups from Baptists to Buddhists, Jews to Quakers, 
Methodists to Presbyterians etc., views HR 2357 and 2931 as ethical 
liabilities and sees no advantage whatsoever for our society or our 
churches. The proposed legislation would inevitably cause internal 
dissension among congregations, and tear our communities of faith 
apart.
    Our stance, based on longstanding policy voted by our member 
communions, is also supported by recent opinion polls that once again 
lift up the common sense of the American public. The Pew Research 
Center for the People and the Press and the Pew Forum on Religion and 
Public Life found that 70 percent of Americans feel that houses of 
worship should not favor one candidate over another during political 
elections. Another poll, conducted by Gallup and the Interfaith 
Alliance Foundation, canvassed the clergy and found that a full 77 
percent of America's clergy are opposed to their fellow clergy 
endorsing political candidates.
    I want to conclude this testimony with a quotation on this subject 
from our former counsel for religious liberty, the Rev. Oliver Thomas, 
who was trained both as a Baptist minister and a lawyer. The wisdom 
that he shared with congregations sums up many of our objections to HR 
2357 and H.R. 2931 and I share his words with you now. Mr. Thomas said, 
``Even if there were no prohibition on electioneering in the tax code, 
churches would do well to avoid such partisan political activity. 
Rarely, if ever, can a particular candidate or party be identified as 
God's choice. The misguided use of Christ's church for secular 
political purposes not only creates dissension within the household of 
faith but also inevitably diminishes the churches' witness and 
credibility on moral concerns.--In most cases, good theology and good 
tax advice go hand in hand.''
                                 ______
                                 

         Member Communions of the National Council of Churches

          African Methodist Episcopal Church
          African Methodist Episcopal Zion Church
          Alliance of Baptists
          American Baptist Churches in the USA
          The Antiochian Orthodox Christian Archdiocese of North 
        America
          Armenian Church of America
          Christian Church (Disciples of Christ)
          Christian Methodist Episcopal Church
          Church of the Brethren
          Coptic Orthodox Church in North America
          The Episcopal Church
          Evangelical Lutheran Church in America
          Friends United Meeting
          Greek Orthodox Archdiocese of America
          Hungarian Reformed Church in America
          International Council of Community Churches
          Korean Presbyterian Church in America (General Assembly of 
        the)
          Malankara Orthodox Syrian Church
          Mar Thoma Syrian Church of India
          Moravian Church in America (Northern Province, Southern 
        Province)
          National Baptist Convention of America, Inc.
          National Baptist Convention, USA, Inc.
          National Missionary Baptist Convention of America
          Orthodox Church in America
          Patriarchal Parishes of the Russian Orthodox Church in the 
        USA
          Philadelphia Yearly Meeting of the Religious Society of 
        Friends
          Polish National Catholic Church of America
          Presbyterian Church (U.S.A.)
          Progressive National Baptist Convention, Inc.
          Reformed Church in America
          Serbian Orthodox Church in the USA and Canada
          The Swedenborgian Church
          Syrian Orthodox Church of Antioch
          Ukrainian Orthodox Church of America
          United Church of Christ
          The United Methodist Church

                               

    Chairman HOUGHTON. Thank you very much, Ms. Girton-
Mitchell. Mr. Coyne, would you like to inquire?
    Mr. COYNE. Thank you, Mr. Chairman.
    Dr. Kennedy, Mr. Miller earlier in the other panel 
testified that there already is a vehicle by which religious 
organizations can channel money into political activities by 
forming a section 501(c)(4), and I wondered if you took 
advantage of that particular path.
    Reverend KENNEDY. I am sorry, you wonder if I could----
    Mr. COYNE. I wonder if you are currently taking advantage 
of that provision in the IRS Code?
    Reverend KENNEDY. Yes, sir. At one of our ministries, we 
are.
    Mr. COYNE. So why, then, is it necessary to channel money 
or support legislation that would channel money from the 
collection plate into political activities when you have this 
section 501(c)(4) option?
    Reverend KENNEDY. Because actually this bill does not 
really address any other religious organizations, but simply 
houses of worship. This other ministry I am referring to is not 
a church. It is not a house of worship, so it really has 
nothing to do with this.
    Mr. COYNE. Thank you.
    Chairman HOUGHTON. Mr. Lewis?
    Mr. LEWIS. Thank you very much, Mr. Chairman.
    Mr. Chairman, I want to thank you for inviting the 
witnesses to be here, and I want to thank all of the witnesses 
for appearing.
    I don't know exactly where to start, but I have noticed 
certain names and church groups and organizations have been 
thrown around. I don't know where to start, but let's see.
    Mr. May, in the beginning you made the point that the 
church should be allowed to take care of the sick, feed the 
hungry, clothe the naked, visit those in prison, and maybe, Mr. 
Fauntroy went on to say to others, to preach the good news. 
There is nothing that prevents the church from doing any of 
these things, is there?
    Mr. MAY. There is nothing that says they cannot feed the 
hungry and clothe the naked. What happens, however, is that a 
minister may believe, for the same reason he is called to feed 
the hungry and clothe the naked, that he needs to speak out on 
an issue, as Mr. Fauntroy has already indicated he has done his 
whole life, because it is a matter of conviction and justice. 
In those instances, they are frozen off of the field, because 
if they do so, they compromise their ability to, in fact, 
clothe the naked and feed the hungry.
    Mr. LEWIS. Reverend Fauntroy, am I missing something here? 
Tell me. Help me out, here. I have a list of Members of the 
National Council of Churches, and almost every major Protestant 
denomination, Methodist, Baptist, Orthodox Christian, Christian 
Methodist Episcopal, CME, Church of the Brethren, the Baptists, 
Presbyterian, all types, oppose this legislation.
    Now, your church is a Member of the National Council of 
Churches, right?
    Reverend FAUNTROY. That is right.
    Mr. LEWIS. In the Baptist tradition we believe in a 
democracy, but how did you break with the National Council of 
Churches? How did you break with the national Baptists or the 
progressive Baptists?
    Reverend FAUNTROY. I break with all of them on the basis of 
the fact that I am an experienced Pastor who heads a house of 
worship.
    Mr. LEWIS. Are you saying these other religious leaders are 
not experienced as pastors?
    Reverend FAUNTROY. You said, break with the body. I would 
say, with my church. I am an experienced Pastor, and I am an 
experienced politician. I know that politics is about who gets 
how much of what, when, and where in five areas. For 20 years I 
watched and participated with this Congress in the decision as 
to who got how much of what of the Commerce budget of the U.S. 
Department of Health and Human Services, and so forth. So that 
is one reason I speak, out of the authority of my experience as 
Pastor.
    Second, I beg to differ with some here who stated, and if I 
am incorrect, help me to understand this, that this bill would 
authorize churches out of their budgets to pay staff for 
political campaigns. Help me out, somebody.
    Mr. MAY. In fact, no. I think I stated and my testimony 
outlined for you where in the Federal campaign laws this 
activity is specifically precluded now, whether this bill ever 
gets out of Committee or not.
    Reverend FAUNTROY. All right. Second, someone has suggested 
that a person may make a tax-deductible contribution to the 
church to free up money to carry out its budget 
responsibilities. In 43 years of ministry, I have thought that 
it has always been unlawful for people to designate where the 
money they give to the church goes. Our church and most 
churches I know develop a budget to carry out the worship and 
service ministries.
    I must tell you as a Minister and Pastor of a church, I did 
not dare ask the church to put my campaign in the budget. But I 
will tell you one thing, when the Tuesday before the Sunday 
came, when politicians show up at a place where they know they 
have motivated people, I made it clear that having listened to 
all the candidates and assessed the issues as they affect 
income in our neighborhood, education for our children, health 
care for our sick, housing, and justice, that I recommend to 
you that you vote for this person or that. If you had shown up 
in the sixties on that, the seventies, eighties, or now, and 
put me in jail, I would go to jail on that.
    All I am saying is, and I said at the end, that I recognize 
that people who talk east and walk west on income, education, 
health care, and housing for the least of these may use this 
idea that we cannot speak, but they ought to be able to use it 
under the kinds of fairness and equity that I think exists now. 
It does not include some rich person trying to support a 
politician who is going to cut the cake of the income, 
education, housing for his people and to the exclusion of the 
least of these; who can give his money and have it covered like 
that, no. When Members contributed to my campaigns, they had to 
go through the usual process.
    Mr. LEWIS. Mr. Chairman, may I have another moment or so, 
since the witness used so much of my time?
    Reverend FAUNTROY. Please forgive me, Congressman Lewis.
    Mr. LEWIS. Let me say, Congressman Fauntroy, I appreciate 
the contribution you have made to the cause of civil rights and 
the religious community. I appreciate it very much.
    But I wonder whether Dr. Gaddy or Reverend Lynn, Ms. 
Girton-Mitchell, would have something to say about the need to 
plant this strong, solid wall, the separation of church and 
State.
    I want to make another little point here, Mr. Chairman. We 
could be dealing with some other issues here in this Congress. 
I know this is dealing with political activities coming to the 
churches. Many of these big churches are competing with Wal-
Mart and K-Mart. You are not only engaged in political 
activity, but some of you in certain communities around the 
country, certain churches, are known as the Republican church, 
a Democratic church. It is known. But in some places you are 
selling books, tapes, T-shirts, the Bible, and everything. I 
know we are not dealing with that today, we are dealing with 
political activity.
    Some of you have mentioned Martin Luther King, Jr. I knew 
him; he was a friend of mine. He was my leader. I first met him 
in 1958 when I was 18 years old. He never, to my knowledge, 
never endorsed a political candidate. You can preach the good 
news and tell the story, but you cannot use the church as a 
political platform. I think that is in violation of the law.
    Dr. GADDY. Reverend Lynn? Ms. Girton-Mitchell?
    Reverend GADDY. Congressman Lewis, thank you very much for 
the observation. I just have two points to make quickly for the 
sake of time.
    I must live in a different world from that of Dr. Kennedy. 
I also have traveled the Nation. I also have talked to lots of 
ministers. I have never met a minister worth his or her salt 
that was refusing to talk about moral issues. I don't know how 
one ministers without talking about moral issues.
    The legislation that we are talking about today does not 
discourage talking about moral issues. It does not prohibit 
that. It does prohibit the endorsement of a candidate for 
political office.
    I have admired the ministry of Walter Fauntroy for a long 
time, I once, long ago, asked him to speak to a session that he 
probably does not remember now. But instead of pursuing the 
proclamation of good news in the five arenas that he has talked 
about so eloquently by endorsing a candidate for office from 
the pulpit, I think it is much more in order to encourage the 
people in the congregation to think out of their orientation to 
the good news, and to work in both political parties and among 
Independents to accomplish the goals.
    I don't ever want to live in a nation that has come to 
identify political integrity by a spiritual definition, or that 
defines spiritual authenticity by a political identification.
    Reverend LYNN. If I might add to that, and to clarify the 
record on this important issue about whether this allows the 
transfer of funds directly from a religious institution, a 
church or an association of churches, all those organizations 
covered by the Tax Code. Congressman Crane's bill is called the 
Bright-Line Act because he wants to permit up to 5 percent of 
the revenues of a church to be utilized for these purposes. 
That is more than a casual comment, that is an extraordinary 
amount, a large amount from a megachurch with a budget of $2 
million or $3 million which, as Congressman Lewis points out, 
exist all over these the United States. So this is not just a 
comment here or there that we are talking about, but the direct 
ability of organizations to transfer from the collection plate, 
literally or figuratively, hundreds of thousands of dollars for 
the benefit of political persons that they believe, rightly or 
wrongly, for the best of reasons or the worst of reasons, will 
somehow move along their agenda.
    I think that is absolutely the most dangerous, retrograde 
direction we can go when we think about both the integrity of 
the church and the integrity of the political process, which we 
are all concerned about cleaning up on a day-to-day basis.
    Chairman HOUGHTON. We have some other questioners here.
    Mr. Foley.
    Mr. FOLEY. Thank you very much.
    Mr. Lynn, you advocate for, obviously, separation of church 
and State. Do you quarrel with what is, in essence, a Federal 
subsidy to churches through tax-exempt status?
    Reverend LYNN. The Members of Americans United for 
Separation of Church and State are not monolithic in their 
answer to that question. The last time we did a survey of our 
own Members, about half of them said, do away with tax 
exemptions for churches. The other half said, no, keep them, 
they are important, as long as you give a similar tax exemption 
to other charities. That is why we are not actively advocating 
on this or other occasions about that issue.
    Mr. FOLEY. Let me further the conversation earlier, because 
you mentioned, why don't we give the right to the American 
Cancer Association and others to be politically active? But I 
sense there is a little bit of a difference, because in the 
churches, truly, you do discuss a multitude of areas where 
there is a need for involvement. Reverend Fauntroy mentioned it 
himself. Don't you at least allow that that preacher, rabbi, 
has some significant stake in the outcome of an election? You 
can have these great moral discussions in church all day long, 
but if you end up electing the wrong person who has no interest 
in any of these issues, and you have allowed it to happen, 
don't you by some sense fail your congregation?
    Reverend LYNN. I think you may overstate the case about the 
church and understate it for charities, because I think you can 
say of any major organization that is tax-exempt, that they 
have an interest, in the broadest sense, in the outcome of 
elections.
    But I do think it is a good idea to have a class of 
organizations, tax-exempt charities, religious and otherwise, 
which are trying to effect social change through the work that 
they do day to day, through the advocacy and the educational 
work, without getting involved in the issue of choosing the 
best political candidate in every election. The equation is 
exactly the same for all those other charities.
    Believe me, as you well know as Members of this body, 
people who are advocates for more funding for cancer and those 
who are advocates for more funding for Parkinson's disease both 
have an interest in the outcome of elections.
    Mr. FOLEY. Granted.
    Let me suggest to you that I am called to speak by the 
Alzheimer's Association, the cancer groups. All these groups 
ask me to speak to them two or three times a year. During each 
presentation, they go on to tell their Members how strong I am 
on these issues: ``Mark Foley wrote a letter for these, Mark 
Foley did this.'' Ultimately, their influence is achieving the 
same thing that this basic ruling is suggesting that they are 
not capable of doing.
    Reverend LYNN. They are capable of doing the same. In fact, 
many churches would invite you and other Members of this and 
other political bodies to come to their churches, and they 
would thank you for the good work that you did.
    They would not, however, put out campaign leaflets 
explaining why you are literally God's gift to the country. 
They would not endorse you from the pulpit. Those would be 
steps that they would not be allowed to take under current law. 
They should not take those under current law now, just as those 
medical organizations should not be able to pass out your 
campaign literature at their conventions, or invite you to 
speak and not acknowledge that you have someone running against 
you. That would be as wrong for a secular charity as it would 
be for a church.
    Mr. FOLEY. But they do.
    Reverend LYNN. Maybe somebody should form a group and look 
into that, because it is not my experience that charities, or 
churches, by the way, are looking to break the law. I think 
most charities want to obey the law. They like the bright-line 
test we have now, which is no political endorsement.
    ``No'' does not mean a little bit, it does not mean 5 
percent, 20 percent, or 19 percent. It just means no 
intervention in a political campaign. I think it is simple to 
understand. I think it has served us well, and I think we 
should keep it.
    Mr. FOLEY. Mr. May, maybe you can help us. Have you talked 
to other church groups about the legislation, both versions, 
Mr. Crane's and Mr. Jones', relative to their support for the 
legislation?
    Mr. MAY. I have. In Congressman Jones' measure, H.R. 2357 
has polled the largest area of support. I would emphasize that 
what this measure will ultimately do is simply remove the 
anxiety and uncertainty, because it is very obvious, either 
from Mr. Fauntroy's testimony or from the nearly 60 examples I 
have provided in pages 18 through 22 of my testimony, that this 
measure is not abided by by a whole bunch of churches in 
America. I don't think we intend for those churches to be 
regarded as criminals or somehow acting outside the law.
    We know Jesse Jackson, for example, has preached in 
churches, been endorsed in churches, raised money in churches. 
This is not about creating some great fear that we are going to 
change the nature of our democracy. Remember, until 1954, 
churches did this all the time, and our democracy was not 
otherwise fractured or fissured off in 100 directions.
    The bottom line is that we want to make sure that the 
occasional, the incidental endorsement, particularly from the 
pulpit itself, does not mean that you lose your tax exemption.
    Then I want to add one thing. Barry Lynn keeps saying that 
somehow this permits the actual transfer of moneys from the 
U.S. Department of the Treasury or from the donation plate of 
the church. I have looked through the campaign finance reform 
law. I defy him to show me a section of that law which makes 
this legal and permissible. It is not there. It cannot be done.
    Mr. FOLEY. Let me just ask quickly, Dr. Kennedy, do you 
think that prohibiting ministers from speaking from the pulpit 
on political issues and their candidates unfairly limits them 
in carrying out their vocation?
    Reverend KENNEDY. Yes, I do. For example, we talk about 
moral issues. I have, as thousands of other clergymen have, 
spoken at times about abortion, feeling that this is not right 
and should not be done. But should I, 90 days before an 
election, speak on that same issue and indicate some candidate 
that may be against it or for it, I am in great jeopardy of 
losing; or I do not lose anything, it is the congregation, the 
people who lose it. I do not lose the money, it goes to the 
church. But the people who give it lose their tax exemption, 
which is something that they have now.
    Mr. FOLEY. Thank you.
    Chairman HOUGHTON. Thank you. Ms. Girton-Mitchell, I think 
we cut you off at one point. Would you like to make a 
statement?
    Ms. GIRTON-MITCHELL. Thank you, Mr. Chairman. I was simply 
going to say that on behalf of the National Council of 
Churches, we believe that this legislation is unnecessary, 
unwise, and unwanted. With the present statutes, the clergy is 
able to do what is needed to be done.
    Our primary focus is that of helping society in general. 
Ministers are able to speak out on issues. We have very 
knowledgeable congregations today who, with the right 
educational opportunities, are able to make their decision on 
political candidates without direct endorsements from the 
pulpit.
    Chairman HOUGHTON. Thank you very much.
    Mrs. Thurman.
    Mrs. THURMAN. Mr. Chairman, Mr. Pomeroy has a 4:00, and if 
I could, I would like to go ahead and let him have my time.
    Chairman HOUGHTON. All right. Go ahead, sir.
    Mr. POMEROY. Thank you, Mr. Chairman, and thank you, 
Congresswoman Thurman.
    I must say that I am somewhat surprised at the testimony 
that I have heard. One would conclude from some on the panel 
that the church has been utterly silent on the moral issues of 
our time for the last 50 years, ever since 1954.
    Now, I think if we look back, my recollection of the 
church's role during this period of time is as a significant 
source of activism and leadership against segregation policies, 
a major bulwark of the movement for civil rights, and certainly 
raising the four questions, the important questions that needed 
to be asked about the Vietnam War.
    If some would think church activism and moral issues only 
come from the left, look at the seventies, eighties, nineties, 
the tremendous activism marshaled in congregations against 
abortion, and the tremendous political force that has come from 
there. So it certainly is not as though the churches have been 
constricted or leaders of churches have been constricted from 
speaking out about the moral issues of our time.
    Really what this legislation is about is not at all, not 
one little bit, about a fear that some kind of nuanced slip 
from the pulpit might cross the line.
    There are a couple of items I wish to put in the record on 
this hearing. First is a copy of the ad that provoked the court 
case in the Pierce Creek case that revoked their tax exemption. 
This is a full-page newspaper ad that cites Scriptures: ``The 
Bible warns us not to follow another man into sin, nor help him 
promote sin, lest God chasten us. How then can we vote for Bill 
Clinton?'' And it says by way of disclaimer, ``This 
advertisement is cosponsored by the Church at Pierce Creek. 
Tax-deductible donations for this advertisement are gladly 
accepted.'' This is not some nuanced thing from the pulpit.
    [The information follows:]

                                                          USA Today
                                                       October 1992

                            CHRISTIAN BEWARE

         Do not put the economy ahead of the Ten Commandments.
             Did you know that Governor Bill Clinton . . .
           Supports abortion on demand? (Violates Exo. 20:13, 
        Lev, 20:1-5)

           Supports the homosexual lifestyle, and wants 
        homosexuals to have special rights? (Violates Exo. 20:14, Lev. 
        20:13. See also Rom. 1:26,27)

           Promotes giving condoms to teenagers in public 
        schools? (Violates Exo. 20:12, Col. 3:5. See also Rom. 1:28-32)

    Bill Clinton is promoting policies that are in rebellion to God's 
Laws. In our desire for change, do we really want as a president and a 
role model for our children a man of this character who supports this 
type of behavior?
                      But what about the economy?
    Yes, we are in tough economic times but if God forbid that we sell 
out our most sacred beliefs in a vain hope of financial gain. How can 
we expect God to bless our economy if we plunge down a path of 
immorality? (Deur. 28)

    The Bible warns us to not follow another man in his sin, nor help 
him promote sin--lest God chasten us. (See Deut. 13, Jer. 23, Prov. 
4:14; 11:21; 16:5, 1 Tim. 5:22)
                 How then can we vote for Bill Clinton?
        This advertisement was cosponsored by The Church at Pierce 
        Creek, Daniel J. Little, Senior Pastor, and by churches and 
        concerned Christians nationwide. Tax deductible donations for 
        this advertisement gladly accepted. Make donation to: The 
        Church at Pierce Creek. Mail to: PO Box 132 SVS, Binghamton, NY 
        13903-0132

        This advertisement was not authorized by any political 
        candidate or candidate Committees.

                               

    Mr. POMEROY. What worries me about this is that we are 
going to have almost an Elmer Gantry model, someone with an 
agenda that is not their best effort at understanding their 
lord's agenda, God's agenda, but their agenda, trying to enlist 
and inflame the congregation so they might contribute funds 
that church leadership could directly funnel into campaigns 
with utterly no disclosure about where those dollars are 
individually coming from.
    Now, you say, no way, religious leaders would not be prone 
to overstate. Let me read to you from an ad that I will also 
put into the record of this hearing, a mailing: ``Stop IRS 
intimidation of churches and ministries. Please help my church 
and my pastor so we can,'' and this is the response, ``Yes, 
help us. Fight for us. Please help my church and pastor so we 
can speak out on moral issues of national importance. I stand 
behind you to support all the work'' of a certain ministry. And 
it goes on to say in the petition itself, ``Please give your 
full support to passage of legislation that would restore 
freedom of speech to America's houses of worship.''
    [The information follows:]

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    Mr. POMEROY. Well, in my opinion, that does not in any way 
represent an effort to capture for the parishioner the issue 
before us. In fact, I think it is a perfect example of what we 
are worried about, a religious leader leveraging the confidence 
and faith of their congregation to drive a personal agenda by 
funneling cash directly into the political system. A lot has 
changed since 1954, Mr. May.
    In fact, in 1954, I think we would have one cycle where 
there was the initial effort of television advertising. The 
technological revolution undergirding the campaign since that 
time has been a complete revolution, completely expanding the 
influence of money in campaigns and enhancing the danger of 
those that would purport to speak on behalf of God interpreting 
very narrow political agendas.
    I will quote from the testimony of Dr. Kennedy, where he 
talks about we need this bill because present law selectively 
silences those who have the greatest vested interest in 
upholding the moral law of God. Well, Dr. Kennedy, there are a 
whole host of churches on the other side of this question from 
now. I go to one of those churches, the Presbyterian church, 
and when we pray the Lord's prayer in my church, we pray that 
God's will be done on Earth like it is in heaven, and we really 
mean it.
    We don't think you mean it any more than we mean it. We 
mean it, too. We couldn't be more sincere and devout as we try 
to bring this about. So, I must say I not only take exception, 
but I take some offense that you purport to have a greater 
vested interest than we do in trying to bring about the Lord's 
work on Earth. And let me just tell you that that is exactly 
the kind of attitude that makes me so fearful of a church 
leader being able to use, really almost misappropriate the 
funds of the trusting parishioners for crass direct entry into 
the political system, again, without any accountability in 
terms of where those dollars are coming from.
    I have used my time, Mr. Chairman. I thank you for letting 
me speak my piece on this important legislation.
    Reverend KENNEDY. Mr. Chairman, having been mentioned by 
name----
    Mr. POMEROY. Go ahead, Doctor.
    Reverend KENNEDY. I would like to respond. Sir, you totally 
misunderstand what that statement means. I, in making that 
statement, was referring to the clergy in general in this 
country, that if the clergy are silenced, since it is the God-
given function of the clergy to try to maintain decency and 
order and morality in a nation. As we have seen one historian 
said, it was from the Puritan pulpit that the moral force of 
America was borne and strengthened. Therefore, I am saying if 
the Congress, or anybody, were to silence clergy on crucial 
issues, then they would have been, indeed, hampering the moral 
ongoing of decency in America, and that I say is what precisely 
has happened.
    Mr. POMEROY. Dr. Kennedy, I would just respond by saying 
that this country was founded on very important religious 
values. They continue to be the bedrock of what distinguishes 
our Nation and represent the hope for our future, but it does 
not take a 30-second ad funded by parishioners to establish 
moral leadership from the churches. And in fact, the moral 
leadership of the churches during the period of time that you 
say we have been silenced, I think, speaks so powerfully for 
historical evidence that indeed the present balance has allowed 
the church plenty of room to offer their ongoing vital 
contribution to this country. I believe this legislation tipped 
that over in very dangerous ways.
    Mr. MAY. Mr. Chairman, since my name was mentioned as well, 
might I have a moment to respond?
    Chairman HOUGHTON. Absolutely.
    Mr. MAY. I would just say, again, on page 1 of my 
testimony, I explain why under the new campaign finance laws 
and the current campaign finance laws, there is no such thing 
as taking out a 30-second ad by the parishioners with use of 
the church money. It can't happen. The second thing is that you 
have expressed, I think, a balanced revulsion toward the idea 
that churches may get so involved in political matters. But the 
truth is, there is a gigantic portion of the churches in 
America who do this, and either we have laws that are 
evenhanded and apply across the board or not. We have had 
testimony from Mr. Fauntroy, who has made it clear that he has 
endorsed from the pulpit. The IRS expert panelist said that 
clearly is political intervention in violation of the Tax Code. 
I don't believe it is the intent of Congress for our pastors 
and our moral leaders to be able to say to their congregations, 
I have an understanding about what I believe is right in terms 
of justice and indeed what the call of God is on my life and my 
congregation's life. And therefore, I believe that so and so 
does better in the public sphere to recognize and to fulfill 
those things than such and such. Please support and vote for so 
and so.
    And when you do that incidentally or occasionally, I don't 
believe the republic comes crashing down. We did it before 
1954, and this measure simply provides that same sense of 
balance back into what we are doing today.
    Mr. POMEROY. Again, it is not as though the churches have 
been missing from the landscape of debate on these issues since 
1954. They have been at the heart of debate on one moral issue 
after another. Dr. Gaddy, as long as everyone else is jumping 
in with the other side, do you feel or do you, the ministers 
your organization speaks for, feel as though they are somehow 
constrained and muted about their ability to participate in 
national debate relative to moral issues?
    Reverend GADDY. I am completely baffled by that 
observation. I don't know what ministers are talking about in 
the pulpit if they are not talking about the way religion 
impacts life in all of its complexity and need. What is at 
stake here, as I understand it, is not a prohibition against 
any minister talking about issues that have moral dimensions to 
them. What is at stake here is saying to ministers that you 
should not use the sacred desk and claim the authority of God 
to endorse a candidate for public office. And I have a hard 
time, I must admit, understanding why ministers resist that.
    The fact is that if we went that route, perhaps there would 
be mobilized some political movements that would be satisfying 
to the supporters of these proposed bills. You might accomplish 
that, but you would lose your congregations. Can you imagine 
what happens to people in a congregation who have fundamental 
spiritual needs of grief or family counseling or whatever, and 
they find themselves in a congregation in which they, on the 
basis of their conscience, disagree with the endorsement of the 
president of the congregation or of the pastor or the rabbi or 
the imam? Where do they go for help? And, so you reconfigure 
the whole religious landscape so that people are looking for 
ministers whom they can trust for spiritual counsel on the 
basis of the political identity of that congregation. People 
don't deserve that, and this Nation doesn't need that.
    Mr. POMEROY. You think indeed that there might be, with 
this legislation, more of an inducement for those to take 
advantage of a minister position to drive a political agenda, 
either personal or very personally entwined with the 
ideological advocacy in an election?
    Reverend GADDY. It is an invitation to do that as I see it. 
To pass the legislation would say we are encouraging ministers 
to become political power brokers and to endorse candidates 
from the pulpit. Ministers are a cross-section of the 
population, and sometimes ministers, like everyone else, use 
their religion rather than letting their religion use them. It 
is very possible, under the passage of a bill like this, that 
someone could mistake indigestion or a political preference as 
the revelation of God. In a hierarchical congregation in 
particular, if the minister says this is God's man or woman for 
this position, people in that congregation have a religious 
responsibility to pay attention to that authority. I think it 
is a blatant misuse of religious authority.
    Reverend FAUNTROY. May I respond to two issues?
    Chairman HOUGHTON. We have got to move along here, Walter. 
But please go ahead, and then we will----
    Reverend FAUNTROY. Well, first of all, if I thought that 
this bill authorized the laundering of money for political 
purposes to the churches, I would be opposed to it. And second, 
I do take issue with those who say the church has spoken out 
over the last 30 or 40 years. And most of the times they have 
spoken out the wrong way, as far as I am concerned. You ought 
to read Martin Luther King's letter from a Birmingham jail to 
get an idea of what some churches thought needed to be done to 
endorse the status quo.
    And you need--I teach my people, at least in my church, 
that I am not God, that God is not a Democrat or a Republican, 
God is not a white or a black, God is not a Muslim, Catholic, 
or a Jew. God is the one who rewards those who diligently seek 
him in the care of the least of these. And it is not enough to 
talk that talk generally. You have got to take the newspaper in 
the pulpit, at least what they are reading, and help them to 
interpret the word of God.
    And I would hope that this bill would not authorize people 
to claim they speak in the name of God. They speak in a name of 
a world that is consistent across every major religion in the 
world. Take it from somebody who has studied comparative 
religion, that God requires you to do justly, love mercy, and 
walk humbly with God and not just talk it, but walk it.
    Chairman HOUGHTON. Thank you. Mrs. Thurman.
    Mrs. THURMAN. Thank you, Mr. Chairman. First of all, I need 
to ask a question. How many churches are there in this country? 
I am just curious. I have no clue what that number is. Anybody 
know?
    Reverend KENNEDY. There are about 300,000 Protestant 
churches. I know that.
    Mr. MAY. I was just going to add there must be at least 
280,000 because Barry Lynn mails to them to make sure that 
churches don't do this sort of thing.
    Reverend FAUNTROY. I can tell you the statistics for--the 
1990 Census show there were 40,000 African American churches 
across seven denominations that convened 24 million people a 
week.
    Mrs. THURMAN. So, Mr. May, when you said that this law was 
intrusive, let me just give you some facts that we have, that 
there has only been two churches that have lost their 
exemptions. There have been only four to five religious groups 
that have lost their exemption. And it is my understanding 
there are only two that have led or have had to pay an excise 
tax. So I would say, after asking that question and the 
response I get, that is a very small percentage. I certainly 
can appreciate and understand, you know, the issue and why you 
are in favor of this, but I certainly am not one to believe 
that we have been so intrusive of this government into our 
churches and our places or worship that this, you know, has 
caused a problem.
    You know, I am somewhat offended in some ways for those 
that might be for this piece of legislation. I know that sounds 
a little curse, but I have to tell you. You know, I am a 
thinking person. I go to a church to get my moral stability, to 
hear the teachings, to have an understanding of the word. I 
don't go for somebody to interpret for me how and what I should 
believe, how I should think, and how I should vote. I would be 
offended and am offended if that happens. That is my right to 
decide that, and I do worry about that retribution if I, in 
fact, voiced a different opinion as to either part of my 
congregation or to my pastor. You know, what kind of 
retribution is put on me as a person that has a different 
thought?
    I mean, we see that now all across our country where that 
can happen. I mean, you know, I have people that come up to me 
all the time and say I am such and such, but I just don't 
believe, you know, this part of what they are teaching. And to 
come down and feel like--I mean, I have to tell you, I mean, I 
would like to believe that we should not take something that we 
think is very precious to our democracy away from people, and 
that is, the ability to think and clearly decide, based on what 
you have taught them. I mean, you also need to understand that 
you have been giving them what you believe is the right way to 
live your life.
    And certainly through those teachings, you know, Dr. 
Kennedy and others, you would be imparting that information 
onto them. Do we have such little faith in those folks that 
listen to us that not to make the right decision, but that we 
would have to be told what decision were made because we don't 
get it? I mean, I just--I am very confused that we would go in 
that direction.
    And maybe the opposite I guess could be made that, you 
know, maybe you should be able to do that and we should still 
have the right to have that decision, but I--just as a person 
who would do that--and especially because there is an ability 
for you to already do that under section 501(c)(4). If people 
believed that you ought to be involved in those activities, 
they have a way of giving those moneys, just like people who 
give money to me for my campaign. They don't get tax deductions 
for that, and they give me the opportunity to spread my word, 
and people have the right to hear it and make a decision.
    So I just--if you want to comment on it, fine. I just kind 
of----
    Reverend LYNN. I would like to comment on it also. I think 
Congresswoman Thurman, you raise a good point about what brings 
70 percent of Americans in the latest poll to opposing this 
idea of allowing churches to contribute. Churches do, in fact, 
make important civic contributions by the educational process 
they use. Even a tax exempt church is invited to have--
certainly may invite all the candidates for the school board or 
the local congressional race to come to their church. If he or 
she chooses not to come, that is the decision by the candidate. 
There are also kinds of civic responsibilities that churches 
can take, including nonpartisan get-out-the-vote campaigns, as 
the representatives on the first panel made clear.
    So it is not like those of us who are actively engaged in 
the church cannot help educate people, but ultimately the 
education ought to stop at the polling place curtain. I think 
that is exactly where ministers, priests, imams, and rabbis 
should not be. And this is a bill that would take them a lot 
closer than they ought to get.
    Reverend KENNEDY. May I say that I certainly agree with you 
that intelligent people have the right to think. If this bill 
were in any way trying to limit that, I would definitely oppose 
it. I certainly believe that I have the right to think. I 
believe my congregation has the right to think. Our 
congregation happens to be of a certain economic level, but 
most of those people are very well educated. We have many 
doctors, lawyers, professors of this sort in our congregation.
    I have never once ever told them to vote for anyone or 
against anyone. Why? It is against the law. I try to keep the 
law. Nor the idea that I as a clergyman am going to go inside 
the curtain when they pull their levers and cast their votes, I 
mean, that is just too preposterous even to comment on. But the 
thing is, if it is true that many, many people would hear a 
pastor speaking and may recommend a candidate, if they didn't 
like that, they would go somewhere else, and let me say this, 
ministers are not utterly stupid. They are not going to do 
things from the pulpit that are going to drive their 
congregation away. I can't imagine that they would be that 
foolish.
    And so, you know, there is a fact, a man has his own 
conscience, his own mind, and he is going to indeed keep in 
mind the congregation he is dealing with. And the ideas that 
have been bounced around by several Congresspersons today to me 
are just beyond comprehension that any minister would do 
something as foolish as that.
    Mr. MAY. Could I just comment that all this measure--
Congressman Jones' measure is intended to do, is, for the same 
reasons, apparently Congress is comfortable with, an 
insubstantial amount of lobbying activity from churches and 
exempt organizations. They are going to accept the same sort of 
thing from churches, and part of the reason is it is already 
happening. You know it is happening. I know it is happening. 
But we are talking about direct endorsements now. Again, I 
refer you to the 60 examples I provided in my testimony, just 
from a Lexus-Nexus search. It is real clear that many pastors 
in America, in fact, believe for the reasons that Mr. Fauntroy, 
who has communicated here today, that he believes may be part 
of his responsibility to let his flock know how he feels about 
these issues. There is nothing improper or immoral about it.
    I don't believe he insults his congregation when he does 
it, and I am sure they are filled with thinking people just 
like your congregation is. But he believes it is important to 
do it, and it is part of the democratic pluralistic system we 
have. And when you know that many churches may do it, but 
others, for the reasons that Dr. Kennedy just articulated, he 
won't break the law, you have got yourself this dual-standard 
kind of a system.
    Now, that is not what anybody really is trying to get here, 
so all we do for the same reasons that you trust them to be 
able to engage in lobbying, a very important activity for a 
free people, likewise they could do the same thing.
    Now incidentally or occasionally, not a lot of it, 
insubstantial is the phrase--no 5 percent Bright-Line. We are 
not here to support Congressman Crane's measure in that 
context, but Congressman Jones' we are for the reasons we 
expressed. We do believe it is a liberty issue, which is why we 
are very comfortable in suggesting that, in fact, it is a 
necessary change for the law.
    Mrs. THURMAN. But let me say something to you, though. 
Every day we are going to have a piece of legislation on the 
floor this week, and my guess is that there will be a group of 
organizations that will be supporting the welfare reform or not 
supporting it. It will have the interfaith alliance. It will 
have the Catholic church charities. It will have, I don't know 
how many more. We get that lobbying all the time. We hear from 
those people all the time. It is not against anything. It is 
not, you know, so you are still given that opportunity in your 
participation of government.
    Mr. MAY. And you don't believe it threatens democracy and 
freedom, of course. That's right. It is perfectly good to have 
that exchange.
    Mrs. THURMAN. And I don't disagree, but I think from, maybe 
from the pulpit or from or ways without going through the 
proper channels, I mean, I think, you know what? We just 
disagree.
    Mr. MAY. Will you just acknowledge for me that, in fact, it 
happens and it does happen a lot in a lot of churches in 
America right now today, and either the IRS has decided because 
it was articulated in its panel that it is against the current 
law, and yet they do it and the IRS goes, oops, I didn't see 
that, but now and again, they may decide there it is; I am 
going to make sure this person gets penalized. And that is the 
reason I think you have to change it, to make it fair and right 
for all players in the game for the reasons that----
    Mrs. THURMAN. Well, it just seems odd to me, as I mentioned 
the statistics that I have, that two or three churches have 
been the ones that have been penalized when there are hundreds 
of thousands of other churches out there. One or two didn't 
play. One or two didn't get caught. I don't know what the 
reasons are, but it seem to me some chose to go a little step 
further than those who have tried to play by the rules. And I 
think that is the issue here.
    Reverend LYNN. You know, I do know what the answer to some 
of this is, because we were involved in distributing 
information to the Internal Revenue Service about that 
outrageous ad that Congressman Pomeroy indicated. It had been 
placed in USA Today at a cost of $44,000. The pastor of that 
church, who Mr. May represented, said repeatedly, including to 
the courts and to the IRS, you know, God told me what to do and 
I don't really care what the Congress says or the courts say or 
the IRS. I am going to keep doing it. Compare that to your 
former colleague here, Congressman Floyd Flake. Congressman 
Flake endorsed Al Gore over Bill Bradley in the New York 
primary in the last presidential race. That was considered a 
pulpit endorsement. The IRS visited him. He said, you know, I 
did the wrong thing. I am not going to do it again.
    So obviously the treatment that the IRS gives to someone 
who says I made a mistake and I am not going to do it again 
ought to be different from that of a man who says, God told me 
to do it, I don't care what the secular law requires, and I am 
going to keep doing it again. That is a distinction that makes 
a difference in law enforcement across the board.
    Reverend FAUNTROY. Mr. Chairman, may I please ask for 
clarity on three things. I read 2357, and I did not think it, I 
did not interpret it as authorizing churches to monitor money 
for political candidates.
    Mr. MAY. It does not.
    Reverend FAUNTROY. Second, I did not consider it a means by 
which a church could meet and, by a binding vote, commit the 
church to vote for somebody. That is not true, is it?
    Mr. MAY. No.
    Reverend FAUNTROY. All right. Now, third, my view is that 
the responsibility of leadership is to lead, and I will not 
abandon that responsibility. And I don't want to see ministers 
like Floyd Flake who have got people who are wanting in income, 
in education, health care, housing, and justice, to many 
ministers every day who have a stake in the election, not to 
know what he is committed to learn as a leader, to share with 
them, not a binding vote, but simply to say, look, I have 
looked at this. You all have been pushing pots and pans in 
somebody's scrub kitchens all week.
    I have been reading, and I have been studying these things, 
and I think consistent with our mission, I am going to vote 
this way, and I hope you will. Is anything wrong with that? And 
why would Floyd Flake feel upset about looking at----
    Reverend GADDY. I do see something wrong with it.
    Reverend FAUNTROY. Tell me.
    Reverend GADDY. Okay. Because the authority of the person 
behind the pulpit is a derived authority. When you become a 
religious person, you don't become perfect in all 
understanding. Ordination doesn't carry with it a guarantee of 
infallibility. The authority is a derived authority based on 
the scriptures and oral traditions, and the nature of the God 
that you serve. People listen to you when you work with that 
authority saying ``We need to feed the poor, we need to clothe 
those who are naked'' and so forth, but the leap from speaking 
with that authority to saying ``and the best way for you to do 
that is to vote for this candidate'' that is not a legitimate 
use of spiritual authority. Then you are speaking of your 
personal judgment.
    Reverend FAUNTROY. Sir, you need to come to my church and 
be a part of my----
    Reverend GADDY. I can't. I have to preach in my church.
    Reverend FAUNTROY. They do not consider me God. You hear 
me? And a lot of people in the congregation----
    Chairman HOUGHTON. We will accept that as fact, Walter.
    Reverend FAUNTROY. No, they really don't. And you can trust 
people to make their own judgments, but they want to know from 
their spiritual leader, and spirituality has little to do with 
a pie in the sky. It has to do with these five things I have 
been talking about, and they want to know how you feel.
    Reverend GADDY. But you are using a spiritual judgment, in 
your words, using a spiritual judgment to commend a political 
decision.
    Reverend FAUNTROY. And politics is about who gets how much, 
what, when, and where. I understand that and----
    Chairman HOUGHTON. All right. I would like to ask Mr. Lewis 
for a comment.
    Mr. LEWIS. Mr. Chairman, I think Dr. Gaddy said it all, and 
I don't want to get into a battle between these two religious 
leaders here. Walter, all of that may be well and good, maybe 
perfect in your understanding. No one is asking people to 
violate their conscience, their religious conviction, but if 
you violate the law, then you are prepared to pay the 
consequences, and that is very much in keeping with the 
philosophy of nonviolence, with the philosophy of David Thoreau 
in Civil Disobedience. So if you go down that road, then all 
the rest will be--you know, the law is the law.
    Reverend FAUNTROY. That's right.
    Mr. LEWIS. And the church is not necessarily--the 
activity--political activity, cannot secede the law.
    Chairman HOUGHTON. Thanks very much.
    Mr. LEWIS. I guess we can say amen to that, huh?
    Reverend FAUNTROY. Yeah. I have done it all my life. Unjust 
laws are not to be obeyed. Ask Thoreau. Ask Martin Luther King, 
Jr.
    Chairman HOUGHTON. Well, usually the Chairman has to step 
in and stir things up. I didn't have to do that today. It has 
been an extraordinary day. I certainly appreciate this, and if 
there are no other questions, this Subcommittee hearing is 
adjourned.
    [Whereupon, at 4:27 p.m., the hearing was adjourned.]
    [Submissions for the record follow:]
                                               Alliance for Justice
                                          Washington, DC 20036-1206
                                                       May 14, 2002
The Honorable Amo Houghton, Chairman
Committee on Ways and Means
Subcommittee on Oversight
U.S. House of Representatives
1136 Longworth House Office Building
Washington, D.C. 20515
    Dear Representative Houghton:
    The Alliance for Justice submits this written statement for 
consideration by the Subcommittee On Oversight and inclusion in the 
printed record for the May 14, 2002 hearing on the Houses of Worship 
Political Speech Protection Act (H.R. 2357) and the Bright-Line Act of 
2001 (H.R. 2931).
    The Alliance for Justice is a national association of 60 public 
interest advocacy organizations. A primary mission of the Alliance is 
to strengthen the capacity of the public interest community to 
influence public policy. The Alliance's Nonprofit Advocacy Project 
works with nonprofits around the country to enhance their ability to 
participate in the policy process. The Project monitors federal 
legislative developments that impact 501(c)(3) organizations, offers 
workshops on the rules governing nonprofit lobbying and political 
activity, and produces plain-language legal guides for nonprofit 
organizations.
    The Alliance for Justice is opposed to the passage of the Houses of 
Worship Political Speech Protection Act and the Bright-Line Act of 2001 
in their present form. We oppose any amendment of the tax code that 
confers rights to one group of 501(c)(3) organizations to the exclusion 
of others. However, we would support permitting all public charities to 
engage in a limited amount of political activity.
    Presently, the law strictly prohibits any 501(c)(3) organization 
from engaging in political activity. The Houses of Worship Political 
Speech Protection Act and the Bright-Line Act of 2001 propose to amend 
the Internal Revenue Code to permit religious 501(c)(3) organizations 
to engage in political activity while continuing to forbid non-
religious 501(c)(3) organizations from engaging in these activities. 
This distinction between religious and non-religious 501(c)(3) 
organizations is both exclusionary and unwarranted.
    The provision is unwarranted because non-religious 501(c)(3) 
organizations are in greater need of a law allowing insubstantial 
political activity than are religious organizations. As the D.C. 
Circuit Court of Appeals noted in Branch Ministries v. Rossotti, when a 
religious organization loses its tax-exempt status because it engages 
in political activity the loss is more symbolic than substantial. If 
the Church does not intervene in future political campaigns, it may 
hold itself out as a 501(c)(3) organization and receive all the 
benefits of that status. 211 F.3d 137 (D.C. Cir. 2000). Religious 
501(c)(3) organizations do not have to submit an application to the IRS 
for tax-exempt recognition, thus, the loss of their tax-exempt status 
is less detrimental then it would be to a non-religious 501(c)(3) 
organization. Non-religious organizations stripped of their exemption 
for electioneering would have to reapply with the IRS to regain their 
tax-exempt status.
    In addition, history suggests that a complete ban on political 
activity was never intended for any 501(c)(3) organization. Legislative 
history supports the view that Senator Lyndon Johnson's amendment to 
create the political prohibition, adopted as part of the 1954 Revenue 
Act, was intended to extend the same insubstantial activity 
restrictions on political activity as it did to lobbying. 100 Cong. 
Rec. 9,604 (1954). Nevertheless, the IRS and judiciary have continued 
to interpret an absolute ban on political activity. Thus, to correct 
this misinterpretation, all 501(c)(3) organizations should be allowed 
to engaged in an insubstantial amount of political activity.
    The Alliance for Justice believes that any change to the political 
prohibition should apply equally to all 501(c)(3) organizations, not 
strictly religious 501(c)(3) organizations. We oppose any proposed 
change that is inequitably reserved for the benefit of some 501(c)(3) 
organizations to the exclusion of others. Therefore, unless the Houses 
of Worship Political Speech Act and the Bright-Line Act of 2001 are 
amended to apply to all 501(c)(3) organizations, we would oppose any 
amendment to the current political prohibition.
    Thank you for this opportunity to comment on these bills. We would 
be happy to assist the Subcommittee in any way as it considers this 
legislation.
            Sincerely,
                                                           Nan Aron
                                                          President

                               

               Statement of the American Jewish Committee

AJC STRONGLY OPPOSES THE HOUSES OF WORSHIP POLITICAL SPEECH PROTECTION 
                              ACT OF 2002

    With over 110,000 members and supporters and 32 offices around the 
country, the American Jewish Committee, an organization, long engaged 
in the fight for civil rights and religious liberty, strongly opposes 
the Houses of Worship Political Speech Protection Act, introduced last 
year as H.R. 2357 by Representatives Walter Jones (R-NC) and John 
Hostettler (R-IN).
    This bill would endanger the integrity and autonomy of houses of 
worship by injecting them into partisan political campaigns. Federal 
tax law has been clear for decades: houses of worship, like other 
501(c)(3) organizations, cannot legally engage in partisan politicking 
and retain their tax exempt status for contributions. This simple and 
unambiguous provision of federal law has served as a valuable safeguard 
for the integrity of both religious institutions and the political 
process.
    Current law upholds the integrity of houses of worship. Churches, 
synagogues, temples and mosques should not be used as political 
headquarters or as a means of partisan fundraising for political 
activities. Tying houses of worship to partisan activity would demean 
those institutions, and the potential for them to be involved in 
political campaigns would lead to pressure on them to take a partisan 
stance.
    This bill is unwanted and unneeded by America's clergy. In a recent 
Gallup/Interfaith Alliance Foundation poll, a full 77% of clergy were 
opposed to their fellow clergy endorsing political candidates. Another 
poll conducted by The Pew Research Center for the People and the Press 
and The Pew Forum on Religion and Public Life, found that 70% of 
Americans feel that houses of worship should not come out in favor of 
one candidate over another during political elections.
    The bill is predicated on false assumptions about existing law. 
Supporters of these bills have argued that their enactment is necessary 
to allow religious leaders to speak out on issues of interest to their 
congregations. The reality is that religious leaders have an absolute 
right to use their pulpit to address the moral issues of the day. The 
only things tax-exempt houses of worship may not do is endorse or 
oppose candidates, or use their tax-exempt donations to support 
partisan campaigns. Current law simply limits groups from being both a 
tax-exempt ministry and a partisan political entity.
    In addition, this bill would open a dramatic loophole in the 
nation's campaign finance laws. Donations to houses of worship are tax 
deductible because the government assumes that their work is 
contributing to the common good of society, not a political party or a 
partisan campaign. As such, contributions to churches are tax 
deductible and donations to political candidates and parties are not. 
Therefore, these bills would create a significant new loophole in our 
nation's campaign finance laws with serious ethical and legal 
implications.
    The American Jewish Committee urges you to oppose this measure, 
which threatens religious liberty and the independent character of 
houses of worship.

                               

               Statement of the American Jewish Congress
    The American Jewish Congress is an organization of American Jews 
founded in 1918 to protect the civil, political, religious and economic 
rights of American Jews and all Americans. It is tax exempt under 26 
USC Sec. 501(c)(3). In its work it has emphasized both the protection 
of religious liberty and the ban on religious establishment. Although 
firmly committed to the freedom of religious persons and institutions 
to speak freely concerning public issues, it nevertheless opposes the 
so-called House of Worship Political Speech Protection Act, H. 2357 as 
both unwise and unconstitutional. Moreover, even if it agreed with the 
bill's purpose and goals, the language of the House of Worship 
Political Speech Protection Act would not in any event achieve its 
stated purpose.
I. LReligious Ideas Are Not-Band Should Not Be-Banned From the 
        Marketplace of Ideas
    Exempt organizations are, and should be, free to address public 
policy questions from whatever perspective they choose without 
hindrance from government. This is as true of religious organizations 
as it is of any other.
    The separation of church and state does not require the exclusion 
of religious voices from the marketplace of ideas. On the contrary, as 
Justice Brennan explained, concurring in McDaniel v. Paty, 435 U.S. 
618, 640-42 (1978):

          [R]eligious ideas, no less than any other, may be the subject 
        of debate which is ``uninhibited, robust, and wide-open. . . 
        .'' Government may not interfere with efforts to proselyte or 
        worship in public places. . . . It may not tax the 
        dissemination of religious ideas. . . . It may not seek to 
        shield its citizens from those who would solicit them with 
        their religious beliefs. . . .

          That public debate of religious ideas, like any other, may 
        arouse emotion, may incite, may foment religious divisiveness 
        and strife does not rob it of constitutional protection. . . . 
        The mere fact that a purpose of the Establishment Clause is to 
        reduce or eliminate religious divisiveness or strife, does not 
        place religious discussion, association, or political 
        participation in a status less preferred than rights of 
        discussion, association, and political participation generally. 
        ``Adherents of particular faiths and individual churches 
        frequently take strong positions on public issues including . . 
        . vigorous advocacy of legal or constitutional positions. Of 
        course, churches as much as secular bodies and private citizens 
        have that right.''

          The . . . goal of preventing sectarian bickering and strife 
        may not be accomplished by regulating religious speech and 
        political association. The Establishment Clause does not 
        license government to treat religion and those who teach or 
        practice it, simply by virtue of their status as such, as 
        subversive of American ideals and therefore subject to unique 
        disabilities. . . .

          In short, government may not . . . promote ``safe thinking'' 
        with respect to religion and fence out from political 
        participation those, such as ministers, whom it regards as 
        overinvolved in religion. Religionists no less than members of 
        any other group enjoy the full measure of protection afforded 
        speech, association, and political activity generally. The 
        Establishment Clause, properly understood, is a shield against 
        any attempt by government to inhibit religion. . . . It may not 
        be used as a sword to justify repression of religion or its 
        adherents from any aspect of public life. . . .

          The antidote which the Constitution provides against zealots 
        who would inject sectarianism into the political process is to 
        subject their ideas to refutation in the marketplace of ideas 
        and their platforms to rejection at the polls.

(Citations omitted.)
    Nothing in the Internal Revenue Code prohibits houses of worship, 
or their clergy, from taking a position on the burning ``moral'' issues 
of the day or from endorsing candidates. Any rule of that sort would be 
incompatible with historic practice. American religious leaders took a 
leading role in preaching about the Revolution, slavery-on both sides, 
it should be recalled-social reform, nativism, science teaching in the 
schools, prohibition, war and peace, civil rights, and, of course, 
gambling and abortion. In retrospect, some of these religious 
intrusions into the political sphere produced happy results. In others, 
the results were less happy, even, judged by today's standards, 
offensive. But that does not mean that government should seek to 
silence religious speech. And, in fact, it has not, although it does 
limit (or ban) such speech when paid for with tax exempt dollars.
    Whatever else may be said about the current tax law, it cannot be 
said that it has silenced religious or anti-religious speech. One would 
have to inhabit a different political universe than ours not to know 
that on many of the burning political and moral issues of the day, 
religious voices play an important, even determinative, role. Studies 
of recent elections show that even under current tax law, religious 
positions on such issues correlate closely with voting behavior. See 
generally, M. Silk, ed., Religion and American politics: The 2000 
Election In Context (2001). If there is a problem of a closing of the 
marketplace of ideas to moral or religious ideas, it is not evident to 
informed observers.
    The American Jewish Congress often disagrees with the speech of 
religious leaders, sometimes even often insisting that religious 
speakers seek imprudently to inject religion into the sphere of 
government. But those disagreements do not justify silencing religious 
speech, any more than religious objections to secular speech justify 
silencing it.
Current Law
    Current law (26 U.S.C. Sec. 501(c)(3)) exempts from income tax any 
``corporation organized and operated exclusively for religious, 
charitable, scientific or . . . education purposes,'' provided that 
``(a) no substantial part of the activities of which is carrying on 
propaganda or otherwise attempting to influence legislation; and (b) 
which does not participate in, or intervene in . . . any political 
campaign on behalf of (or opposition to) any candidate for public 
office.'' Contributions to exempt organizations are, more importantly, 
tax deductible. 25 U.S.C. Sec. 170.
    The ban on endorsing or opposing a candidate for public office is 
total and applies equally to all 501(c)(3) tax exempt organizations. 
Religious groups labor under no special disability. All 501(c)(3) 
organizations may not use a ``substantial'' portion of their resources 
to influence legislation, and none can use any tax-exempt money to 
intervene in a political campaign. Religious opponents of abortion and 
secular advocates of reproductive choice alike must use taxable dollars 
to endorse or oppose candidates. By contrast, the ban on ``attempting 
to influence legislation'' is less total. An ``insubstantial'' amount 
of a secular or religious exempt organization's assets may be used to 
influence legislation.
    Unfortunately, neither the Code nor the implementing regulations 
specify the demarcation line between substantial and insubstantial 
efforts at influencing legislation. The result is that exempt 
organizations live with a fair amount of uncertainty. In practice, the 
IRS has not been particularly vigilant in enforcing this condition. It 
appears to rely chiefly on self-policing, a policy which can give the 
unscrupulous a substantial advantage over groups attempting good faith 
compliance with the law.
    The late Reverend Dean Kelley, the National Council of Church's 
expert on church-state relations, once informed the undersigned that 
internal IRS documents released to him under the Freedom of Information 
Act placed the line at somewhere between 5 and 20 percent of an 
organization's expenditures. This uncertainty makes it difficult for 
exempt organizations to know whether to speak on a particular piece of 
legislation, since they have no way of knowing whether that effort 
would put the organization over the vague ``substantial'' threshold. 
Organizations have to decide whether to be active in influencing 
legislation in February, lest come October they would be silenced on a 
more important issue. H.R. 2357 would compound this confusion by 
extending the ``substantiality'' test to ``supporting or opposing 
candidates,'' without lending any greater precision to it.
    Congress has provided an alternative to the uncertainty of the 
substantiality test for secular 501(c)(3) organizations. They may elect 
to be covered by the so-called Conable Amendment, 26 U.S.C. 
Sec. 501(h), which, incorporating provisions of 26 U.S.C. Sec. 4911, 
specifies amounts which may be spend on influencing legislation. 
Churches may not so elect, 26 U.S.C. Sec. 501(h)(5).
    The exclusion of churches was not intended to discriminate against 
churches, nor was it motivated by an animus against religious speech, 
nor the fear that encouraging religious organizations to influence 
legislation would endanger church/state separation. The exclusion was 
inserted at the behest of churches, who wished to preserve their claim 
that Congress could not constitutionally tax churches, and surely not 
condition exemption on limiting their religious speech.
    Subsequent to the enactment of Conable, however, the Supreme Court 
has twice held that religious institutions are not constitutionally 
exempt from taxation, Jimmy Swaggert Ministries v. Bd. of Equalization, 
493 U.S. 378 (1990); Bob Jones University v. U.S., 461 U.S. 574 (1983). 
It has further held that conditioning exemption for 501(c)(3) 
organizations on limits on influencing legislation is not an 
unconstitutional condition. Regan v. Taxation With Representation, 461 
U.S. 540 (1983); Branch Ministries v. Rossoti, 211 F.3d 137 (D.C. Cir. 
2000).
    Although religious institutions had--and have--a substantial claim 
that the separation of church and state prohibits the state from taxing 
the church, for the moment-and for the foreseeable future-that claim is 
not recognized by the Supreme Court. Consequently, Congress may want to 
reconsider the blanket exclusion of religious organizations from 
Conable coverage. Provided that Conable election remains voluntary, it 
is hard to see why religious institutions should be automatically 
foreclosed from such an election.
    As noted, the ban on the endorsement of candidates is total. Again, 
the prohibition applies equally to all organizations exempt from 
taxation under Sec. 501(c)(3). And, as noted, the courts have found 
this restriction constitutional even as applied to religious 
organizations. Branch Ministries, supra; Christian Echoes National 
Ministry v. U.S., 470 F.2d 849 (10th Cir. 1972). As Branch 
Ministries pointed out, these rulings are simply a routine application 
of the general rule that tax exemption is a form of subsidy which the 
government need not extend to all subjects on which people choose to 
speak, 211 F.3d at 143-44, citing Regan, supra, 461 U.S. at 548; 
Cammarano v. U.S., 358 U.S. 498, 513 (1959).
    Although Regan and Cammarano are free speech cases, adding the Free 
Exercise Clause to the analysis changes nothing. Cf. Larsen v. Valente, 
456 U.S. 258 (1982) (religious speech subject to same restrictions as 
secular speech). The rule barring a group from involving itself in a 
political campaign as a condition of receiving exemption is a rule of 
general applicability allowing for no individualized exceptions. Under 
current law, such rules do not violate the Free Exercise clause. Smith 
v. Oregon Div. of Employment Security, 494 U.S. 872 (1990).
    Even if, as the AJCongress believes would be best, Smith were to be 
overruled, and the law would return the older and sounder rule of 
Sherbert v. Verner, 374 U.S. 398 (1963), it would be necessary to 
demonstrate that a rule ``substantially burdened'' religious activity 
before the government would be obligated to offer any accommodation. 
The Supreme Court has held that while subjecting religious 
organizations to neutral tax rules makes religious speech marginally 
more expensive, it does not ``substantially burden'' it as that term is 
used in constitutional law. Jimmy Swaggert Ministries, supra, 493 U.S. 
at 391; Hernandez v. CIR, 490 U.S. 680, 700 (1989). Government is under 
no duty to exempt religious organizations from the limits contained in 
Section 501(c)(3).
    In Regan, several concurring Justices observed that the 
restrictions of 26 U.S.C. Sec. 501(c)(3) would be constitutional only 
if there were an alternative avenue of communication left open to 
exempt organizations. Later cases adopt this requirement. Religious and 
other exempt organizations are not, however, without an effective and 
adequate alternative. As the D.C. Circuit Court of Appeals has 
explained:

          [T]he Church may form a related organization under section 
        501(c)4) of the Code. Such organizations are exempt from 
        taxation; but unlike their section 501(c)(3) counterparts, 
        contributions to them are not deductible. . . . Although a 
        section 501(c)(4) organization is also subject to the ban on 
        intervening in political campaigns . . . it may form a 
        political action committee ``PAC'') that would be free to 
        participate in political campaigns. . . . (``an organization 
        described in section 501(c) that is exempt from taxation under 
        section 501(a) may, [if it is not a section 501(c)(3) 
        organization], establish and maintain such a separate 
        segregated fund to receive contributions and make expenditures 
        in a political campaign.'')

          At oral argument, counsel for the Church doggedly maintained 
        that there can be no ``Church at Pierce Creek PAC.'' True, it 
        may not itself create a PAC; but as we have pointed out, the 
        Church can initiate a series of steps that will provide an 
        alternate means of political communication. . . .

(Citations omitted.)
II. H.R. 2357 Unconstitutionally Prefers Religious Viewpoints
    In addition to fixing a statute that is not broken-and in vague 
language that undermines, not advances, its stated purpose-H.R. 2357 is 
flat out unconstitutional. Although that is not the most serious flaw 
with the bill, it ought to be enough to condemn it. The House of 
Worship Political Speech Protection Act is a naked preference for 
religious political speech over competing secular political speech. 
Under any view of the Establishment, Free Speech and Press Clauses, 
such a preference is unconstitutional. No view of the Constitution 
would allow government to subsidize a religious group to oppose 
candidates who support gambling on the ground that the Bible is opposed 
to it, but deny a subsidy to a secular organization to oppose such 
candidates on secular grounds.
    The thrust of the Supreme Court's decisions over the last twenty 
years has been to equate religious and secular speech, and to insist 
that identical rules apply to both. See, e.g., Good News Club v. 
Milford Central School District, 121 S.Ct. 2093 (2001); Lamb's Chapel 
v. Center Moriches School District, 508 U.S. 949 (1994); Rosenberger v. 
Bd. of Rectors, University of Virginia, 515 U.S. 819 (1995); Board of 
Educ. Westside Community Schools v. Mergens, 496 U.S. 226 (1990); 
Larsen v. Valente, 456 U.S. 228 (1982). Many of those organizations and 
individuals who have testified in support of H.R. 2357 have devoted 
much energy to establishing that legal principle, insisting all the 
while that they do not seek any advantage for religious speech, but 
only to end discrimination against it. That position and support for 
H.R. 2357's preference for religious political speech cannot be 
squared.
    The case most on point, dealing with a statute almost on all fours 
with H.R. 2357, is Texas Monthly v. Bullock, 489 U.S. 1 (1989). There 
the Supreme Court invalidated a sales tax exemption for religious but 
not secular periodicals. The narrowest holding of the Court is stated 
in the concurring opinion of Justice O'Connor, who wrote:

          In this case, by confining the tax exemption exclusively to 
        the sale of religious publications, Texas engaged in 
        preferential support for the communication of religious 
        messages. Although some forms of accommodation religion are 
        constitutionally permissible . . . this one surely is not. A 
        statutory preference for the dissemination of religious ideas 
        offends our most basic understanding of what the Establishment 
        Clause is all about and hence is constitutionally intolerable.

(Citations omitted)

          In a separate concurrence, Justice White put the result on 
        grounds of freedom of the press: The Texas law at issue here 
        discriminates on the basis of the content of publications: it 
        provides that ``[p]eriodicals . . . that consist wholly of 
        writings promulgating the teaching of (a religious faith) . . . 
        are exempted'' from the burdens of the sales tax law. . . . 
        Thus, the content of a publication determines whether its 
        publisher is exempt or nonexempt. Appellant is subject to the 
        tax, but other publications are not because of the message they 
        carry. This is plainly forbidden by the Press Clause of the 
        First Amendment.

    Subsequent to Texas Monthly, courts have uniformly invalidated 
sales tax exemptions for religious periodicals only on one or the other 
of these grounds. ACLU v. Crawford,______F.Supp.2d______(E.D. La. 
2002); Haller v. Commonwealth, 556 Pa. 289, 728 A.2d 351 (1999); 
Ahlburn v. Clark, 728 A.2d 449 (R.I. 1999); Thayer v. South Carolina, 
307 S.C. 6, 413 S.E.2d 810 (1997); Finlator v. Powers, 902 F.2d 1158 
(4th Cir. 1990). Cf. In Re Springmoor, 479 N.C. App. 184, 
479 S.E.2d 795 (1997) (invalidating exemption of only religiously 
operated nursing homes from real property taxation). By a parity of 
reasoning, allowing a religious exempt organization greater leeway to 
engage in political endorsements than competing secular organizations 
is unconstitutional.
    The governing constitutional principle is neither technical nor 
obscure. It goes to the heart of the constitutional arrangements for 
the relationship between church and state. The government is required 
to be neutral between religious and secular viewpoints, given the 
Establishment, Free Speech and Free Press Clauses. Current tax law 
maintains that balance. So would a law permitting all exempt 
organizations to intervene in campaigns, a law we do not think 
desirable. H.R. 2357, however, upsets the constitutional balance 
exactly as would a law that permitted secular but not religious exempt 
organizations to endorse candidates. H.R. 2357 is unvarnished viewpoint 
discrimination of the kind the Supreme Court has repeatedly condemned.
    The American Jewish Congress does not subscribe to the view that 
government may accommodate religion only where the Free Exercise Clause 
compels exemption, a very narrow class of cases subsequent to the 
unfortunate decision in Employment Division v. Smith, supra. Smith 
itself disclaims any such rule. But the sine qua non of permissible 
accommodation is a substantial governmental burden on religious 
practice. Here, there is none.
    There is surely no burden on religious organizations that does not 
equally apply to their secular counterparts. Remedying one but not the 
other burden invidiously discriminates against speech on the basis of 
its viewpoint. Such discrimination violates core First Amendment, 
principles.
III. H.R. 2357 Is Extraordinarlily Poor Public Policy
    If there is one lesson to be learned from repeated efforts at 
campaign finance reform, it is that political parties will accommodate 
themselves to whatever fund raising opportunities the law allows. 
Rather than politics driving fund raising, fund raising has come to 
drive politics. So it was with PAC's, so it was with soft money and so 
it would be if religious organizations, alone among exempt 
organizations, could intervene in political campaigns with ``cheaper'' 
tax-deductible dollars while secular competitors had to pay for their 
endorsements with more ``expensive'' after-tax dollars.
    Passage of H.R. 2357 would inevitably cause politics to be recast 
and redrawn along religious lines, not as they are now, in an indirect, 
unspoken and therefore uncertain, demographic sense (evangelicals are 
conservative, Jews liberal, Catholic swing voters, and the like), but 
explicitly, as politicians and parties aligned and realigned themselves 
to gain favor of religious groups and access to their tax exempt 
dollars. That would be a most unfortunate and unhappy development.
    With a few exceptions, our Nation has avoided a religiously 
centered politics, even as it has allowed religious groups full freedom 
to express themselves on the issue of the day. To be sure, Alexander 
Hamilton unsuccessfully tried to organize a Christian Party to oppose 
Thomas Jefferson, the short lived Know-Nothing party was called into 
being by Protestants to limit the power of Catholics, and the National 
Reform Association unsuccessfully attempted to amend the Constitution 
so that it acknowledged the nation's Christian heritage.
    These isolated examples call attention to the secular and 
ecumenical cast of American political parties. Surely for all of the 
twentieth century and continuing into the twenty-first, this country 
has harbored no serious, significant or substantial political party 
whose platform was religious, whose candidates and leaders were 
selected because they held approved religious beliefs or designated 
clerical office, and whose members shared a common set of religious 
dogmas or rituals.
    It takes no more than a glance around the world to see how 
fortunate we have been. In countries with religiously based political 
parties and a politics riven with religious debate and differences, 
parties compete over which one more vigorously advances God's agenda. 
Those differences are difficult to the point of the impossible to 
compromise. Who dares compromise God's command?
    Other countries, to avoid this evil, have gone to the opposite 
anti-clerical extreme, substantially restricting the liberty of 
religious groups to address political issues and to participate in 
politics. The former countries are condemned to instability and 
internal division. The latter are deprived of the moral insight 
religion brings to bear on public issue. Neither is an attractive 
alternative. Neither is the American way.
    Whether or not H.R. 2357 would, as we predict, lead to the creation 
of religious parties, it would surely lead existing parties to jockey 
for the favor of organized religious groups who could provide the 
dollars modern political campaigns require. The results would be 
unhappy, and far worse than whatever shortcomings inhere in the present 
system.
IV. The Internal Revenue Service Should Clarify The Law
    Although H.R. 2357 is unnecessary, unwise and unconstitutional, 
there is substantial room for improvement in the way that the Internal 
Revenue Service enforces Section 501(c)(3). Enforcement of the 
restriction on intervening in campaigns is hardly aggressive and 
universal. Only the most egregious and public of violations result in 
enforcement actions. Under such a lax enforcement policy, it is not 
surprising that those ``caught'' believe they are the victims of 
selective prosecution. Another consequence of under-enforcement is that 
conscientious and law abiding organizations are often asked by their 
members to intervene in campaigns in ways that competing exempt 
organizations do with apparent impunity.
    One reason for the relatively relaxed enforcement-beyond the 
Service's understandable and commendable reluctance to challenge the 
speech of religious and other not-for-profit organizations over rules 
some of whose parameters are uncertain-is that the penalties for a 
violation are so draconian. Loss of tax exemption is the organizational 
equivalent of a death sentence. It had been hoped that the intermediate 
sanctions of 26 U.S.C. Sec. 4495 might result in some leeway for the 
Internal Revenue Service and hence more aggressive enforcement of the 
no-intervention rule, but this has so far not happened. Perhaps 
Congress ought to consider anew the question of graduated penalties for 
violations of the anti-intervention rules.
    Second, a search of the Internal Revenue Service's website turned 
up no publication setting out in plain English the Internal Revenue 
Service's positions on what constitutes influencing legislation or 
endorsing or opposing candidates. Some while ago, the Internal Revenue 
Service did publish a helpful booklet for religious groups (as it does 
for veterans organizations) but it was not widely disseminated and it 
cannot now be found on the IRS website (or at least the undersigned 
cannot find it, which may be a very different thing).
    The Service ought to consider ways to make its views on these 
issues more widely and easily available to not-for-profits and 
especially smaller and less well-counseled religious institutions. 
Doing so would not eliminate all disputes about the scope of Section 
501(c)(3), but it would eliminate much of the chilling effect generated 
by uncertainty and ignorance. Increased clarity would, we believe, 
dispel many of the grievances giving rise to H.R. 2357.
    Although various Revenue Rulings and internal training materials 
(the latter are not binding law) make clear that a Section 501(c)(3) 
organization which has a long-standing position on a public policy 
issue need not refrain from expressing that view because a campaign is 
underway, many organizations believe they are condemned to silence 
during the never-ending campaign season. Similarly, the Internal 
Revenue Service has offered views on the much mooted and recurring 
question of when employees and lay leaders of not-for-profit 
organizations can speak out in support of or opposition to candidates 
even though their speech may be identified with their organization (can 
a Rabbi announce personal political preference from the pulpit?), but 
it is apparent that its views are not widely known.
    Without endorsing every one of its interpretations, it seems fair 
to say that the IRS' views on these subjects are on the whole 
reasonable and practical-and go far to meeting the objections which 
have given rise to the present legislative proposal. Were they better 
known, there would be less impetus for legislation such as HR 2357. The 
IRS should cure this problem on its own.
Conclusion
    The Committee should not favorably report H.S. 2357. It should 
reexamine whether religious groups should be permitted to elect under 
the Conable rules (Section 501(h)). It should also consider whether 
more moderate penalties for violations would lead to better and more 
equal enforcement of Section 501(c)(3) restrictions. Finally, the IRS 
should undertake to make its understanding of the restrictions which 
accompany 501(c)(3) status broadly accessible.

                               

      Statement of the Anti-Defamation League, New York, New York

   Opposing HR 2357 (``Houses of Worship Political Speech Protection 
             Act'') and H.R. 2931 (``The Bright Line Act'')

    The Anti-Defamation League has long been a lead voice advocating 
for the separation of church and state. Founded in 1913 to ``to stop 
the defamation of the Jewish people and to secure justice and fair 
treatment to all citizens alike,'' ADL has worked tirelessly to fight 
anti-Semitism, racism, and bigotry (including religious intolerance), 
to advocate for good will and mutual understanding among Americans of 
all creeds and races, and to safeguard the rights and liberties of all 
Americans. To this end, and to the end of the general stability of our 
democracy, ADL strongly advocates for the separation of church and 
state and the right to the free exercise of religion.
    ADL opposes H.R. 2357 (``Houses of Worship Political Speech 
Protection Act ``), introduced by Representative Jones, Jr., and H.R. 
2931 (``The Bright Line Act''), introduced by Representative Crane. 
These legislative initiatives would amend federal tax law to permit 
houses of worship to utilize tax-exempt contributions and other 
resources to fund partisan political activity and candidates for 
political office.
    Both bills are unconstitutional because each would give religious 
organizations, specifically houses of worship, an advantage over non-
religious organizations simply because they are religious 
organizations. The bills fail each of the three most commonly used 
tests that the Supreme Court has articulated to determine whether a 
statute runs foul of the Establishment Clause:

          1) Under the standard articulated in Lemon v. Kurtzman (403 
        U.S. 602 (1971)), a statute is unconstitutional if it lacks a 
        secular purpose, or if it has the primary effect of advancing 
        religion, or if it fosters excessive governmental entanglement 
        with religion. A statute which expressly selects houses of 
        worship for special treatment (and gives them benefits that 
        other, non-religious non-profits do not have) plainly lacks a 
        secular purpose and advances religion over non-religion. 
        Statutes that give special advantages to religious 
        organizations simply do not pass constitutional muster. See 
        Board of Ed. of Kiryas Joel Vill. Sch. Dist. v. Grumet, 512 
        U.S. 687 (1994)

          2) Under the no-endorsement standard, government may not 
        advance religion over non-religion. The Constitution 
        ``preclude[s] government from conveying or attempting to convey 
        a message that religion or a particular religious belief is 
        favored or preferred.'' Wallace v. Jaffree, 472 U.S.38 at 70 
        (1985) (O'Connor, J., concurring in judgment)

          3) Under the neutrality standard, government must be 
        ``neutral'' among religions and between religion and non-
        religion. Everson, 330 U.S. 1 at 18 (1947). See also Abington 
        School District v. Schempp, 374 U.S. 203, 305, 83 S.Ct. 1560, 
        1615, 10 L.Ed.2d 844 (1963) (Goldberg, J., concurring) (``The 
        fullest realization of true religious liberty requires that 
        government . . . effect no favoritism among sects or between 
        religion and nonreligion'').

    The plain effect of these bills is to give houses of worship--
religious institutions--a special advantage over non-religious non-
profits. It is a cornerstone of Establishment Clause jurisprudence that 
the government cannot prefer religion over non-religion. Therefore, 
these bills are unconstitutional and we urge Congress to reject them.
    These bills, especially H.R. 2357, the House of Worship Free Speech 
Act, suffers from another failing as well. Supporters of these measure 
wrongly argue that, under current law, religious viewpoints in 
particular are being muzzled in the public arena. That is simply not 
true. Houses of worship, like other 501(c)(3) non-profit organizations, 
are permitted to engage in a wide range of non-partisan voter 
participation and voter education initiatives. All 501(c)(3) non-
profits, however, are expressly prohibited from the sort of politicking 
that these bills would allow. To identify religious organizations as 
being unfairly silenced is both unfair and disingenuous.

                               

                                            Baptist Joint Committee
                                          Washington, DC 20002-5797
                                                       May 13, 2002
The Honorable Amo Houghton, Jr.
United States House of Representatives
Washington, DC 20515
    Dear Mr. Chairman:
    You are being asked to consider legislation that would allow houses 
of worship explicitly to endorse or oppose candidates for public 
office, and even contribute money and other resources to candidates and 
political parties, while maintaining their tax-exempt status. We write 
to you in order to express our opposition to H.R. 2357 and H.R. 2931.
    The ``Houses of Worship Political Speech Protection Act'' and ``The 
Bright-Line Act'' may sound good at first but would ultimately pervert, 
not protect, houses of worship. The First Amendment already creates 
protection for houses of worship by setting boundaries between church 
and state. While we agree that houses of worship need to speak out on 
the social and moral issues of the day, they already have that freedom.
    Preachers can and do speak out with impunity, even from the pulpit, 
on any issue, and houses of worship may engage in some lobbying to 
advocate moral/ethical positions. Houses of worship may encourage good 
citizenship among their members by launching voter registration and 
education projects, conducting a nonpartisan forum for the candidates 
and distributing the answers to candidate questionnaires. Pastors and 
other church leaders, as individuals, can participate in the electoral 
political process as much as they wish, but nonprofits cannot 
participate in electioneering without jeopardizing their tax-exempt 
status under Section 501(c)(3).
    Why is it so bad to allow houses of worship to endorse candidates 
or give political contributions? Electioneering by churches would be 
highly divisive. For religious leaders to seek to endorse and 
contribute money to candidates on behalf of the entire house of worship 
would be to drop a bombshell in the sanctuary of most congregations, 
especially Baptist churches. Worshipers in the pew do not need or want 
religious leaders telling them how to vote or funneling tithes to the 
coffers of political parties.
    Electioneering by houses of worship would compromise their 
prophetic witness. Credibility and integrity of congregations would 
suffer with bad decisions of candidates they endorsed. Partisan groups 
would have increased incentives to use congregations as a conduit for 
political activity and expenditures, thus diminishing the distinctive 
role of the church.Houses of worship could be turned into virtual 
political action committees. These bills would provide an irresistible 
loophole for some to deduct political contributions by funneling them 
through houses of worship. It would become the preferred way to make 
political donations. This would be a step backward in the quest for 
campaign finance reform and raise the stakes for exploitation of the 
good name and resources of houses of worship.
    In short, these bills would do houses of worship no favors. Anytime 
the wall of separation between church and state is breached, religious 
liberty is threatened. These bills would compromise church autonomy, 
turn pulpit prophets into political puppets and politicize our houses 
of worship.
    We encourage you to oppose ``The Houses of Worship Political Speech 
Protection Act'' and ``The Bright-Line Act.''
            Sincerely,
                                                    J. Brent Walker
                                                 Executive Director

                                                  K. Hollyn Hollman
                                                    General Counsel
                                 ______
                                 

          RELIGIOUS LEADERS SAY: OPPOSE H.R. 2357 & H.R. 2931

    Dear Representative,
    We, the undersigned religious and denominational organizations, are 
writing to urge you to oppose both H.R. 2357, ``The Houses of Worship 
Political Speech Protection Act,'' introduced by Rep. Walter Jones, and 
H.R. 2931, ``The Bright Line Act,'' introduced by Rep. Phillip Crane. 
Both of these bills would lead to partisan political activity in our 
nation's houses of worship.
    Current federal law states that houses of worship, like other 
501(c)(3) organizations, cannot legally engage in partisan political 
activities and retain their tax-exempt status. This provision of 
federal law has served as a valuable safeguard for the integrity of 
both religious institutions and the political process. Both H.R. 2357 
and H.R. 2931 would lift important safeguards, and allow houses of 
worship to use their tax-exempt contributions for political purposes 
and to endorse candidates.
    Religious leaders, denominational offices and faith-based 
organizations are against H.R. 2357 and H.R. 2931 for many ethical 
reasons:

           Current law upholds the integrity of houses of 
        worship. Churches, synagogues, temples and mosques should not 
        be used as political headquarters or as a means of partisan 
        fundraising for political activities. Tying churches to 
        partisan activity demeans the institutions from which so many 
        believers expect unimpeachable decency.
           This bill is unwanted and unneeded by America's 
        clergy. In a recent Gallup/Interfaith Alliance Foundation poll, 
        a full 77% of clergy were opposed to their fellow clergy 
        endorsing political candidates. Another poll conducted by The 
        Pew Research Center for the People and the Press and The Pew 
        Forum on Religion and Public Life, found that 70% of Americans 
        feel that houses of worship should not come out in favor of one 
        candidate over another during political elections.
           The bill is predicated on false assumptions about 
        existing law. Supporters of these bills have argued that their 
        enactment is necessary to allow religious leaders to speak out 
        on issues of interest to their congregations. The reality is 
        that religious leaders have an absolute right to use their 
        pulpit to address the moral issues of the day. The only things 
        tax-exempt houses of worship may not do is endorse or oppose 
        candidates, or use their tax-exempt donations to contribute to 
        partisan campaigns. Current law simply limits groups from being 
        both a tax-exempt ministry and a partisan political entity.
           This bill would open a dramatic loophole in the 
        nation's campaign finance laws. Donations to houses of worship 
        are tax deductible because the government assumes that their 
        work is contributing to the common good of society, not a 
        political party or a partisan campaign. As such, contributions 
        to churches are tax deductible and donations to political 
        candidates and parties are not. Therefore, these bills would 
        create a significant new loophole in our nation's campaign 
        finance laws with serious ethical and legal implications.

    For these reasons, we urge you to oppose H.R. 2357 and H.R. 2931.
            Sincerely,
                                          American Jewish Committee
                                           American Jewish Congress
                                             Anti-Defamation League
                          Baptist Joint Committee on Public Affairs
                              Central Conference of American Rabbis
                           Church of the Brethren Washington Office
                                               Council of Khalistan
                 Friends Committee on National Legislation (Quaker)
       General Board of Church and Society, United Methodist Church
              Hadassah, the Women's Zionist Organization of America
                                Interfaith Alliance Foundation, The
                                                        NA'AMAT USA
                  National Council of Churches of Christ in the USA
                                   National Council of Jewish Women
                       Presbyterian Church (USA), Washington Office
                   Seventh-day Adventist Church, General Conference
                Soka Gakkai International--USA Buddhist Association
                            The Congress of National Black Churches
                             Union of American Hebrew Congregations
                                 Unitarian Universalist Association
             United Church of Christ Justice and Witness Ministries

                               

        Statement of James Bopp, Jr., Bopp, Coleson & Bostrom, 
                          Terre Haute, Indiana
    Thank you for the opportunity to submit written comments regarding 
the Internal Revenue Code Section 501(c)(3) requirements for religious 
organizations and in support of H.R. 2357, the Houses of Worship 
Political Speech Protection Act, and H.R. 2931, the Bright-Line Act of 
2001.
    I am a practicing attorney with the law firm of Bopp, Coleson & 
Bostrom in Terre Haute, Indiana. Since 1980, a significant portion of 
my law practice has involved the representation of non-profit and 
religious organizations--including the National Right to Life Committee 
and the Christian Coalition of America--regarding compliance with 
Internal Revenue Code Section 501(c)(3), Section 501(c)(4), and Section 
527. I have represented non-profit organizations in both state and 
federal courts, successfully challenging state laws that were an 
infringement on their constitutional right of freedom of speech.
    I am also the General Counsel for the James Madison Center for Free 
Speech (a corporation recognized as tax exempt by the Internal Revenue 
Service under 501(c)(3) of the Internal Revenue Code), which advocates 
and promotes free speech and association rights in the election law 
context through litigation, legislative analysis and testimony, 
comments on proposed rule-making by the Federal Election Commission, 
and which publishes scholarly and popular articles.
    Because of my developed expertise in federal constitutional law, I 
have provided testimony on numerous occasions before federal and state 
legislative committees on proposed election legislation and before the 
FEC on proposed regulations. Since 1996, I have served as the Chairman 
of the Election Law Subcommittee and the Free Speech & Election Law 
Practice Group of The Federalist Society for Law & Public Policy 
Studies.

                              Introduction

    I am pleased to support H.R. 2357, the Houses of Worship Political 
Speech Protection Act, and H.R. 2931, the Bright-Line Act of 2001. The 
problem addressed by these resolutions is illustrated when, on the one 
hand, people of faith who speak about moral issues in public are 
accused of attempting to force their religion upon others; and when, on 
the other hand, they address moral issues in church, they are accused 
of engaging in politics. The Jeffersonian ``wall of separation'' 
doctrine, which does not appear in the U.S. Constitution, has inspired 
a rather bold attempt to silence people of faith not only in the public 
square, but also in their houses of worship. This attitude is an 
unofficial but outspoken form of bias or discrimination against people 
of faith.
    A good example is the issue of abortion. When people of faith speak 
out against abortion in the public arena, they are told not to force 
their religious views upon others. When people of faith speak out 
against abortion in their churches, they are told not to bring politics 
into the church. Opposition to abortion is interpreted as support for 
pro-life political candidates and opposition to pro-abortion 
candidates, even when the candidates' names are not mentioned.
    Sometimes churches are also threatened with loss of tax exempt 
status, and sometimes they are investigated by the Internal Revenue 
Service in order to determine whether revocation of their exempt status 
is justified. Thus, the possible loss of tax exempt status is used by 
those hostile to people of faith, to chill their right of free speech, 
and silence them in their own houses of worship.
    This bias against houses of worship has been codified in Section 
501(c)(3) by the prohibition against activities considered ``political 
intervention'' broadly interpreted and enforced by the Internal Revenue 
Service. The root of the current problem with the prohibition against 
political intervention by churches and other organizations exempt under 
IRC Sec. 501(c)(3) is: (1) the vague and overbroad definition of 
``political intervention;'' (2) the draconian penalties for violation 
of the prohibition; and (3) the resulting chilling effect of the 
prohibition on churches who want to speak out about the social and 
moral issues facing our nation.

I. The vague and overbroad definition of ``political intervention'' 
includes much more than the use of express words in favor of or 
opposition to a candidate for public office.

    Section 501(c)(3) tax exempt status is limited to organizations 
``which do not participate in, or intervene in (including the 
publishing or distributing of statements), any political campaign on 
behalf of (or in opposition to) any candidate for public office'' 
(emphasis added). Treasury Regulation Sec. 501(c)(3)-1(c)(3)(iii) 
provides:

          The term candidate for public office means an individual who 
        offers himself, or is proposed by others, as a contestant for 
        an elective public office, whether such office be national, 
        state, or local. Activities which constitute participation or 
        intervention in a political campaign on behalf of or in 
        opposition to a candidate include, but are not limited to, the 
        publication or distribution of printed statements or the making 
        of oral statements on behalf of or in opposition to such a 
        candidate.

    The prohibition on participation or intervention in a political 
campaign language has been shortened for quick reference in customary 
usage to the phrase ``political intervention.''

          A. What is ``political intervention''?

    ``Political intervention'' constitutes any activity ``influencing 
or attempting to influence the selection, nomination, election, or 
appointment of any individual to any Federal, State, or local public 
office or office in a political organization, or the election of 
Presidential or Vice Presidential electors.'' 26 U.S.C. Sec. 527(e)(2).
    ``All activities that are directly related to and support the 
process of influencing the selection, nomination, election or 
appointment of any individual to public office and office in a 
political organization'' are political intervention. Treas. Reg. 
Sec. 1.527-2(c)(1).
    Although the Federal Election Commission has adopted a bright line 
test of what constitutes ``political intervention,'' the IRS has not.1 
Instead of a bright line test, the IRS has adopted a ``facts and 
circumstances'' test: ``[I]t is not feasible for the Service to adopt 
the FEC `express advocacy' standard,'' because ``[t]he language of IRC 
501(c)(3) indicated a much broader scope to the concept of 
participation or intervention in a political campaign.'' Thus, ``there 
is no bright-line test,'' and ``all the facts and circumstances must be 
considered.'' Judith E. Kindell & John Francis Reilly, Election Year 
Issues, in Exempt Organization Continuing Professional Education 
Technical Instruction Program for FY 2002 344, 346, 349 (2001) 
(hereinafter ``Election Year Issues'').
    It has even been acknowledged that educational activities may be 
political intervention when using such a vague and overbroad test: 
``Educating the public is not inherently inconsistent with the activity 
of impermissibly intervening in a political campaign.'' Treasury Advice 
Memorandum 8936002.

          B. Specific activities.

    For example, voter registration and GOTV activities are considered 
``political intervention'' by the IRS unless they are nonpartisan, done 
without regard to voter's political preference, do not name any 
candidate or do not favor one candidate over another, do not name a 
political party, and the materials only urge registering and voting.
    The preparation and distribution of voter guides is ``political 
intervention'' unless they address a ``wide variety'' of issues, the 
position of the organization on the issues is not indicated, and the 
voter guides are distributed broadly to the general public, not a 
target audience. Revenue Ruling 78-248, 1978-1 C.B. 154; Election Year 
Issues at 370-72.
    Candidate forums are only permissible voter education if ``all 
legally qualified persons'' are included, a broad range of issues are 
covered, questions are posed by ``a nonpartisan, independent panel of 
knowledgeable persons,'' candidates are given an equal opportunity to 
present their views, and the moderator states that the views expressed 
are the views of the candidates, not the organization. Revenue Ruling 
86-95, 1986-2 C.B. 73; Election Year Issues at 372-75.
    Even educational activities may be deemed ``political 
intervention'' if there is a use of ``code words'' like 
``conservative,'' ``liberal,'' ``pro-life,'' ``pro-choice,'' ``anti-
choice,'' ``Republican,'' or ``Democrat.'' Election Year Issues at 345. 
Further, any ``coordination'' of an otherwise permitted activity with a 
political committee or candidate constitutes ``political 
intervention.'' Treasury Advice Memorandum 9117001.
    It is obvious that the expression of an opinion on any matter of 
public concern may be deemed ``political intervention'' when such a 
vague and overbroad definition is used. When political issues are 
inherently moral issues as well, houses of worship are effectively 
excluded from the debate by such a vague and overbroad rule. When the 
Internal Revenue Service uses an ``all the facts and circumstances'' 
test, the likelihood that any communication addressing social and moral 
issues will be found to be ``political intervention'' is substantial.

II. There are draconian penalties for violation of the prohibition.

    The prohibition against ``political intervention'' by organizations 
that are tax exempt under Section 501(c)(3) of the Internal Revenue 
Code is absolute. Not only will a church that is deemed to have engaged 
in activities constituting ``political intervention'' lose its tax 
exempt status, there are taxes to be paid.
    In 1987, Congress enacted several new provisions concerning the 
political campaign prohibition for 501(c)(3) organizations. The first 
of these was IRC 4955. Section 4955(a)(1) provides for an initial tax 
of ten percent of each political expenditure. IRC 4955(b)(1) imposes an 
additional tax of 100 percent of each political expenditure previously 
taxed and not corrected within the taxable period. There is no upper 
limit on the tax that can be levied on the organization. IRC 4955(a)(2) 
imposes a tax of 2\1/2\ percent of the political expenditure on any 
``organization manager'' (e.g., priests, pastors and other officers of 
the organization) who agreed to make a political expenditure. 
Organizational managers who refuse to agree to all or part of the 
correction are subject to a tax of fifty percent of the political 
expenditure. Election Year Issues at 355.
    Congress enacted Section 4955 because revocation for violation of 
the prohibition on political campaign activity was viewed by some as an 
inappropriate remedy in two situations. First, the penalty of 
revocation was disproportionate to the violation in cases where the 
expenditure was small, the violation was unintentional, and the 
organization subsequently had adopted procedures to assure that similar 
expenditures would not be made in the future. Second, in some cases, 
revocation would be an ineffective remedy, particularly if the Section 
501(c)(3) organization ceased operations after it diverted all of its 
assets to improper purposes. Election Year Issues at 354.
    Although Section 4955 penalties may be used as a type of 
``intermediate sanctions,'' they may also be used in addition to 
revocation, as an additional deterrent. Congress also enacted Section 
6852, which provides that if such a violation occurs, the Service may 
immediately determine the amount of income and Section 4955 tax due 
from the Section 501(c)(3) organization. Section 7409 grants authority 
to the Service to seek an injunction against a 501(c)(3) organization 
that flagrantly violates the political campaign prohibition to prevent 
further political expenditures by the organization.
    Thus, the remedies include revocation of exemption, a ten percent 
tax, a 100 percent tax, a 2\1/2\ percent tax against officers, an 
immediate assessment of tax due, and injunction. These remedies have a 
chilling effect on churches that wish to address social and moral 
issues.

III. The result of the prohibition is a chilling effect on churches who 
want to speak out about the social and moral issues facing our nation.

    The First Amendment states: ``Congress shall make no law . . . 
abridging the freedom of speech, or of the press, or of the right of 
the people peaceably to assemble, and to petition the Government for a 
redress of grievances.'' The First Amendment protects the four 
``indispensable democratic freedom[s].'' Thomas v. Collins, 323 U.S. 
516, 529-30 (1945).
    Political expression is ``at the core of our electoral process and 
of the First Amendment freedoms.'' Williams v. Rhodes, 393 U.S. 23, 32 
(1968). Further, ``[I]t can hardly be doubted that the constitutional 
guarantee [of the First Amendment] has its fullest and most urgent 
application precisely to the conduct of campaigns for political 
office.'' Buckley v. Valeo, 424 U.S. 1, 14-15 (1976). ``[T]here is 
practically universal agreement that a major purpose of [the First] 
Amendment was to protect the free discussion of governmental affairs, . 
. . of course includ[ing] discussions of candidates.'' Mills v. 
Alabama, 384 U.S. 214, 218 (1966).
    Section 501(c)(3), as currently interpreted, effectively silences 
houses of worship by prohibiting them from addressing those social and 
moral issues that are at the center of public policy debate. In other 
words, Section 501(c)(3) only permits churches to discuss moral issues 
that don' t have any impact on current public policy issues. Such a 
rule marginalizes people of faith and makes houses of worship 
irrelevant to public discourse and debate. It is inherently 
discriminatory.
    Even if very carefully orchestrated, any communication that might 
have an impact on an issue of public policy may be deemed ``political 
intervention'' by the IRS under current law. All that is necessary is 
that a communication be found by the IRS to ``contain some relatively 
clear directive that enables the recipient to know the organization's 
position on a specific candidate or slate of candidates.'' Election 
Year Issues at 345-46. No wonder so many clergy and churches avoid 
addressing any social or moral issues during an election year. No 
matter what the church's communication is, it can be construed under 
the ``all the facts and circumstances'' test to be supporting all 
candidates who share the same or similar view, and opposing all 
candidates who hold a different view.
IV. How the proposed legislation will change Section 501(c)(3)
    In order to properly understand the effect of the proposed changes 
on Section 501(c)(3) we must first look at the history of Section 
501(c)(3).

          A. The history of Section 501(c)(3)

    Prior to 1954, there was no statutory provision prohibiting 
organizations described in the antecedents of IRC 501(c)(3) from 
engaging in political campaign activities. From the earliest days of 
our Republic churches have played a key role in public life. Where 
moral issues and political issues collided, as with the abolitionist 
movement, churches were frequently the forum for public discussion and 
debate. Many sermons were preached on such subjects central to our 
national discourse and debate.
    The current political campaign prohibition has a vague but 
unenacted antecedent. What eventually became the Revenue Act of 1934, 
under which the lobbying restriction of IRC 501(c)(3) was first 
enacted, at one time contained a provision extending the prohibition to 
``participation in partisan politics.'' S. Rep. No. 73-558, 73d Cong., 
2d Sess. 26 (1934). The provision, however, was deleted in conference, 
so that only the lobbying restriction remained. H.R. Conf. Rep. No. 73-
1385, 73d Cong., 2d Sess. 3-4 (1934). In explaining its deletion, 
Representative Samuel B. Hill stated: ``We were afraid this provision 
was too broad.'' 78 Cong. Rec. 7,831 (1934) (emphasis added); Election 
Year Issues at 336. A fear that it now appears was well founded.
    During the Senate consideration of what became the Revenue Act of 
1954, Lyndon Johnson, then Senate Majority Leader, added a floor 
amendment to provide that IRC 501(c)(3) organizations may not 
``participate in, or intervene in (including the publishing or 
distributing of statements), any political campaign on behalf of any 
candidate for public office.'' Johnson stated ``. . . [t]his amendment 
seeks to extend the provisions of section 501 of the House bill, 
denying tax-exempt status to not only those people who influence 
legislation but also to those who intervene in any political campaign 
on behalf of any candidate for public office.'' 100 Cong. Rec. 9,604 
(1954). The amendment was accepted; no debate or discussion took place. 
The Conference Report (H.R. Conf. Rep. No. 83-2543, 83d Cong., 2d Sess. 
(1954) contains no further discussion of the amendment. Election Year 
Issues at 337.
    In 1969, a number of provisions were enacted concerning the 
treatment of private foundations. Under one provision, an initial tax 
in an amount equal to ten percent of each taxable expenditure and an 
additional 100 percent tax on each taxable expenditure previously taxed 
and not corrected within the taxable period was imposed on private 
foundations. In addition, taxes were imposed on foundation managers who 
agreed to the making of the taxable expenditure. IRC 4945. A taxable 
expenditure included any amount paid or incurred by a private 
foundation to influence the outcome of any specific public election or 
to directly or indirectly carry on any voter registration drives, 
unless certain requirements were met. IRC 4945(d)(2); Election Year 
Issues at 337.
    In 1987, Congress again amended the law applicable to charitable 
organizations, this time specifically focusing on the prohibition on 
political campaign activity. Congressional concern appears to have been 
triggered by two occurrences. First, in 1986, an organization then 
exempt under IRC 501(c)(3), the National Endowment for the Preservation 
of Liberty, was reported to have intervened in Congressional campaigns, 
opposing the reelection of members who had not supported aid to the 
Nicaraguan Contras. Second, questions had been raised about the use of 
ostensibly educational 501(c)(3) organizations by politicians to 
promote their candidacy or potential candidacy. After hearings held by 
this Subcommittee and after it made its recommendations, IRC 501(c)(3) 
was amended to clarify that the prohibition on political campaign 
activity applied to activities in opposition to, as well as on behalf 
of, any candidate for public office, in accordance with the existing 
interpretations of the prohibition in the regulations. Election Year 
Issues at 338.

          B. How would H.R. 2357 change Section 501(c)(3)?

    If H.R. 2357 were enacted, Section 501(c)(3) would be revised as 
follows:

          (c) List of exempt organizations.--The following 
        organizations are referred to in subsection (a):

                  (3) Corporations, and any community chest, fund, or 
                foundation, organized and operated exclusively for 
                religious, charitable, scientific, testing for public 
                safety, literary, or educational purposes, or to foster 
                national or international amateur sports competition . 
                . . and except in the case of an organization described 
                in section 508(c)(1)(A) (relating to churches), which 
                does not participate in, or intervene in (including the 
                publishing or distributing of statements), any 
                political campaign on behalf of (or in opposition to) 
                any candidate for public office and, in the case of an 
                organization described in section 508(c)(1)(A), no 
                substantial part of the activities of which is 
                participating in, or intervening in (including the 
                publishing or distributing of statements), any 
                political campaign on behalf of (or in opposition to) 
                any candidate for public office.

Although the bill would not change the vague and overbroad definition 
of ``political intervention,'' it would exempt churches from the 
absolute prohibition, and establish a ``no substantial part of the 
activities'' standard for political intervention. This is identical 
language to the restriction on legislative lobbying activities, thus it 
utilizes familiar statutory language and interpretative precedents. It 
is not a bright line test, but a test that would take the chill out of 
occasional church pronouncements on social and moral issues, and allow 
an insubstantial amount of political activities by churches.

          C. How would H.R. 2931 change Section 501(c)(3)?

    H.R. 2931, the Bright-Line Act of 2001, would also give houses of 
worship some breathing room. It would add a new subsection to Section 
501(c)(3):

          (p) EXPENDITURES BY CHURCHES, ETC., TO INFLUENCE LEGISLATION 
        OR PARTICIPATE IN CAMPAIGN ACTIVITIES--

                  (1) EXPENDITURES TO INFLUENCE LEGISLATION--An 
                organization to which this subsection applies shall be 
                denied exemption from taxation under subsection (a) 
                because a substantial part of the activities of such 
                organization consists of carrying on propaganda, or 
                otherwise attempting, to influence legislation, but 
                only if such organization normally makes lobbying 
                expenditures (as defined in section 4911(d)) for each 
                taxable year in excess of an amount equal to 20 percent 
                of such organization' s gross revenues for such year.

                  (2) EXPENDITURES TO PARTICIPATE IN CAMPAIGNS--An 
                organization to which this subsection applies shall be 
                denied exemption from taxation under subsection (a) 
                because such organization participates in, or 
                intervenes in (including the publishing or distributing 
                of statements), any political campaign on behalf of (or 
                in opposition to) any candidate for public office, but 
                only if such organization normally makes expenditures 
                for such purpose for each taxable year in excess of an 
                amount equal to 5 percent of such organization' s gross 
                revenues for such year.

                  (3) AGGREGATE LIMIT--An organization to which this 
                subsection applies shall be denied exemption from 
                taxation under subsection (a) if the aggregate of the 
                expenditures described in paragraph (1) and the 
                expenditures described in paragraph (2) which such 
                organization normally makes for each taxable year 
                exceeds an amount equal to 20 percent of such 
                organization's gross revenues for such year.

                  (4) GROSS REVENUES--For purposes of this subsection, 
                the term `gross revenues' means the sum of--

                          (A) the organization's gross income for the 
                        taxable year, and

                          (B) the aggregate contributions and gifts 
                        received by such organization during such year.

                  (5) ORGANIZATIONS TO WHICH SUBSECTION APPLIES--This 
                subsection shall apply to any disqualified organization 
                (as defined in subsection (h)(5)) which is described in 
                subsection (c)(3).

                  (6) AFFILIATED ORGANIZATION--If, for any taxable 
                year, 2 or more organizations to which this subsection 
                applies are members of an affiliated group of 
                organizations (as defined in section 4911(f)(2)----

                          (A) paragraphs (1), (2), (3), and (4) shall 
                        be applied by treating such group as 1 
                        organization, and

                          (B) if such group exceeds the expenditure 
                        limitation of paragraph (1), (2), or (3), each 
                        organization to which this subsection applies 
                        which is a member of such group shall be 
                        treated as not described in subsection (c)(3).

                The preceding sentence shall not be applied so as to 
                treat an organization which is not (without regard to 
                the preceding sentence) exempt from tax by reason of 
                paragraph (1), (2), or (3) as being so exempt.

          (b) EFFECTIVE DATE--The amendment made by subsection (a) 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.

    As stated in its short title, the primary feature of this 
resolution is to provide a bright line test for compliance. Houses of 
worship would be permitted to use 20% of their gross receipts for 
lobbying, and 5% of their gross receipts for activities considered 
``political intervention.'' Although the vague and overbroad definition 
of ``political intervention'' is not changed by this resolution, it 
does give churches some breathing room before loss of tax exemption, or 
penalties, would apply.
    A secondary feature of this resolution is the ``affiliated 
organizations'' provision in subsection (6). This provision would 
provide additional protection to individual churches that are 
affiliated with other similarly exempt organizations. When an 
individual church's gross receipts and political expenditures would 
fail the proposed bright line test, the affiliation provision would 
require the examiner to use the grand totals of gross receipts and 
political expenditures of all affiliated organizations. This would 
provide remarkable protection for churches in denominations, that would 
be unavailable to unaffiliated churches. It would also provide an 
increased safe harbor for churches with affiliated charitable 
organizations, schools, missions, or other affiliated organizations 
under Section 4911(f)(2).

                               Conclusion

    It is time to stop the IRS and others from using Section 501(c)(3) 
to silence houses of worship. H.R. 2357 and H.R. 2931 will go a long 
way in accomplishing that goal. Clergy and churches should be able to 
make public statements about social and moral issues without threat of 
investigation, loss of tax exempt status, or assessment of taxes and 
penalties.
    H.R. 2357 permits an insubstantial amount of activity that would 
otherwise be prohibited as ``political intervention.'' It allows 
churches to discuss moral issues without threat of sanctions by the 
IRS. The threshold established by H.R. 2357, namely ``no substantial 
part of the activities,'' is the same standard applied to legislative 
lobbying and is sufficiently clear and well established as to remove 
the threat of sanctions for public communications on social and moral 
issues by churches.
    H.R. 2931 provides a bright line test that would make the 
determination of a violation more objective. By providing an explicit 
limit of 5% of gross receipts by a house of worship and its affiliated 
organizations it may insulate clergy and churches from being singled 
out for investigation and penalties for a single act considered 
``political intervention'' under the ``all facts and circumstances'' 
test of the Internal Revenue Service.
    Both resolutions return clergy and houses of worship to some 
measure of the freedom of speech they enjoyed from the founding of this 
nation to 1954 when the absolute prohibition of ``political 
intervention'' went into effect.
    For these reasons, I support the Houses of Worship Political Speech 
Protection Act and the Bright-Line Act of 2001.

                              

 STATEMENT OF THE HON. CHET EDWARDS, A REPRESENTATIVE IN CONGRESS FROM 
                           THE STATE OF TEXAS

    Chairman Houghton, Ranking Member Coyne, and Members of the 
Subcommittee:
    Thank you for allowing me to submit a statement regarding H.R. 
2357,The Houses of Worship Political Speech Protection Act, and H.R. 
2931, the Bright Line Act. I appreciate your interest in the marriage 
of religion and politics, and I am glad to see you are giving it the 
thoughtful consideration it deserves.
    Let me begin by asking one of the basic questions of America's 
experiment in democracy: what it the proper role of churches and houses 
of worship in our government?
    The Founding Fathers clearly considered this an important question 
and placed their answer squarely at the beginning of the Bill of 
Rights, asserting, ``Congress shall make no law respecting an 
establishment of religion or prohibiting the free exercise thereof.'' 
For over two centuries, those 16 words have worked to protect our 
religious freedom, and in my opinion, make religious liberty the crown 
jewel of America's experiment in democracy. As students of human 
behavior, and human history, our forefathers understood that, 
politicians, if allowed, could not withstand the temptation to use 
religion as a means to their own political ends.
    Martin Luther King, Jr. faced this same question and voiced his 
answer well. He said: ``The church must be reminded that it is not the 
master or the servant of the state, but rather the conscience of the 
state.'' (Strength to Love, p. 47,1963) He knew that the independence 
of religious institutions during the civil rights movement gave them 
the freedom to speak out against government policies--unconstrained by 
the potential repercussions.
    As a person of faith, I believe religion has a profound impact on 
our private values, our personal lives and our public life as a nation. 
However, one of the principles that keeps our government and our 
religious institutions so strong is that each has been allowed to 
flourish separately. To see how religious institutions and government 
operate together, I suggest you look at countries across the Middle 
East. I humbly submit that we in this country keep our own model rather 
than following theirs.
    Currently, federal law prohibits all 501(c)(3) organizations, 
including churches and houses of worship, from legally participating in 
partisan political activities without forfeiting their tax-exempt 
status. In essence, once an organization participates in political 
activities, it can no longer be considered tax-exempt. I believe this 
is an important safeguard measure, which protects the autonomy of all 
religious organizations. However, provisions in both H.R. 2357 ad H.R. 
2931 will enable houses of worship to be excluded from this prohibition 
and to use their tax-exempt contributions for political activities and 
endorse candidates. I cannot emphasize how dangerous this could be for 
our government and for our religious institutions--it could ultimately 
compromise the integrity of both. Do we really want to create a system 
where elected officials will use our churches and houses of worship as 
a tool in partisan fighting and politics?
    Religious freedom is of the utmost importance to me, and I urge the 
Subcommittee to consider the threat that these bills pose to that 
pillar of American democracy.

                               

          Statement of the Islamic Supreme Council of America

         In the Name of God, Most Merciful, Most Compassionate

    Chairman Houghton and distinguished Members of the Subcommittee:
    The Islamic Supreme Council of America (ISCA) is a religious 
organization dedicated to providing practical solutions for American 
Muslims, based on the rulings of classical Islamic jurisprudence. We 
work proactively with government and civil institutions, both 
domestically and abroad, to present the ideological standpoint of 
traditional Muslims throughout the world.
    We respectfully express to you today our opposition to HR 2357 and 
HR 2931, which would amend the Internal Revenue Service Code of 1986 to 
permit churches and other houses of worship to engage in political 
campaigns.
    In restricting the political participation of religious 
organizations, the current tax codes embody the will of our Founding 
Fathers and reflect their wise and sound judgment not to converge 
religious institutions and the political system of this nation.
    As traditional Muslims, we know that classical Islamic doctrine is 
in harmony with the views articulated by the framers of our 
Constitution in this matter.
    According to Islamic tradition, our houses of worship are for God 
and for God alone. Though this makes mosques the central focus of 
public life in Islam, it also places them outside the sphere of worldly 
discourse. Emphasizing the purely spiritual nature of the mosque in 
Islam, the Prophet Muhammad (s) said, ``And a prayer followed by a 
prayer with no worldly talk during the gap between them will be 
recorded in the good deeds of believers.''
    The sanctity of the mosque as a place for remembrance of God and 
His worship is emphasized time and again in the Holy Quran. In one 
place it was revealed, ``When the call is made for prayer on Friday, 
then hasten to the remembrance of God and leave off trading; that is 
better for you, if you know'' (62:9). Trade here refers to all that 
involves the worldly life--not just buying and selling but the business 
of power-seeking and politics. Thus the emphasis is that, in responding 
to the call for prayer, worldly concerns are set aside as one enters 
the mosque. Once prayers are completed, the affairs of this world may 
be picked up again outside the mosque as the next verse stresses: ``And 
when the prayer is finished, then may ye disperse through the land, and 
seek of the Bounty of God . . .'' (62:10).
    For this reason, the 2nd Caliph of the Prophet, Umar ibn al-
Khattab, set aside an area near the mosque and said, ``Whoever wishes 
to talk of this world . . . or raise his voice should go to that 
area.''
    Throughout the ages, the leading thinkers of the Islamic world have 
warned against turning the mosque into a political forum. These men and 
women valued the sanctity of the mosque and knew that allowing it to 
become a political venue would diminish its holy status. They also knew 
that doing so would divide the members of a congregation along 
political lines, turning a house of worship into an arena for political 
wrangling, in-fighting, and all manner of intrigues.
    We believe the same holds true for churches and synagogues, too. 
What sincere believer would like to see the pulpit of his church or the 
bima of her temple turned into a stump for political lobbying, 
fundraising or vote seeking? Who would like to see their pulpit turned 
into the floor of Congress?
    While there are surely members of every faith community that would, 
in their short-sighted pursuit of greater political influence, welcome 
the increased lenience proposed by the authors of these two bills, we 
believe that the problems created thereby far outweigh any possible 
benefits.
    The tragic events of September 11 are a grim reminder of the 
ultimate consequences of transforming religion into a political tool. 
It is an extreme example, but one which should not be forgotten in the 
present debate.
    As Muslims, we are all too aware of the perils posed by 
politicizing religion. As Americans, we are also well aware of the 
prudent provisions our Founding Fathers instituted to prevent the 
marriage of politics and religion. As people of faith, we urge the 
Subcommittee to leave those barriers intact, to leave that door closed 
and to ensure that America's mosques, synagogues, chapels and churches 
remain places of worship, not of politics.
    Thank you.

                               

  Statement of the Hon. Walter B. Jones, a Representative in Congress 
                    from the State of North Carolina
    Mr. Chairman, Ranking Member Coyne, members of the Committee, thank 
you for holding this hearing to discuss whether the 1st 
Amendment to the U.S. Constitution guarantees the freedom of speech to 
our churches, synagogues, and mosques.
    Specifically the question is: Should the Internal Revenue Service 
be able to determine what is appropriate speech in our nation's houses 
of worship, and then revoke the tax-exempt status if it feels those 
religious institutions have ``crossed the line''?
    Mr. Chairman, if this were 1953, there would be no need for this 
oversight committee hearing, because at that time our nation's 
churches, synagogues and mosques had no restrictions on speech! But in 
1954, one Senator, Lyndon Johnson--without a debate--attached an 
amendment to a tax bill that for the first time since the writing of 
the Constitution restricted the political speech of all 501 c (3) 
organizations.
    I find the restriction on the speech of houses of worship to be 
particularly troubling, and that is what this bill attempts to address.
    The First Amendment to the Constitution says, ``Congress shall make 
no law respecting an establishment of religion, nor prohibiting the 
free exercise thereof. '' I firmly believe that threatening the tax 
exempt status of those houses of worship whose speech the IRS deems has 
`crossed the line into politics' has the effect of denying their right 
to the free exercise of their religious beliefs.
    HR 2357 would take the Internal Revenue Service out of the business 
of telling houses of worship what is and what is not appropriate 
speech, by restoring the rights they enjoyed prior to 1954.
    Just as non-profit organizations--including churches--are currently 
allowed to expend an ``insubstantial'' amount of their funds on 
lobbying activities, they would be allowed to expend an ``insubstantial 
amount'' on political activity. Just as they are allowed to speak out 
on the moral ramifications and endorse bills before Congress, 
ministers, priests, and rabbis would to be able to speak out about 
candidates on the ballot.
    Is speaking out on candidates, or engaging in an insubstantial 
amount of political activity a good thing? People of faith will 
obviously disagree. A great many good things, like the abolition of 
slavery for instance, would not have happened without the political 
involvement--through the churches--of people of faith.
    But the appropriate level--if any--of political speech should be 
decided by the church and its parishioners, not the Internal Revenue 
Service.
    Examples of the chilling effect of the Internal Revenues Service's 
policing of speech in the pulpit are not difficult to find.
    When Floyd Flake, a former member of congress and pastor of Allen 
A.M.E. Church in Harlem, asked his parishioners to vote for Al Gore in 
the 2000 Presidential race, he did so believing--right or wrong--that 
his moral code, grounded in his religious faith, led him to believe 
that voting for Mr. Gore was the right thing to do. Not just right 
politically, but right morally.
    What was his reward for speaking out on the practical political 
expression of his religious beliefs? The Internal Revenue Service 
threatened to revoke his tax-exempt status, and required Floyd Flake to 
sign a document promising to cease politicking from the pulpit.
    A minister of the Gospel being required by an agency of the United 
States Government to cease speaking out on issues which his morality 
compels him to address! That is as chilling as it is wrong.
    In my own district, for example, I know of a constituent who asked 
his priest to remind the parishioners during the homily (sermon) that 
George Bush was pro-life, and that Al Gore was pro-choice. The priest 
replied that he felt he could not make that statement--not because he 
did not feel it was important, but because he feared that speaking out 
on the practical political application of his church's moral code might 
jeopardize his church's tax status. Consider what that priest was 
saying: Preaching the practical application of your church's faith 
risks incurring the wrath of the IRS!
    Unfortunately, the examples go on. The practical result is nothing 
less than a violation of free speech and the free exercise of religion 
guaranteed by the Constitution.
    To add insult to injury, Mr. Chairman, the law is not applied in an 
even manner. Press accounts are full of candidates in some churches 
prior to elections, asking for--and receiving--the endorsement of the 
minister. Yet the same IRS that gagged Floyd Flake turns a blind eye to 
alleged violations of the law that are printed in the newspapers for 
all the world to see!
    The IRS should treat all the churches, synagogues, and mosques 
equally. There are only two ways to do so: Either have armies of IRS 
agents and informants, permanently monitoring the speech and activities 
of every house of worship, or by getting the IRS out of the religious 
speech business.
    Mr. Chairman, I submit the only way to fairly apply the law, in a 
manner consistent with our national and constitutional values, is to 
get the IRS out of the business of telling ministers, priests, and 
rabbis, what is appropriate speech.
    Therefore, we need to eliminate the Johnson Amendment. The IRS 
should not be the ``Speech Patrol''. Our spiritual leaders should feel 
free to speak on moral and political issues of the day, including 
talking about candidates for public office and where they stand on 
those issues. If a minister believes that one candidate best reflects 
that church's moral beliefs, the IRS should be in no position to deter 
him or her from saying so.
    Mr. Chairman, we as members of the United States Congress take an 
oath to defend the constitutional rights of the American people. I hope 
this committee will move a bill that will return the 1st 
Amendment rights to our spiritual leaders. It is the right thing to do.
    Thank You.
                              

                                             Maryland Bible Society
                                          Baltimore, Maryland 21202
    Ways and Means:
    As a United Methodist Minister for 35 years and an Executive 
Director of a religious nonprofit, I am totally against any church or 
religious group using funding to do campaigning and electioneering for 
political candidates through churches or ministries. This is absolutely 
the wrongheaded way of doing business. Discussion of issues and 
candidates freely yes, but the use of nonprofit funds for such 
political and partisan agendas is absolutely stupid. I totally oppose 
any religious institution or church using any funding as a nonprofit 
tax exempt body for political purposes of pushing the candidacy of any 
political party.
    Thank you.
                                       Rev. Dr. Raymond T. Moreland
                                                 Executive Director

                               

                         National Council of Nonprofit Associations
                                          Washington, DC 20005-1525
                                                       May 28, 2002
The Honorable Amo Houghton, Chairman
Committee on Ways and Means
Subcommittee on Oversight
U.S. House of Representatives
1136 Longworth House Office Building
Washington, DC 20515
via e-mail ([email protected]v) and facsimile 
        ((202) 225-2610)
Re: Comments for the May 14, 2002 Hearing on the Review of Internal 
Revenue Code Section 501(c)(3) Requirements for Religious Organizations

    Dear Representative Houghton:
    Thank you for the opportunity to submit a written statement for 
consideration by the Subcommittee and for inclusion in the printed 
record of the May 14, 2002 hearing on the Houses of Worship Political 
Speech Protection Act (H.R. 2357) (the ``Political Speech Protection 
Act'') and the Bright-Line Act of 2001 (H.R. 2931) (the ``Bright-Line 
Act''). These comments are submitted by and on behalf of the National 
Council of Nonprofit Associations (NCNA).
    NCNA is a membership organization of state and regional 
associations of nonprofits that represent and serve thousands of local 
nonprofits throughout the country. Our members work at the state and 
local level to provide training and technical assistance to improve the 
operations and effectiveness of organizations while promoting the value 
of the nonprofit sector.
    NCNA strongly believes in the need for a united nonprofit sector, 
and opposes any legislative or regulatory act that seeks to divide the 
nonprofit sector based on subject matter and philosophy. Both the 
Political Speech Protection Act and the Bright-Line Act are intended 
to--and will--divide the sector.
    These bills allow churches to engage in activities not permitted of 
all other 501(c)(3) organizations. Such distinctions are unnecessary 
and harmful to the sector. Whether nonprofits should be prohibited from 
engaging in electioneering activities (participating in, or intervening 
in, political campaigns on behalf of a candidate) is a legitimate 
question. However, neither the Political Speech Protection Act nor the 
Bright-Line Act address it. Instead, they allow churches and other 
church-related organizations only to participate in campaigns.
    In addition, the Bright-Line Act would permit churches to expend 
greater expenditures to influence legislation than section 501(h) of 
the Internal Revenue Code of 1986, as amended (the ``Code''), allows 
all other organizations. Churches could spend up to twenty (20) percent 
of its gross revenues to influence legislation, while all other 
organizations that make the 501(h) election (``Electing Charities'') 
are limited to a maximum expenditure of the lesser of $ 1,000,000 or 
twenty (20) percent of the first $ 500,000 of gross revenues, plus 
lesser percentages of its remaining gross revenues. In addition, while 
Electing Charities can spend no more than twenty-five (25) percent of 
its lobbying expenditures on grassroots lobbying,\1\ the Bright-Line 
Act does not contain a similar limitation for churches. Such 
disparities based on type of organization should not be endorsed and 
enacted into law.
---------------------------------------------------------------------------
    \1\ NCNA is supporting current efforts to eliminate the distinction 
between grassroots and direct lobbying under Code section 4911(c)(4) 
and to raise the lobbying expenditure limits contained in Code section 
4911(c)(2).
---------------------------------------------------------------------------
    One of the stated justifications for these bills is that churches 
are refraining from engaging in legally permissible activities due to 
fear of losing their tax-exempt status for engaging in an impermissible 
activity. However, the solution is not to change the law, but to better 
educate the churches about permissible activities. NCNA and its network 
of state associations are currently engaging in these educational 
efforts, along with other national organizations such as the Alliance 
for Justice and Charity Lobbying in the Public Interest.
    Thank you for this opportunity to comment. Please let me know if 
you have any questions or would like any further information on my 
comments, or if NCNA can be of any further assistance to the 
Subcommittee on Oversight of the Committee on Ways and Means.
            Sincerely,
                                                 Audrey R. Alvarado
                                                 Executive Director

                               

  Statement of Kay Guinane, Counsel and Manager, Community Education 
                           Center, OMB Watch
    OMB Watch is a nonprofit organization that promotes government 
accountability and citizen participation in public issues and decision-
making. We appreciate the opportunity to comment on HR 2357 and HR 
2931, on our own behalf and in the interest of the nonprofit sector.
    OMB Watch works with and through the nonprofit sector because of 
its vital place in communities and our faith that the sector can play a 
powerful role in reinforcing our democratic principles. Because of our 
commitment to strengthening the voice of the nonprofit sector in public 
policy debates we fully support the right of all nonprofits to speak 
out publicly on the moral and political issues of the day, regardless 
of their religious character. This right is protected the First 
Amendment to the Constitution and current tax law. There is nothing in 
current law to stop religious congregations or any other 501(c)(3) 
organization from fully exercising this right.

1. Current Law is Adequate to Protect the Right of Religious 
Organizations to Speak on Public Policy Issues

    Proponents of HR 2357 and HR 2931 claim passage is necessary to 
protect the right of religious organizations to speak on moral and 
political issues, and that its impact would only be to free clergy to 
speak on issues and their principles of faith. However, the tax code 
specifically limits the definition of prohibited ``political'' to 
speech the support of or opposition to a candidate for office. This 
hardly puts a muzzle on clergy that wish to address the morality of 
abortion, the death penalty or any other public issue. HR 2357 and HR 
2931 ignore current legal protections for speech by 501(c)(3) 
organizations.
Current Law Allows Unlimited 501(c)(3) Time and Money for:

           Commentary on public issues from the pulpit
           Public education campaigns
           Publication of pamphlets, research, newsletters and 
        analysis
           itigation
           Comment on proposed regulations
           Participation in agency and commission proceedings
           Nonpartisan voter education, registration and get 
        out the vote activity
Limitations on 501(c)(3) Legislative Lobbying

           All public charities, including religious 
        organizations, can lobby at the local, state or national level 
        as long as it is not a ``substantial part'' of its overall 
        activities.
Prohibition on Supporting or Opposing Candidates for Office

           The tax code prohibits support or opposition to 
        candidates, but there are no regulations that clearly define 
        what activities are allowable and what are not. The IRS uses a 
        ``facts and circumstances'' test to determine whether a 
        501(c)(3) has in fact engaged in partisan electioneering. This 
        lack of clarity leaves all 501(c)(3)s, not just religious 
        organizations, without clear guidance.
           Religious organizations can create 501(c)(4) 
        affiliates that can endorse or oppose candidates. Contributions 
        to these organizations are not tax deductible.
Clergy, Members of Congregations and Others Can Act as Individuals

           Any person, acting on their own behalf, can endorse 
        candidates, volunteer on campaigns, or even run for public 
        office, as long as they do not use the resources of a 501(c)(3) 
        organization.
    Based on the above, we believe there is no need for new legislation 
to protect the right of religious organizations to speak on issues.

2. HR 2357 and HR 2931 Would Turn Religious Organizations Into Soft 
Money Conduits

    The proposed bills would have an enormous financial impact on 
campaign finance. They would create an enormous soft money loophole, 
and turn religious congregations into conduits for campaign 
contributors seeking to avoid campaign finance laws. They would allow 
religious congregations to spend money and use their institutional 
resources for a wide range of partisan political activity, from 
operating phone banks to running ads on radio or TV.

           The soft money problem would be exacerbated by two 
        factors:
           Donations to 501(c)(3) organizations are tax 
        deductible and

    Religious organizations are not required to file IRS Form 990, the 
annual information return filed by most 501(c)(3) organizations. Since 
there is less public accountability, it would be impossible to know the 
extent of the use of religious organizations as conduits for 
unregulated campaign contributions, or to know who is contributing and 
what candidates they support or oppose.
    This is clearly contrary to the intent of Congress is passing the 
Bipartisan Campaign Finance Reform Act earlier this year, and for that 
reason alone is sufficient justification to defeat these bills.

3. HR 2357 and HR 2931 Discriminate Against Non-religious 501(c)(3) 
Organizations

    If free speech rights of 501(c)(3) organizations are to be 
extended, they should be extended fairly, to all public charities, not 
just religious organizations. By limiting new rights to congregations, 
the proposed legislation unduly discriminates against other charities 
that can be equally concerned with the moral and political issues of 
the day. There is no rational justification for such a distinction.
Conclusion
    All 501(c)(3) organizations share the same experience with the 
current lack of clarity of what constitutes prohibited partisan 
electioneering. If, as is claimed by the proponents of this 
legislation, the problem is the chilling effect this lack of clarity 
has, the uneven enforcement that results, the solution should be 
fashioned to fit the problem. HR 2357 and HR 2931 go well beyond what 
is needed to bring clarity to the law. If, on the other hand, the 
sponsors of these bills believe that tax deductible dollars should be 
used for candidate campaigns, they should clearly state why, and allow 
for a debate on that issue.

                               

                                        People for the American Way
                                               Washington, DC 20036
                                                       May 10, 2002
House of Representatives
Washington, DC
    Dear Representative,
    On behalf of the more than 500,000 members and supporters of People 
For the American Way, we are writing to urge you to oppose H.R. 2357, 
the so-called ``Houses of Worship Political Speech Protection Act.'' 
This bill threatens religious liberty by turning America's houses of 
worship into partisan political operations.
    H.R. 2357 flies in the face of federal tax law, which clearly 
states that houses of worship, like all other 501(c)(3) organizations, 
cannot legally engage in partisan politics and still retain their tax-
exempt status. This law safeguards the integrity of both religious 
institutions and the political process.
    H.R. 2357 is based on the false assumption that existing law does 
not allow religious leaders to speak out on issues pertinent to their 
congregations. Claims that existing law would have silenced the 
religious community on issues such as abolitionist and civil rights 
movements are simply not true. Religious leaders currently use their 
moral authority to address current issues. They are prevented, however, 
from endorsing or opposing candidates, and using their tax-exempt 
donations to contribute to partisan campaigns.
    Finally, H.R. 2357 is unnecessary, and unwanted by America's 
clergy. Supporters of this bill erroneously claim that there is a 
clamoring within the religious community for radical changes to 
existing tax law pertaining to houses of worship. In actuality, a 
recent Gallup poll found that 77% of clergy were opposed to clergy 
endorsing political candidates.
    Please join us in opposing H.R. 2357.
            Sincerely,
                                                      Ralph G. Neas
                                                          President

                                                   Stephenie Foster
                                          Director of Public Policy

                               

 Statement of William J. Murray, Chairman, Religious Freedom Coalition
    The Religious Freedom Coalition commends Congressmen Phil Crane (R-
IL) and Walter Jones (R-NC) for trying to alleviate the present 
intolerable situation in which clergymen and their congregations fear 
to express publicly any political views or even opinions about moral 
issues such as abortion, because these may be perceived as political. 
This climate of fear, which is exactly what the First Amendment was 
created to prevent, is caused by uncertainty about what is or is not 
permissible for a clergyman to say without having the church's tax 
exempt status taken away.
    As things stand now, the guidelines are so unclear that it is just 
up to the discretion of IRS bureaucrats to decide who is in violation. 
There is evidence that these rulings by the IRS are selectively and 
unfairly enforced, targeting those who express conservative views while 
ignoring others whose liberal views are favored.
    Congressman Crane's Bright Line Act of 2001 (H. R. 2931) and 
Congressman Jones' Houses of Worship Political Speech Protection Act 
(H. R. 2357) would help restore First Amendment rights to America's 
churches and synagogues.
    America had a long history of free speech in her houses of worship, 
beginning with Revolutionary War era preachers who spoke out for 
freedom and encouraged the founding of the new country. It was largely 
in the churches where the abolitionist movement began, as religious 
people stirred up the conscience of the nation about the evils of 
slavery. In the first half of the twentieth century, clergymen spoke 
out fearlessly on many social issues and they warned of the dangers of 
murderous fascism and communism.
    The era of free speech came to an ignoble end in 1954 when Senator 
Lyndon Johnson inserted the ban on political speech as a little noticed 
floor amendment to another bill. There were no hearings on this 
amendment, nor does the Congressional Record indicate that any 
explanation was ever given for this ban. There was a behind the scenes 
explanation though; Johnson was being criticized by a conservative 
Texas pastor. To silence his critic, he slipped in a law that clearly 
violates the spirit of the Constitution.
    It's true that the law was ignored when Martin Luther King and 
other black pastors led peaceful civil rights demonstrations in the 
1960's. If it had been strictly enforced, Dr. King and other church 
leaders could have been silenced. In fact, the law was largely ignored 
until the early 1990's, when Democrats realized they could follow the 
example of LBJ and use it against political opponents.
    During Bill Clinton's 1992 presidential campaign, the Church at 
Pierce Creek in Conklin, New York sponsored a newspaper ad that 
criticized Clinton for his stand on abortion. In retaliation, the 
church had its tax exempt status revoked. Yet when first Bill Clinton 
and then later Al Gore campaigned in churches, there was hardly a word 
said from IRS officials. Preacher and former Democrat Congressman Floyd 
Flake invited candidate Gore to speak at his Allen A.M.E. Church in 
Queens, New York. From behind the pulpit Flake told the congregation, 
``This should be the next president of the United States.'' Was Rev. 
Flake or his church punished in any way? Well, he did get a ``caution'' 
from the IRS, but that was all.
    While this was a clear violation of the law, the actual wording of 
the tax code is so vague that IRS officials may interpret it any way 
they please. It is not necessary to name a candidate or political party 
to get in trouble. All that is necessary is that the IRS finds a given 
communication ``contains some relatively clear directive that enables 
the recipient to know the organization's position on a specific 
candidate or slate of candidates.'' In other words, suppose a certain 
candidate is well known to be in favor of unlimited abortion, 
homosexual marriage, or anti-Semitism. If a pastor in an election year 
chooses to address such moral issues, is that an implicit rejection of 
the candidate and therefore a ``political statement?'' It can be, if 
the IRS so decides.
    Religious organizations deserve the clarity of knowing exactly what 
political activity is acceptable and allowed by law. It should not be 
left up to some bureaucrat to interpret the law and determine if a 
religious institution is in violation, thus losing their tax exempt 
status. We believe that either the Crane or the Jones bill will remove 
confusion from sanctioned and unsanctioned activities by establishing a 
clear set of standards and bringing proper enforcement.

                               

                                          Topeka, Kansas 66605-2086
Honorable Bill Thomas
Chairman, Committee on Ways and Means
U.S. House of Representatives
Washington, D.C.
Phone: (202) 225-3625
Fax: (202) 225-2610
E-Mail: [email protected]

Ref: Comments on The Houses of Worship Political Speech Protection Act 
(HR 2357) and the Bright Line Act of 2001 (HR 2931)

    Dear Chairman Thomas:
    Please accept these comments on HR 2357 and HR 2931. The nonprofit 
sector has a vital place in communities with this sector playing a 
powerful role in reinforcing our democratic principles. Please 
strengthen the voice of the nonprofit sector in public policy debates 
and support the right of all nonprofits to speak out publicly on the 
moral and political issues of the day, regardless of their religious 
character. As you know, this right is protected the First Amendment to 
the Constitution and current tax law. There is nothing in current law 
to stop religious congregations or any other 501(c)(3) organization 
from fully exercising this right.
1. LCurrent Law is Adequate to Protect the Right of Religious 
        Organizations to Speak on Public Policy Issues

    Proponents of HR 2357 and HR 2931 claim passage is necessary to 
protect the right of religious organizations to speak on moral and 
political issues, and that its impact would only be to free clergy to 
speak on issues and their principles of faith. However, the tax code 
specifically limits the definition of prohibited ``political'' to 
speech the support of or opposition to a candidate for office. This 
hardly puts a muzzle on clergy that wish to address the morality of 
abortion, the death penalty or any other public issue. HR 2357 and HR 
2931 ignore current legal protections for speech by 501(c)(3) 
organizations.
    Current Law Allows Unlimited 501(c)(3) Time and Money for:

          Commentary on public issues from the pulpit
          Public education campaigns
          Publication of pamphlets, research, newsletters and analysis
          Litigation
          Comment on proposed regulations
          Participation in agency and commission proceedings
          Nonpartisan voter education, registration and get out the 
        vote activity
Limitations on 501(c)(3) Legislative Lobbying

    All public charities, including religious organizations, can lobby 
at the local, state or national level as long as it is not a 
``substantial part'' of its overall activities.
Prohibition on Supporting or Opposing Candidates for Office

    The tax code prohibits support or opposition to candidates, but 
there are no regulations that clearly define what activities are 
allowable and what are not. The IRS uses a ``facts and circumstances'' 
test to determine whether a 501(c)(3) has in fact engaged in partisan 
electioneering. This lack of clarity leaves all 501(c)(3)s, not just 
religious organizations, without clear guidance. Religious 
organizations can create 501(c)(4) affiliates that can endorse or 
oppose candidates. Contributions to these organizations are not tax 
deductible.
Clergy, Members of Congregations and Others Can Act as Individuals

    Any person, acting on their own behalf, can endorse candidates, 
volunteer on campaigns, or even run for public office, as long as they 
do not use the resources of a 501(c)(3) organization.
    Based on the above, I believe there is no need for new legislation 
to protect the right of religious organizations to speak on issues.
2. LHR 2357 and HR 2931 Would Turn Religious Organizations Into Soft 
        Money Conduits

    The proposed bills would have an enormous financial impact on 
campaign finance. They would create an enormous soft money loophole, 
and turn religious congregations into conduits for campaign 
contributors seeking to avoid campaign finance laws. They would allow 
religious congregations to spend money and use their institutional 
resources for a wide range of partisan political activity, from 
operating phone banks to running ads on radio or TV.
    The soft money problem would be exacerbated by two factors:
    Donations to 501(c)(3) organizations are tax deductible and 
Religious organizations are not required to file IRS Form 990, the 
annual information return filed by most 501(c)(3) organizations. Since 
there is less public accountability, it would be impossible to know the 
extent of the use of religious organizations as conduits for 
unregulated campaign contributions, or to know who is contributing and 
what candidates they support or oppose.
    This is clearly contrary to the intent of Congress is passing the 
Bipartisan Campaign Finance Reform Act earlier this year, and for that 
reason alone is sufficient justification to defeat these bills.
3. LHR 2357 and HR 2931 Discriminate Against Non-religious 501(c)(3) 
        Organizations

    If free speech rights of 501(c)(3) organizations are to be 
extended, they should be extended fairly, to all public charities, not 
just religious organizations. By limiting new rights to congregations, 
the proposed legislation unduly discriminates against other charities 
that can be equally concerned with the moral and political issues of 
the day. There is no rational justification for such a distinction.
Conclusion
    All 501(c)(3) organizations share the same experience with the 
current lack of clarity of what constitutes prohibited partisan 
electioneering. If, as is claimed by the proponents of this 
legislation, the problem is the chilling effect this lack of clarity 
has, the uneven enforcement that results, the solution should be 
fashioned to fit the problem. HR 2357 and HR 2931 go well beyond what 
is needed to bring clarity to the law. If, on the other hand, the 
sponsors of these bills believe that tax deductible dollars should be 
used for candidate campaigns, they should clearly state why, and allow 
for a debate on that issue.
    Thank you for the opportunity to bring these remarks to your 
attention. Mindful of the enormous responsibilities which stand before 
you, I am,
            Yours sincerely,
                                                Robert E. Rutkowski

                               

      
                 Soka Gakkai International-USA Buddhist Association
                                               Washington, DC 20004
                                                       May 13, 2002
Rep. Amo Houghton, Chairman
Attn: Kimberly A. Reed, Esq.
U.S. House of Representatives
Committee on Ways and Means Oversight Subcommittee
Washington, DC 20515
    Dear Rep. Houghton,
    I am writing to express our opposition to both H.R. 2357 ``The 
Houses of Worship Political Speech Act'' introduced by Rep. Walter 
Jones, and H.R. 2931, ``The Bright Line Act'' introduced by Rep Phillip 
Crane. Both bills would have the undesirable and corrupting effect of 
bringing partisan political activity into our nation's religious 
institutions.
    Religious voices have spoken out consistently and at times 
passionately to provide both guidance and prophetic warning concerning 
the affairs of our nation. It is a role that has served both our nation 
and our churches well. Present law provides well for this function. To 
make our churches centers of partisan activity would be to undermine 
the moral authority of these essential voices.
    Furthermore, the proposed legislation would have the effect of 
creating a significant loophole in our nation's campaign finance laws. 
At present, those who contribute to our religious organizations may 
deduct those donations from their taxes, because these 501(c)(3) 
organizations are understood to be working for the general welfare of 
society. Allowing church funds to support partisan causes would so 
confuse the nature of these institutions as to erode the ethical basis 
for tax-exemption.
    From the events of the past year, we have witnessed with horror and 
anger how those who seek to advance their political agenda can 
manipulate religion and religious symbols. Let us learn from this 
example and promote the health of both our religious institutions and 
our political discourse by protecting the integrity of our voices of 
conscience.
    Speaking on behalf of the 300,000 US members of our Buddhist 
community, I assure you that we as individuals of faith want to bring 
our voices and our ideas into the public square of this nation. We 
believe we can do this best under existing law and ask that you oppose 
H.R. 2357 and H.R. 2931.
    The Soka Gakkai International-USA is a culturally diverse Buddhist 
association with more than 80 centers located throughout the country. 
Its community-based activities invite a shared commitment to the values 
of peace, culture and education.
            Sincerely,
                                                         Bill Aiken
                                         Director of Public Affairs

                               

                  Union of Orthodox Jewish Congregations of America
                                               Washington, DC 20036
                                                       May 10, 2002
Chairman Amo Houghton
Ranking Member William J. Coyne
& Members of the
Committee on Ways & Means,
Subcommittee on Oversight
1136 Longworth Building
Washington, DC 20515
    Dear Chairman Houghton, Ranking Member Coyne and Members of the 
Subcommittee,
    We write to you on behalf of the Union of Orthodox Jewish 
Congregations of America--this nation's largest Orthodox Jewish 
umbrella organization, representing nearly 1,000 synagogues across 
America--to express our serious concerns over H.R. 2357, ``The Houses 
of Worship Political Speech Protection Act,'' and H.R. 2931, ``The 
Bright Line Act,'' which are the subjects of your May 14 hearing. While 
noble in their goals, both of these bills in their current forms would 
allow partisan political pressures to be exerted upon our synagogues 
and all other houses of worship in the United States.
    As you are aware, current federal law provides that houses of 
worship, like other 501(c)(3) organizations, may not engage in partisan 
political activities and retain their tax-exempt status. This provision 
of federal law has served to insulate religious institutions from the 
political process in important ways. While we strongly advocate for a 
vigorous role for religious institutions in our nation's public life, 
both H.R. 2357 and H.R. 2931 would remove from the law the most 
critical legal provision that keeps America's houses of worship at 
arm's length from the rough and tumble of political contests.
    Supporters of these bills contend that their enactment is necessary 
to allow religious leaders to speak out on issues of interest to their 
congregations. However, current law grants religious leaders an 
absolute right to use their pulpits to address the moral issues of the 
day. Tax-exempt houses of worship may not endorse or oppose candidates, 
or use their tax-exempt donations to contribute to partisan campaigns. 
Without this clear legal prohibition, clergy and/or their congregations 
may well be pressured by candidates for office or congregational 
leaders to explicitly support a political candidacy with no recourse 
but to extend that support or risk offending the candidate or leader 
whose support the religious institution needs for its core mission.
    We agree with the proponents of H.R. 2357 and H.R. 2931 that the 
Internal Revenue Service must not be allowed to meddle in the missions 
of America's houses of worship and must not be allowed to selectively 
enforce the provisions of 501(c)(3) against some churches but not 
others. But we believe that these goals are better achieved by this 
Subcommittee's oversight of the I.R.S., not by altering the legal 
status quo in the manner proposed by H.R.2357 and H.R.2931. We would 
welcome the opportunity to discuss with you these matters and possible 
alternative avenues of addressing them should you or the sponsors of 
these bills wish to do so.
    Thank you for considering our views on this important matter. 
Please do not hesitate to call upon us for any assistance we may render 
in your deliberations.
            Sincerely,
                                                       Harvey Blitz
                                                   Richard B. Stone
                                             Rabbi T. Hersh Weinreb
                                                  Nathan J. Diament

                               

          Statement of William Wood, Charlotte, North Carolina
    It is fascinating that there are hearings on the 501(c)3 status of 
churches and their ability to engage in political speech. On the one 
hand, every perversion, foul word, and form of pornography passes as 
``free speech'' under the pretense that no one dare tread on this 
liberty. Yet ``free speech'' is not so free in the province and domain 
of religious institutions. The first Amendment did not suggest that 
there was ``free speech'' except for churches and pastors. Yet somehow 
we have interpreted ``freedom of religion'' to have both speech 
prohibitions and religious prohibitions through IRS regulations. This 
paper approaches the entire subject of IRS regulation from the 
standpoint of why is political speech restricted at all in a church? 
How has ``freedom OF religion'' been converted to ``freedom FROM 
religion'' in the political sphere by the use of IRS code?
    A more preliminary investigation as to whether or not a 501(c)3 
designation, and IRS regulation is in order.

          ``Separation of church and state today goes beyond the simple 
        non-coercion approach of the founders. What appears to be 
        happening is that government (e.g., the defendant in the Good 
        News Club case) appears to be affirmatively hostile to 
        religion. Many people rightly sense three things: (1) the 
        exclusion of religion from the public square threatens liberty 
        by stunting the formation of moral consciences; (2) the 
        exclusion of religion also threatens liberty by requiring 
        government to use government power to enforce secular norms of 
        morality; and (3) the exclusion of religion in the name of 
        neutrality is false and discriminatory when the government then 
        chooses to endorse and promote a secular morality that is 
        offensive to the very people excluded from the debate. As 
        applied, the notion of the wall of separation between church 
        and state, rather than removing government from the morality 
        game, just picks certain winners and losers, a result that the 
        founders sought to avoid.''\1\
---------------------------------------------------------------------------
    \1\ Wendall Hall. March 28, 2001

    ``The door of the Free Exercise Clause stands tightly closed 
against any governmental regulation of religious beliefs as such.\2\ 
Government may neither compel affirmation of a repugnant belief; \3\ 
nor penalize or discriminate against individuals or groups because they 
hold religious views abhorrent to the authorities; \4\ nor employ the 
taxing power to inhibit the dissemination of particular religious 
views.'' \5\
---------------------------------------------------------------------------
    \2\ Sherbert v. Verner, 374 U.S. 398, 402 (1963) citing Cantwell v. 
Connecticut, 310 U.S. 296, 303
    \3\ Sherbert at 402 citing Torcaso v. Watkins, 367 U.S. 488
    \4\ Sherbert at 402 citing Fowler v. Rhode Island, 345 U.S. 67
    \5\ Sherbert at 402 citing Murdock v. Pennsylvania, 319 U.S. 105; 
Follett v. McCormick, 321 U.S. 573; cf. Grosjean v. American Press Co., 
297 U.S. 233
---------------------------------------------------------------------------
    Our ``American'' legal system and government have in fact done 
exactly that which has been prohibited. We have enacted special IRS 
rules, regulations, and procedures, under the guise of a ``501'' et. 
al. status, for churches. Our founding fathers, many of them men of 
faith, would have seen this as a direct assault on the First Amendment. 
With ``free speech'' in America, anything goes, but with Freedom of 
Religion, ONLY that endorsed, approved, and stamped with the IRS 501 
approval qualifies.
    Yet there is no ``compelling state interest'' for regulating the 
political speech of churches through backdoor means, through a 501, or 
any other IRS status;

          ``[T]he Supreme Court has applied ``strict scrutiny'' to 
        government actions burdening free exercise of religion, 
        requiring the government to show that its action serves a 
        compelling state interest and is the least restrictive means 
        for achieving the government objective . . .'' \6\ ``If there 
        is any fixed star in our constitutional constellation, it is 
        that no official, high or petty, can prescribe what shall be 
        orthodox in politics, nationalism, religion, or other matters 
        of opinion or force citizens to confess by word or act their 
        faith therein.'' \7\
---------------------------------------------------------------------------
    \6\ Employment Div., Dep't of Human Resources v. Smith, 494 U.S. 
872, 881-82 (1990); Yoder, 406 U.S. at 233 (1972); Sherbert v. Verner, 
374 U.S. 398, 402 (1963).
    \7\ West Virginia Bd. of Educ. v. Barnette, 319 U.S. 624, 642 
(1943).

    Yet this continued encroachment on ``political speech'' and 
restriction on ``endorsing political candidates'' is precisely what the 
IRS designations aim to assert. As if to imply that in a DEMOCRACY the 
people hearing a message from the pulpit are too stupid, too frail, or 
too intimidated to exercise an opinion contrary to the utterances from 
the pulpit. These restrictions are simple anti-Christ[ian] exercises of 
restriction on free speech by banning certain types of speech by a 
religious institution. Of course under threat of losing their tax-
exempt status. I am constantly amazed by the ``ACLU's'' (I question how 
``American'' they really are) incessant attacks on anything even 
remotely resembling Christianity, yet proclaiming that perversions such 
as NAMBLA (the North American Man Boy Love Association who believes in 
homosexual sex with little boys by 8 years old) as ``Free Speech.'' 
Apparently there are few if any restraints on free speech AS LONG AS IT 
DOES NOT OCCUR IN A CHURCH!
    What if a pastor, with sincere conviction and belief, were to speak 
a particularly pointed message against a particular politician, or a 
particular bill in the context of;

          For we wrestle not against flesh and blood, but against 
        principalities, against powers, against the rulers of the 
        darkness of this world, against spiritual wickedness in high 
        places.\8\
---------------------------------------------------------------------------
    \8\ Ephesians 6:12

    What of those times when a pastor, near election time, considers 
the particular actions of a legislator, where that legislator has 
endorsed a particularly reprehensible proposition? Say for example, the 
partial birth abortion debate where a baby's head is exposed from the 
womb, stabbed in the head with a sharp object, and then its brains are 
sucked out until the head collapses. What if a minister of a faith 
considers this a particularly reprehensible evil that must be spoken 
against, from the pulpit, naming specifically those individuals, 
considering them ``rulers of darkness'' or practicing ``spiritual 
wickedness in high places''? What of a Bill introduced in that would 
allow for homosexual marriages, or the right to consortium with 
animals, or with children such as that NAMBLA espouses, or other 
reprehensible legislation. Must they IGNORE their conscience, and their 
religious beliefs, and the tenets of their faith to satisfy an IRS that 
would now DICTATE this is impermissible speech? Why is the IRS, an arm 
of the Federal government, entangled in the regulation of religion to 
dictate and determine what is acceptable political speech? Is this not 
a ``breach'' in the fictitious ``wall of separation''?
    Or the reverse, where a particular politician or legislator is 
openly praised through ``supplications, [public] prayers . . . and 
giving of thanks . . .''

          ``I exhort therefore, that, first of all, supplications, 
        prayers, intercessions, and giving of thanks, be made for all 
        men; For kings, and for all that are in
        authority; that we may lead a quiet and peaceable life in all 
        godliness and honesty. For this is good and acceptable in the 
        sight of God our Saviour . . .'' \9\
---------------------------------------------------------------------------
    \9\ 1 Timothy 2:1-4

    So we now have codified provisions, that based on the honest, 
sincere, rights of conscience, free exercise of religion, and freedom 
of speech where these ideals may be attacked. And where men and women 
of conviction or virtue may have their speech silenced BECAUSE of their 
religious affiliation which allows them the ``tax-exempt'' status.
    How can we have ``free speech'' and ``freedom of religion'' with a 
few IRS bindings and shackles on religious speech? WHY do we use the 
IRS to regulate supposedly ``free'' speech in the ``free exercise of 
religion''? \10\
---------------------------------------------------------------------------
    \10\ Constitutional rights, such as liberty, are not suitable 
objects for taxation or encumbrances. West Virginia v Barnette, 319 US 
624; US v Euge, 444 US 707.
---------------------------------------------------------------------------
What ``Separation of Church and State''?
    We have erected anti-Christ[ian] barriers to religion in America 
under the fraudulently constructed guise of ``Separation of Church and 
State''. This often quoted phrase is used as an excuse to ATTACK every 
display of anything founded upon the Judeo-Christian Biblical beliefs. 
Yet it is a LEGAL FRAUD!
    Thomas Jefferson WAS NOT IN THE COUNTRY FOR THE CONSTITUTIONAL 
DEBATES OVER THE FIRST AMENDMENT MAKING EXCERPTS FROM A LETTER OF HIS 
VOID. ``Of [the Constitutional] convention Mr. Jefferson was not a 
member, he being then absent as minister to France.'' \11\ In fact, as 
noted in the US Supreme Court case just quoted from, Jefferson 
``expressed his disappointment at the absence of an express declaration 
insuring the freedom of religion.'' Somehow Jefferson's idea of 
``freedom OF religion'' has been twisted and perverted into a legal 
fiction almost demanding ``freedom FROM religion'' in politics. Our 
legal system has inappropriately given weight to the anti-Christ[ian] 
``separation of church and state'' phrase. In according so much 
``authority'' to this phrase, equal weight must be given to the 
remaining letters lest the legal system finally seen as declaring open 
war on Judeo-Christian beliefs. Most especially one in which Jefferson 
strictly forbid the use of his own letters as a source of 
Constitutional interpretation;
---------------------------------------------------------------------------
    \11\ Reynolds v. U.S., 98 U.S. 145, 163 (1878)

          ``On every question of construction [of the Constitution] let 
        us carry ourselves back to the time when the Constitution was 
        adopted, recollect the spirit manifested in the debates, and 
        instead of trying what meaning may be squeezed out of the text, 
        or intended against it, conform to the probable one in which it 
        was passed.'' \12\
---------------------------------------------------------------------------
    \12\ Thomas Jefferson, letter to Justice William Johnson, June 12, 
1823, The Complete Jefferson, p.322

    Even more distressing and exposing the passionate anti-Christ[ian] 
perspective of the modern ``American'' legal system, and the proponents 
of the often taken out of context ``separation of church and state'' 
are the sheer number of state legislatures whose Constitutions openly 
endorsed Judeo-Christian principles AFTER THE FIRST AMENDMENT WAS 
PASSED. Mysteriously, they found no conflict in their own 
---------------------------------------------------------------------------
Constitutional constructions;

          Massachusetts; First Part, Article II (1780) ``It is the 
        right as well as the duty of all men in society, publicly, and 
        at stated seasons, to worship the SUPREME BEING, the great 
        Creator and Preserver of the universe. . . The governor shall 
        be chosen annually; and no person shall be eligible to this 
        office, unless. . .he shall declare himself to be of the 
        Christian religion.''; Chapter VI, Article I (1780) ``[All 
        persons elected to State office or to the Legislature must] 
        make and subscribe the following declaration, viz. 'I, 
        ____________________, do declare, that I believe the Christian 
        religion, and have firm persuasion of its truth. . .' ''

          New Hampshire; Part 1, Article 1, Section 5 (1784) ``. . .the 
        legislature . . . authorize . . . the several towns . . . to 
        make adequate provision at their own expense, for the support 
        and maintenance of public protestant teachers of piety, 
        religion and morality. . .''; Part 2, (1784) ``[Provides that 
        no person be elected governor, senator, representative or 
        member of the Council] who is not of the protestant religion.''

          Pennsylvania; Article IX, Section 4 (1790) ``that no person, 
        who Acknowledges the being of a God, and a future state of 
        rewards and punishments, shall, on account of his religious 
        sentiments, be disqualified to hold any office or place of 
        trust or profit under this commonwealth.''

          Tennessee; Article VIII, Section 1 (1796) ``. . .no minister 
        of the gospel, or priest of any denomination whatever, shall be 
        eligible to a seat in either house of the legislature . . .''; 
        Section 2 ``. . . no person who denies the Being of God, or a 
        future state of rewards and punishments, shall hold any office 
        in the civil department of this State.''

    Are we as American people to believe that Massachusetts, New 
Hampshire, Pennsylvania, and Tennessee endorsed Judeo-Christian 
principles in their Constitutions but somehow ratified the US 
Constitution with this implicit ``freedom FROM religion'' as practiced 
in the legal system today? Or what of the other colonies who already 
had Constitutions with similar provisions BEFORE the adoption of the US 
Constitution and then did not set about to immediately change their 
Constitutions? The question for every person of faith in this country 
is why there is such a passionate hatred for Christianity and Judeo-
Christian beliefs that this country was founded upon? And why there has 
been such a concerted effort to encroach upon the domain of the church 
by REGULATING A CHURCH'S POLITICAL SPEECH.
    Even other legal scholars, and Federal Judges know of the outright 
legal FRAUD perpetrated on the Christian faith in America. Judge 
Brevard Hand, a Federal District Judge stated the ``Supreme Court erred 
in its reading of history.'' \13\ In fact, after this rather 
embarrassing expose, the US Supreme Court left off relying on the 
intent of the framers, clearly demonstrating their anti-Christ[ian] 
bent and re-created the original Legal Fraud under a principle called 
the ``crucible of litigation.'' \14\ As applied in this case, the 
``crucible of litigation'' in laymen's terms is translated to mean 
that; whether we have constructed an anti-Chrit[ian] fraud or not, we 
will not back down from our improper interpretation of the historical 
foundations \15\ of this country's Christian heritage. In fact, in 
analyzing this case, Rhenquist noted;
---------------------------------------------------------------------------
    \13\ Jaffree v. Board of School Comm. of Mobile Co., 554 F. Supp. 
1104, 1128 (1983)
    \14\ Wallace v. Jaffree, 472 U.S. 38, 52 (1985)
    \15\ ``[N]o understanding of the eighteenth century is possible if 
we unconsciously omit, or consciously jam out, the religious theme just 
because our own milieu is secular.'' . . . ``[R]eligion was a 
fundamental cause of the American Revolution.''--Mitre and Sceptre, 
Oxford University Press, 1962.

          ``But the greatest injury of the ``wall'' notion is its 
        mischievous diversion of judges from the actual intentions of 
        the drafters of the Bill of Rights. The ``crucible of 
        litigation,'' is well adapted to adjudicating factual disputes 
        on the basis of testimony presented in court, but no amount of 
        repetition of historical errors in judicial opinions can make 
        the errors true. The ``wall of separation between church and 
        State'' is a metaphor based on bad history, a metaphor which 
        has proved useless as a guide to judging. It should be frankly 
        and explicitly abandoned.'' \16\
---------------------------------------------------------------------------
    \16\ Wallace v. Jaffree, 472 U.S. 38, 52 (1985)

    America was founded as a Christian nation,\17\ ``one nation under 
God,'' with coins that read ``In God We Trust.'' Before the US Supreme 
Court, and the US legal system became so antagonistic toward 
Christianity, it declared ``[w]e are a Christian people \18\ according 
to one another the equal right of religious freedom, and acknowledging 
with reverence the duty of obedience to the will of God.'' \19\
---------------------------------------------------------------------------
    \17\ Common Law is the traditionally accepted means of interpreting 
the US Constitution consistent with the intent of the framers. The 
following are judicial authority for the proposition that Christianity 
is part ofthe common law in the United States: Shover v.State, 10 Ark. 
259 (1850); State v. Chandler, 2 Har. 553 (Del. 1837); State v. Bott, 
31 La. Ann. 663 (1879); Pearce v. Atwood, 13 Mass. 324 (1816); 
Lindenmuller v. People, 33 Barb. 548 (N. Y. 1861); Updegraph v.Comm., 
11 5. & R. 394 (Pa. 1882); Charleston v. Benjamin, 2 Strob. 508 (S. C. 
1846); Bell v. State, 1 Swan 42 (Tenn. 1851); Grimes v. Harmon, 35 Ind. 
198 (1871); Melvin v. Easley, 52 N. C. 356 (1860); Judefind v. State, 
78 Md. 510, 28 Atl. 405 (1894).
    \18\ U.S. v. MacIntosh, 283 U.S. 605 (1931) citing Holy Trinity 
Church v. United States 143 U.S. 457, 470, 471 S., 12 S. Ct. 511
    \19\ U.S. v. MacIntosh, 283 U.S. 605 (1931)
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    The US Supreme Court, in all of its anti-Christ[ian] zqeal, has 
recently struck down the Religious Freedom Restoration Act \20\ 
insisting that Congress had violated the separation of powers doctrine. 
Yet it has ignored its previous precedents to ensure the legal fraud; 
Congress ``remains free to alter what [this Court has] done;'' \21\ and 
the Judiciary has enacted its own legislation to guarantee that it can 
break the law at will \22\ by giving itself ``immunity.'' Yet there is 
no rush in the Judiciary to abandon its own self-legislated immunity to 
break the law as it sees fit (all the while somehow declaring the 
violating the law must be some form of ``judicial function'').
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    \20\ City of Boerne v. Flores, 521 U.S. 507 (1997)
    \21\ Patterson v. McLean Credit Union, 491 U. S. 164, 173 (1989).
    \22\ ``[O]fficial immunity doctrine, which ``has in large part been 
of judicial making ``Doe v. McMillan, 412 U.S. 306, 318-319 citing Barr 
v. Matteo, 360 U.S. at 569. Yet this concept was rejected by Mr. Thomas 
Jefferson as well when he stated ``It is error [or abuse] alone which 
needs the support of government. Truth can stand by itself.''
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    Until the unprecedented attack on Christian morals, values, and 
beliefs in the US Legal system in the last 40 +/- years, it was well 
understood that ``[c]hristianity and democracy are not separable if 
democracy is to persist.'' \23\
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    \23\ Stephens, School, Church and State (1928) 12 MARQ. L. REV. 206
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    And WHY do we use the IRS to regulate supposedly ``free'' speech in 
the ``free exercise of religion''? \24\
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    \24\ ``A (government) may not impose a charge for the enjoyment of 
a right granted by the federal constitution.'' Murdock v Pennsylvania, 
319 US 105; 113.
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Why attack the Christian Foundations of America?
    Many of those (though unfortunately not all), who wage war on the 
Christian foundations of this country do so out of ignorance, or a 
predisposition to creating and generating more government power and 
control. Most judges and elected representatives do not consciously 
conceive of ways to undermine the country's foundations and values. In 
fact, the greatest problem in all three branches of government is a 
lack of basic principles and understandings that our founding fathers 
were well aware of.
    In evaluating the recent Wallace v. Jaffree opinion undermining the 
Religious Freedom Restoration Act, an interesting legal philosophy 
emerges--, the replacement of unalienable rights with civil rights. The 
court relied heavily on ``Civil Rights'' contained in the 
14th Amendment. In the last 40+ years there has been an 
accelerated use of ``Civil Rights'' as a means to undermine and destroy 
our Founder's concept of unalienable rights.
    This whole concept of unalienable rights comes from the Declaration 
of Independence where our Founding Fathers sought to throw off the 
bands of tyranny and oppression;
          ``We hold these Truths to be self-evident, that all Men are 
        created equal, that they are endowed by their Creator with 
        certain unalienable rights . . .''
    Inalienable (or unalienable) rights ``cannot be transferred or 
surrendered'' \25\ and include ``natural rights'' which ``exist 
independently of rights created by government or society, such as the 
right to life, liberty, and property,'' \26\ as well as ``natural law'' 
which contains ``legal and moral principles . . . [or] divine justice 
rather than from legislative or judicial action; moral law embodied in 
principles of right and wrong.'' \27\
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    \25\ Black's Law Dictionary (2000 abridged edition) p. 1060 and 
1061
    \26\ Black's p. 1061
    \27\ Black's p. 841
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    And then the 14th Amendment was created, after the 
13th Amendment (which abolished slavery) noting;

          ``No State shall make or enforce any law which shall abridge 
        the privileges or immunities of any citizen of the United 
        States; nor shall any State deprive any person of life, 
        liberty, or property without due process of law; nor deny to 
        any person within its jurisdiction the equal protection of the 
        laws.''
    The 14th Amendment became the basis of Civil Rights, or 
Civil law for the United States. Civil Rights are ``the individual 
rights of personal liberty guaranteed by the Bill of Rights and by the 
13th, 14th, 15th, and 19th Amendments, as well as by 
legislation . . . Civil rights include especially . . . the right of 
due process, and the right of equal protection under the law.'' \28\ 
Civil Liberty is a part of Civil Rights denoting ``freedom from UNDUE 
governmental interference or restraint [as determined by government of 
course]. This term usually refers to freedom of speech or religion.'' 
\29\ Civil Rights are also part of the Civil Law which is ``the body of 
law IMPOSED BY THE STATE, as OPPOSED to moral law. '' \30\ One of the 
signers of the Constitution noted the intention of American law stating 
``[f]ar from being rivals or enemies, religion and law are twin 
sisters, friends, and mutual assistants. Indeed, these two sciences run 
into each other. The divine law, as discovered by reason and the moral 
sense, forms an essential part of both.'' \31\
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    \28\ Black's p. 195
    \29\ Ibid.
    \30\ Ibid. definition 3.
    \31\ James Wilson, The Works of the Honourable James Wilson 
(Philadelphia: Bronson and Chauncey, 1804), Vol. I, p. 106
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    As the 14th Amendment is applied today, it is in direct 
opposition to the ``Creator endowed unalienable rights'' guaranteed by 
our originally enacted Constitution. Where there are ``creator endowed 
unalienable rights'' there is the requirement to determine the Creator 
who endowed them so that the rules are clear. This principle was widely 
understood and clearly known throughout the early history of our 
country, until it came under direct attack by the lawyers in black 
robes in our courts today. As Thomas Jefferson noted ``[n]othing. . . . 
is unchangeable but the inherent and inalienable rights of man.'' \32\ 
To the extent that they are changeable, such as under Civil Rights 
interpretations by the lawyer led courts, they are no longer 
unalienable rights. The clearest example of this can be seen with the 
whole abortion debate. A brand new ``Civil'' right was created to allow 
the killing of babies on demand, even to the point of stabbing a 
partially born human child in the head, and then sucking its brains 
out. This is a ``state'' created, state endorsed, and state sponsored 
right which can be altered at any time. That is why we hear shrieks of 
horror at the prospect of a Supreme Court Justice who might not be 
favorable to this state created right. Under ``Creator endowed 
unalienable rights'' stabbing a partially born human child in the head 
and sucking its brains out would be a seditious evil demanding of 
criminal prosecution for those carrying out such heinous acts.
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    \32\ Thomas Jefferson to J. Cartwright, 1824
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    To gain and keep power and control, the black robed lawyer led 
judiciary MUST maintain and promote Civil Rights as opposed to 
unalienable rights. Civil Rights give the courts their power over 
issues that our Founding Fathers would be horrified to see today. Civil 
Rights allow the ``back door control'' of churches through state 
created ``statuses'' such as the IRS code in question here. The 
exercise of unalienable rights takes power and control away from both 
the state and the courts. So frightening is the prospect of unalienable 
rights to the lawyer led Judiciary that all vestiges of unalienable 
rights MUST be drawn under their control and domain. To gain Civil 
control Bibles MUST be banned from the classroom (the very rule book 
for the unalienable rights), political speech MUST be stopped from the 
pulpit (to stifle and stop morality, values, and any virtuous influence 
in politics), and the 10 Commandments and every Biblical reference in 
our Nation MUST be torn down and removed from EVERY place in the 
Nation.
    As a direct result of the blatant attack on the Foundations of this 
Nation's religious history, America now enjoys an unprecedented place 
in history, of the industrialized nations we are now;

        #1 In Teen Pregnancy
        #1 In Violent Crime
        #1 In Prison and Jail incarcerations
        #1 In illiteracy
        #1 In Suicide
        #1 In Divorce
        #1 In Drug Use

    And the list goes on and on. Yet the frightening part of all of 
this is that it serves a CIVIL government well. The more social 
disorder, chaos, immorality, violence, crime, and other ills suffered 
by society, the greater need for more and more government control. And 
the greater and greater need for the growth of government to ``combat'' 
the ills that its attack on America's foundations created to begin 
with.
    ``Can the liberties of a nation be thought secure when we have 
removed their only firm basis, a conviction in the minds of the people 
that these liberties are the gift of God?'' \33\
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    \33\ Thomas Jefferson: Notes On Virginia, 1782
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    The principles of our Founding Fathers were simple, they believed 
that if one abided by the ``golden rule'' and preserved a sense of 
community based in common morals, values, and virtues, that little 
government would be needed.
    Please take a moment and read some of the quotes from our Founding 
Fathers and then ask yourself, would THEIR interpretation of the 
Constitution allow the IRS to regulate a church's political speech?

          [O]nly a virtuous people are capable of freedom. As nations 
        become corrupt and vicious, they have more need of masters.\34\
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    \34\ Benjamin Franklin, The Writings of Benjamin Franklin, Jared 
Sparks, editor (Boston: Tappan, Whittemore and Mason, 1840), Vol. X, p. 
297, April 17, 1787
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          [N]either the wisest constitution nor the wisest laws will 
        secure the liberty and happiness of a people whose manners are 
        universally corrupt.\35\
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    \35\ William V. Wells, The Life and Public Service of Samuel Adams 
(Boston: Little, Brown, & Co., 1865), Vol. I, p. 22, quoting from a 
political essay by Samuel Adams published in The Public Advertiser, 
1749.
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          [I]t is religion and morality alone which can establish the 
        principles upon which freedom can securely stand. The only 
        foundation of a free constitution is pure virtue.\36\
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    \36\ John Adams, The Works of John Adams, Second President of the 
United States, Charles Francis Adams, editor (Boston: Little, Brown, 
1854), Vol. IX, p. 401, to Zabdiel Adams on June 21, 1776
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          [I]f we and our posterity reject religious instruction and 
        authority, violate the rules of eternal justice, trifle with 
        the injunctions of morality, and recklessly destroy the 
        political constitution which holds us together, no man can tell 
        how sudden a catastrophe may overwhelm us that shall bury all 
        our glory in profound obscurity.\37\
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    \37\ Daniel Webster, The Writings and Speeches of Daniel Webster 
(Boston: Little, Brown, & Company, 1903), Vol. XIII, p. 492. From ``The 
Dignity and Importance of History,'' February 23, 1852
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          ``Religion, morality, and knowledge . . . [are] necessary to 
        good government and the happiness of mankind.''--Northwest 
        Ordinance (1787)
          [W]e have no government armed with power capable of 
        contending with human passions unbridled by morality and 
        religion . . . . Our constitution was made only for a moral and 
        religious people. It is wholly inadequate to the government of 
        any other.\38\
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    \38\ The Works of John Adams, Second President of the United 
States, Vol. IX, p. 229, October 11, 1798
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          The law given from Sinai was a civil and municipal as well as 
        a moral and religious code; it contained many statutes . . . of 
        universal application-laws essential to the existence of men in 
        society, and most of which have been enacted by every nation 
        which ever professed any code of laws.\39\
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    \39\ John Quincy Adams, Letters of John Quincy Adams, to His Son, 
on the Bible and Its Teachings (Auburn: James M. Alden, 1850), p. 61.)
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          No free government now exists in the world, unless where 
        Christianity is acknowledged, and is the religion of the 
        country.\40\
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    \40\ Pennsylvania Supreme Court, 1824. Updegraph v. Cmmonwealth; 11 
Serg. & R. 393, 406 (Sup.Ct. Penn. 1824)--such a modern profession by a 
judge would be ridiculed, criticized, and the judge making such a 
statement would be attacked and maligned.
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          The doctrines of Jesus are simple, and tend all to the 
        happiness of mankind.\41\
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    \41\ Thomas Jefferson, The Writings of Thomas Jefferson, Albert 
Bergh, editor (Washington, D.C.: Thomas Jefferson Memorial Assoc., 
1904), Vol. XV, p. 383

    And WHY do we use the IRS to regulate supposedly ``free'' speech in 
the ``free exercise of religion''? \42\
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    \42\ The exercise of religion is not a suitable basis for taxation. 
Follett v McCormick, 321 US 573. The mere chilling of a constitutional 
right is held oppressive. Shapiro v Thompson, 374 US 618.
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