    [House Hearing, 110 Congress]
    [From the U.S. Government Publishing Office]

                         S. 1, THE SENATE APPROACH TO
                                LOBBYING REFORM

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

                                    HEARING

                                   BEFORE THE

                       SUBCOMMITTEE ON THE CONSTITUTION,
                       CIVIL RIGHTS, AND CIVIL LIBERTIES

                                     OF THE

                           COMMITTEE ON THE JUDICIARY
                            HOUSE OF REPRESENTATIVES

                           ONE HUNDRED TENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 MARCH 1, 2007

                                   __________

                                Serial No. 110-4

                                   __________

             Printed for the use of the Committee on the Judiciary

          Available via the World Wide Web: http://judiciary.house.gov

                                     ______

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                                WASHINGTON : 2007

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                           COMMITTEE ON THE JUDICIARY

                     JOHN CONYERS, Jr., Michigan, Chairman
    HOWARD L. BERMAN, California         LAMAR SMITH, Texas
    RICK BOUCHER, Virginia               F. JAMES SENSENBRENNER, Jr.,
    JERROLD NADLER, New York                 Wisconsin
    ROBERT C. SCOTT, Virginia            HOWARD COBLE, North Carolina
    MELVIN L. WATT, North Carolina       ELTON GALLEGLY, California
    ZOE LOFGREN, California              BOB GOODLATTE, Virginia
    SHEILA JACKSON LEE, Texas            STEVE CHABOT, Ohio
    MAXINE WATERS, California            DANIEL E. LUNGREN, California
    MARTIN T. MEEHAN, Massachusetts      CHRIS CANNON, Utah
    WILLIAM D. DELAHUNT, Massachusetts   RIC KELLER, Florida
    ROBERT WEXLER, Florida               DARRELL ISSA, California
    LINDA T. SANCHEZ, California         MIKE PENCE, Indiana
    STEVE COHEN, Tennessee               J. RANDY FORBES, Virginia
    HANK JOHNSON, Georgia                STEVE KING, Iowa
    LUIS V. GUTIERREZ, Illinois          TOM FEENEY, Florida
    BRAD SHERMAN, California             TRENT FRANKS, Arizona
    ANTHONY D. WEINER, New York          LOUIE GOHMERT, Texas
    ADAM B. SCHIFF, California           JIM JORDAN, Ohio
    ARTUR DAVIS, Alabama
    DEBBIE WASSERMAN SCHULTZ, Florida
    KEITH ELLISON, Minnesota
    [Vacant]

                  Perry Apelbaum, Staff Director-Chief Counsel
         Sean McLaughlin, Deputy Chief Minority Counsel/Staff Director
                                     ------

      Subcommittee on the Constitution, Civil Rights, and Civil Liberties

                       JERROLD NADLER, New York, Chairman

    ARTUR DAVIS, Alabama                 TRENT FRANKS, Arizona
    DEBBIE WASSERMAN SCHULTZ, Florida    MIKE PENCE, Indiana
    KEITH ELLISON, Minnesota             DARRELL ISSA, California
    JOHN CONYERS, Jr., Michigan          STEVE KING, Iowa
    ROBERT C. SCOTT, Virginia            JIM JORDAN, Ohio
    MELVIN L. WATT, North Carolina
    STEVE COHEN, Tennessee

                         David Lachmann, Chief of Staff

                        Paul B. Taylor, Minority Counsel

                                C O N T E N T S

                                  ----------

                                 MARCH 1, 2007

                               OPENING STATEMENT

                                                                       Page
    The Honorable Jerrold Nadler, a Representative in Congress from
      the State of New York, and Chairman, Subcommittee on the
      Constitution, Civil Rights, and Civil Liberties................     1
    The Honorable Trent Franks, a Representative in Congress from the
      State of Arizona, and Ranking Member, Subcommittee on the
      Constitution, Civil Rights, and Civil Liberties................     2
    The Honorable John Conyers, Jr., a Representative in Congress
      from the State of Michigan, Chairman, Committee on the
      Judiciary, and Member, Subcommittee on the Constitution, Civil
      Rights, and Civil Liberties....................................     5
    The Honorable Darrell Issa, a Representative in Congress from the
      State of California, and Member, Subcommittee on the
      Constitution, Civil Rights, and Civil Liberties................     6
    The Honorable Steve Cohen, a Representative in Congress from the
      State of Tennessee, and Member, Subcommittee on the
      Constitution, Civil Rights, and Civil Liberties................    10

                                   WITNESSES

    Mr. Kenneth A. Gross, Skadden, Arps, Slate, Meagher & Flom LLP
      Oral Testimony.................................................    12
      Prepared Statement.............................................    14
    Ms. Sarah Dufendach, Chief of Legislative Affairs, Common Cause
      Oral Testimony.................................................    16
      Prepared Statement.............................................    18
    Mr. Bradley A. Smith, Professor of Law, Capital University Law
      School
      Oral Testimony.................................................    40
      Prepared Statement.............................................    41
    Mr. Thomas E. Mann, The Brookings Institution
      Oral Testimony.................................................    51
      Prepared Statement.............................................    52

              LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

    Prepared Statement of the Honorable Jerrold Nadler, a
      Representative in Congress from the State of New York, and
      Chairman, Subcommittee on the Constitution, Civil Rights, and
      Civil Liberties................................................     2
    Prepared Statement of the Honorable Trent Franks, a
      Representative in Congress from the State of Arizona, and
      Ranking Member, Subcommittee on the Constitution, Civil Rights,
      and Civil Liberties............................................     4
    Prepared Statement of the Honorable John Conyers, Jr. a
      Representative in Congress from the State of Michigan,
      Chairman, Committee on the Judiciary, and Member, Subcommittee
      on the Constitution, Civil Rights, and Civil Liberties.........     6
    Prepared Statement of the Honorable Steve Cohen, a Representative
      in Congress from the State of Tennessee, and Member,
      Subcommittee on the Constitution, Civil Rights, and Civil
      Liberties......................................................     7
    Prepared Statement of the Honorable Jim Jordan, a Representative
      in Congress from the State of Ohio, and Member, Subcommittee on
      the Constitution, Civil Rights, and Civil Liberties............     8

                                    APPENDIX

    Material Submitted for the Hearing Record........................    69

                         S. 1, THE SENATE APPROACH TO
                                LOBBYING REFORM

                                  ----------

                            THURSDAY, MARCH 1, 2007

                      House of Representatives,
                     Subcommittee on the Constitution,
                     Civil Rights, and Civil Liberties,
                                    Committee on the Judiciary,
                                                        Washington, DC.
        The Subcommittee met, pursuant to notice, at 10:10 a.m., in
    Room 2141, Rayburn House Office Building, the Honorable Jerrold
    Nadler (Chairman of the Subcommittee) presiding.
        Staff present: David Lachmann, Staff Director; Michelle
    Persaud, Counsel; Paul Taylor, Minority Counsel; and Susana
    Gutierrez, Clerk.
        Mr. Nadler. Good morning, ladies and gentlemen. This
    hearing of the Subcommittee on the Constitution, Civil Rights,
    and Civil Liberties will come to order.
        I would like to begin by welcoming everyone to the first
    hearing of this Subcommittee in the 110th Congress. In
    particular, I want to extend a warm welcome to the Ranking
    Member of the Subcommittee, Mr. Franks.
        I know that whatever disagreements we may have on
    particular matters of policy--and I am sure there will be
    some--we share a dedication to the important work of the
    Subcommittee.
        I also want to welcome the very distinguished Members of
    this panel, and especially to our new Members.
        We have an outstanding panel and I very much look forward
    to our working together.
        I will begin by making an opening statement, before I turn
    for an opening statement to Mr. Franks.
        Recent scandals--including criminal convictions, involving
    prominent lobbyists, Members of Congress, of the executive
    branch, and of their staffs--have heightened public awareness
    of the need to reform some of the ways in which Congress does
    its business.
        In keeping with our pledge to reform this institution, the
    Democratic leadership put forward, and the House adopted,
    changes to the House Rules in the first 100 hours of this
    Congress.
        Today, we begin consideration of proposed changes to the
    Lobby Disclosure Act. The Senate has already acted with the
    passage of S. 1. The House is now beginning its consideration
    of these issues.
        In addition to the Senate bill, we also have a number of
    proposals put forward by Members of this Committee, by other
    Members of the House and by various activists. These proposals
    merit careful consideration.
        It is my hope that this hearing will enlighten our efforts
    and that we will be able to work together on a bipartisan basis
    to advance a reform agenda.
        Some of these issues are very difficult but we have an
    obligation to deal with them and to deal with them right.
        The American people sent a clear message in November that
    they want their Government cleaned up. We would ignore that
    message at our peril. If the public loses confidence that the
    process of lawmaking is fair and open to all on an equal basis,
    then that can only undermine respect for the rule of law.
        I would just add that the whole question of lobbyists is
    only one part of the problem. The core issue is the pervasive
    influence of money in politics. So long as we have a political
    system in which office seekers must raise large sums of money
    from people with a direct interest in legislation, the
    regulation of lobbying by itself will not fully solve this
    problem. A lobbyist without a PAC has a hard time corrupting
    the process. We must ensure that a private citizen without a
    PAC gets at least the same consideration as the powerful
    moneyed interests. That is the ultimate goal of our work.
        So I want to welcome our witnesses today and thank them for
    their testimony and their assistance.
        [The prepared statement of Mr. Nadler follows:]
    Prepared Statement of the Honorable Jerrold Nadler, a Representative in
    Congress from the State of New York, and Chairman, Subcommittee on the
                Constitution, Civil Rights, and Civil Liberties
        Recent scandals, including criminal convictions, involving
    prominent lobbyists, Members of Congress, of the executive branch, and
    their staff, have heightened public awareness of the need to reform the
    way Congress does its business.
        In keeping with our pledge to reform this institution, the
    Democratic Leadership put forward, and we adopted, changes to the House
    Rules in the first 100 hours of this Congress.
        Today we begin consideration of proposed changes to the Lobby
    Disclosure Act. The Senate has already acted, with the passage of S. 1.
    The House is now beginning its consideration of these issues. In
    addition to the Senate bill, we also have a number of proposals put
    forward by members of this Committee, by other members of the House and
    by various activists. These proposals merit careful consideration.
        It is my hope that this hearing will enlighten our efforts, and
    that we will be able to work together, on a bi-partisan basis, to
    advance a reform agenda.
        Some of these issues are very difficult, but we have an obligation
    to deal with them, and to do it right. The American people sent a clear
    message in November that they want their government cleaned up. We
    ignore that message at our peril.
        If the public loses confidence that the process of lawmaking is
    fair and open to all on an equal basis, that can only undermine respect
    for the rule of law.
        I would just add that lobbyists are only one part of the problem.
    The core issue is the pervasive influence of money in politics.
        So long as we have a political system in which office seekers must
    raise large sums of money from people with a direct interest in
    legislation, the regulation of lobbying, by itself, will not fully
    solve the problem. A lobbyist without a PAC has a hard time corrupting
    the process.
        We must ensure that a private citizen without a PAC gets at least
    the same consideration as the powerful, moneyed interests. That is the
    ultimate goal of our work.
        So, I want to welcome our witnesses today, and thank them for their
    testimony and their assistance.

        Mr. Nadler. I would now recognize our distinguished Ranking
    minority Member, the gentleman from Arizona, Mr. Franks, for
    his opening statement.
        Mr. Franks. Well, thank you, Mr. Chairman, for those kind
    words. And they are reciprocated completely. I hope that all of
    us on this Committee can remind ourselves that we are here for
    such a brief time and that we are here to promote human dignity
    and human freedom. And I consider it a privilege to be here.
        Mr. Chairman, the introduction of this bill was preceded by
    high-profile ethics probes into actions by prominent officials,
    most notably in the Abramoff scandal.
        The public, and many of us here, called for decisive action
    to clean up Beltway politics and to curb the misdeeds of
    unscrupulous officials and lobbyists. This should be the
    objective of this bill.
        However, I am extremely disappointed to learn, through all
    three prepared statements of the Democrats' witnesses, that
    there is, indeed, a movement afoot to revive the blatantly
    unconstitutional grassroots lobbying provisions that were
    wisely stripped from the Senate version of this bill, because
    they had no connection with Washington's ethical scandals.
        Grassroots lobbying was defined in the original bill as
    ``the voluntary efforts of members of the general public to
    communicate their own views on an issue to Federal officials or
    to encourage other members of the general public to do the
    same.''
        Just reading those words describing what speech could be
    criminalized under such provisions should chill the spine of
    anyone who supports a strong first amendment.
        Grassroots lobbying is the very lifeblood of a healthy
    democratic Government. Grassroots lobbyists are, perhaps, a
    preacher in Kansas, who encourages his congregation to voice
    their values, or a young activist blogger in Manhattan, who
    encourages her readers to take action to support the saving of
    the people in Darfur, or a non-profit in Scottsdale that
    encourages letter-writing campaigns to pressure for improved
    child health care, and I could go on.
        What grassroots lobbying provisions would do to such people
    is the question. It would require them to register with the
    Government and report completely and thoroughly each qualified
    communication that was made in their efforts.
        Failure to capture each piece of data required by the
    Government could result in 10 years in prison and hundreds of
    thousands of dollars in fines. That is 10 years in prison,
    hundreds of thousands of dollars in fines for free speech in
    America.
        Mr. Chairman, the Supreme Court has made clear that such
    efforts to regulate political activity beyond direct contact
    with Members of Congress is in ``serious constitutional
    doubt.''
        In Rumley v. the United States, the Supreme Court noted,
    ``it is said that indirect lobbying by the pressure of public
    opinion on the Congress is an evil and a danger. That is not an
    evil. It is a good, the healthy essence of the democratic
    process.''
        Grassroots lobbying is largely responsible for the very
    formation of this country. Grassroots lobbying, through the
    publishing of the Federalist Papers, the famous essays written
    by James Madison and Alexander Hamilton, is largely responsible
    for the ratification of our Constitution.
        And grassroots lobbying, Mr. Chairman, protected each and
    every guarantee of that Constitution's first amendment:
    ``Congress shall make no law respecting an establishment of
    religion, or prohibiting the free exercise thereof; or
    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.''
        But for grassroots lobbying, there would be no American
    Revolution. There would be no abolition of slavery, no labor
    movement, no women's movement, no civil rights movement,
    because very few people would risk 10 years in prison and
    hundreds of thousands of dollars in fines for failing to
    perfectly capture every qualified instance of free speech made
    to spur their cause. How would Dr. Martin Luther King have
    fared under such a law?
        Subjecting to Federal regulation the voluntary efforts of
    members of the general public to communicate their views cuts
    to the very core of freedom of speech that has made this
    country the most vibrant, creative and free Nation on Earth.
        Grassroots lobbying regulation is unconstitutional, Mr.
    Chairman. It does nothing to even address the real ethical
    scandals in Government. And it has no place in this bill, now,
    or in the future.
        And with these concerns in mind, I look forward to hearing
    from all the witnesses today.
        Thank you, Mr. Chairman.
        [The prepared statement of Mr. Franks follows:]
     Prepared Statement of the Honorable Trent Franks, a Representative in
    Congress from the State of Arizona, and Ranking Member, Subcommittee on
              the Constitution, Civil Rights, and Civil Liberties
        The introduction of this bill was preceded by high-profile ethics
    probes into actions by prominent government officials, most notably in
    the Abramoff scandal. The public, and many of us here, called for
    decisive action to clean up Beltway politics and to curb the misdeeds
    of unscrupulous officials and lobbyists. This should be the objective
    of the bill, and I am 100% behind this effort.
        However, I am extremely disappointed to learn, through all 3
    prepared statements of the Democrats' witnesses, that there is indeed a
    movement afoot to revive the blatantly unconstitutional grassroots
    lobbying provisions that were wisely stripped from the Senate version
    of this bill because they had no connection with Washington's ethical
    problems.
        Grassroots lobbying was defined in the original bill as (quote)
    ``the voluntary efforts of members of the general public to communicate
    their own views on an issue to federal officials or to encourage other
    members of the general public to do the same.'' (unquote). Just reading
    the words describing what speech would be criminalized under such
    provisions should chill the spine of anyone who supports a strong First
    Amendment.
        Grassroots lobbying is the VERY LIFEBLOOD of a healthy democratic
    government.
        Grassroots lobbyists are, perhaps, a preacher in Kansas who
    encourages his congregation to voice their values; or a young activist
    blogger in Manhattan who encourages her readers to take action to
    support the saving of the people in Darfur; or a nonprofit in
    Scottsdale that encourages letter writing campaigns to pressure for
    improved child health care, and I could go on.
        What would the grassroots lobbying provision do to such people? It
    would require them to register with the government and report
    completely and thoroughly each qualified communication that was made in
    their efforts. Failure to capture each piece of data required by the
    government could result in 10 years in prison and hundreds of thousands
    of dollars in fines! That's 10 years in prison; Hundreds of thousands
    in fines. For exercising free speech in America.
        Mr. Chairman, the Supreme Court has made clear that such efforts to
    regulate political activity beyond direct contact with Members of
    Congress is in--quote--``serious constitutional doubt.'' \1\ In Rumely
    v. United States, the Supreme Court noted:
    ---------------------------------------------------------------------------
        \1\ Rumely v. United States, 345 U.S. 41, 47 (1953).

            ``It is said that indirect lobbying by the pressure of public
            opinion on the Congress is an evil and a danger. That is not an
            evil; it is a good, the healthy essence of the democratic
    ---------------------------------------------------------------------------
            process. . . .''

        Grassroots lobbying is largely responsible for the very formation
    of this country. Grassroots lobbying through the publishing of The
    Federalist Papers, the famous essays written by James Madison and
    Alexander Hamilton, is largely responsible for the ratification of our
    Constitution. And grassroots lobbying is protected by each and every
    guarantee of that Constitution's First Amendment: (quote) ``Congress
    shall make no law respecting an establishment of religion, or
    prohibiting the free exercise thereof; or abridging the freedom of
    speech, or of the press, or the right of the people peaceably to
    assemble, and to petition the government for a redress of grievances.''
        But for grassroots lobbying, there would be no American Revolution,
    No Abolition of Slavery, No Labor Movement, No Women's Movement, and No
    Civil Rights Movement, because very few people would risk 10 years in
    prison and hundreds of thousands of dollars in fines for failing to
    perfectly capture every qualified instance of free speech made to spur
    their cause. How would Dr. Martin Luther King have fared under such a
    law?
        Subjecting to federal regulation the voluntary efforts of members
    of the general public to communicate their own views cuts to the core
    of the freedom of speech that has made this country the most vibrant,
    creative, and free nation on Earth.
        Grassroots lobbying regulation is unconstitutional, Mr. Chairman.
    It does nothing to even address the real ethical scandals in
    government, and it has no place in this bill now or in the future.
        With these concerns in mind, I look forward to hearing from all the
    witnesses today.

        Mr. Nadler. Thank you.
        We will now hear an opening statement from the
    distinguished Chair of the Committee, who has requested to make
    an opening statement.
        Mr. Conyers. Thank you, Chairman Nadler.
        I needed to just say a couple of things, because, in my
    mind, my approach here connects the subject matter today with
    the confidence that the American people have to have in the
    integrity of the ballot, the integrity of the voting process,
    and the lobbying reform that we are undertaking.
        And I commend you for doing this without the usual
    convenience of having a piece of legislation to discuss one way
    or the other. I think we have to take into consideration the
    unusual circumstances in which this hearing is taking place. I
    think it is something that must be done, because we have an
    obligation in the 110th to move forward on this.
        There are only three points that, to me, I would like to
    hear from the witnesses on: stronger revolving-door provisions,
    enhanced disclosure, and stronger enforcement. And it has
    already been remarked by all of you, how long should Members be
    delayed before they can lobby their former colleagues? I think
    this is a valid question that we all should entertain
    collectively.
        We need more disclosure from lobbyists about their clients
    and their contacts with Members of Congress. And so we need
    more sunlight on this part of the questions that we are
    examining.
        We want questions of gifts and pay travel to be very
    carefully parsed, so that we know that we are not just building
    a wall which can be gone around easily. And I think we should
    increase the penalties for non-compliance or violation of the
    lobbying disclosure act requirements.
        And so, with that said, I thank you for the opportunity to
    make an opening comment. And I look forward to this
    distinguished panel of witnesses.
        [The prepared statement of Mr. Conyers follows:]
    Prepared Statement of the Honorable John Conyers, Jr., a Representative
      in Congress from the State of Michigan, Chairman, Committee on the
    Judiciary, and Member, Subcommittee on the Constitution, Civil Rights,
                              and Civil Liberties
        First, I believe there is a strong need for lobbying reform
    legislation. A public opinion poll taken in 1964 found that 76% of the
    American people trusted their government to do what is right most or
    all of the time. More than forty years later, the landscape is
    decidedly different, with the vast majority of the public having a
    strong lack of faith in Washington's decisions. A January 2006 CBS
    News/New York Times poll found that only 27% of Americans said they
    trust the Federal Government to do what's right ``most of the time''
    and only 5% said that they trusted the Federal Government to do what's
    right ``just about always.''
        The public's skepticism is partially driven by recent scandals
    involving lobbyists and Members of Congress. We all know the details
    and there is no need to repeat them here. What is important about these
    scandals is that they have revealed systemic problems in the way the
    profession of lobbying is carried out and how lobbying activities are
    disclosed. We need to fix these problems.
        I believe that there are three essential ingredients to an
    effective lobbying reform measure:
    Stronger Revolving Door Provisions.
        Current law only requires Members to wait one year after they leave
    the Congress before they can lobby their former colleagues. This has
    led to the unfortunate appearance that people simply run for Congress
    as a stepping stone to a lobbying career. There is also the unfortunate
    appearance that former friends and colleagues, advocating on behalf of
    well heeled special interests, are given greater access to elected
    officials than members of the public who argue for the public good. I
    believe we need greater restrictions on this ``revolving door'' from
    congress to lobbying and sometimes back and forth again.
    Enhanced Disclosure.
        We also need more disclosure from lobbyists about their clients and
    their contacts with members of Congress. It has been said that sunlight
    is the best disinfectant. We should require lobbyists to file more
    detailed reports disclosing their contacts with Congress as well as
    certifications by the lobbyist that they did not give a gift or pay for
    travel in violation of the rules. These reports should be filed
    electronically, more frequently--quarterly, rather than semi-annually--
    and they should be made available to the public for free over the
    internet.
    Stronger Enforcement.
        Most significantly, an effective measure should increase the civil
    and criminal penalties for violation of or noncompliance with the
    Lobbying Disclosure Act requirements. This act alone will prove to be a
    great deterrent not only for corrupt activity, and also will signal the
    general importance of timely and accurate disclosures.
        I thank the panel for joining us and I believe that today's hearing
    will prove to be a positive step in the direction toward real and
    effective lobbying reform.

        Mr. Nadler. Thank you, Mr. Chairman.
        In the interest of proceeding to our witnesses, and mindful
    of our busy schedules, I would ask that other Members submit
    their statements for the record.
        Mr. Issa. Mr. Chairman, I have an opening statement.
        Mr. Nadler. Without objection, all Members will have 5
    days.
        Do you object?
        Mr. Issa. Yes, I do.
        Mr. Nadler. Very well. The objection is heard. Mr. Issa?
        Mr. Issa. Thank you.
        And I understand the shortness of time, and I will be
    brief. But I certainly think in order to have both sides be
    heard in the opening process, we need to try to have both sides
    heard.
        Mr. Chairman, I appreciate your holding this hearing. And
    I, too, would join with you in saying that there is a need for
    reform of many of the aspects of the existing campaign finance
    laws, not the least of which is the continued abuse by 527s of
    the clear intent of prior legislation.
        Additionally, though, I would like to bring note to the
    Chair's organizational letter on this hearing, in which, Mr.
    Chairman, you said the need for legislation--and the paragraph
    that concerns me the most for today is the one that says the
    need for further reform is highlighted by--during the 109th
    Congress, by scandals involving--and you go on to say Jack
    Abramoff. No problem there. You note Native American tribes.
        Of course, my only problem here is I neither see these
    Government entities from being covered under the Senate
    legislation, nor were they covered by the House rules, even
    though that was asked for, that we not give a pass to
    Government entities, which is exactly what Jack Abramoff took
    advantage of. So it is very clear that that is not a genuine
    statement of reform, either under the Senate bill or under
    Speaker Pelosi's reforms.
        But, additionally, I would like to take exception to the
    fact that all of the examples included only Republicans as
    scandalous. Additionally, not only did you not include Mr.
    William Jefferson's $90,000 of cash in his freezer, but you, in
    fact, included former Senator Conrad Burns, charged with
    nothing, and House Majority Leader Tom DeLay, whose only
    violation was a State law, which, to date, has not been
    adjudicated.
        So I think that to disparage two Republicans, and then to
    name two additional Republicans, both of whom have gone to
    jail, and gone to jail for existing laws, points up exactly the
    fallacy of the hearing here today.
        We are not talking about laws which are not in place,
    remedies that do not exist, just the opposite. What we are
    doing is showing examples of failure to act, when we already
    could have acted in the case of the Abramoff Government
    loophole. And, then, on a partisan-only basis naming Members of
    Congress--and former Members of Congress, I should say--two of
    whom would certainly not be covered by any or all of the
    proposed legislation. And the other two are in jail today for
    the crimes they committed.
        So, Mr. Chairman, I would hope that, in the spirit of
    bipartisan behavior, we would get to dealing with 527s, we
    would respect the constitutional right of free speech, and that
    we would move the legislation in a direction which was
    bipartisan and not one that starts off so overtly partisan.
        With that, I yield back.
        Mr. Nadler. Thank you.
        Without further objection, all other Members will have 5
    legislative days to submit opening statements for inclusion in
    the record.
        [The prepared statement of Mr. Cohen follows:]
     Prepared Statement of the Honorable Steve Cohen, a Representative in
     Congress from the State of Tennessee, and Member, Subcommittee on the
                Constitution, Civil Rights, and Civil Liberties
        I look forward to hearing from the witnesses today regarding Senate
    Bill S.1, which enhances the transparency for interactions between
    Members of Congress and lobbyists. Too much of the important decision-
    making in Washington is influenced by the power and influence exerted
    by lobbying activity which takes places far from public view. Such a
    situation can easily lead to abuses of the public trust, as evidenced
    by the high-profile scandals from the previous Congress. I hope to
    learn more not only about how S.1 increases transparency, but also
    about how we in the House of Representatives can further strengthen
    reform of the lobbying process.

        [The prepared statement of Mr. Jordan follows:]
      Prepared Statement of the Honorable Jim Jordan, a Representative in
                        Congress from the State of Ohio
        Mr. Chairman, I wish to express my approval of Sen. Robert
    Bennett's (R-UT) actions in introducing S.AMDT. 20--passed in the
    Senate on January 18--which removed the grassroots lobbying
    requirements from the bill that is before us today.
        The Senate rejection of this grassroots lobbying provision is
    entirely appropriate. It would be counter to our purposes in increasing
    transparency and accountability in government to pass a provision that
    would greatly restrict the ability of our constituents to organize and
    petition us. Would we not have much less accountability if we silence
    the families and taxpayers that we serve?
        Mr. Chairman, it is obvious that restricting grassroots organizing
    would run counter to the First Amendment of the United States
    Constitution, which we swore to uphold. We are clearly forbidden from
    making any law that would restrict each citizen's right to assemble and
    petition government. Grassroots organizations play a valuable role in
    keeping their members up-to-date on legislative activities in Congress.
    Because of them, citizens are able to stay better informed on the
    issues most important to them and better able to cut through the
    confusing jargon we often use here.
        It is clear that placing grassroots groups under the same
    restrictions as professional lobbyists will greatly slow their
    activities at best and kill many of them off at worst. Many small
    grassroots organizations will have difficulty understanding and
    following the new requirements they would be expected to meet, and the
    risks of accidental failure to comply would intimidate them into
    shutting down their activities. Our nation and our constituents would
    then be the poorer for it. We would be slowing democratic discourse.
        Mr. Chairman, I want to express my continued concern and wish that
    this grassroots lobbying provision NOT reappear in this House in any
    form. Democracy demands that we vigilantly preserve the rights of our
    constituents and we must keep the lines of communication with them wide
    open.

        Mr. Nadler. Without objection, the Chair will be authorized
    to declare a recess of the hearings.
        We will be joined today by our colleague, the gentleman
    from Massachusetts, Mr. Meehan. Our colleague has been a leader
    on this issue for many years. Without objection, the gentleman
    from Massachusetts----
        Mr. Franks. Mr. Chairman?
        Mr. Nadler. One second--will be permitted to sit with the
    Subcommittee to ask questions of the witnesses for 5 minutes.
        Mr. Franks. Mr. Chairman, at the request of the Ranking
    Member Smith, I respectfully object to the participation of a
    non-Subcommittee Member.
        House rules provide for participation in hearings only by
    the Members of that Committee or Subcommittee. House Rule 11
    states each Committee shall apply the 5-minute rule during the
    questioning of witnesses in a hearing until such time as each
    Member of the Committee who so desires has had an opportunity
    to question each witness.
        The Committee rules only explicitly allow the participation
    of non-Members of a Subcommittee in one instance, and that is
    for the Chair and Ranking Member to participate as ex officio
    Members of any Subcommittee.
        Any exception to the rules must be granted under unanimous
    consent, and, as a general policy, we intend to object to the
    participation of non-Members.
        Ranking Member Smith believes this should be an across-the-
    board policy at the Judiciary Committee.
        Put simply, membership on a Subcommittee should mean
    something. Subcommittee membership allows Members the privilege
    of participation.
        Also, setting a precedent that allows one non-Member of a
    Subcommittee to participate could lead to a situation where 10
    other Members might also want to do so.
        I want to stress that this objection has nothing to do with
    the Member in question or the subject matter at hand. Rather,
    we want to establish a general principle that being elected to
    a Subcommittee carries some real weight. Participation in a
    hearing should be the privilege of the Members of that
    Subcommittee.
        Thank you, Mr. Chairman.
        Mr. Nadler. I would remind my friend that under Mr.
    Chabot's chairmanship, when I was the Ranking minority Member
    for the last 6 years, this Subcommittee routinely extended the
    courtesy of allowing Members of the full Committee, and other
    Members, regardless of party, to participate in hearings of the
    Subcommittee.
        It was always our aim, despite the sometimes strenuous
    disagreements we had on policy, to conduct the business of the
    Subcommittee with dignity and comity. It is my hope that we
    will be able to continue to function in that collegial spirit.
        I would urge my friend to reconsider his objection and
    remind him that once people start objecting to routine
    courtesies, there is likely no end to it. I hope the Members
    will not drag the Subcommittee down that path.
        We have been sent here by the voters to do their business.
    I am determined to follow that mandate. And I hope we can
    continue, as we have in the past, to extend routine courtesies
    to other Members of the full Committee.
        Regardless, I remain committed to applying the rules in a
    fair and even-handed manner, but I would invite the gentleman
    to reconsider his objection, if he would.
        Mr. Franks. Mr. Chairman, at such time as the Ranking
    Member and the Chair of this Committee can have colloquy among
    themselves, I have to maintain my objection.
        Thank you, sir.
        Mr. Issa. Mr. Chairman, I would ask for a unanimous consent
    request.
        Mr. Nadler. The gentleman will state his unanimous consent
    request.
        Mr. Issa. My unanimous consent is, in the alternative to
    that proposal, that we divide our time equally, alternating 5
    minutes per side. If the majority would agree to a back and
    forth in perpetuity on a 5-minute-per-side, then we would be
    equally dividing the time, and it would be irrelevant who you
    chose to recognize on your side versus the Ranking Member on
    their side.
        Mr. Nadler. I am not sure I understand what you are
    proposing.
        Mr. Issa. For each hearing in which unanimous consent was
    granted. Mr. Chairman, on the floor, we normally divide time
    equally 30 minutes per side, 10 minutes per side. This allows
    for each side to control----
        Mr. Nadler. The rules provide that every Member or every
    person who sits here gets 5 minutes. Now, we have always
    followed the practice--and I don't know that anybody has ever
    kept count, and I certainly never have. I mean, sometimes it
    may happen to be, depending on attendance, more Republicans
    than Democrats or more Democrats than Republicans, and so be
    it. We have never said that, well, there are more Republicans
    here, so some Democrat will get 10 minutes. I mean, I don't
    think we want to go down that--every Member, 5 minutes, sir.
        Mr. Issa. Mr. Chairman, I offered the unanimous consent in
    order for the Chair of the full Committee and the Ranking
    Member to be able to work together in a collegial fashion to
    find an alternative that might be mutually accepted.
        Mr. Nadler. I am not sure--I am going to have to object at
    this time.
        Mr. Issa. That is fine.
        Mr. Nadler. Because I think we should continue to follow
    alternating 5 minutes, and we will let the full Committee Chair
    and the Ranking minority Member of the full Committee deal with
    this further.
        For what purpose does the gentleman from Tennessee seek
    recognition?
        Mr. Cohen. Mr. Chairman, if I could just make like a
    minute-and-a-half opener.
        Mr. Nadler. Without objection.
        Mr. Cohen. Thank you, Mr. Chairman.
        I am the freshman here and the new person. And I don't know
    about Republicans and Democrats and who did wrong. There has
    been wrong done by Democrats and there has been wrong done by
    Republicans.
        It was shown in the last election, though, that the people
    felt ethics was a major issue. And they didn't like a lot of
    the things they read about in Congress. And Congress went to
    its lowest point ever in the public's regard. It was like 30-
    something percent. And they voted the Democrats in in record
    numbers. So the public spoke.
        But, regardless, if they were speaking about Democrats or
    Republicans, but they said they want better ethics laws. And we
    need to work together.
        If Mr. Meehan has expertise--when I was chairman of State
    and local, and we dealt with ethics laws, we encouraged people
    like that to come forward and help us draw a better law for the
    public's interest.
        I would hope we could have the best expertise, the best
    experience and institutional knowledge to be brought here for
    the public's issue.
        This isn't a Republican-Democrat thing. This is to make
    Congress better, to uplift all of us.
        And I am really amazed that somebody brings up Dr. Martin
    Luther King in terms of 527s when you are talking about speech.
    Dr. King changed this Nation by the force of his issue, by the
    people going to the streets, by what mankind should have done
    100 years earlier to pass civil rights laws, after 100 years of
    Jim Crow. And to invoke Dr. King's name on money and politics
    is the opposite of what Dr. King was about. He was about
    issues. He was about spirit. He was about soul. He wasn't about
    dollars. And I object to that as the congressperson from the
    district where he was unfortunately killed.
        Thank you, Mr. Chairman.
        Mr. Nadler. Thank you.
        I would now like to introduce the distinguished members of
    our panel.
        We have Ken Gross. Our first witness is a leading expert in
    the law of lobbying and campaign finance. Ken Gross is a
    partner at the firm of Skadden, Arps, where he heads the
    political law group. He advises many Fortune 500 companies
    relating to the regulation of political activities.
        He appears frequently as a legal commentator on CNN, Fox
    and other networks. And his quotes appear regularly in the
    national newspapers. Formerly, he was associate attorney
    general at the Federal Election Commission, where he supervised
    the Office of the General Counsel Enforcement staff and oversaw
    the legal review of audits.
        He serves on the ABA Committee on Election Law and co-
    chairs the Practicing Law Institute's seminar on ``Corporate
    Political Activities.'' Also, he co-chairs the BNA publication
    on Corporate Political Activities.
        We also have Sarah Dufendach, who is the chief of
    legislative affairs for Common Cause, an organization created
    by John Gardner in 1970 as one of the very first non-partisan,
    public-advocate, Government-watchdog groups.
        I would like to join my colleagues in welcoming Sarah back
    to the Hill. She served in the United States House of
    Representatives as a top aide for former Congressman and former
    Whip David Bonior for over 25 years.
        Sarah left the Hill to become the chief operating officer
    for the Vietnam Veterans of America Foundation, a $25 million
    NGO, providing health care for landmine victims in 24 countries
    over four continents. It received the Nobel Peace Prize for its
    work in the coalition, Campaign for a Landmine Free World. From
    there, she joined Common Cause.
        We then have Professor Smith, who returned to the Capital
    University campus faculty in 2005, after 5 years here in
    Washington, where he served as commissioner, vice chairman and
    chairman of the Federal Election Commission. As chairman,
    Professor Smith oversaw the implementation of the McCain-
    Feingold campaign finance bill, and successfully fought to
    increase due process protections for defendants in FEC
    enforcement actions.
        As with our other witnesses, he has previously testified
    before Congress, and his writings have appeared in numerous
    academic journals and popular publications. He is the author of
    ``Unfree Speech: The Folly of Campaign Finance Reform.''
    Professor Smith is founder and chairman of the Center for
    Competitive Politics.
        And, finally, we have Thomas Mann, who is the W. Averell
    Harriman chair and senior fellow in Governance Studies at The
    Brookings Institution. Between 1987 and 1999, he was director
    of Governmental Studies at Brookings. Before that, he was
    executive director of the American Political Science
    Association.
        He earned his B.A. in political science at the University
    of Florida and his M.A. and Ph.D. at the University of
    Michigan. He first came to Washington in 1969 as a
    congressional fellow in the offices of Senator Philip Hart and
    Representative James O'Hara.
        Mr. Mann has taught at Princeton University, Johns Hopkins
    University, Georgetown, the University of Virginia and American
    University, and served as an expert witness in the
    constitutional defense of the McCain-Feingold campaign finance
    law.
        Gentlemen and ladies, each of your written statements will
    be made part of the record in its entirety. I would ask that
    you now summarize your testimony in 5 minutes or less.
        To help you stay within that time limit, there is a timing
    light at your table. I am sure you are aware of that. When 1
    minute remains, the light will switch from green to yellow, and
    then red, when the 5 minutes are up. Thank you very much.
        Mr. Gross?

      TESTIMONY OF KENNETH GROSS, SKADDEN, ARPS, SLATE, MEAGHER &
                                FLOM LLP

        Mr. Gross. Good morning, Chairman Nadler, Ranking Member
    Franks and other Members of the Committee. Thank you for
    inviting me to testify.
        I support S. 1. I think it is a good bill, in general, with
    certain reservations, which I will note.
        It deals with a lot of provisions: gift provisions, lobby-
    disclosure provisions, revolving-door provisions, et cetera.
        In terms of gifts, since the gift ban went into effect in
    the House on January 4th, it has actually, I think, worked
    fairly well.
        I wouldn't mind if there was a small de minimis exception.
    I don't know if the horse has left the barn on that, but I have
    dealt with more questions about tuna-fish sandwiches served
    during plant tours and fact-finding trips and a member visiting
    with an editorial board for a newspaper that may happen to have
    a lobbyist in their organization.
        And I think the executive branch 20-50 rule--20 per
    occasion and 50 for the year--just takes away a lot of small
    silly questions, so you don't have to throw a $10 bill on the
    table for a tuna-fish sandwich while you are touring around a
    plant or some other presentation that doesn't quite meet the
    widely attended exception.
        In terms of the lobby provisions, I support them. They have
    quarterly reporting, which is a good thing, more contracted
    periods for when the report has to be made on the public
    record. It has the gift disclosure on it. It cross references
    the FEC political information as well.
        I think that there are certain small provisions that should
    be blended, so the timing of the information on political
    contributions coincides with the FEC and that the threshold is
    over $200, not $200, which can create some problems with the
    way information is reported.
        In fact, I think it could be strengthened with some
    additional breakdown on the lobby report between in-house
    lobbying, outside lobbying and trade-association dues related
    to lobbying. That is all required on the current report, but it
    is one aggregate number. And I think if there was a breakdown
    of it, it would further compliance and be a more meaningful
    report.
        There is a part of the disclosure on the S. 1 proposal that
    does cause me some concern, and that has to do with the
    bundling provisions.
        What the law says is that if a lobbyist collects or
    arranges for contributions to be forwarded to a Member of
    Congress, a candidate, that that information has to be
    disclosed.
        I am having a lot of difficulty understanding what that
    provision is saying. I think I know what it means to collect,
    if you are actually gathering contributions and forwarding them
    to a candidate or even distributing coded envelopes, which is
    what is the law at the FEC right now. That is how they define
    bundling. But I do not know what it means to arrange for a
    contribution. I do not know what it means to have an informal
    agreement to forward contributions, solicit contributions,
    direct contributions, when you are not actually necessarily
    handling the contribution.
        If I serve on your national finance committee and I say I
    will raise $25,000 for you, and then I send an e-mail to
    everybody in the district who I think is likely to contribute
    to you, thousands of dollars are going to come in over the
    transom from those people, potentially, not because of my e-
    mail, but I could claim credit for it.
        And we all know that when a contribution comes over the
    transom, it has got many claimants, you know, perhaps more
    claimants than Anna Nicole's baby has. And we are going to see
    multiple reporting of the same money coming over. I think there
    needs to be either an elimination of the arrangement provision.
        The other part of it is I have to report, as a lobbyist,
    any contributions that the Member has actual knowledge that I
    have solicited or raised. How am I supposed to know what actual
    knowledge the Member or the candidate has of contributions have
    been raised? And, as has been noted, you know, there are
    serious penalties in these bills. And I think that has to be
    looked at again before it becomes part of a House bill.
        In terms of the grassroots lobbying, I know that is a hot-
    button issue. All I have really said about that is that I think
    that you could draft a grassroots-lobbying law that deals with,
    you know, sort of hired lobbying efforts over very high
    thresholds, and it would survive a facial challenge under the
    law. I mean, the 1954 decision on Harris does say that
    artificially stimulated letter-writing campaigns can be subject
    to disclosure.
        The only concern that I have in the area of grassroots is
    that it cannot interfere with associational rights of an
    organization, and it can set up a rubric for as-applied
    challenge. I think the grassroots provisions could be written
    to survive a facial challenge, but there probably would be a
    good bit of litigation over the application of it as to any
    particular group. And I have expressed some concerns about
    that, despite, I think, the ability of Congress to write a law
    that could survive an overall challenge.
        Finally, the revolving-door----
        Mr. Nadler. The 5 minutes has expired. Could you finish
    your statement?
        Mr. Gross. Sure.
        I think that the provision in the revolving-door section
    that requires Members of Congress not to participate behind the
    scenes goes too far. I think the 2-year restriction on making
    appearances works. But it is an infringement to extend it to
    behind-the-scenes activity. That is not where the undue
    influence is exercised. It is exercised when you are making an
    appearance or you are using the name of a Member in trying to
    get in the door.
        Thank you.
        [The prepared statement of Mr. Gross follows:]
                     Prepared Statement of Kenneth A. Gross

           (with the assistance of Matthew Bobys and Christine Kirk)
        Good morning Chairman Nadler, Ranking Member Franks, and Members of
    the Judiciary Subcommittee on the Constitution, Civil Rights, and Civil
    Liberties. Thank you for the opportunity to appear before you today to
    discuss the merits of S. 1 and the Senate approach to lobbying reform.
        My name is Kenneth Gross. I am a partner at Skadden, Arps, Slate,
    Meagher & Flom LLP, where I head the firm's political law practice. I
    specialize in compliance with campaign finance, lobbying, and ethics
    laws. Prior to Skadden, I was head of enforcement in the General
    Counsel's Office of the Federal Election Commission.
        S. 1 is, overall, a constructive step toward positive reform of the
    federal lobbying law. By emphasizing increased disclosure, the bill
    succeeds in effecting practical change in the way lobbying activities
    are reported and monitored without infringing upon our First Amendment
    rights as citizens to petition our government for a redress of
    grievances.
        With regard to gifts, the House has already adopted strong gift
    rule provisions. However, I continue to believe that there is room for
    a de minimis provision. It does not have to be $50, the previous
    threshold which some believe was abused and often exceeded, but a small
    exemption for meals of $20 or less per occasion would take care of many
    situations that may arise during, for example, a plant visit or other
    meetings at which a meal is served but where the requirements for a
    widely attended event are not met.
        The bill undertakes to increase the transparency of lobbying by
    requiring more frequent disclosure with a shorter lag time (days
    between the end of a reporting period and the report's due date), and
    by requiring more substantive disclosure--for example, requiring lobby
    registrants and their lobbyists to disclose their federal political
    contributions and those made by their PACs; and requiring the reporting
    of certain gifts to Members and legislative staff made by lobby
    registrants, lobbyists, and their PACs. However, there should also be a
    breakdown of the aggregate amount currently disclosed on a corporate
    lobby report. The following should be separately itemized: (1) the
    value of in-house personnel, including overhead expenses for all
    employees (not just those who meet the 20% threshold); (2) outside
    lobbyist fees; (3) trade association dues related to lobbying; and (4)
    travel and entertainment expenses.
        S. 1 takes great steps to increase the transparency of governmental
    decision-making by making electronic filing the standard and requiring
    reports to be searchable, sortable, and posted quickly for the benefit
    of the public.
        Although the bill does not create an independent enforcement body,
    it does increase the penalties for violations of the lobbying law and
    the making of gifts and for the first time exposes donors of gifts to
    civil enforcement liability. I advocate a meaningful and measured
    enforcement of the law to ensure compliance with these reforms.
        There are three different areas of reform that I would like to
    address today: bundling, grassroots lobbying, and the revolving door.
                                    bundling
        S. 1 requires lobby registrants and their lobbyists to disclose the
    recipients of contributions of $200 or more per year that they
    ``collected or arranged'' and the aggregate amount of those
    contributions. ``Collected funds'' include those that a lobbyist
    forwards to a campaign. ``Arranged funds'' include (i) formal and
    informal agreements to ``credit'' contributions as being raised,
    solicited, or directed by a lobbyist or (ii) actual knowledge by the
    lobbyist that the candidate is aware that the lobbyist raised,
    solicited, or directed the contributions. A lobbyist must also disclose
    the aggregate amount or a good faith estimate of the amount of campaign
    contributions raised at a fundraiser that he or she hosted or
    sponsored.
        Regarding ``collected funds,'' under current federal election law,
    an individual who bundles contributions must file a conduit report with
    the Federal Election Commission. It is impermissible for an individual
    acting as a representative of a corporation, for example as a Vice
    President for Government Affairs, to collect and forward contributions.
    However, an individual who has a significant position in a campaign and
    has been authorized by the campaign to raise funds, is permitted to
    collect and forward contributions without disclosing this activity.
    Thus, depending on the circumstance, bundling contributions may be
    illegal, require special disclosure, or require no disclosure.
        What constitutes ``arranging'' contributions is even more difficult
    to define in application. It is typical that contributions received by
    a committee have more than one individual claiming credit for them; it
    is up to the committee to sort this out. This provision might have the
    effect of individuals claiming credit for contributions beyond those
    they are responsible for raising. For example, an individual could have
    an agreement with a campaign to raise a certain amount of money, and
    send out hundreds of e-mails soliciting contributions, and claim credit
    for all contributions made by the recipients of those e-mails, which
    would result in an inflated amount of contributions credited to the
    individual and campaign.
        Additionally, much of the money raised for federal campaigns (in
    particular, for presidential campaigns) is not raised by lobbyists but
    by friends of a candidate or by senior corporate executives who do not
    meet the definition of ``lobbyist.'' The bundling rules only apply to
    contributions collected or arranged by those defined as lobbyists. If
    Congress is interested in a more complete disclosure provision, it
    would have to apply to all individuals, not just lobbyists.
    Consequently, the bundling provision as written in S. 1 is vague and
    open to misapplication. It should be drafted so it is limited to
    contributions physically handled by a lobbyist or those forwarded to a
    campaign in coded envelopes, as is currently required under Federal
    Election Commission rules.
                              grassroots lobbying
        As you know, the Senate deleted the grassroots lobbying provision
    from S. 1. The concerns over the now-deleted provisions have been
    generally overstated, but it would be wrong to require disclosure of
    communications among members or employees of an organization. If the
    required disclosure is limited to information regarding the cost of
    artificially stimulated letter-writing or electronic communications,
    sometimes called ``astroturf lobbying,'' there are fewer constitutional
    concerns. In 1954, the Supreme Court specifically upheld the disclosure
    of artificially stimulated letter-writing campaigns, and I believe
    would do so again if legislation was narrowly drawn to address
    disclosure of astroturf lobbying with a specific call to action on
    legislation in the communication. However, an as-applied challenge may
    succeed if a particular group can demonstrate that disclosure would
    result in harassment or threats of reprisal against group members.
                                 revolving door
        Any restrictions on prohibiting Members or certain staff from
    lobbying after they leave Congress must be narrowly and clearly drawn.
    Existing restrictions on appearances by Members and senior staff meet
    that standard. S. 1 contains a provision not previously seen at the
    federal level. It prohibits appearances as lobbyists and behind-the-
    scenes lobbying activities of former Members for two years after
    leaving Congress. At the very least, the enforceability of such a
    provision may be difficult. At worst, it may constitute an improper
    infringement on an individual's right to engage in certain lobbying
    activities.
        The proposed changes that we are discussing today only address part
    of the puzzle; the regulation of lobbying activity is a delicate
    process. Lobbying is a protected core First Amendment right. Effective
    disclosure is the only viable method of regulation, and this bill
    addresses shortcomings in the current law. It is my sincere hope that
    with the changes proposed in S. 1 and the other issues under discussion
    here, it will start the process of restoring public confidence in the
    legislative process.

        Mr. Nadler. Thank you very much.
        Ms. Dufendach?

                TESTIMONY OF SARAH DUFENDACH, CHIEF OF
                   LEGISLATIVE AFFAIRS, COMMON CAUSE

        Ms. Dufendach. Good morning. My name is Sarah Dufendach. I
    am the chief of legislative affairs for Common Cause. I want to
    thank Chairman Nadler and Ranking Member Franks and the
    Subcommittee for holding this important hearing and for
    inviting Common Cause.
        For 37 years, Common Cause has worked for an open,
    accountable and ethical Congress. These issues matter greatly
    to our 300,000 members across the country.
        The Subcommittee has asked this panel to give our
    perspectives on S. 1, focusing on three particular issues and
    how we think the legislation could be made better.
        Common Cause strongly supports the bundling provisions of
    S. 1. Bundling is becoming so prevalent that many presidential
    candidates are feeling the public pressure to disclose their
    own bundling. When lobbyists disclose only how much they
    personally give to a Member's campaign, it may vastly
    underestimate the true efforts that that lobbyist could be
    making in soliciting substantially more money for that Member.
    The absence of this information gives an unrealistic picture of
    the role that lobbyists are playing in election fundraising.
        Common Cause also strongly supports the revolving-door
    provisions in S. 1. Changing the cooling-off period for Members
    of Congress from 1 year to one congressional session better
    reflects the realities of the legislative and election cycles.
        Lobbying is much more than just contacting Members. So the
    definition should be expanded to reflect the full range of
    knowledge and skills which make hiring former Members so
    attractive to wealthy and powerful special interests.
        The cooling-off period only affects staff making over
    $110,000. It is still just 1 year and only affects lobbying
    contacts, not activity. It does expand the staff lobbying
    prohibition from just their former Members and Committees to
    the entire body, to the whole House. But that better reflects
    the true reach that staff at that pay grade have.
        Common Cause believes Astroturf lobbying activities should
    be disclosed. For those who think we don't need this type of
    disclosure, I have got three words: Harry and Louise.
        According to media accounts, Health Insurance Association
    of America spent $17 million to pay for TV ads attacking the
    Clinton health-care plan. None of that multimillion-dollar
    campaign had to be publicly disclosed.
        The public and elected officials need to know who is
    sponsoring major campaigns seeking to turn public opinion.
    Otherwise, we can't understand the motivation and the true
    objectives behind that effort.
        S. 1 is, indeed, landmark ethics legislation. But most
    reform groups think it falls far short in one very important
    area, and that is enforcement of congressional ethics rules.
    Stricter rules mean little if they are not enforced. And the
    public has lost faith in the House to enforce its rules and
    discipline its own Members.
        In fact, the public, by 80 percent, supports establishing a
    permanent, independent commission to investigate and enforce
    ethics rules for Members of Congress and their staff.
        State legislatures in 23 States have adopted some form of
    independent ethics enforcement. The Kentucky legislative ethics
    commission was established 14 years ago. When surveyed, 97
    percent of its legislators responded that an independent ethics
    commission does a better job overseeing compliance with State
    ethics rules than committees of legislators, such as the House
    or Senate Ethics Committees. They felt the biggest contribution
    it had made is its ability to depoliticize ethics enforcement.
        Some critics say that independent ethics enforcement is
    unconstitutional. The Constitution gives the House and the
    Senate the power to punish its Members for disorderly behavior.
    But legal scholars widely believe that Congress has the power
    to delegate the receipt and investigation of complaints to an
    independent body, provided that each chamber retain its power
    to make the final decision about disciplining its Members.
        My time is running out, and so I will just note that
    Representative Michael Castle and Representative Todd Platts
    have introduced a bill, H.R. 97, to establish an independent
    ethics commission in the House, which has been referred to this
    Subcommittee.
        With that, I thank you for this opportunity to testify. And
    I look forward to your questions.
        [The prepared statement of Ms. Dufendach follows:]
                     Prepared Statement of Sarah Dufendach

        Mr. Nadler. Thank you. And I congratulate you for coming in
    under the 5 minutes.
        Professor Smith?

         TESTIMONY OF BRADLEY SMITH, PROFESSOR OF LAW, CAPITAL
                         UNIVERSITY LAW SCHOOL

        Mr. Smith. Thank you, Mr. Chairman, Ranking Member Franks
    and Members of the Committee. My name is Brad Smith. I am a
    professor at Capital Law School. I practice law with the firm
    of Vorys, Sater, Seymour and Pease.
        And I am here today in my capacity as chairman of the
    Center for Competitive Politics, which works to educate the
    public on the benefits of free and open political
    participation.
        The point I would leave for you, more than anything, is to,
    as you consider what approach to take, is to think about what
    exactly is the goal, what is the harm that you are trying to
    address, and how do the measures that you are considering
    address it.
        For example, S. 1 requires quite a bit of lobbying
    reporting. Now, I don't have a particular problem with that. I
    think it helps the public understand what lobbyists are doing
    in terms of contact with their legislators to help them
    understand what Government is doing.
        On the other hand, much of that reporting is simply
    duplicative of Federal Election Commission reporting. And much
    of that information that the Senate bill would require to be
    put into a database is already available through private
    databases, such as Political Money Line and Open Secrets and so
    on. And, as the law is drafted, it would seem to require a
    separate reporting date. So the people would have to report the
    same thing, but twice, to different folks on different
    timelines.
        So I would just urge you to think about these things. Is it
    really necessary or is this just kind of show to make the
    public feel good, like something is going on? There is a need
    for something to be done substantively. But let's make sure we
    don't mess it up by just kind of throwing in the kitchen sink.
        I have listed some various concerns in my prepared
    testimony. I share many of Mr. Gross's points about vagueness
    of some of the issues. I do think there are problems. And I
    think one reason there is some issue with the vagueness on some
    of these terms, which I have highlighted in my testimony, is
    that it is not entirely clear what is the harm you are trying
    to address. And so you end up with a provision that is fairly
    vague in trying to address it.
        In terms of an ethics committee, you know, I don't have any
    strong opinion as to whether you ought to have a separate
    ethics group or not. If you want a little police force that
    goes around and checks up on you, that is kind of your
    business.
        I do think that the public often has shown, and I think
    benefits, from being able to hold Members directly responsible
    for what they do, and I think they have shown that they can do
    that.
        I note that the list that is included in Ms. Dufendach's
    testimony, what States have ethics committees, that the most
    toughest ones are Kentucky. No scandals there with Governor--no
    scandals in Connecticut, another one of the toughest ones where
    the governor has had to resign not long ago.
        Whereas, among those States that don't have an independent
    ethics committee are such hotbeds of corruption as Iowa, Utah,
    Vermont, and a State called the best-governed State in the
    Nation by Governing Magazine, the State of Virginia. But, you
    know, you do what you want.
        I do want to address the grassroots lobbying provisions
    here. They are not in this bill, but, obviously, there are
    people who want them to be in this bill.
        Ms. Dufendach is a good advocate for her position, a
    skilled woman. I don't know her, but I am impressed by her
    background, and I note that she has spent her entire career in
    Washington.
        And Mr. Mann I have known for several years, and he is also
    going to urge you to regulate grassroots lobbying. He is a
    talented political scientist, one of the most respected opinion
    leaders in Washington. If you were to go around and try to come
    up with somebody you would give the title of Mr. Washington to,
    it might be Tom Mann, right?
        Now, I come from a little town in Ohio called Granville,
    Ohio. It has got 3,000 residents, and I will tell you that one
    thing people there don't care about at all and are not
    concerned about is that citizens are contacting Congress. That
    just doesn't worry these folks in the least, nor do they
    particularly care why they are contacting Congress.
        When a citizen hears about something, about an issue, and
    it moves that citizen to want to take action, it doesn't matter
    where that comes from. And the corrupting link that is supposed
    to be there between lobbyist and the Government is broken,
    because a citizen--a real person, not a fake person, not an
    Astroturf person--a phrase, frankly, I find insulting--a real
    voter, one of your constituents, has to decide to take action
    and call you up. And that breaks that link between the
    lobbyist.
        It doesn't matter whether the person hears this from a
    radio talk show. It doesn't matter whether they are misinformed
    from a New York Times editorial. The fact is a citizen has
    acted.
        So pay attention to what it is that you are trying to get
    at. And I think if you do that, you will recognize that
    grassroots lobbying is actually a check on the type of insider
    lobbying that created the kind of scandals that brought some of
    you in the majority into power with people such as Jack
    Abramoff.
        Thank you very much.
        [The prepared statement of Mr. Smith follows:]
                     Prepared Statement of Bradley A. Smith
        Mr. Chairman, Ranking Member Franks, and members of the Committee:
        Thank you for inviting me here to testify today on the important
    issue of lobbying reform. By way of introduction, I am currently
    Professor of Law at Capital University in Columbus, Ohio; founder and
    Chairman of the Center for Competitive Politics, and Of Counsel in the
    Columbus and Washington offices of the law firm of Vorys, Sater,
    Seymour & Pease. From 2000 to 2005 I served as Commissioner on the
    Federal Election Commission, including a term as Chairman in 2004. In
    this latter capacity, I was privileged to travel and speak throughout
    the country with ordinary Americans concerned about corruption in
    government and the perceived remoteness of Washington to their everyday
    concerns. Although Vorys, Sater, Seymour and Pease represents many
    clients before the government, I am not a registered lobbyist and do
    not lobby myself. I address the Committee today on my own behalf and
    that of the Center for Competitive Politics, and do not speak for the
    law firm of Vorys, Sater, Seymour & Pease or Capital University.
        The Center for Competitive Politics (``CCP'') is a non-profit
    educational organization operating under Section 501(c)(3) of the tax
    code, with offices in Arlington, Virginia. Through studies, reports,
    conferences, and assistance in litigation, CCP seeks to educate the
    public and lawmakers on the operation and effects of money in the
    political and legislative systems. In light of the comments to follow,
    I also note that neither CCP nor Vorys Sater or Capital University
    engage in what is called ``grassroots lobbying.''
        As the House considers lobbying reform, it is important to balance
    carefully targeted regulations that address real abuses, while
    minimizing the burden on the vast majority of lobbyists who are honest,
    dedicated individuals helping citizens to exercise their fundamental
    Constitutional Rights of Free Speech and the Right to Petition the
    Government for Redress of Grievances. These are among the most
    important rights guaranteed by our Constitution. Yet all too often in
    the past, we have allowed isolated incidents of improper behavior--
    scandal--to stampede us to hastily conceived, ill-considered measures
    that restrict these important Constitutional rights while doing little
    to address the abuses that allegedly justify the restrictions. All of
    us here know that lobbyists can provide a valuable function, providing
    members with useful, important information on public opinion, and also
    with the information needed to craft wise, beneficial, effective
    legislation. We know that abuses exist, but that they are the
    exception, not the rule.
        We must also recognize that whatever steps Congress takes, there
    will be a substantial element of popular distrust of the government in
    general and Congress in particular. This is normal in every democracy--
    around the world, even at the peaks of confidence in government in the
    societies most trustful of government, there is typically one-quarter
    to one-third of the electorate that believes that government cannot be
    trusted to pursue the public good. This is normal and indeed it can be
    healthy--it is this skepticism that enables the public to serve as a
    watchdog against government corruption, and as a guardian of its own
    rights against government overreach. There is no legislation you can
    pass, no magic wand you can wave, that will make all Americans trust
    their government, and it would be a mistake to try. Thus, it is
    important to pass serious, balanced legislation, that addresses
    specific and real problems, rather than to engage in populist
    grandstanding or pass measures merely because they ``send a message.''
        The problem, as I see it, based on my travels around the country
    and my conversations with lobbyists, officeholders, civic leaders, and
    ordinary citizens, is that lobbyists have access to information, and to
    legislators, that is not known to the general public. In a small number
    of isolated cases, lobbyists have used their access, outside of the
    public eye, to bribe or improperly influence members. More commonly,
    the simple lack of transparency, even absent any improprieties, has
    resulted in the public being closed out of decisions made by the
    government. I have never heard it expressed, however, that the problem
    is too much involvement by the American people, or that the people are
    contacting members of Congress, or that citizens and groups are
    attempting to provide information to the people at large. Thus, the
    Senate approach is quite right to focus on legislative transparency,
    and avoid the efforts by some to use lobbying reform to pursue other
    agendas that aim to limit, rather than enhance, popular checks on
    government.
        In particular, the Senate was quite correct in removing from the
    bill, as it was originally introduced, Section 220, pertaining to the
    regulation and in particular the disclosure of grassroots lobbying. As
    a matter of constitutional law, the Supreme Court has repeatedly
    recognized a right to engage in anonymous political speech. These cases
    include Thomas v. Collins, 323 U.S. 516 (1945) (striking down a statute
    requiring labor organizers to register and disclose to the government
    prior to speaking); NAACP v. Alabama, 357 U.S. 449 (1958) (guaranteeing
    the NAACP the right to protect the identities of its members and
    financial supporters); Talley v. California, 362 U.S. 60 (1960)
    (protecting anonymous speech to the public); McIntyre v. Ohio Elections
    Commission, 514 U.S. 334 (1995) (upholding the right to anonymous
    speech on political issues during the course of a campaign); and
    Watchtower Bible & Tract Society v. Village of Stratton, 536 U.S. 150
    (2002) (striking down a statute requiring prior registration with
    government). Only in the narrow circumstances of political
    advertisements directly related to a candidate election and either
    expressly advocating the election or defeat of a candidate or involving
    substantial expenditures for broadcast ads mentioning a candidate
    within 60 days of an election has the Court ever upheld restrictions on
    anonymous speech. See Buckley v. Valeo, 424 U.S. 1 (1976); McConnell v.
    Federal Election Commission, 540 U.S. 93 (2003). Regulation of
    grassroots lobbying through mandatory disclosure of funding sources
    directly violates the Constitution, as repeatedly interpreted by the
    Supreme Court.
        Moreover, as a policy matter, regulation of grassroots lobbying
    makes little or no sense in addressing the problem of government
    corruption. Contact between ordinary citizens and members of Congress,
    which is what ``grassroots lobbying'' seeks to bring about, is the
    antithesis of the ``lobbying'' at the heart of the recent congressional
    scandals. It is citizens expressing themselves to fellow citizens, and
    citizens to members of Congress. That they are engaged or
    ``stimulated'' to do so by ``grassroots lobbying activities'' is
    irrelevant. Regulation that would hamper efforts to inform and motivate
    citizens to contact Congress will increase the power of professional
    lobbyists inside the beltway. Regardless of what lobbying reform is
    passed, not even the most naive believe it will mean the end of the
    professional, inside-the-beltway lobbyist. Thus, grassroots voices
    remain a critical counterforce to lobbying abuse.
        Disclosure of the financing, planning, or timing of grassroots
    lobbying activities adds little, and will often be harmful, leading to
    exactly the type of favoritism and/or negative pressure that the public
    abhors. I want to stress that I have first hand experience with being
    on the receiving end of grassroots lobbying campaigns. As a
    Commissioner on the Federal Election Commission, I was the target of
    several such campaigns, one of which generated over 100,000 citizen
    communications. I found it helpful to hear from the public, even if in
    the form of mass generated campaigns. I know that these campaigns were
    easily detected and appropriately discounted (but not ignored or
    resented). No member of Congress even remotely in touch with his
    district will be unaware that a sudden volume of similar calls,
    letters, or emails coming from his or her district is possibly, if not
    probably, part of an orchestrated campaign to generate public support.
    But because the callers themselves are real, there is little to be
    gained by knowing who is funding the underlying information campaign
    that has caused these constituents to contact their Members. The
    constituent's views are what they are; the link between lobbyist and
    Congress is broken by the intercession of the citizen herself.
        Various Washington-based organizations, many of which employ
    registered lobbyists and many of which have no membership base, have
    attempted to denigrate this citizen activity by referring to it as
    ``Astroturf'' lobbying, implying that it is somehow fake or fraudulent.
    But there is nothing fake about real citizens--that is, voters and
    constituents--having views on issues and calling their representatives
    in Washington. It simply does not matter if those views were stimulated
    by a newspaper editorial, a conversation with a friend, a speech at the
    local Rotary Club, or a paid communication. These are real people with
    real concerns, not ``fake'' or ``Astroturf'' constituents.
        Moreover, there are many valid reasons for preferring anonymity.
    Anonymous speech is not illegitimate in some way. Remember that the
    Federalist Papers were published anonymously, in order to force readers
    to deal with the arguments put forth rather than engaging in ad hominem
    attacks against the authors. As the Supreme Court put it in McIntyre,
    in an opinion written by Justice Stevens, ``[t]he decision to favor
    anonymity may be motivated by fear of economic or official retaliation,
    by concern about social ostracism, or merely by a desire to preserve as
    much of one's privacy as possible.'' 514 U.S. at 357.
        Many members of this Committee have expressed deep concern about
    what was called the ``K Street Project,'' in which it is believed that
    pressure was placed on organizations in Washington to hire lobbyists on
    the basis of partisan considerations. Of course, the identity of
    lobbyists is necessarily known, and the public can benefit from knowing
    who lobbyists are and with whom members are meeting. That is how the
    public can provide a check on undue influence exercised behind the
    scenes. But grassroots lobbying contacts do not pose the possibility of
    behind the scenes meetings or bribery or improper influence, because by
    definition grassroots lobbying relies on voters--constituents--to take
    action. Efforts to force disclosure of grassroots lobbying needlessly
    open up that field to K Street Project-type pressure. Such forced
    disclosure can make seasoned professionals reluctant to assist
    unpopular causes or those contrary to the current administration,
    resulting in a chilling effect that would deprive grassroots
    organizations of the services of talented consultants who make their
    livings, in part, on Capitol Hill. Indeed, those consultants most
    likely to abandon the field will often be those most motivated by
    ideology. Those motivated by pecuniary gain will have an added
    incentive to bear the cost of disclosure and carry on.
        Finally, let me note that I have heard, in ways that cause me to
    believe it to be true, that some members have said that ``disclosure''
    is, ``not regulation.'' How absurd! If you honestly believe that, then
    I urge you to begin filling out the forms yourselves and imagine that
    you face civil and criminal penalties for any errors or late filings.
    Clearly, disclosure is regulation, and often the most intrusive
    regulation.
        In summary, the Senate wisely stripped regulation of grassroots
    lobbying from the bill, and this House would be wise to similarly
    reject opportunistic efforts by various Washington-based interest
    organizations to stifle citizen speech. As further explication of the
    points raised above, I have attached to this statement a copy of CCP's
    Policy Primer, ``Grassroots Lobbying Proposals Seem Not to Further
    Congress' Interest in Correcting Lobbying Abuses.''
        Let me now address just a few specifics of what was retained in
    Senate Bill 1. First, a Section 212 of S. 1 requires that registrants
    must file quarterly reports ``Not later than 45 days after the end of
    the quarterly period beginning on the 20th day of January, April, July
    and October of each year. . . .'' Accordingly, the quarterly reporting
    period for the first quarter of the year will be January 20th through
    April 19th--not January 1st through March 31st. Needless to say, using
    a different quarterly reporting period for Lobbying Disclosure Act
    purposes than is used for FEC reporting purposes will create
    unnecessarily burdensome accounting problems for separate segregated
    funds whose contributions now have to be reported to the FEC, the Clerk
    of the House and the Secretary of the Senate. I have been told that
    this was not intended, but it appears to be the law as passed out of
    the Senate. I urge you to bring this provision into harmony with FEC
    reporting dates.
        More substantively, Sec. 212 is one of the key sections of the
    Senate bill, requiring added disclosure of lobbyists political
    contributions. However, I would note that many of the terms in that
    section are vague and left undefined. For example, reporting is
    required whenever a ``fundraising event was hosted, co-hosted, or
    sponsored.'' The FEC has no definition of any of these terms. An
    individual might raise money for an event but not be listed as a
    ``host'' or ``sponsor'' of the event; another person might be listed as
    a ``host'' but play no role in raising funds. Indeed, there is no clear
    definition even of what constitutes an ``event.'' What is an event? Any
    gathering? Must it be a physical gathering, or is a video or virtual
    gathering sufficient? If all that is targeted is ``events,'' will
    anything have been accomplished? If these terms are left vague, they
    subject honorable people to civil and even potential criminal penalties
    for honest efforts to engage in political activity, while at the same
    time they may not even address the issues you seek to address. I would
    urge you to make sure you know what the purpose this regulation is, and
    to see that it is appropriately targeted.
        Section 116 of S. 1 would deny COLA adjustments to members who vote
    against them. I am one of the few people--sometimes I think the only
    person--in the country willing to go on record and say that I believe
    members of Congress ought to be paid more--substantially more--than
    they are currently paid. During the last campaign, I spoke publicly
    against the tireless demagoguery about members ``voting themselves pay
    raises,'' a charge usually made by challengers who fully expected, if
    victorious, to receive the benefits of these past COLA adjustments.
    Nevertheless, I believe it very bad policy to hold a member's own
    income hostage to his voting in a particular way on any bill or
    resolution, and equally bad to create several classes of members
    receiving different levels of pay. Further, I do not see what this
    provision has to do with lobbying reform.
        I would urge you to reject the Senate approach of establishing a
    ``Commission to Strengthen Confidence in Congress.'' The Commission's
    mission, as defined in S. 1, seems to suggest partisan retaliation for
    legislation in some cases long past. I believe it will be destructive
    of efforts to create genuine, nonpartisan ethics reform, or to increase
    public confidence in Congress, to inform the public that you have
    created another ``commission'' with a specific mission to focus on a
    few laws--some passed as long as 5 years before we can expect the
    Commission to meet--apparently chosen for partisan reasons. Some
    members will no doubt draw satisfaction from such an approach, but
    frankly it mocks the entire ethics and lobbying reform project.
        Let me conclude, generally, by urging moderation. Aim for real
    problems, not appearances. For example, Sec. 212 of S. 1 requires added
    disclosure of contributions arranged as small as $200. There is some
    logic here, as $200 is the threshold for full disclosure of
    contributions under the Federal Election Campaign Act. Yet I doubt that
    any of us in this room really believe that $200 in campaign
    contributions is going to corrupt anybody. Such low thresholds lead to
    voluminous reports that can actually make it harder to find larger
    volumes of money.
        Similarly, it is easy to dictate voluminous reporting requirements
    for members and staff. But be careful. Complying with formalistic
    reporting requirements should not become the major function of
    Congress. Congress must operate ethically, to be sure, but it must
    exist for reasons other than to comply with ethics rules as well.
        There are changes, such as earmark reform, that can and should be
    done, many of which are included in the Senate bill. But understand
    that nothing you do will eliminate or prevent every episode of
    corruption--there simply are some corrupt people in the world--and
    trying to do so burdens good, ethical people and can even hinder
    efficient, effective government. Similarly, it is normal and healthy
    that the public have some skepticism of what its government is doing--
    nothing you can do can eliminate all such skepticism. Finally, remember
    that the problem is ``insider'' abuses, not participation by the public
    at large, and avoid those who, in pursuit of their own insider agendas,
    urge regulation of grassroots activities.
        Thank you.
                                   __________

                                   ATTACHMENT

       POLICY PRIMER: Grassroots Lobbying Proposals Seem Not to Further
                Congress' Interest in Correcting Lobbying Abuses
                            By Stephen M. Hoersting
                              and Bradley A. Smith
                                 (614) 236-6317

                                    Abstract
        Of the several policy proposals circulating Capitol Hill to correct
    lobbying abuses, strengthen the relative voice of citizens, and add
    accountability to the earmarking process, one policy prescription seems
    oddly out of place. Proposals for so-called ``grassroots lobbying
    disclosure'' do nothing either to sever the link between lobbyist cash
    and lawmakers' pecuniary interests, or to strengthen the relative voice
    of citizens. Grassroots lobbying--encouraging or stimulating the
    general public to contact lawmakers about issues of general concern--is
    citizen-to-citizen communication that fosters citizen-to-lawmaker
    communication. It correspondingly weakens the relative strength of
    lobbyist-to-lawmaker communications, in furtherance of Congress'
    objective in seeking lobbying reform.
        Efforts to limit grassroots lobbying, require disclosure of donors,
    or compel lobbyists to register with the government to assist groups in
    contacting fellow citizens, strips donors and consultants of
    constitutionally guaranteed anonymity, and would deprive organizations
    championing unpopular causes of skilled representation. This anonymity,
    long recognized and protected by the Supreme Court, fosters political
    association, guards against unwarranted invasions of privacy, and
    protects the citizens who fund or assist groups such as Progress for
    America or People for the American Way from calumny, obloquy, and
    possible retribution--including retribution by public officials.
        Disclosure is not always a good thing. The rationale for requiring
    disclosure of contributions to candidate campaigns, and disclosure of
    direct lobbying activity, is the same for protecting anonymity in the
    discussion of policy issues: to protect citizens from retribution by
    abusive officeholders. History demonstrates that while such retribution
    may be uncommon, it is real. Indeed, even today we read of a Texas
    prosecutor who has subpoenaed donor records for a group after the group
    ran grassroots lobbying ads that took a position contrary to that of
    the prosecutor.
        The abuse of non-profit entities by a handful of lobbyists to host
    golf trips or entertain lawmakers with donations from lobbyist clients
    can be cured in other ways, without enacting disclosure measures too
    attenuated to the problem Congress seeks to correct, and that could
    damage or diminish America's system of information exchange for years
    to come.
                                  introduction
        Senator Dianne Feinstein recently captured public sentiment when
    she said that there should ``be a wall'' between registered lobbyists
    and the pecuniary interests of Members of Congress.\1\ The problem is
    not the technical and professional information lobbyists provide
    lawmakers, nor is it information on the opinions of the American people
    that honorable and ethical lobbyists provide lawmakers everyday.
    Indeed, it is the relative voice of the average citizen that the
    Senator wants to strengthen. This is why Senator Feinstein and Senate
    Rules Committee Chairman Trent Lott have proposed bringing sunlight to
    the earmarking process and other measures that would weaken the link
    between lobbyist cash and lawmaker policy.\2\ Senators Lott and
    Feinstein are not alone. Other proposals include gift bans, travel
    restrictions, other types of earmark reform, revoking floor privileges
    of former lawmakers, slowing the ``revolving door,'' and limiting
    lobbyist donations to charities affiliated with Members, to name a few.
    What all of these proposals seek to do is to limit the direct pecuniary
    exchange between lobbyists and lawmakers.
        Circulating among these provisions, however, is another
    recommendation that is oddly out of place. It has little or nothing to
    do with reducing the coziness between lobbyists and lawmakers. These
    are the so-called ``grassroots lobbying disclosure'' provisions now
    under consideration in various quarters, which require organizations
    and associations to disclose in detail their efforts to run issue-
    oriented advertising aimed at fellow citizens, and in some cases, to
    identify donors.
        In proposals to disclose grassroots lobbying, we are witnessing two
    canons of political law on an apparent collision course: that
    government corruption is cured by disclosure; and that the right of
    individuals to speak and associate freely depends upon their ability to
    do so anonymously. But the conflict is a false one--a byproduct of
    fuzzy thinking--because both canons achieve the same purpose when each
    is applied to its proper context. Both protect citizens from abusive
    officeholders. Disclosure regimes for campaign contributions protect
    citizens from officeholders who have free will and can confer benefits
    on large contributors (and pain on opponents) by passing future
    legislation. Disclosure regimes for true lobbying activities, that is,
    consultants engaged in face-to-face meetings with officeholders,
    protects citizens in a similar manner.
        Regimes that protect the right to speak anonymously with fellow
    citizens about issues, even issues of official action or pending
    legislation, also protect citizens from abusive officeholders by
    reducing an officeholder's ability to visit retribution on those who
    would oppose his policy preferences. Citizens learn much about the
    relative merits of a candidate by knowing who supports him. They learn
    about the legislative process by knowing who is paying consultants to
    meet with officeholders directly. But citizens learn little about the
    relative merits of a clearly presented policy issue by knowing who
    supports it. Grassroots lobbying registration and disclosure regimes
    that would provide honest citizens and abusive officeholders alike with
    knowledge of which groups and individuals support which issues,
    including the timing and intensity of that support, impose too high a
    cost for too little benefit in a constitutional democracy.
                        the value of grassroots lobbying
        Far from being part of the current problem, grassroots lobbying is
    part of the solution to restoring the people's faith in Congress. Polls
    show that Americans are fed up with what is increasingly seen as a
    corrupt Washington way of business. Ninety percent of Americans favor
    banning lobbyists from giving members of Congress anything of value.
    Two-thirds would ban lobbyists from making campaign contributions. More
    than half favor making it illegal for lobbyists to organize
    fundraisers.\3\ Seventy six percent believe that the White House should
    provide a list of all meetings White House officials have had with
    lobbyist Jack Abramoff.\4\ But there is no evidence whatsoever that the
    public views grassroots lobbying activity as a problem.
        Indeed, even the name grassroots ``lobbying'' (as opposed to
    ``activism,'' ``communication,'' or other term) is in some sense a
    misnomer. ``Grassroots lobbying'' is merely the effort to encourage
    average citizens to contact their representatives about issues of
    public concern. It is not ``lobbying'' at all, as that phrase is
    normally used outside the beltway, meaning paid, full-time advocates of
    special interests meeting in person with members of Congress away from
    the public eye. What the public wants is what Senator Feinstein and
    others have recognized--they want to break the direct links between
    lobbyists and legislators, thus enhancing the voice and influence of
    ordinary citizens. They do not want restrictions on their own efforts
    to contact members of Congress, or on the information they receive
    about Congress.
        Contact between ordinary citizens and members of Congress, which is
    what ``grassroots lobbying'' seeks to bring about, is the antithesis of
    the ``lobbying'' at the heart of the Abramoff scandals. It is ordinary
    citizens expressing themselves. That they are engaged or ``stimulated''
    to do so by ``grassroots lobbying activities'' is irrelevant. These are
    still individual citizens motivated to express themselves to members of
    Congress.
        Regulation that would hamper efforts to inform and motivate
    citizens to contact Congress will increase the power of professional
    lobbyists inside the beltway. Regardless of what lobbying reform is
    passed, not even the most naive believe it will mean the end of the
    professional, inside-the-beltway lobbyist. Thus, grassroots voices
    remain a critical counterforce to lobbying abuse. Recently one member
    of Congress expressed his concern that Jack Abramoff's Indian Tribal
    clients were used to contact Christian Coalition members, ``to stir up
    opposition to a gambling bill.'' \5\ But it cannot be denied that the
    individuals who responded to that grassroots lobbying were ordinary
    citizens who were, in fact, opposed to a gambling bill. They are
    precisely the type of people that Congress ought to hear from, rather
    than or in addition to inside-the-beltway lobbyists. Regardless of how
    they learned about the issue, they had to make the decision that the
    issue was important to them, and take the time to call Congress.
        Disclosure of the financing, planning, or timing of grassroots
    lobbying activities adds little, and will often be harmful, leading to
    exactly the type of favoritism and/or negative pressure that the public
    abhors. No member of Congress even remotely in touch with his district
    will be unaware that a sudden volume of calls coming from his or her
    district is possibly, if not probably, part of an orchestrated campaign
    to generate public support. But because the callers themselves are
    real, there is little to be gained by knowing who is funding the
    underlying information campaign that has caused these constituents to
    contact their Members. The constituent's views are what they are; the
    link between lobbyist and Congress is broken by the intercession of the
    citizen herself.
        Disclosure, however, comes with a price. The most obvious is that
    it re-establishes the link between the lobbyist and the officeholder.
    When the source behind the grassroots campaign is anonymous--either a
    donor or consultant--the opportunity for favoritism, and for
    retaliation, is gone. Mandatory disclosure reintroduces that link. It
    is true that many financiers of grassroots lobbying campaigns are happy
    to be publicly identified--for example, George Soros and Steve Bing
    make no bones about their efforts to educate the public. Unions, and
    some trade associations, such as the Health Insurance Association of
    America (HIAA) in its 1994 ads urging citizens to oppose a national
    health plan, are more often than not open about their activities. But
    others prefer anonymity, and there are many reasons for wanting
    anonymity and for providing its protection.
        To use the example of HIAA, under the national health plan proposed
    by the Clinton Administration in 1994, private insurance companies were
    to have a major role in administering the plan. But it would be a role
    achieved through a bidding process. A company donating money or
    expertise to an HIAA ad campaign against adoption of the plan might
    sincerely believe that the plan was bad for America, but be prepared to
    bid to administer the plan had it passed. And even if the plan failed,
    companies in such a highly regulated industry might wish to avoid
    retaliation from disappointed lawmakers who had supported the plan.
    Such a company might therefore prefer anonymity. Anonymity would
    protect it and its lobbyists from retaliation, favoritism and
    government pressure--precisely the result that Congress is seeking to
    achieve in lobbying reform.
        Others will have other reasons for anonymity. A prominent Democrat
    may not want to be identified as having consulted on ads urging
    citizens to support the nomination of Samuel Alito to the Supreme
    Court; a prominent Republican consultant may not want to be identified
    as being on the other side. Some donors simply don't want to have their
    donations to grassroots lobbying known so that they will not be
    approached for added donations. In each case, anonymity not only
    protects the donor or consultant, it prevents favoritism, retaliation,
    and improper pressure by government officials.\6\ As Justice Stevens
    stated for the Supreme Court in McIntyre v. Ohio Elections Commission,
    anonymous speech, ``exemplifies the purpose behind the Bill of Rights
    and of the First Amendment in particular: to protect unpopular
    individuals from retaliation--and their ideas from suppression.'' \7\
        Anonymous speech aimed at rousing grassroots opinion is a long and
    honored tradition in American politics. Alexander Hamilton, James
    Madison, and John Jay authored the Federalist Papers anonymously. Most
    of the opposition to the ratification of the Constitution was also
    published anonymously by such distinguished Americans as Richard Henry
    Lee, then New York governor George Clinton, and New York Supreme Court
    Justice Robert Yates.\8\ Other famous Americans known to have engaged
    in anonymous ``grassroots lobbying'' include Thomas Jefferson, Abraham
    Lincoln, Winfield Scott, Benjamin Rush, and New Jersey Governor William
    Livingston.\9\
          grassroots lobbying disclosure provisions are unrelated to
                         the purpose of lobbying reform
        Grassroots lobbying disclosure proposals amend the Lobbying
    Disclosure Act of 1995 to reach any employment of paid lobbyists to
    urge the general public to contact a Federal official about an issue of
    general concern. Proposals require ``grassroots lobbying firms'' (or
    organizations that employ lobbyists) to register with the Secretary of
    the Senate or Clerk of the House of Representatives not later than
    twenty days after being retained by a client. Most proposals require
    reporting of all amounts paid for grassroots lobbying activities, or
    amounts paid to ``stimulate'' grassroots lobbying, including separate
    disclosure for all paid advertising. This typically includes monies
    spent for preparation, planning, research, and background work, as well
    as monies spent coordinating lobbying activities with other
    organizations. One approach would expose nonmembers of an organization
    who donate above a certain level--typically $10,000--as a separate
    ``client'' listed on the lobbying disclosure form. Such changes would
    dangerously expand the scope of an understandable reform effort into
    uncharted and unconstitutional territory. They would drive many
    publicly spirited persons on either side of an issue--those who care
    passionately about nothing more than the proper administration of
    justice, for example, in the case of the recent Samuel J. Alito
    confirmation hearings--out into the open, and perhaps, therefore, out
    of future debates altogether. They would make seasoned lobbyists
    reluctant to assist unpopular causes or causes contrary to the current
    administration. Compelled disclosure robs such donors or consultants of
    constitutionally protected anonymity, often subjecting them to calumny,
    obloquy and possible retribution by entrenched interests fighting on
    the other side, especially when the other side is the government
    itself. This would have a chilling effect on donors to issues
    organizations on both sides of the aisle, and deprive organizations of
    the services of talented consultants who make their livings, in part,
    on Capitol Hill. Indeed, those most likely to withdraw from the field
    will often be those motivated by ideology. Those motivated by pecuniary
    gain will have an added incentive to bear the cost of disclosure and
    carry on.
        To clean up the Abramoff mess there is no reason to smoke out the
    more generous donors to groups like Progress for America or Alliance
    for Justice, or to make consultants fearful to assist those
    organizations with controversial issues. Even if those groups hired
    lobbyists for any purpose, including as consultants who know best how
    to craft a message, donations to those groups for grassroots lobbying
    do not support direct lobbyist-to-lawmaker contact--the source of
    public concern. (Nobody cares if a lobbyist flies on a corporate jet--
    what they object to is his giving rides to congressmen on a corporate
    jet!). Grassroots lobbying fosters citizen-to-citizen communication,
    and later, citizen-to-lawmaker communication. The message consists of
    information for citizens, and an appeal to those citizens to take part
    in a public discussion. Some citizens will get involved because they
    agree with the message and share its concern; others because they
    disagree; and still others will not get involved at all. With even the
    most effective grassroots lobbying, however, there is always an
    intervening decision made by the citizen to get involved or not to get
    involved, and to decide on which side of the issue to get involved, to
    what degree, and in what capacity. The aggregate of those individual
    decisions is itself critically important and valuable information to
    the lawmaker.
        Lawmakers are representatives of the people. No matter how citizens
    first hear of a pending legislative issue, when they engage they are
    engaging in citizen-to-lawmaker communication; the citizens making the
    calls are not registered lobbyists. With the decision to contact
    lawmakers, from whatever side of the debate, citizens reduce the
    relative power of lobbyist-to-lawmaker communication, which is
    precisely the power shift the public wants to see, and is the shift
    most needed in an era of unlit, undisclosed earmarking and lobbying
    scandal.
       grassroots lobbying disclosure provisions may be unconstitutional
        In addition to complex policy questions surrounding society and its
    information exchange, regulation of grassroots lobbying raises
    constitutional concerns. The Supreme Court has recognized that ``there
    is practically universal agreement that a major purpose of [the First]
    Amendment was to protect the free discussion of governmental affairs.''
    \10\ In Buckley v. Valeo, the Supreme Court held that regulation of
    political speech and association is constitutionally justified only to
    prevent corruption or the appearance of corruption in government, by
    preventing the exchange of favors that flows from an inordinate
    connection or nexus between campaign donors and lawmakers.\11\ In
    McConnell v. FEC, the Supreme Court extended the rationale to guard
    against the appearance of corruption created by ``access'' to
    politicians.\12\ Neither grassroots lobbying aimed at citizens, nor any
    ensuing contact by citizens to members of Congress, creates the reality
    or appearance of corruption. And both work to alleviate the problem of
    unequal access noted in the McConnell decision.
        Anonymous grassroots lobbying has received unwavering First
    Amendment protection from the Supreme Court.\13\ As recently as 2002,
    the Supreme Court invalidated a ``village ordinance making it a
    misdemeanor to engage in door-to-door advocacy [with fellow citizens]
    without first registering with the mayor'' as a violation of ``the
    First Amendment protection afforded to anonymous . . . discourse.''
    \14\ And there is no doubt that retribution is real. It is not hard to
    imagine, for example, why the State might have wanted to know the names
    of all members of the NAACP in 1950s Alabama, and why the Supreme Court
    said in response to Alabama's desire to learn those names that ``[i]t
    is hardly a novel perception that compelled disclosure of affiliation
    with groups engaged in advocacy may constitute as effective a restraint
    on freedom of association as [other] forms of governmental action.''
    \15\ It is also easy to imagine the leverage Alabama could have put on
    the NAACP, and the potential damper on the civil rights movement, if
    1950s Alabama knew about the NAACP what the twenty-first century
    Congress proposes to learn about grassroots organizations. What could
    Alabama have done had it known: when the NAACP engaged in preparation,
    planning, research, or background work; when it coordinated activities
    with like minded organizations; when the organization proposed to
    engage its fellow citizens with advertising and in what quantity; or
    knew the names of the consultants that would assist them in the effort?
        Nor are these merely episodes of the past. In what many consider a
    blatant attempt at intimidation, a Texas county prosecutor recently
    subpoenaed the donor records of a group called the Free Enterprise Fund
    after it ran grassroots lobbying ads critical of his behavior in
    office.\16\ It is easy to forget when rushing to correct lobbyist
    excess, even excess covered by current law, that citizens can be
    intimidated and harassed by officials. In McIntyre v. Ohio Elections
    Commission, Margaret McIntyre, a local anti-tax activist who
    distributed fliers opposing a school levy, was warned she was not
    properly identified on them. Nonetheless, she distributed fliers at the
    Middle School, where her children faced potential retaliation from
    school officials. An assistant schools superintendent who learned
    McIntyre's identity filed a complaint with the Ohio Elections
    Commission in what one Ohio Justice characterized as ``retribution
    against McIntyre for her opposition.'' \17\ The Supreme Court of United
    States invalidated the Ohio statute, stating that ``[t]he decision to
    favor anonymity may be motivated by fear of economic or official
    retaliation, by concern about social ostracism, or merely by a desire
    to preserve as much of one's privacy as possible.'' \18\
        Requiring even the most grizzled or politically connected lobbyists
    to register and report their attempts to solicit citizens on behalf of
    an organization is also suspect. In Thomas v. Collins, the Supreme
    Court struck down a Texas statute that required labor organizers--
    defined as ``any person who for . . . financial consideration solicits
    [citizens] for membership in a labor union``--to register with the
    Secretary of State, provide his name and union affiliations, and wear a
    State-issued organizer's card before soliciting membership in a labor
    union.\19\ The State claimed the statute affected only the right to
    engage in business as a paid organizer. The Court, however, held there
    was a ``restriction upon the right [of the organizer] to speak and the
    rights of the workers to hear what he had to say,'' \20\ and stated
    that it is ``in our tradition to allow the widest room for discussion,
    and the narrowest range for its restriction, particularly when this
    right is exercised in conjunction with peaceable assembly.'' \21\
        The potential for elite firms and private consultants to avoid
    unpopular causes to protect their long-range economic interests, and,
    in turn, to deprive unpopular organizations of competent representation
    is not implausible. For example, in 2004, two radio jockeys in
    Washington State (who, by the nature of radio, lacked anonymity)
    stimulated grassroots activity by advocating the repeal of a newly
    passed 9.5 cents per-gallon increase in the Washington state gasoline
    tax.\22\ The jockeys were persuasive, and partly responsible for an
    anti-tax initiative making the ballot with the fourth-highest number of
    signatures of any measure in the history of Washington State. The
    cities of Auburn, Kent, and Seattle filed suit against the radio
    jockeys and their station five months before Washington's citizens
    would decide the fate of the tax repeal. Id. The cities claimed that
    the jockeys failed to report their commentary to the State as in-kind
    contributions to the anti-tax initiative,\23\ which, had it passed,
    would have cost the State of Washington $5.5 billion.\24\ Both parties
    to the litigation are being represented for free; the cities by Foster
    Pepper PLLC, one of the largest law firms in the Pacific Northwest,
    with over 130 attorneys, and the firm handling the State of
    Washington's bond issue for the gas tax increase. The radio jockeys
    found free representation in a non-profit, public-interest law firm,
    headquartered 3000 miles from Washington State.\25\
     lobbyist abuse of non-profit organizations can be addressed in other
                                      ways
        Jack Abramoff allegedly abused non-profit organizations to cozy up
    to lawmakers, shelter income, bankroll golf junkets, or bolster the
    bank account of his Washington restaurant.\26\ Some cite this abuse of
    outside organizations as demonstrating a need to require disclosure of
    citizen donations to issue campaigns. But Congress may prevent
    lobbyists from hiding gifts or bribes, or financing golf trips to
    Scotland in more direct ways. Congress could require disclosure by
    lobbyists, or perhaps even by non-profit organizations themselves, when
    the non-profit makes direct contact with a lawmaker, that is, when a
    non-profit organization hosts or entertains lawmakers with donations
    from or directed by lobbyists, or when the non-profit accepts gifts
    from lobbyists with instructions to lavish a portion of it on
    lawmakers. But the passing of pecuniary interests from lobbyists to
    lawmakers through non-profit organizations is not a justification for
    requiring citizens who donate to issue campaigns, or the recipient
    organizations, to disclose the amount of those donations, the timing of
    those donations, or the name and home address of the donor.
                                   conclusion
        Anonymous grassroots lobbying is a long and honored tradition,
    engaged in by many of the greatest Americans, including Lincoln and
    Jefferson. The United States Supreme Court has recognized that
    anonymous grassroots lobbying is entitled to the fullest protection of
    the First Amendment.
        The problem of lobbying abuses is one of lobbyist influence outside
    the light of scrutiny. It is not a problem of citizen influence.
    Grassroots lobbying encourages citizens to get involved, and the
    involvement of citizens breaks the link between lobbyists and
    lawmakers. Hence, grassroots lobbying should be encouraged in every way
    possible, not discouraged, as a way to restore the trust of the
    American people in Congress.

        Stephen M. Hoersting is the Executive Director of the Center for
    Competitive Politics and former General Counsel to the National
    Republican Senatorial Committee.
        Bradley A. Smith, former Chairman of the Federal Election
    Commission, is Senior Advisor to the Center for Competitive Politics,
    and Professor of Law at Capital University Law School in Columbus,
    Ohio.
        The Center for Competitive Politics seeks to educate the public on
    the benefits of free competition, fairness, and dynamic participation
    in the political process.
        Nothing in this primer should be construed as advocacy for or
    against any legislation.

    ------------
        \1\ Tory Newmeyer, Hill Eyes a Treasure Trove, Roll Call, Feb. 13,
    2006.
        \2\ Spotlight, Politics: Earmark Debate Starting to Focus on
    Transparency, not Reduction, Environmental and Energy Daily, Feb. 9,
    2006.
        \3\ ABC News Washington Post Poll, Majorities See Widespread
    Corruption, Want Tougher Lobbying Restrictions, Jan. 9, 2006, available
    at http://abcnews.go.com/Politics/PollVault/story?id=1487942.
        \4\ ABC News Washington Post Poll, Majorities Disapprove of Bush on
    Ethics, Favor Release of Abramoff Meeting Records, Jan. 27, 2006,
    available at http://abcnews.go.com/Politics/PollVault/story?id=1547685.
        \5\ Congressional Quarterly, Transcript of Hearing, Senate
    Committee for Homeland Security and Governmental Affairs, Jan. 25, 2006
    (comments of Senator Durbin).
        \6\ See e.g. James Nash, Political Ties Costs Law Firms, Columbus
    Dispatch, Feb. 15, 2006 at B1.
        \7\ McIntyre v. Ohio Elections Commission, 514 U.S. 334, 357
    (1995).
        \8\ Id. at 343.
        \9\ Bradley A. Smith, Unfree Speech: The Folly of Campaign Finance
    Reform 7, 18 (2001); McIntyre, 514 U.S. at 361, 363 (Thomas, J.,
    concurring in the judgment.)
        \10\ Mills v. Alabama, 384 U.S. 214, 218 (1966).
        \11\ Buckley v. Valeo, 424 U.S. 1 (1976).
        \12\ McConnell v. Federal Election Commission, 540 U.S. 93 (2003).
        \13\ See McIntyre v. Ohio Elections Commission, 514 U.S. 334
    (1995); Talley v. California, 362 U.S. 60 (1960); NAACP v. Alabama ex
    rel. Patterson, 357 U.S. 449 (1956). See also First National Bank of
    Boston v. Bellotti, 435 U.S. 765 (1978) (non-anonymous corporate speech
    on public issues protected by First Amendment).
        \14\ Watchtower Bible v. Village of Stratton, 536 U.S. 150 at 153,
    160 (2002).
        \15\ NAACP v. Alabama, supra note 13, 357 U.S. at 462 (1956).
        \16\ Robert Novak, DeLay Prosecutor Subpoenas Critics, Human Events
    Online, Dec. 16, 2005. There was no dispute that the ads were
    unconnected to any election.
        \17\ Duane St. Clair, Campaign Pamphlets Must Bear Source, Court
    Says, Columbus Dispatch, Sep. 26, 1993 at 5B.
        \18\ McIntyre, supra note 7, 514 U.S at 341-342 (1995).
        \19\ Thomas v. Collins, 323 U.S. 516, 519, n1 (1945)
        \20\ Id. at 524
        \21\ Id. at 530.
        \22\ Neil Modie, ``Gas Tax Foes Are Fighting Back,'' The Seattle
    Post-Intelligencer, p. B1 (Aug. 10, 2005).
        \23\ Id.
        \24\ Editorial, ``Gas Tax Repeal: Pennies or Projects?'' The
    Seattle Post-Intelligencer, p. C2 (July 10, 2005).
        \25\ Modie, supra note 22.
        \26\ Chuck Neubauer and Richard B. Schmitt, Abramoff's Charity
    Began at Home, Los Angeles Times, Feb. 11, 2006, at A1.

        Mr. Nadler. Thank you, Professor, and I congratulate you
    also for being under the 5-minute limit.
        Mr. Mann?

                       TESTIMONY OF THOMAS MANN,
                       THE BROOKINGS INSTITUTION

        Mr. Mann. Thank you, Mr. Chairman.
        I wish I could say, ``Oh, shucks, I am from a town of 300
    in Ohio.'' Instead, I have to admit I am from Milwaukee,
    Wisconsin, which is much, much bigger.
        I am delighted to be with you. Thank you for inviting me.
        As the Chair said, this process of lobbying and ethics
    reform has begun with the adoption of the House rules. There is
    a bipartisan task force at work looking into the possibility of
    building in some independent capacity into the ethics process.
    Your Subcommittee is appropriately dealing with a lobbying
    disclosure act and possible amendments to it.
        I believe, like others, S. 1 is an excellent point of
    departure for you. There are many sort of, I think, excellent
    and non-controversial provisions in this bill that has passed
    the Senate. And I urge you to use it as a basis.
        But, obviously, there are two elements that are
    controversial that are included in S. 1, and one that is not,
    that is even more controversial, as the statement from the
    Ranking Member, Mr. Franks, has indicted.
        Let me just say, on the matter of, if you will, making,
    arranging or collecting political contributions, I believe Mr.
    Nadler, the Chair's statement about money is absolutely
    correct. I believe, in this case, disclosure, transparency is
    the best alternative.
        And let me say, I don't view this as nefarious lobbyists
    trying to ply you with money and to gain special advantage from
    doing so. Frankly, I think you, as Members, individuals, as
    political parties and the like, frankly, are under too much
    temptation to ask for too much help from those who have
    business before you.
        And, in some respects, the best thing about transparency
    here is that, if you think it is legitimate, if it won't
    compromise your ability to make independent decisions on what
    those lobbyists want out of Congress, even though they are
    setting up fundraisers for you and arranging other
    contributions for you, then you should have no objection to
    having that information public. I think it is perfectly
    legitimate for you to make the case that it is legitimate, but,
    then, why can't the public know about it as well?
        Second provision has to do, of course, with the revolving-
    door provision. Again, we have a problem here. More and more
    Members and staff are going to work immediately for lobbying
    firms. This does not exactly set the tone that one would like.
    There is just too much of a perception of private gain from
    public service.
        There is nothing wrong with lobbying, but if we could just
    put a little breathing room in there, so that Members who are
    leaving voluntarily or are defeated, and staffers, aren't sort
    of so immediately and constantly thinking about how they will
    build their lobbying business, it would be a healthy thing.
        Ken raised appropriate points about the language, but I
    think it is all--it is doable here, and I urge you to look hard
    at that recommendation.
        The third provision, final, is the grassroots lobbying.
        Mr. Franks, if I thought any language would be passed by
    this Subcommittee and Committee and full House that had the
    effect of restricting those people you talked about, I would
    strongly oppose it. So I am with you on the statement.
        But from what I understand, we are talking about no
    individuals, no lobbying organizations. We are talking about
    lobbying firms and firms that are engaged in providing paid
    advertising to influence specific legislative provisions with a
    $100,000-a-quarter provision. It doesn't require any new
    registration or reporting by individuals and existing
    organizations, except those that are simply in the business of
    doing--the reality is we are not talking about old-style,
    grassroots lobbying.
        We are talking about a very different set of activities,
    now, that is central to lobbying in Washington. There is a lot
    of research on this. It is a reality.
        I urge you, Mr. Franks, to approach this with an open mind,
    and if language can be found that achieves that broader
    objective of massively funded lobbying campaigns by paid media
    and exempts everything else, then maybe it is a good thing.
        Thank you.
        [The prepared statement of Mr. Mann follows:]
                    Prepared Statement of Thomas E. Mann \1\
    ---------------------------------------------------------------------------
        \1\ The views expressed in this testimony are solely my own and
    should not be ascribed to the trustees, officers, or other staff
    members of The Brookings Institution. A brief resume is attached.
    ---------------------------------------------------------------------------
        Mr. Chairman and other members of the Subcommittee, thank for you
    inviting me to share my views of S. 1, the bill on lobbying reform
    passed by the Senate earlier this year. The prosecution and guilty
    pleas of lobbyist Jack Abramoff, Representatives Randy ``Duke''
    Cunningham and Bob Ney, and several former congressional staff have
    understandably brought to public attention the adequacy of laws,
    congressional rules, and enforcement mechanisms regulating the
    interactions between lobbyists and Members of Congress and their
    staffs. These scandals, ongoing investigations of others, and the
    widespread public perception of a culture of corruption in Washington
    could provide the boost required to enact long-needed changes in that
    regulatory system.
        Lobbying has changed dramatically in recent years. The number of
    registered lobbyists has tripled. Budgets for Washington representation
    and grassroots lobbying have risen exponentially. Retiring or defeated
    Members are now more likely to stay in Washington and join their ranks.
    Congressional staff routinely move from Capitol Hill to lobbying shops
    around town. Some Members have been actively involved in placing their
    staff and those of their colleagues in key positions within the
    lobbying community. Many Members enlist lobbyists to help raise
    campaign funds for their re-election campaigns, leadership PACs,
    endangered colleagues, and political party committees. The escalating
    cost of campaigns has put intense pressure on Members, even those with
    safe seats, and lobbyists to raise and contribute substantial sums of
    money. At the same time, more opportunities exist for Members and their
    leaders to deliver benefits to lobbyists and their clients. These
    include earmarks, in appropriations and authorization bills;
    invitations to participate in informal mark-up sessions in party task
    forces, standing committees, and conference committees; amendments
    added late in the legislative process under the veil of secrecy; and
    letters and calls to executive branch officials. These conditions
    foster practices that risk conflicts of interest and unethical or
    illegal behavior.
        The House began the process of ethics and lobbying reform at the
    start of the 110th Congress by enacting in H. Res. 6 a number of rules
    changes governing gifts, privately-financed travel, and earmarks. A
    bipartisan task force has been commissioned to recommend ways of
    strengthening the ethics process in the House, including some role for
    an independent panel composed of former Members and others. What
    remains to be done is the enactment of changes in law, most importantly
    the Lobbying Disclosure Act of 1995 (P.L. 104-65), enhancing the
    transparency of interactions between Members of Congress and lobbyists.
        S. 1 is an excellent point of departure for your deliberations on
    this latter responsibility. That bill, for example, very constructively
    requires quarterly, instead of semiannual, filing of lobbying
    disclosure reports, which are then made available to the public in a
    timely and useable fashion on the Internet. It also increases the
    penalties for failure to comply with lobbying laws and provides for a
    GAO audit of lobbying reports.
        One of the most important provisions of S. 1, and also one of the
    most controversial, adds new language requiring lobbyists to disclose
    contributions they make, arrange, or collect for Members, candidates,
    leadership PACs, and political parties. These provisions, contained in
    Section 212 of the Senate bill, are identical to the language of H.R.
    633, introduced by Representatives Chris Van Hollen and Marty Meehan.
    Unlike the restrictions on gifts and travel by lobbyists to Members
    already contained in the House and Senate rules, the new language
    provides for transparency, not prohibition. While federal campaign
    finance law requires candidate and political committees to disclose the
    source and size of contributions of at least $200, including those from
    lobbyists, lobbying disclosure law is silent on contributions. Yet many
    lobbyists are actively involved in political fundraising for Members
    they seek to influence. In addition to direct contributions, these
    efforts include administering leadership PACs, hosting fundraising
    events, and soliciting contributions from others (commonly known as
    ``bundling'').
        I believe public disclosure of these contributions from lobbyists
    to members and their political and party committees would serve the
    broad public interest without unduly invading the privacy rights of
    lobbyists or making unreasonable reporting demands on them. The
    language is carefully crafted to allow ``good faith estimate(s)'' of
    funds raised from events or solicitations when precise figures on such
    amounts are not available. To the extent Members believe such
    contributions are legitimate forms of political participation and do
    not compromise their ability to make independent decisions on
    legislative matters of interest to the lobbyists making the
    contributions, Members ought to be willing to make them transparent.
    The inclusion or exclusion of this provision in the legislation adopted
    by the House is likely to determine the seriousness of its response to
    the scandals associated with Jack Abramoff and the K Street Project.
        Another important and, therefore, controversial provision of S. 1
    deals with the ``revolving door'' problem. Current law (18 U.S. C. 207)
    provides for a one-year cooling off period before former Members can
    lobby the legislative branch; also, former senior congressional staff
    may not lobby their former employer, whether Member or committee, for
    the same amount of time. The Senate bill extends the cooling off period
    for Members from one to two years; the comparable period for senior
    congressional staff remains one year, but the prohibition on lobbying
    activity is extended to the entire Senate. In addition, the Senate bill
    expands the lobbying activities covered during the cooling off period
    from only direct contacts to include behind-the-scenes activities,
    advice, or consultations in support of lobbying contacts.
        Make no mistake, this is a very tough provision. It would make
    former members and senior congressional staff less marketable in the
    lobbying community upon their departure from Congress and reduce their
    immediate post-Congress career options. But it would likely have a
    healthy impact on the policy process and the state of American
    democracy. The newly-defined cooling off period would encourage more
    diverse career patterns among former Members and staff, diminish the
    payoff from privileged connections and enhance the benefits of genuine
    expertise, and begin to change a culture fostering the quest for
    private gains from public service. I urge you to retain this language
    in the House bill.
        The last item I would like to raise with you is one that is absent
    from the Senate bill, after a successful floor amendment to delete it
    from the underlying bill. Grassroots lobbying campaigns now constitute
    a major part of lobbying activities. Huge sums are spent on paid media,
    computerized phone banks, direct mail, and other forms of public
    communications to stimulate lobbying of Congress by citizens. Yet
    professional grassroots (``Astroturf'') lobbying organizations and
    lobbying firms are not required to report on the sums they spend on
    these campaigns. It makes little sense to exclude these activities
    whose costs may well exceed expenditures for direct lobbying.
        The trick is to define these organizations and activities in a way
    that does not restrict the free flow of information. New requirements
    must also be crafted to avoid placing new reporting burdens on
    organizations that spend relatively small sums on grassroots lobbying
    or that are communicating with their own members or with the general
    public to recruit new members. I understand efforts to amend the
    original Senate language to reflect these concerns are well underway in
    the House. I urge you to bring these negotiations to a successful
    conclusion and include a grassroots lobbying disclosure provision in
    the House bill.
        In sum, I recommend that you look favorably on S. 1, in particular
    its provisions regarding the disclosure of political contributions
    (including bundling) and the slowing of the revolving door between
    Congress and the lobbying community. I also recommend that you include
    in the House bill a provision to require the disclosure of sums spent
    on behalf of major grassroots lobbying campaigns. When combined with
    the new House rules adopted in January and a strengthened ethics review
    and enforcement process now being considered by a bipartisan task
    force, such a lobbying reform bill would go a long way in responding to
    scandals of recent Congresses and improving the ethical climate in
    Washington.

        Mr. Nadler. Thank you very much.
        The direct testimony of the witnesses has concluded.
        As we ask questions of our witnesses, the Chair will
    recognize Members in the order of their seniority in the
    Subcommittee, alternating between majority and minority,
    provided that the Member is present when his or her turn
    arrives. Members who are not present when their term begins
    will be recognized after the other Members have had the
    opportunity to ask their questions. The Chair reserves the
    right to accommodate a Member who is unavoidably late or only
    able to be with us for a short time, especially if there is a
    competing Committee meeting at the same time.
        I will begin by recognizing myself for 5 minutes.
        Mr. Gross, you said in your testimony that the bundling
    provision, as written in S. 1, is vague and open to
    misapplication. Can you give us an example of how you think
    this might be remedied?
        Mr. Gross. I think that if you eliminate the arranged-for
    part of the definition and define collecting as those checks
    that you physically handle and perhaps those that you forward
    in coded envelopes, you will narrow the ambiguity of the
    provision and it will coincide with the FEC definitions of what
    it means to be a conduit. So I think with those changes right
    there, you would go a long way toward improving the provision.
        Mr. Nadler. Thank you.
        Let me ask--starting with Mr. Gross--then comment on the
    other members of the panel--one of the concerns we hear about
    Astroturf lobbying--that is, the provision that didn't get into
    S. 1, but there are various suggestions about Astroturf
    lobbying--is that they sweep too broadly.
        Do the members have suggestions as to how to clarify the
    definition, if necessary, between so-called legitimate--well, I
    won't say ``illegitimate,'' but when you should face a
    disclosure requirement, when you shouldn't, if at all?
        Mr. Gross first, and then----
        Mr. Gross. Well, yes, and some of those points have been
    brought out already in the testimony. I think that you
    certainly don't want to do anything that is going to affect the
    associational rights within an organization or sort of
    homegrown grassroots, if you will.
        I think with dollar thresholds, as has been proposed in the
    S. 1 and some, I think, other drafts that are going around now,
    along with a specific situation where there has been an
    engagement for hired--call it Astroturf, call it what you
    want--a hired effort to artificially stimulate the community
    with either e-mails or letter-writing campaigns, in that
    situation, I think you can at least provide a law that has
    clarity and limited application that is not going to infringe
    somebody speaking on T.V.
        Also, I think you need a specific call to action. If you
    are going to define grassroots, it should be a specific
    communication to call your congressman and vote yes on H.R. 15,
    not some vague statement that, ``I don't like the Social
    Security laws out there.''
        Mr. Nadler. But, in other words--so let me see if I
    understand one of the distinctions you are making. If the Right
    to Life Committee or Common Cause or somebody spends $100,000
    on revving up the troops to write Congress, that should not be
    disclosable.
        Mr. Gross. Right----
        Mr. Nadler. But, if the Right to Life Committee or Common
    Cause hires ABC law firm to stimulate people to write to
    Congress, that should be disclosable, if it is over a certain
    amount?
        Mr. Gross. Yes. I think that would be something that could
    perhaps withstand challenge.
        Mr. Nadler. Yes.
        Ms. Dufendach, the same questions?
        Ms. Dufendach. With the exception that if that
    communication was to increase membership for Common Cause, it
    would not be included.
        I think Congressman Meehan is actually working on a
    proposal that is far narrower than the proposal that was
    defeated in the Senate. And, in fact, we are told that no
    organization at all would ever have to disclose under the new
    proposal.
        Even in the situation of Harry and Louise, the Health
    Insurance Association would not have had to disclose. Only the
    firm that actually did the campaign would have had to
    disclosure who their client was, what the issue was----
        Mr. Nadler. In other words, the firm that was paid by
    somebody else----
        Ms. Dufendach. Yes.
        Mr. Nadler. ABC Advertising Corp. would have had to
    disclosure that the American Medical Association, let's say--I
    have no idea who did it, but the American Hospital Association,
    whoever, hired them----
        Ms. Dufendach. Health insurance.
        Mr. Nadler. Whatever--hired them to gin up local letter
    writing to Congress or whatever.
        Ms. Dufendach. Yes.
        Mr. Nadler. Thank you.
        I am sorry that Mr. Meehan is not here to explain his
    proposal.
        Does anybody else want to comment on this question?
        Mr. Smith. I would. Thank you, Mr. Chairman.
        I would just disagree that the distinction really ought to
    be made.
        Mr. Nadler. Which distinction? I am sorry.
        Mr. Smith. Well, the distinction between what should be
    disclosed or what should not, or, some would say, what is
    illegitimate or legitimate.
        And I note that you began to say that and stopped. But I
    think--because that is what we hear all the time is a lot of
    these folks do think that some of the stuff is illegitimate,
    and we get used to talking in those terms.
        It is not illegitimate. It is not illegitimate for a group
    to spend money to try to get citizens to talk. And I would
    suggest that what is wrong with Harry and Louise?
        First, everybody knew who was behind Harry and Louise. This
    was not a big secret.
        Second, what is wrong with that? American citizens watched
    their televisions and they saw something----
        Mr. Nadler. We are running out of time.
        Mr. Mann, quickly?
        Mr. Mann. Thank you.
        Mr. Nadler. Do you have a comment on this?
        Mr. Mann. Nothing is wrong. And if nothing is wrong, what
    possible objection is there to the firms, not the
    organizations, being required to report this as lobbying
    activities? It is a reality. There is nothing wrong with it. It
    is perfectly legitimate. Let's disclose.
        Mr. Nadler. Thank you, Mr. Mann.
        My time has expired.
        Mr. Franks?
        Mr. Franks. Thank you, Mr. Chairman.
        Professor Smith, I almost hate to ask you a question
    because your testimony itself was so compelling in my mind.
        But, you know, the term ``grassroots lobbying'' encompasses
    a broad array of activities, such as simply encouraging other
    people to contact their Federal officials, regardless of their
    opinion on an issue.
        And I am wondering if you think that criminal penalties for
    failure to comply that include prison and large fines would
    stifle large amounts of legitimate speech, when people just
    refrain from speaking simply to avoid an overzealous
    prosecutor?
        Mr. Smith. Well, surely the threat of penalties discourages
    people from speaking. If people think they might be subject to
    penalties if they get the law wrong, they don't want to do it.
        The question comes up, ``Well, what is wrong with requiring
    disclosure? It is just disclosure, you know? I mean, what is
    wrong with that?''
        Well, you know, you don't see the letters we get from
    people at the FEC who were fined real money for trying to
    comply with disclosure laws and making mistakes. And we have to
    think about people.
        Would it be better--I mean, there are many unpopular causes
    out there, and there are many of the groups that are capable of
    running grassroots campaigns and stimulating citizen
    involvement in Government who are reliant on their reputations
    in Congress and working in Congress.
        You know, I know, Mr. Chairman, you have expressed a lot of
    concern about the K Street Project over the years. Well, what
    is grassroots lobbying disclosure, other than a way to
    implement another K Street Project? You find out, well, who is
    paying for this? What firms? And then you can pressure those
    firms. And you say, ``We don't like your clients. We don't like
    who you are hiring as lobbyists.''
        The wonderful thing about non-disclosure is that is not a
    threat, and there is not a threat to Government, again, because
    we have that voter who is choosing to take action.
        And voters are misinformed by all kinds of things. Like I
    said, a New York Times editorial will misinform any voter, you
    know? Voters get information from all kinds of sources, from
    talk radio, from grassroots campaigns, from Websites, from
    Rotary Club speeches.
        We want to encourage voters to get involved, and they are
    your real constituents, and you need to deal with it. And will
    this kind of disclosure chill speech? Sure it will. The Supreme
    Court has recognized that in case after case.
        I will be real quick here, but Mr. Gross mentioned that he
    thought the court would uphold this kind of disclosure under
    Harris. Well, a lot of water has gone under the bridge since
    Harris, a lot of first amendment water in the last 50 years,
    including, NAACP v. Alabama, Talley v. California.
        McIntyre v. Ohio, election commission specifically
    distinguished, in holding that you couldn't require disclosure,
    noted that Harris was different because it involved the
    activities of lobbyists who have direct access to elected
    representatives. And that is an opinion by Justice Stephens,
    giving a very narrow interpretation to Harris.
        I think that if you take this present court and the way it
    has gone on disclosure, it has consistently said that only in
    the narrow context of specific candidate elections can you
    uphold it. And they have done that because they recognize, Mr.
    Franks, that, yes, it has a chilling effect on speech.
        Mr. Franks. Well, thank you, Professor.
        Mr. Gross, the Federalist Papers were essays written by
    James Madison and Alexander Hamilton. They were defending the
    ratification of the Constitution that we live under today, and
    they were written anonymously and published in newspapers under
    pen names, pseudonyms, precisely because those Founding Fathers
    wanted to cause people to think about the substance of what
    they were saying, rather than who was saying it.
        And with sincere respect, to use your words, were they
    artificially stimulating pubic opinion when they did that?
        Mr. Gross. I don't know. In that situation, probably not.
    The words ``artificially stimulating'' come from the U.S.
    Supreme Court in the Harris case. And I guess, you know, it is
    a question of definition whether this is a hired effort in the
    modern-day, sophisticated effort to influence thinking.
        I certainly would distinguish any homegrown effort, such as
    the Federalist Papers, and there is some Supreme Court support
    for anonymity for that type of distribution in the McIntyre
    case, as Professor Smith has mentioned.
        But I do think that can be distinguished from the hiring of
    outside vendors to engage in certain types of--we call it
    Astroturf, call it what you will--communications with a call to
    action with dollar thresholds in it.
        It is a challenge. It is not the easiest thing in the world
    to do, I would admit that, but I think it can be done.
        Mr. Franks. Thank you, Mr. Chairman. I think it would be
    tough for me to get another question in.
        Mr. Nadler. Well, thank you.
        The distinguished Chair of the Committee, Mr. Conyers?
        Mr. Conyers. Thank you, Chairman Nadler.
        There are so many fine lines here, but I would like to
    begin with the question about independent ethics commission,
    because, as I understand it, Common Cause thinks this is a good
    idea, and ACLU does not--two of my friendly organizations.
        Could you begin a discussion with this, Ms. Dufendach?
        Ms. Dufendach. I am unaware that the ACLU has said that,
    but I can give you an idea about why Common Cause thinks that
    it is a good idea.
        I think perhaps the best way to say this is, at this point,
    the Ethics Committee in the House has so little credibility
    that it cannot even protect the innocent. It cannot even, with
    any credibility, dismiss a complaint that is completely
    frivolous, because no one has any faith in it.
        And the thing that might be the most benefit to Members
    right now is that an independent body could, in fact, do that,
    could do it quickly, swiftly and have penalties for people who
    purposefully file a frivolous complaint.
        At this point, the Ethics Committee can't--it has been
    proven that it doesn't hold the guilty to task, and it can't
    even really protect the innocent.
        If you have a specific question about constitutionality or
    anything like that, I could go forward with that. Otherwise, I
    will stop.
        Mr. Conyers. Well, we were hoping that the Ethics Committee
    had a new slate, now that they are in a new Congress with a
    great change in their membership. We don't want to have the
    problems of the past just hang over whoever joins the Committee
    from this point on. Goodness knows we wouldn't want that to
    happen to the Judiciary Committee.
        Ms. Dufendach. If I could just comment. Frequently, people
    say that if only the right people could get put on the Ethics
    Committee, it would function. But I think over the last 30
    years, at some place--who decides who are the right people? And
    over the last three decades, it has proven that it can't. It
    either----
        Mr. Conyers. You don't think there have been any----
        Ms. Dufendach [continuing]. Too much or doesn't do enough.
        Mr. Conyers. There have been some right people.
        Ms. Dufendach. Well, I think the idea of the institutions
    of a democracy are to set up systems and functions where, no
    matter who is in control, the system will allow the democratic
    process to move forward.
        Mr. Conyers. Ken Gross, do you think this is a stretch here
    that we should try to keep an independent ethics commission or
    that it might create constitutional problems?
        Mr. Gross. It is conceivable that you could set up an
    investigative body that wouldn't abridge constitutional
    concerns.
        I am kind of lukewarm on it. I think a lot of the problems
    that the Ethics Committee has had are procedural problems that
    only one Member can file a complaint at another Member. And
    people don't like firing lines assembled in the shape of a
    circle.
        And, you know, I think if there were complaints, credible
    complaints that could come in, and the Ethics Committee is
    staffed properly, that it could be handled within that
    mechanism without creating another entity, another process,
    which will have investigative powers only, which will, then,
    ultimately, have to refer, presumably, to an ethics commission.
    So I think with modification of some of the procedures that
    were in place, we don't have to go that route.
        Mr. Conyers. Professor Smith, I wasn't clear on why you
    thought calling Astroturf--using the term ``Astroturf''
    lobbying is something that you consider distasteful. When I
    hear the term, I am thinking of the phenomenon of groups that
    are pretending that they are grassroots groups and they are
    really not at all. They are the product of some clever
    consultant. How do you view that?
        Mr. Smith. Yes, Mr. Chairman. Let me say here is what I
    would think of in my definition as an Astroturf lobbyist: There
    is a group that is pushing for this regulation that is an
    organization called Democracy 21. It is headed by a guy named
    Fred Wertheimer.
        They have no members. Fred Wertheimer is a registered
    lobbyist. His power comes because his wife is a prominent
    journalist, and he has direct access to the editorial pages of
    The New York Times, right?
        To me, he is an Astroturf lobbyist. He purports to come in
    and speak for the American people, but he speaks for himself.
    He doesn't have any members to account to or anything. It is
    funded by a few foundations.
        When a group, even if it is a business group or something,
    goes out and contacts your voters, they are contacting people
    who are real voters. They are members of what we call the
    grassroots. And if those people choose to contact you, they are
    still grassroots real voters, who are now contacting you.
        And so I think this idea that their opinions are somehow
    false, or Astroturf, because somebody was paid to contact them
    is very wrong. And I cannot understand the philosophy would
    say, ``There is absolutely nothing wrong with this, but we need
    to regulate it.''
        Mr. Conyers. Let me ask Ms. Dufendach if she agrees with
    the Wertheimer comparison, since he came out of--didn't he
    start Common Cause?
        Ms. Dufendach. No, no, no. John Gardner started Common
    Cause.
        Mr. Conyers. Very well. Okay.
        Mr. Nadler. The gentleman's time has expired, but I will
    permit Ms. Dufendach to answer the question.
        Ms. Dufendach. I think when asked what is the problem that
    we are trying to correct here, what it is is you have got $17
    million, $20 million worth of ad campaigns going on nationwide.
    Everybody is seeing them. It does make a difference who is the
    sponsor of them. It serves to put context to what is being
    said.
        No one is saying that they can't do it. Nobody is saying
    that they don't have the right to lobby, and lobby in this way.
        All we are saying is please let us know who is behind this,
    so we can judge for ourselves what the message is or the motive
    or the objective of this particular ad campaign is.
        Common Cause is a grassroots organization. If I thought
    that this was going to imperial our talking with our Members or
    in any way doing our grassroots, I would not be so in favor of
    it.
        I will also just say that the Sierra Club was opposed to
    the Senate version of this Astroturf. They now have seen the
    very narrow new proposal that is being crafted, and they are
    for it.
        Mr. Nadler. Thank you, Ms. Dufendach.
        The gentleman from Indiana?
        Mr. Pence. Thank you, Mr. Chairman. I appreciate you
    holding this hearing and the civility with which it is being
    conducted, and the thoughtful presentations of the panel.
        With regard to the independent ethics commission, I would
    observe that it is interesting. I find your comments
    provocative, Ms. Dufendach.
        But it does seem to me that the call for an independent
    ethics commission in Congress was a call for creating something
    similar to the Independent Counsel Act that there is broad
    bipartisan opinion in Washington that that has been a disaster,
    to create kind of an extra constitutional agency of Government.
        Whitewater investigations become investigations into lying
    about sex with interns. Investigations into classified leaks
    become prosecutions over perjury before grand juries. I would
    just observe that as a cautionary note with regard to that
    comparison for your consideration.
        Let me just say, I supported bipartisan legislation in the
    House in January for greater disclosure. I commend the majority
    for their leadership on ethics and earmarks. And so, to Mr.
    Mann's point, I am open to new ideas about how we create
    greater transparency and greater accountability.
        I am just really struggling with this grassroots provision,
    to be candid, and that has to do with my concern about the
    chilling effect.
        And I guess I would like to direct my questions, maybe
    first to Mr. Mann, and to the extent that--the panel, Mr.
    Gross, and Mr. Smith in particular.
        My question is, it seems to me that what has been talked
    about here--the dollar threshold or the rest--all of this
    activates, if, in fact--not if grassroots lobbying goes on to
    generate context to Congress, but if someone is hired to help
    do that.
        It does seem to me that I am perfectly free, if I was a
    private citizen, to go out and encourage people to write my
    congressman. But I get into a whole range of disclosures if I
    hire somebody who actually knows how to do that. So as long as
    I am kind of learning on my own how to do it and encouraging
    people, as opposed to hiring someone who professionally knows
    how to do it, that I am okay, under some of what has been
    discussed.
        And I hold the view Common Cause is a storied organization.
    Might be startled to know when I first ran for Congress 15
    years ago, I refused PAC money. I was the first Republican to
    do that. I have gotten over that. But Common Cause was harshly
    critical of me, even though I was advocating something they
    promoted at the time. But that was okay. My veteran father
    said, ``I can disagree with everything you say. But I will
    fight to the death for your right to say it.''
        So my question to the panel is is there any concern about a
    chilling effect? Would this encourage or discourage a diversity
    of views being expressed to Congress by the American people, if
    we essentially create a new hurdle, when people who are good at
    what they do, who are professional at what they do are engaged
    in assisting?
        I am beginning with you, Mr. Mann.
        Mr. Mann. Mr. Pence, I think that is very well-stated. I
    mean, that is the issue. And the key here is in adding any new
    disclosure provision that you don't have that chilling effect,
    that you don't discourage speech.
        My personal view is the more speech the better. That is why
    I am not in a related area, campaign finance. I am not in the
    business of eliminating money, reducing money. But I do
    believe, in the old days, if you will, one segment of the
    reform community said, ``Let's deregulate and disclose.'' Now,
    they are moving to deregulate and don't disclose.
        My view in this area is that you need to craft this
    provision in which no individual who hires professional help is
    going to have any reporting requirements at all. That is, you
    have to set this up so that what you are getting at is major or
    major paid communication campaigns to influence the general
    public to lobby Congress on a particular piece of legislation.
    And the only reporting requirement is from the firm that is
    taking in, say, $100,000 a quarter or more from a particular
    client.
        If you set the limits in that way, you are not going to
    touch any of the legitimate areas of concern that Mr. Franks
    and that Professor Smith have discussed, in my view.
        Mr. Nadler. Time has expired, but I see Mr. Gross----
        Mr. Pence. Thank you, Chairman.
        Mr. Gross. I don't think it is that far of a leap from what
    we are already requiring for direct lobbyists, that type of
    disclosure. And 31 States, based on the last survey that I did
    of States, actually has some form of grassroots disclosure
    right now.
        Mr. Nadler. Thank you. Does anybody else want to comment on
    that particular point?
        If not, the gentleman from Alabama?
        Mr. Davis. Thank you, Mr. Chairman.
        I know one of the purposes of this hearing is not so much
    to wade into the details of the legislation, but with four of
    you to talk about some of the theoretical underpinnings.
        Let me make two observations.
        I certainly take the concerns of my friend from Indiana,
    and I take the concerns, I take it, Professor Smith, that you
    have raised, but I don't understand the constitutional
    argument. I don't understand the argument that there is somehow
    a constitutional impediment on speech if we curtail lobbying
    activity in terms of more disclosures, in terms of more
    information being provided to the general public, for a very
    simple reason.
        The class of people or the class of entities who choose to
    lobby Congress or who choose to lobby Federal agencies is a
    self-selected group of folks. They decide to engage in a
    particular calling, that of lobbying. It is their right to do
    that.
        But it seems to me that the institution that is being the
    subject or the target of that speech, if you will, can put
    certain reasonable restrictions on time, place, or manner, can
    put certain reasonable restrictions on how that speech is
    received, how it is parceled out, and how it is disclosed. And
    without boring everybody here with 100 hypotheticals, that is a
    fairly bed-of-rock constitutional principle.
        So I don't understand the force of the argument that
    somehow we are curtailing the ability of individuals to engage
    in speech, because we limit how and when they can do it and who
    they have to tell about it.
        The second point that I want to make, again, going back to
    the broad atmospherics here. It is important. The status quo
    that we have is under attack. I agree with that. And there is a
    good reason it is under attack.
        Right now, I don't think anybody in this room disputes the
    obvious. Certain entities and certain individuals have more
    sway over this institution than others, and it is almost always
    a matter of resources and ability to mobilize. And, by the way,
    last time I checked, ability to mobilize is tied, first and
    foremost, to resources.
        All of us who have set in this institution the last several
    years have seen riders added to appropriation bills. We have
    seen votes on suspensions.
        Number one, several years ago, we were having a vote on
    something fairly innocuous involving whether foreign companies
    could sell parts to China that they could use as part of their
    missile program. And the thing was about to pass
    overwhelmingly, and Boeing discovered that it might somehow
    restrict some of their sales in some way, shape or form. And
    130 Members of the House went down to the well to change their
    vote on a suspension bill.
        Now, whether that was a meritorious decision or not, I
    don't think anybody can cite an example of a bill being on the
    floor and 130 Members going down to change their vote, because
    they discovered, all of a sudden, maybe this cuts the S-CHIP
    program more than we would like, or, ``Gee, maybe this affects
    funding for Medicaid in my State.'' I have never seen 130
    Members change their vote over that kind of thing.
        There is a reason for that world. There is a concentration
    of power and resources on one side.
        So I agree with some of the observations that have been
    made that some of this bill may sweep a little bit further than
    necessary. But there, frankly, may be a good reason that we
    have to do that, because the system now is so weighted and so
    imbalanced in one particular direction. So we may have to err
    on the side of regulation and disclosure to correct that
    imbalance.
        Any responses to any of those observations?
        Mr. Smith. As the one who has made the constitutional
    argument here on the panel, I guess I feel it is appropriate to
    respond, Mr. Davis.
        I would go back to the question of what is the harm that
    you are attempting to address? Where is the harm in citizens
    hearing about issues, even if it is from a paid campaign? Why
    is that harmful to them?
        Now, the only thing I have heard from harm is Ms.
    Dufendach, who has said several times, ``Well, we just have to
    know.''
        Mr. Mann keeps saying we have to know, but he doesn't even
    say why.
        Ms. Dufendach says, ``Because, otherwise, we can't judge
    the
    ----''
        Mr. Davis. Isn't the harm the imbalance, Professor Smith?
        Mr. Smith. Well, but here is where I want to get directly
    into your question, the imbalance is not something--the Supreme
    Court has rejected the notion that you can regulate speech of
    citizens in order to try to create equality.
        Furthermore, in Buckley v. Valeo, the Supreme Court
    rejected the notion that restrictions on money spending for
    speech can be viewed as time, place and manner restrictions,
    because they are aimed directly at the speech, not at the time,
    place and manner.
        And the court has consistently upheld the right of citizens
    to engage in anonymous speech. It has recognized only one
    constitutionally justifiable reason, and that is preventing
    quid pro quo corruption, and that corruption is not present
    where you are being contacted by voters----
        Mr. Davis. Hasn't the court said recently, in the Missouri
    case a few years ago, that the appearance of quid pro quo is
    also a constitutionally recognizable----
        Mr. Smith. Certainly, the appearance--yes, that is correct.
        Mr. Davis. And isn't all of this consistent with that
    Missouri ruling? Isn't it all aimed at appearance?
        Mr. Smith. I would say absolutely not because it still has
    to be the appearance of quid pro quo corruption. And, like I
    say, the one thing I don't----
        Mr. Davis. Wasn't that interpreted broadly in the Missouri
    case? That case dealt with campaign contribution.
        Mr. Smith. Well, but that is campaign contributions
    directly to candidates. And the view was that even though you
    were probably not corrupted when somebody gave you a $1,000
    contribution----
        Mr. Davis. Right.
        Mr. Smith [continuing]. Somebody might think you were.
        Mr. Davis. Right.
        Mr. Smith. But it dealt with specifically with
    contributions to your campaign.
        Mr. Davis. Doesn't the logic extend past contributions?
        Mr. Smith. No, it does not, because, in that case, you have
    a citizen who contacts your office. Are you corrupted when one
    of your constituents contacts your office? I don't believe you
    are.
        Mr. Nadler. The gentleman's time has expired.
        The gentleman from California?
        Mr. Issa. Thank you, Mr. Chairman.
        Professor Smith, I do want to follow up a little bit.
        First of all, my understanding is the Supreme Court held
    that privacy was a right. You know, we often argue over
    abortion up here on the dais, but isn't--just go through, sort
    of, an analysis.
        Isn't your ability to have a private vote, to go into a
    voting booth, although it is not as explicitly said in the
    Constitution, isn't there a general belief that you should have
    the privacy of the voting booth, that no one should know how
    you voted?
        Mr. Smith. Well, I think at least most people would agree
    with that, yes.
        Mr. Issa. Okay. Isn't it, every single place in the United
    States, if you vote for one of us up on the dais, you vote
    privately, that it is not open to the public in any way, shape
    or form?
        Mr. Smith. I believe that is true.
        Mr. Issa. Other than the tally. Okay. Well, following
    through on this, if, in fact, you have a private right of
    communication, then that private right of communication is
    abridged by this reporting.
        And we are talking about you didn't give a contribution. We
    already regulate contributions, but just the ability to
    communicate privately is abridged, by definition, if we tax it
    with these procedures.
        Mr. Smith. I think that is correct.
        Mr. Issa. Okay. Following the same line, though, we
    overtly, as a country, decided that poll taxes were wrong,
    didn't we?
        Mr. Smith. Yes.
        Mr. Issa. And that is a tax on or fee on executing your
    constitutional right, right?
        Mr. Smith. Correct.
        Mr. Issa. So if an individual or group of individuals want
    to exercise their constitutional right related to voting, we
    have asserted, constitutionally and through numerous court
    action, that you have a right to do these rights privately, and
    that you are not to be taxed or charged a fee unduly on them.
        SMITH; Well, I think that is correct. And I think it goes
    as well to the chilling effect that has been brought up by Mr.
    Pence and by the Ranking Member and that has been recognized by
    the court repeatedly.
        There is a chilling effect. The court has recognized it
    over and over. And I go back to it doesn't really matter why.
    As Justice Stephens said in McIntyre, he said, ``The decision
    to favor anonymity may be motivated by fear of economic or
    official retaliation, by concern about ostracism or merely by a
    desire to preserve as much of one's privacy as possible.'' I
    think that is exactly right.
        Mr. Issa. Now, I am a Californian, and there is a kind of
    an interesting thing in California. When you go to vote in
    California, we can't ask you for a driver's license or other
    proof of who you are. Did you know that?
        Mr. Smith. I was not specifically aware, I guess, of where
    we stood in California.
        Mr. Issa. Well, it is something that I have long wanted to
    change. This Committee has worked on trying to get reforms that
    would require that if you want to vote, you prove you have a
    right to vote. And the folks that are not presently on the
    other side of the aisle, but when they are present on the other
    side of the aisle, have pushed back on that. And one of the
    reasons is because that if we had the audacity to demand that
    you prove you have a right to vote that we would be pushing you
    away from the voting booth.
        Isn't reporting by grassroot groups, both a tax and an
    elimination of anonymity? And wouldn't it, at a minimum, have--
    and I think you have already quoted once--a potential chilling
    effect? And isn't that what we are dealing with here today is
    that that--that potential exists every bit as much in this
    legislation as it exists in polling-place observation, polling-
    place--if you put the Border Patrol at all the voting places in
    California, et cetera?
        Mr. Smith. If you make it hard for people to hire skilled
    consultants, because those consultants are afraid they are
    representing an unpopular cause, and they rely on the good will
    of folks here in Washington, it very definitely has that
    effect.
        And to elaborate briefly, you mentioned the tax thing, the
    cost of reporting can be very considerable. Many organizations,
    not big ones, spend $50,000, $60,000 a year or more----
        Mr. Issa. And last but not least, isn't the most
    influential group probably in the United States right now
    MoveOn.org, a 527, backed by hundreds of millions of dollars by
    just one person who wants to have huge influence, who does so--
    or at least they are on the top 10?
        Mr. Smith. I will leave it as your characterization. They
    have been a very influential group and were started----
        Mr. Issa. Right.
        And last but not least, this legislation, wouldn't it also
    impact groups like EMILY's List? Because this, in fact, talks
    about bundling. If we are going to get into bundling, then
    wouldn't we envision that EMILY's List would be restricted to
    one contribution and not dozens and dozens only given to pro-
    abortion Democrat women?
        Mr. Smith. Well, I don't know exactly enough of how EMILY's
    List works, but bundling can affect a lot of people. And it
    points up that this is not, as some have tried to make it, sort
    of a partisan issue. You have got the ACLU and a wide variety
    of groups on both sides of the spectrum are concerned about
    this.
        Mr. Issa. Thank you, Mr. Chairman.
        Mr. Nadler. We have no more Democratic Members who wish to
    ask questions, so that the Ranking Member's fears were
    misplaced.
        We will be able, with one more Republican asking questions,
    to finish in time to get to the vote. So I recognize the
    gentleman from Ohio.
        Mr. Jordan. I appreciate there seems to be consensus
    developing on the definitions and the vagueness there, at least
    I heard from a couple of the panel. Appreciate that. And it
    certainly seems to be something that the Committee can work on.
        I want to just go back to the principle that--relative to
    the grassroots lobbying issue that Professor Smith has brought
    out, just this fundamental idea that citizens contact their
    Government and why that is a good thing.
        I mean, my guess is all the members of the panel and
    probably every Member of Congress is like our office. I have
    just been in office 2 months, but one of the things we take
    great pride in is how we respond back to the constituents who
    get a hold of us. So I actually do something each evening,
    because I can't get home to my family. We are here all week,
    and family is back in Ohio.
        I take 10 or 12 people who have contacted our office that
    day and call them back. And it is amazing how many times that--
    you know, the first one, I say, ``This is Congressman Jordan
    calling,'' that they will say, ``Really?'' I mean, it is just
    amazing that they are talking to--you know--the guy that they
    may have voted for, but who at least represents them.
        So I guess I come back to this concept. Professor Smith has
    probably said it best. What is wrong with some organization,
    some entity motivating citizens to contact their
    representative?
        And to call it Astroturf, to call it artificial, to call it
    illegitimate doesn't make sense. It seems that is a good thing.
        In fact, I think the Chair, if I wrote his statement down
    correctly in his--or in his opening statement, talked about a
    private citizen without a PAC should get as much attention as a
    lobbyist with one. And this would seem to help that citizen
    have a better chance of talking to their representative, the
    representative responding back to them.
        So, again, just walk me through--and we have had--I looked
    at the testimony. I think Mr. Gross had talked about the
    concerns over the now-deleted provisions have been generally
    overstated. We have got that kind of general statement versus
    what Mr. Smith has said, that it is a chilling effect, that it
    is unconstitutional, that it is a terrible concept to pursue.
        Just elaborate a little bit more, if you could.
        Mr. Gross. Well, I think the road we are going down here is
    that there is something unholy or improper about a hired gun in
    a lobbying process, or at least there is some chilling effect
    if you hire somebody to lobby. And, now, we are even talking
    about maybe direct lobbying.
        You know, all we are talking about here is disclosure. It
    is true that disclosure--I mean, you have the right to address
    your Government. It is a first amendment-protected right. The
    disclosure of that, whether it is direct lobbying or indirect
    lobbying, is a minimal intrusion on that right.
        So the question is is it a justifiable intrusion? And--go
    ahead.
        Mr. Jordan. Right. It certainly is. I mean, I think about
    our campaign account. We have a lawyer, who is a CPA, who is--
    He asks me--I mean, down the line--and it is still tough to get
    everything right to comply with campaign finance.
        Now, we are talking about the influence it is going to have
    on citizens or groups who may spend whatever the threshold
    amount winds up being. That certainly is a chilling effect.
        Mr. Gross. There is----
        Mr. Jordan [continuing]. For someone who hires, we hire a
    good person to do our stuff, because we want to get it right.
        Mr. Gross. And even requiring direct lobbying, which no
    one, I think, is disputing, the disclosure of direct lobbying
    is an intrusion as well. If you go out and hire a lobby firm
    and you gotta keep track of this and report it on your LDA form
    every quarter, there is an intrusion there as well.
        The court has said if there are large amounts of money
    spent to influence the process--campaign finance is one thing.
    That you can actually limit. But if it is a large amount of
    money to influence the process, and it is not interfering with
    associational rights, that that disclosure of the dollars spent
    on that is a minimal intrusion against the possible corrosive
    effect that undue amounts of money can have on the process,
    whether it is direct or indirect. That is the constitutional
    underpinning for the disclosure of any of this, which is an
    infringement. No question about it.
        I don't know how else to address it, except that I think if
    you narrowly draw that extension, just by hiring, just by
    requiring disclosure of a hired gun in certain situations is
    not an overwhelming, chilling effect for direct or indirect
    lobbying.
        Mr. Smith. Mr. Jordan, if I could briefly comment----
        Mr. Gross. In fact, it is----
        Mr. Smith [continuing]. I would say that one of the things
    that has been overlooked, too, is there is an effort to do this
    through members, and say, ``Well, we will exempt membership
    organizations.''
        In addition to the Chair's comment, why should you be
    limited if you don't have a PAC, why, if you haven't had the
    foresight to form a big membership organization 10 years in the
    past, should you now be limited in your ability----
        Mr. Jordan. Right. Good point.
        Mr. Smith [continuing]. To speak to the American people.
        Mr. Mann. The court has upheld disclosure in campaign
    finance. The Lobbying Disclosure Act is not, as far as I know,
    under challenge. Constitutionally, this is a fairly minor
    addition to it. All of the disclosure responsibility is not
    with individuals----
        Mr. Nadler. Thank you. Thank you.
        Mr. Mann [continuing]. With others.
        Mr. Nadler. Thank you.
        The gentleman's time has expired.
        We have less than 5 minutes on a vote.
        Without objection, all Members will have 5 legislative days
    to submit to the Chair additional written questions for the
    witnesses, which we will forward and ask the witnesses to
    respond as promptly as you can, so that their answers may be
    made part of the record.
        Without objection, all Members will have 5 legislative days
    to submit any additional materials for inclusion in the record.
        Without objection, I thank the Members of the panel. I
    thank the witnesses. I thank the Members of the Committee.
        With that, the hearing is adjourned.
        [Whereupon, at 11:37 a.m., the Subcommittee was adjourned.]

                                A P P E N D I X

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                   Material Submitted for the Hearing Record