[Congressional Record Volume 141, Number 109 (Friday, June 30, 1995)]
[Extensions of Remarks]
[Pages E1388-E1390]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                POLITICAL ADVOCACY WITH TAXPAYER DOLLARS

                                 ______


                       HON. ERNEST J. ISTOOK, JR.

                              of oklahoma

                    in the house of representatives

                          Friday, June 30, 1995
  Mr. ISTOOK. Mr. Speaker, please include the following remarks in the 
Record regarding ``Political Advocacy with Taxpayer Dollars.''
  Political Advocacy With Taxpayer Dollars Violates the Rights of All 
                               Taxpayers

  (Testimony of Representative Ernest J. Istook, Jr., June 29, 1995, 
   before the House National Economic Growth, Natural Resources and 
                    Regulatory Affairs Subcommittee)

       It is time to end taxpayer funded political advocacy! Over 
     40,000 organizations receive over $39 billion in Federal 
     grant funds directly. Preliminary examination of the problem 
     makes it apparent that grant abuse is rampant and needs to be 
     addressed with systemic reform. Systemic reform must not be 
     targeted at any particular group nor any particular political 
     philosophy but must allow the U.S. Congress to perform its 
     fiduciary responsibility to the American taxpayer. That 
     responsibility requires the Congress to track Federal Budget 
     dollars to their usage point.
       I feel strongly that these Federal dollars represent the 
     hard work of many Americans who deserve the assurance that 
     when they are compelled to pay taxes, that these tax dollars 
     are being used appropriately. Using tax dollars for political 
     advocacy not only violates the principles of free speech and 
     free association. Just as the U.S. Supreme Court has ruled 
     (Abood v. Detroit Board of Education, 1977) that compulsory 
     union dues cannot be used to fund political activity, so, 
     too, compulsory taxes should not be used for this purpose. 
     The legislation several of us are working on is but one step, 
     though a major step, in stopping some of the fraud, waste and 
     abuse that plagues the Federal Budget.
       The various attempts at addressing taxpayer-funded 
     political advocacy problem have proven to be inadequate. Were 
     this not the case the problem would not continue to be a 
     significant problem. The IRS Code restrictions on many of the 
     non-profit organizations and the Byrd amendment in 1990 have 
     all proven to be inadequate. Though it is technically illegal 
     to use taxpayer funds for lobbying, schemes have been created 
     to circumvent the law. These include automatically sending a 
     certain percentage of grant money to cover overhead for the 
     lobbying arm, and subgranting funds to other organizations, 
     in which case the audit trail ends. Sometimes the laws that 
     exist are so vague and unenforceable that they are not 
     satisfactory. An example of this is the lobby registration 
     and reporting requirement for Congress. Lobbying is not 
     defined in the law, so lobbyists only report time and 
     expenses for time on Capitol Hill, not time spent in the 
     office studying the issues, making phone calls to prepare for 
     visits, etc. The Byrd amendment never defined appropriated 
     funds, so funds are no longer considered appropriated after 
     they've been deposited into the organization's checking 
     account.
       The goal is not and never should be to restrict free 
     speech. Instead, the goal is to avoid the use of tax dollars 
     to subsidize the private speech of those who have political 
     connections or who rely on taxpayers' money to advocate their 
     political views.
       Upon examination of this problem, I feel the following 
     principles must be put into law regarding the usage of 
     Federal funds by Federal grantees:
       a. The term ``lobbying'' is too narrow to be useful for 
     this purpose. The broader term ``political advocacy'' should 
     be used and defined under the law. This definition would 
     extend to Federal grantees engaging in political campaigns, 
     lobbying the legislative or executive branch agencies from 
     the Federal to the state and local level, and engaging in 
     efforts to influence general and specific public policy 
     through confirmations, referendums or judicial action.
       b. No federal funds should be used for political advocacy.
       c. No grant funds should be used to provide support to 
     other organizations who, in turn, conduct political advocacy.
       d. No organization that receives a federal grant should, in 
     turn, grant those funds to others, except as provided in the 
     authorizing law that created the organization (i.e. the 
     Institute of Peace, the Corporation for Public Broadcasting, 
     etc.) Such
      grantees should be under the same obligation as if they 
     received the Grant directly from the Federal government. 
     Current law does not require this. This will not include 
     state and local governments, but would include any private 
     entity which receives federal grant funds, passed through 
     to them by state or local governments.

[[Page E1389]]

       e. Any Federal grantee should be subject to an audit, at 
     the government's request, and must prove ``by clear 
     convincing evidence'' that any funds used for political 
     advocacy did not come from Federal funds. Grantees are 
     expected to use ``generally accepted accounting principles'' 
     (GAAP) in keeping records. This provision will not require 
     any unusual accounting methods, and will deter, in fact, 
     ``creative'' or otherwise lax accounting.
       f. The federal dollar should be followed to its point of 
     use. This will insure Congress is able to insure each 
     taxpayer dollar is appropriately used for its intended 
     purpose.
       g. Information about all of these grants should be 
     available to the general public.


                   case study: the nature conservancy

       We have already heard testimony today about the Nature 
     Conservancy's use of Federal taxpayer dollars to crush local 
     opposition to a nature sanctuary. This action, even if it 
     were authorized by Congress, violates the rights of the 
     citizens of that county in Florida. The Nature Conservancy, 
     from what we know in this case, used at least $44,000 from 
     the Department of Commerce to National Oceanic and 
     Atmospheric Administration (NOAA), plus $75,000 (most likely 
     Federal funds) from other organizations' subgrants.
       In the Nature Conservancy's ``NOAA Performance Report for 
     the Quarter Ending September 30, 1993,'' they discuss 21 
     items, 19 of which are clearly political advocacy under the 
     definition I expect to outline in my proposed legislation. 
     Items included preparing testimony for people to testify 
     before Congress and ad campaigns. Please notice their item 
     17, which states that they spent money for this effort:
       Developed and directed plan to counter opposition's push 
     for a county-wide referendum against the establishment of the 
     Sanctuary. Recruited local residents to speak out against 
     referendum at two Board of County Commissioners hearings. 
     Organized planning conference call with members of the Center 
     for Marine Conservation, the Wilderness Society, and the 
     Nature Conservancy to discuss plan. Plan was successful in 
     blocking referendum (a 3-2 vote), and generated many positive 
     articles and editorials using many of the messages discussed 
     in plan.
       They blocked a public vote on their plan. This is raw 
     political activity. It does not deserve a subsidy from the 
     voters who they sought to silence.
       The issue is not which organization was bigger, more 
     organized, etc. I would be just as disturbed with any other 
     group Federal grant dollars and using those dollars to crush 
     local opposition to their members' goals.
       We have the right to freely associate with those who 
     espouse principles that we endorse. The key word here is 
     ``freely.'' When tax dollars are used for political advocacy, 
     this is not, by
      any definition, a free speech or free association.


                       first amendment protection

       Some opponents have a general misconception that it is 
     unconstitutional to prevent organizations, especially non-
     profit organizations, from engaging in political advocacy 
     with taxpayer dollars. Nothing could be further from the 
     truth. It is, in fact, unconstitutional to permit recipients 
     of federal funds from engaging in political advocacy with 
     those dollars. In the case of Rob Jones University v. United 
     States, the Supreme Court noted that, ``When the Government 
     grants exemptions or allows deductions, all taxpayers are 
     affected; the very fact of the exemption or the deduction for 
     the donor means that other taxpayers can be said to be 
     indirect and vicarious `donors'.'' In 1977, the Supreme Court 
     ruled in Abood v. Detroit Board of Education that it was 
     unconstitutional to require teachers to contribute to a union 
     where the dues were used to support ideological causes the 
     teacher opposed. The court said that taxpayers should not be 
     required, either directly or indirectly, ``to contribute to 
     the support of an ideological cause [they] may oppose.'' 
     Where recipient organizations receive both a tax exemption 
     and government funding and then use government funds to 
     engage in political advocacy, it is clear the government, and 
     hence the taxpayers, are both supporting the political views 
     advocated by the recipient organization. The Supreme Court 
     noted several years ago in First National Bank of Boston v. 
     Bellotti that where governmental action ``suggests an attempt 
     to give one side of a debatable public question an advantage 
     in expressing the views to the people, the First Amendment is 
     painfully offended.''
       Thus the right of free speech also includes the right not 
     to speak. It includes the right not to support causes or 
     ideologies with tax dollars. No taxpayers should be compelled 
     to support ideological causes or political points of view 
     with which the taxpayer disagrees. This is very important 
     because taxes compulsory, not voluntary. Thus the federal 
     government has a special duty to protect free speech and 
     prevent, whenever possible, the infringement of the free 
     speech of all taxpayers.
       This position is clearly supported by the Supreme Court. On 
     May 23, 1983, the United States Supreme Court unanimously 
     upheld the right of the Federal government not to subsidize 
     the lobbying activities of private, nonprofit, tax-exempt 
     organizations. In the case of Regan v. Taxation with 
     Representation of Washington, 51 U.S.L.W. 1588 (1983), 
     Taxation with Representation of Washington (TWR), a nonprofit 
     corporation organized to promote what it conceived to be the 
     ``public interest'' in the area of federal taxation, applied 
     for tax-exempt status under Section 501(c)3 of the Internal 
     Revenue Code. The IRS denied the application because a 
     substantial part of the organization's activities consisted 
     of lobbying activity. TWR sued based on First amendment and 
     equal protection under the fifth amendment. The court 
     rejected TWR's contention that the government may not deny 
     their application for tax-exempt status. The Supreme Court 
     stated:
       Both tax exemptions and tax-deductibility are a form of 
     subsidy that is administered through the tax system. A tax 
     exemption has much the same effect as a cash grant to the 
     organization of the amount of tax it would have to pay on its 
     income. . . . Congress has not infringed any First Amendment 
     rights or regulated any First Amendment activity but has 
     simply not chosen to subsidize TWR's lobbying out of public 
     funds. . . . A legislature's decision not to subsidize the 
     exercise of a fundamental right does not infringe on that 
     right and thus is not
      subject to strict scrutiny. It was not irrational for 
     Congress to decide that tax-exempt organizations such as 
     TWR should not further benefit at the expense of taxpayers 
     at large by obtaining a further subsidy for lobbying. . . 
     . We have held in several contexts that a legislature's 
     decision not to subsidize the exercise of a fundamental 
     right does not infringe the right. . . . It is also not 
     irrational for Congress to decide that, even though it 
     will not subsidize substantial lobbying by charities 
     generally, it will subsidize lobbying by veterans' 
     organizations. . . . Congress is not required by the First 
     Amendment to subsidize lobbying. . . . Congress--not TWR 
     or this Court--has the authority to determine whether the 
     advantage the public would receive from additional 
     lobbying by charities is worth the money the public would 
     pay to subsidize that lobbying, and other disadvantages 
     that might accompany that lobbying.'' (Regan v. TWR) 461 
     U.S. 540 (1983)
       There is no attempt in our proposed legislation to suppress 
     or limit the First Amendment rights of recipient 
     organizations. There is no ideological classification to 
     apply this to some groups while exempting others. That would 
     not be right. The same standards must apply to all 
     organizations, regardless of their place on the political 
     spectrum. Potential federal grantees would remain free to 
     engage or not to engage in political advocacy as they see 
     fit. I repeat, potential federal grantees would remain free 
     to engage or not to engage in political advocacy as they see 
     fit. They are simply prevented from receiving a tax-paid 
     subsidy for their political advocacy.
       Our legislation also should not be compared to the anti-
     lobbying bill in the 103rd Congress. There is no attempt in 
     this bill to curb or restrict grass-roots lobbying 
     organizations. Nor is there a focus on lobbying as a whole. 
     The touchstone, the trigger for this act, and its provisions, 
     would specifically apply to federal grantees engaging in 
     political advocacy, directly or indirectly, with those funds, 
     thus violating the free association rights of U.S. taxpayers.


                        LIMITED PUBLIC ADVOCACY

       To be sure, many individuals, organizations and businesses 
     in this country spend some of their funds on political 
     advocacy. This is a normal activity and should not be 
     suppressed. After all, we live in a civil society that 
     depends upon democratic participation in the political 
     process. Thus, the fact that an entity engages in political 
     advocacy should not automatically bar the receipt of federal 
     grant money. However, government oversteps the bounds of 
     neutrality when it begins to award grants to selected 
     entities that have as one primary purpose the conduct of 
     political advocacy.
       The First amendment guarantees the right to petition the 
     government for a redress of grievances. But it does not 
     require the government to pay you for it. After careful 
     review, I have found that a reasonable threshold is when 
     organizations spend 5% or more of their annual expenditures 
     to conduct political advocacy. This provision is similar to 
     the IRS 501(h) safe-harbor provisions of the IRS Code for 
     non-profit organizations. This code provision prohibits a 
     wide variety of political activity over $1,000,000 in 
     expenditures. While the 5% threshold is seemingly small, such 
     a percentage is, in fact, quite significant: First, in this 
     modern information age, with cheap and high-speed means of 
     communication, a little money can go a long way; and second, 
     because of the fungibility of cash, each federal dollar 
     received by a grantee frees up more private dollars for 
     political advocacy, thereby leading to a growing amount of 
     indirect government support for political advocacy.


                               CONCLUSION

       Provisions of the legislation we are proposing is designed 
     to protect the First amendment rights of all Americans and, 
     at the same time, fulfill the trust that voters in this 
     Nation have given members of Congress. As the Supreme Court 
     has stated, ``Congress is not required by the First Amendment 
     to subsidize lobbying. . . . Congress--not TWR or this 
     Court--has the authority to determine whether the advantage 
     the public would receive from additional lobbying by 
     charities is worth the money the public would pay to 
     subsidize that lobbying, and other disadvantages that might 
     accompany that lobbying.'' (Regan v. TWR) Congress is charged 
     with insuring taxpayer funds are spent properly, for the 
     public good. The legislation we are crafting has been 
     carefully designed to keep the compliance burden as 

[[Page E1390]]
     low as possible, while insuring that the rights of all Americans are 
     protected.
       I invite public comment on the ideas presented in my 
     testimony and regarding our proposed legislation.
     

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