[Congressional Record Volume 141, Number 148 (Thursday, September 21, 1995)]
[House]
[Pages H9419-H9426]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              GRANT REFORM

  The SPEAKER pro tempore (Mr. Ehlers). Under the Speaker's announced 
policy of May 12, 1995, the gentleman from Maryland [Mr. Ehrlich] is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. EHRLICH. Mr. Speaker, I rise today to engage two freshmen 
colleagues personal friends and people I have high regard for, in a 
colloquy concerning grant reform. I want to take this opportunity to 
publicly thank the gentleman from Washington [Mr. Tate] and the 
gentleman from Indiana [Mr. McIntosh], the chairman of the 
subcommittee, for their wonderful leadership on this issue.
  Let me begin the colloquy by making an observation. It seems as 
though there are a lot of people paying attention to what we have done 
in the House so far, with respect to grant reform, Mr. Speaker. Every 
major newspaper in the country has editorialized with respect to grant 
reform over the last few weeks, and we certainly hit a nerve with the 
American people.
  Now I direct my first question to the gentleman from Indiana [Mr. 
McIntosh], the chairman of the committee and one of the leaders along 
with our friend, the gentleman from Oklahoma [Mr. Istook], in our 
effort, and, of course, the gentleman from Washington [Mr. Tate], being 
one of the more recent victims of the opposition with regard to this 
issue.

                              {time}  1615

  My question to you, my friend, is a lot of people thought we would 
never get this far. And here we are. We had a resounding victory on the 
House floor. We are now in the Senate conference committee.
  I see the gentleman from Washington [Mr. Tate] putting up a piece of 
demonstrative evidence we have used on this floor in the past. I know 
my chairman of the subcommittee wants to make a few remarks at the 
beginning here, and I will yield to him.
  Mr. McINTOSH. Mr. Chairman, I thank the gentleman for taking the lead 
in making the American people aware of what, quite frankly, has been a 
dirty little secret in this town, that Federal taxpayer money has been 
going to lobbying groups in the form of grants.
  The chart that our colleague [Mr. Tate] has shown how this welfare 
for lobbyists works. The taxpayers paying $39 billion, some people 
estimate it would be as many as four or five times that amount in 
grants to many special interests.
  Now, some of them are very worthy charities who are doing the right 
things in their communities, but there are a lot of those groups who 
are really lobbying and political front groups who are taking taxpayer 
dollars and using them to engage in political tactics.
  Now, let me say I think everyone has a right to speak out in this 
country, but they do not have a right to speak out with somebody else's 
money and to be funded by the taxpayer.
  One of the things that our committee is committed to doing is holding 
a series of hearings on this, looking into these groups and finding out 
some answers to some basic questions. Those groups that are lobbyist 
groups, we want to know, is it true that you are segregating the grant 
money you are receiving from political activities? Is it true that you 
have safeguards in place to make sure that you do not violate the 
current law that prohibits that direct funding? And then we also want 
to know what plans that group has been engaged in to encourage lobbying 
by other groups.
  Mr. EHRLICH. Of course, that is the problem. That is really the 
problem.
  Mr. McINTOSH. Exactly. And it is a continuous cycle that has led to 
huge deficit spending in this country.
  Then there is another group who say, we are not lobbying groups, but 
we do not like this reform. And what I want to know from those groups 
is, what do they do to ensure that their donors have accurately been 
informed of what lobbying they do do?

  There are some very highly regarded groups in this country. I am 
thinking of groups like the United Way, the Red Cross, the Girl Scouts, 
the Boy Scouts, who also receive Federal grants, and they engage in 
very worthy and noble activities. Some of them tell us they also want 
to be lobbyists, not extensively, but part-time. And I think we need to 
tell their donors, did you know that they also want to lobby with some 
of the money that you have given them? How much of that money is spent 
on lobbying? Is there a problem with the Washington groups lobbying, 
whereas the groups in the States and the communities do not do that but 
are, in fact, engaged in charitable activities?
  We are going to try to develop a record in our committee on those 
issues.
  Mr. EHRLICH. If the gentleman would yield, really is that not the 
threshold fundamental problem here? It seems as though we have 
addressed this both here on the floor and at various times we have had 
to discuss this issue off the floor, and it seems for some reason, and 
the reason appears to be Federal money, to have developed over the 
years a distinction between acting as an advocate and fulfilling the 
mission of the particular organization.
  I believe it is fair to characterize our piece of legislation as an 
attempt to return these groups. And we are not talking about, by the 
way, many groups out of thousands, tens of thousands of groups, only a 
few hundred who, in our view, have violated both the letter and the 
spirit of the law, by trying to get rid of that distinction, trying to 
limit that distinction to return these groups to their fundamental 
mission, which is to provide service for the less fortunate in our 
society.
  Mr. McINTOSH. The gentleman is exactly correct.
  We heard testimony in one of our hearings in July from Mrs. Arianna 
Huffington who told us that there was a serious problem in the 
charitable community that, rather than doing good works, helping the 
elderly, helping clean up the environment, helping the young people, 
and you may remember she talked about Mrs. Hannah Hawkins here in 
Washington who had used her own money to set up a home for children 
after school in the inner city neighborhoods. They are moving away from 
those charitable missions into becoming lobbyists and advocates that 

[[Page H 9420]]
the Federal Government take over those programs, and she thought that 
was, in fact, corrupting the spirit of charity in this country and that 
our bill would do a lot in this country to restore the true sense and 
purpose of charity.
  So I think you are exactly correct on that point.
  Mr. EHRLICH. Now, I know we have a lot to say about some of the 
misinformation our opposition has used, but I think probably the best 
Member to talk about that is our colleague, Mr. Tate, and I yield to 
Mr. Tate.
  You have been a victim. What happened?
  Mr. TATE. Well, first of all, I would like to thank the gentleman 
from Maryland [Mr. Ehrlich] and the gentleman from Indiana [Mr. 
McIntosh]. Mr. Speaker, these gentlemen, along with the gentleman from 
Oklahoma [Mr. Istook], have done a phenomenal job of bringing this 
issue to the forefront.
  Some of the arguments, and I will get into some of the attacks that 
are occurring at home by some of those organizations that are receiving 
public grants, mind you. Some of the opposition, for example, is: Well, 
you are violating free speech if you are limiting at some capacity what 
they can do with their private dollars.
  The point is, how can it be free? Once again, how can it be free if 
the taxpayers are subsidizing it? The taxpayers are paying for this so-
called free speech.
  I am not here to tell an organization what they can do and cannot do 
with their own money. The point is, they are being subsidized by the 
taxpayers. So we have an obligation to watch out for what is going on.
  The other point is that somehow it is intrusive in some other 
capacity, that somehow it is Orwellian to tell these organizations what 
to do.
  I can think of nothing more intrusive to me or the people of the 
Ninth Congressional District of Washington State than to reach into my 
pocket and take my hard-earned money, to give it to some organization 
or to the Government that gives it to some organization that turns 
around and lobbies for things I do not believe in.
  I mean, we have some great examples, if I may. The American Bar 
Association, for example, just this year as we were working on the flag 
amendment. We can argue whether we should have an amendment to protect 
the flag or not to protect the flag. That is part of our political 
system. What I find very offensive is when organizations like the 
American Bar Association receive millions of dollars in public grants 
and then turn around and lobby against legislation. That is wrong.
  It hit close to home the last couple of weeks, I can tell you, in my 
particular district; and the Washington Times has done a good job of 
chronicling what has been going on.
  Basically what is going on is taxpayer funding of the big lie. They 
are attacking me back in my district. The attacks have ranged from 
anywhere that there would be a greater chance of workers maybe being 
killed by the legislation being passed to somehow Medicare is being 
cut. Two lies. Two lies. And they are being subsidized by the 
taxpayers.
  I can give you a couple of examples of the organizations and how much 
money they have received in public grants. For example, in my 
particular district, the AFL-CIO, under the guise of Stand Up For 
America, spent over $80,000. These on are ads back in my district.
  Another organization called Save America's Families spent over 
$85,000 on television and radio ads, not counting the amount of money 
they spent on Medicare events, spreading the big lie at taxpayer 
expense.
  For example, the AFL-CIO, which is the umbrella group for these 
organizations, received in grants last year, 1994, $1.2 million; and so 
far this year that we can document, they have spent $1.4 million in 
attack ads spreading the big lie across the country.
  So, basically, what we are doing is, once again, hard-working people 
send their money to Washington, DC. They turn around, the Government 
turns around and gives it out to organizations that spend it attacking 
people trying to change the status quo.
  So those are the kinds of changes that we are trying to make back 
here. I guess we should be judged by our enemies. Those organizations 
that are the defenders of the status quo do not like what is going on 
back here, and it is a sign that we are doing our job. If you are not 
making some enemies in Washington, DC, you are not doing your job.
  I yield to the gentleman from Indiana [Mr. McIntosh].
  Mr. McINTOSH. You mentioned that this advertising was going on in 
Washington State in your home area, and that in many cases they were, 
in fact, misinforming the public about what was happening and doing so 
from groups who have been receiving a lot of grant money.
  I had received some information that there are a list of eight 
different groups who have received nearly $100 million in grants, who 
have spent over $6 million in lobbying and political activities, giving 
people bad information about what is happening.
  One of the groups that is not listed there is 60 Plus, and they 
commended us for our effort to try to end the subsidy for these groups 
that are engaged in this type of political activity. The 60 Plus 
Association represents senior citizens in this country. They felt 
seniors were being mislead by a lot of this.
  Was the National Council of Senior Citizens one of the groups that 
was involved in this type of political advocacy?
  Mr. TATE. It is my understanding that they have been involved. In 
fact, the Save America's Families Coalition, which includes Citizen 
Action, the National Conference of Senior Citizens, the AFL-CIO, the 
Service Employees Union, and others, are the ones that are paying for 
the millions of dollars of ads across this country. And the thing to 
keep in mind with that organization is that they receive over $70 
million every year, which makes up 96 percent of their entire budget, 
and then they turn around, and they are spending money with 
advertising.
  Mr. McINTOSH. Do you mean to tell me that they receive over $70 
million of taxpayer funding?
  Mr. TATE. Absolutely. Taxpayer money, $750 million every year in 
taxpayer money, 96 percent of their entire budget, and then they are 
turning around and using money to lobby against reforms that preserve 
and protect Medicare. Taxpayer funding of the big lie.
  Mr. McINTOSH. So this group has been receiving all of this taxpayer 
money, and yet they are spending it on commercials that are not even 
truthful to senior citizens?
  Mr. TATE. You are exactly right.
  Mr. McINTOSH. That is incredible.
  Mr. EHRLICH. If the gentleman would yield, I think I speak for all 
three of the sponsors of this rider when I say we have a great deal of 
confidence that your constituents will see through all of these 
misrepresentations, because facts are dangerous to demagogues.
  Mr. TATE. If the gentleman would yield, we have received, I think as 
of mid-yesterday, about 660 calls on this particular commercial that is 
running back in our district, and over 640 of the calls were saying, 
Randy, stick to your guns; do not give up; we elected you to go back 
there and make real change. What they are outraged about is the 
outrageousness of the lines and the fact that the opposition has no 
plan and that it is all being paid for, these ads, or at least 
subsidized, by their own tax dollars.
  Mr. EHRLICH. The moral here is that these people are smarter than 
these organizations give them credit for.
  Mr. TATE. Exactly.
  Mr. EHRLICH. I see we have been joined by our colleague and friend, 
Mr. Istook from Oklahoma, and I know he has a lot to say on this 
subject. And I know I join my colleague, Mr. McIntosh from Indiana, in 
congratulating him on his great leadership on this bill, and I would 
like to recognize him.
  As a lead-in to his comments, I would just like to point out the fact 
that I sat next to Mr. Istook on the floor when we had our debate here 
a few weeks back, and we were frustrated. Obviously, we had a time 
limitation with respect to how we could respond to some of the charges 
from other side. I believe we were termed as fascists, one of the more 
interesting adjectives used to describe us on the floor that day.
  I know it has been very, very frustrating for all of us involved in 
this 

[[Page H 9421]]
issue to have to respond to simple representations about what this 
rider is about. We have heard that it stops all advocacy, that Pell 
grants are affected, that specific groups are affected, that 
entitlements are affected, that the courts are affected, that States 
and local governments are affected, educational grants.
  Is there any end to the misrepresentations we have heard on this 
floor? I direct the question to our colleague from Oklahoma.
  Mr. ISTOOK. Well, I thank the gentleman. I appreciate people standing 
firm on this effort, because you hear outrageous things. You hear 
people saying, well, if you receive some sort of farm assistance or if 
you receive a student loan or if you receive welfare benefits. And yet 
the legislation clearly states that we are not talking about government 
assistance payments to any sort of individual. We are merely talking 
about government grants which go to organizations.
  The situation is such that we have had what I feel is a perversion of 
the true reason for the existence of charities in this country, and 
Chairman McIntosh and his subcommittee has had hearings that has helped 
develop this. People talking about, you know, we were part of a group 
that was formed to be a nonprofit charity. We raised money trying to 
help people, trying to do good. Then we found people trying to take it 
over and saying, the way we can really do good is to spend all of our 
time and effort, or most of it, anyway, and our resources lobbying 
government for more government programs, more resources, higher taxes 
to pay for it, and they call that charity.

                              {time}  1630

  That is not charity. We need to help the private charities in this 
country to fulfill their true mission by helping separate them from 
those that are masquerading as charities, but are really extensions of 
the Federal Government and extensions of lobbying groups and political 
advocacy groups. We need to draw a clear distinction between them.
  If someone says we want Federal money, now they are not forced to ask 
for Federal money, they are not forced to take Federal money, they 
voluntarily say they want Federal grants to further a purpose, which is 
different from so many other charitable groups. Yet at the same time, 
they want the Federal handouts, but they say nevertheless we want to 
continue to be political advocates rather than true charities.
  There is a difference. There is a crucial difference in who we ought 
to be providing assistance to, and it really scares me that there have 
been some reports that say that the typical nonprofit group today 
receives a third of its money from the government. Now, that frightens 
me. We do not want people to be saying they are charities when actually 
they are extensions of government agencies. If they are an extension of 
the government, they should accept the same type of safeguards which 
would control a Federal agency if it were carrying out a particular 
program.
  They would never be allowed to engage in the type of advocacy that is 
involved there. So if they are carrying out a private function, that is 
great. They ought to be satisfied with the private dollars. If they 
want public dollars, then they ought to accept the types of limitations 
that accompany public dollars.
  It is wrong to ask taxpayers to subsidize political viewpoints 
through this. Thomas Jefferson had a statement on this, and he said to 
compel a man to furnish funds for the propagation of ideas he 
disbelieves and abhors is sinful and tyrannical. I have no desire, and 
I know you do not either, to try to limit the ability of people to 
exercise their free speech rights with their own resources and their 
own money. But if they want to be dependent upon Federal funds instead, 
then they need to decide they should not be political advocacy groups. 
That is the key distinction that we are trying to address in the 
legislation.
  I thank the gentleman for the chance to speak to that and want to 
yield back the floor to him.
  Mr. SKAGGS. May I ask the gentleman one question. I do not want to 
waste a lot of time. If it is the gentleman's intention not to yield at 
all, I will leave the floor.
  Mr. EHRLICH. It is our intention not to yield.
  Mr. SKAGGS. Mr. Speaker, the gentleman does not want to defend any of 
this with anybody with another point of view?
  Mr. EHRLICH. Mr. Speaker, since the gentleman trekked over from his 
office, we will yield.
  Mr. SKAGGS. Mr. Speaker, I thank the gentleman for yielding time.
  I think the point that the gentleman from Oklahoma was just making is 
very, very revealing of the fundamental distortions that are going on 
in this debate. Does the gentleman believe that the efforts made, for 
instance, by the American Red Cross to work with local and State 
governments on emergency planning is political advocacy that is somehow 
a problem in this country? Does he believe that the efforts of the 
American Red Cross to work with all levels of government to ensure that 
regulations are in place to make the blood supply safe, is that somehow 
political advocacy that warrants restrictions? That is what the 
legislation will do.
  Mr. McINTOSH. Mr. Speaker, I think our colleague from Colorado makes 
a very good point there. There has been a lot of misinformation about 
the content of the bill.
  No, I do not think those activities of helping to plan for emergency 
preparedness and working with government agencies to implement a safe 
and effective blood supply in this country are political activities 
that are a problem. I do not think they should be defined as political 
activities.
  Mr. SKAGGS. Mr. Speaker, but that is what the legislation does.
  Mr. McINTOSH. If the gentleman would let me finish, Mr. Speaker. No, 
we have carefully, carefully crafted this bill to make it very clear 
that those activities are not covered. We have worked with the Red 
Cross and their attorneys in letting them know that it is our 
understanding that that would be the case.
  What we are worried about are groups that would take Federal grants 
for those activities and then would begin running television 
advertisements or running media campaigns where they are advocating a 
particular point of view. So let me assure the gentleman we do not 
intend to cover those types of activities. We have worked with language 
that we think does not apply to them and have offered with the Red 
Cross to specify that very clearly.

  Interestingly enough, even when we did that, they said, no, we still 
could not support this bill because we are concerned about the ability 
to be advocates. Then my question is, have they let their donors know 
that that is one of the things they have in their mission statement? 
Have they done a good job when they have done fundraising for these 
other activities of protecting the blood supply, working on emergency 
preparedness, of telling people, well, we also think it might be 
important that we could preserve the right to be a lobbyist? If they 
have done that disclosure, then they have acted in good faith with 
their donors.
  Mr. SKAGGS. Mr. Speaker, if the gentleman would yield.
  Mr. McINTOSH. Yes, I will yield for a question.
  The SPEAKER pro tempore (Mr. Ehlers). It is the gentleman from 
Maryland's time. Does the gentleman yield?
  Mr. EHRLICH. The gentleman will yield for a short followup.
  Mr. SKAGGS. Mr. Speaker, does the gentleman not understand that very 
facile shift from advocacy to lobbying? Now, advocacy presumably does 
include the work of an organization like the Red Cross to make sure 
that we are prepared for an emergency or we have a safe blood supply. 
But with the nice easy elision to lobbying, we are suddenly into a 
whole different range of activity.
  Why is it that we should restrict the ability of an organization like 
the Red Cross to advocate, not to lobby the Federal Government with 
Federal funds, that is against the law already, but to advocate for 
good emergency preparedness at the State and Federal and local level, 
what is wrong with that? Is that not absolutely consistent with what 
their donors expect them to be doing?

[[Page H 9422]]

  Mr. ISTOOK. Mr. Speaker, will the gentleman yield?
  Mr. EHRLICH. Mr. Speaker, I will yield to the gentleman from 
Oklahoma.
  Mr. ISTOOK. Mr. Speaker, of course the key is to understand, as we 
were careful to point out in the legislation, despite many 
misrepresentations that different people have made, is that we did not 
put in the legislation an absolute prohibition recognizing that some 
people may say, well, there is a gray line between things that are 
giving information back to government, and so forth. Some people may 
see some gray area between that and being an advocate, not an advocate 
for safety, not an advocate for emergency preparedness, but a political 
advocate.

  So we specified in the legislation that we were not saying there is 
an absolute prohibition. We simply said that you should not be 
expending more than 5 percent of your non-federal funds, which is a 
threshold that has previously been adopted through courts and through 
the IRS as a key and reasonable threshold.
  So we never said that a group could not engage in any type of 
political advocacy. We just wanted to make sure they were not engaging 
to any significant degree in that, and that very well takes in any type 
of gray area with which anyone may have a concern. So the opponents of 
this bill unfortunately have grossly misrepresented and overstated it, 
calling it, for example, a gag rule, which is totally absurd.
  We have tried to take a common sense approach to it and understand 
that reasonable people may differ. Yet, I think that just about every 
American taxpayer who studies the issue would agree, it is wrong for 
taxpayers' money to be used for lobbying. It is wrong for taxpayers' 
money being used to prop up and be the difference between success and 
failure for an organization.
  With that in mind, I would like to refer to an audit report which was 
part of the audit report, and I understand it was an internal audit 
report for the National Council of Senior Citizens which receives 95 or 
96 percent of its budget from the taxpayers. Their own internal audit 
said the heavy reliance on governmental grants poses a potential danger 
to the long-term structure of NCSC. Absent such grants, the council 
would be unable to continue its current level of operations.
  This is a group that is heavily engaged in lobbying in this country, 
and yet without government grants, they would not be able to sustain 
themselves. They do not have enough private sector support. They depend 
upon taxpayers' money, and I think that is wrong.

  Mr. EHRLICH. Reclaiming my time, Mr. Speaker, I yield to our friend 
and colleague, the gentleman from California [Mr. Dornan].
  Mr. DORNAN. Mr. Speaker, one of the clarifying things about this 
aspect is what type of lobbying, and I understand our colleague from 
Colorado picking an easily discussed case, the Red Cross. To my 
knowledge, the Red Cross has never put PAC money for or against any 
Republican or Democrat in either Chamber on this Hill.
  There are groups sustained 95 percent by taxpayers' money that give 
not only 100 percent money to Democrats, but they have to be of a 
liberal ideological bent. They are not just lobbying for a cause like 
Red Cross earthquake assistance. They are lobbying to fatten their own 
coffers, particularly whiplashing senior citizens. If we cannot reform 
that in this Congress, then there are going to be people coming up here 
with torches as though this were Dr. Frankenstein's castle to burn this 
place down in about 4 to 6 years.
  Mr. EHRLICH. I thank the gentleman for his comments.
  I have a question for our colleague from the State of Washington. He 
has earlier described some of the ads being run against him. This has 
really hit him in a very personal way, and the good news being that of 
the, I believe, 660 phone calls he received?
  Mr. TATE. Mr. Speaker, there were 640 positive saying, stick to yur 
position.
  Mr. EHRLICH. Mr. Speaker, with respect to the negative calls, the 20 
or 30, did they actually buy what the commercials were trying to sell 
them? Was the staff able to articulate what these organizations were 
about and who was funding these organizations?
  Mr. TATE. We are getting that message out as each call comes in. Mr. 
Speaker, our phones light up each time the commercials run. Like I 
said, 99 percent of the calls are positive. When we do get someone who 
is misled by what I call the big lie at taxpayers' expense, we spend 
the time to talk to them and let them know that they are being 
subsidized basically by their own tax dollars, and that alone is enough 
to outrage them. But when they find out that the advertisements are a 
complete misrepresentation of what the truth is, they are even more 
outraged.
  Mr. EHRLICH. Mr. Speaker, The short follow-up question, the gentleman 
is one freshman.
  Mr. TATE. Right.
  Mr. EHRLICH. How much money with regard to the gentleman's best 
estimate at this time has been spent by all of these organizations just 
in his district within the last month?
  Mr. TATE. Mr. Speaker, within the last month, we estimate about 
$165,000. That is the estimate that comes out of the newspaper by these 
particular organizations in their press conferences; $80,000 by Stand 
Up For American Families, which once again is an umbrella group for the 
AFL-CIO, which received millions of dollars in ads. The other one was 
for the Saving America's Families Coalition, another organization made 
up of the national seniors, the Council on Senior Citizens, the 
organization that receives over 95 percent of their money from the 
Federal Government.
  So, to answer the gentleman's question, $165,000 that we can identify 
just from newspaper reports, not counting the countless Medicaravans 
and other misrepresentation of the truth that are subsidized once again 
by the taxpayers, $39 billion every year is being spent on lobbying, 
welfare for lobbyists.
  Mr. EHRLICH. Mr. Speaker, I believe the chairman of the subcommittee, 
the gentleman from Indiana [Mr. McIntosh], has a comment as well.
  Mr. HOYER. Mr. Speaker, after that I would like my friend from 
Maryland to yield.
  Mr. McINTOSH. Mr. Speaker, if I could point out one thing that I 
think is undermining a lot of the public confidence of charitable 
groups, that is when they see activities like we are describing where 
groups who are supposed to be engaged in charity in fact turn 
themselves into political groups and engage in that type of activity.
  That comes on the heels of a few years ago tremendous scandals with 
the United Way and groups where they were misappropriating funds. By 
the way, they have cleaned up their act. I certainly hope they end up 
supporting our effort to end welfare for lobbyists to reassure people 
that they have changed and do not want to see the continued practice 
where a charity says they are doing one thing and then in fact does 
something else with the money they have raised. In this case it is 
engaging in political tactics that are totally unacceptable because 
they are misleading the public about very key and critical issues.
  So there is a question of confidence about what can citizens expect 
from charitable groups. We heard from a lot of the charities who are 
very active in a day-to-day basis in helping people, saying they want 
to see this bill passed because they want to restore that confidence. 
They want us to go forward in this area and clearly separate lobbying 
and political activities from charitable activities.
  So I think we can do them a tremendous favor in this country by 
helping to restore that confidence.
  I also appreciate the gentleman from Washington being willing to 
share with us his experience in his State as an example of what has 
been happening there.
  Mr. EHRLICH. Although this is highly unusual, out of an overabundance 
of friendship for my colleague, the gentleman from Maryland [Mr. 
Hoyer], I will yield to him for a brief question.
  Mr. HOYER. Mr. Speaker, I appreciate very much my friend from 
Maryland yielding. We are pleased to have him as a member of our 
delegation, even though from time to time we may disagree.
  I ask my friend from Maryland, I have a letter here addressed: Dear 
Steny. It makes some comments, but it concludes with this: ``To unduly 
restrict our ability to work with governmental representatives and 
agencies through the additional regulation envisioned by the Istook 
amendment would 

[[Page H 9423]]
not be in the best interest of millions of people who rely on the Red 
Cross when help cannot wait. Sincerely, Elizabeth.''

                              {time}  1645

  All of us know that Elizabeth Dole, the wife of majority leader of 
the Senate, is head of the Red Cross. Throughout this letter, as the 
gentleman may know, she is very concerned about the Istook amendment's 
proscription on the ability of the Red Cross to advocate positions 
which it believes to be in the best interest of the people of this 
country.
  Mr. EHRLICH. Mr. Speaker, I thank my colleague from Maryland for 
asking a very legitimate question and I know my colleague from 
Oklahoma, who has had very, very recent communications with the Red 
Cross, as well as my colleague from Indiana, wants to answer my 
friend's question.
  Mr. ISTOOK. Surely.
  Mr. Speaker, I think what we have seen is there has been a vast 
disinformation campaign that has been stimulated by groups receiving 
Federal funds. They have made contracts, they have made some, frankly, 
scurrilous statements to all sorts of organizations, trying to use 
scare tactics, and certainly they have prompted concern to be expressed 
by those groups. What we have certainly done, in working on this 
legislation, is to have an open door policy, whether a group is for us 
or against us or in between, for an explanation.

  We have certainly been working with the Red Cross both to explain to 
them the difference between what was told to them prompting their 
communications and what is really being pursued, and to make sure, of 
course, that the final form of the legislation is a form that does not 
put any undo restrictions on any sort of legitimate charitable 
organizations. What we have to do is make sure that the legislation has 
the appropriate filter to separate the good from the bad from the ugly.
  Mr. Speaker, just because a group is organized with a so-called 
nonprofit structure does not mean that it has the reputation of the 
good deeds that the Red Cross, of course, is noted for. So we are 
working with the Red Cross and other organizations to address all 
legitimate concerns that are brought to our attention, and I think that 
is going to be reflected in the final product.
  Mr. HOYER. Would the gentleman yield so I can enter into this 
colloquy?
  Mr. EHRLICH. Yes, I would yield to the gentleman.
  Mr. HOYER. Mr. Speaker, I understand what the gentleman has said. 
Presumably, Mrs. Dole, who has an ability to find out about the 
substantive legislation, in her letter to me of September 11 understood 
the legislation as it was then crafted; is that what the gentleman 
says? And if that is the case, have there been changes made since 
September 11 to the Istook amendment?
  Mr. ISTOOK. What we have said, and the gentleman is aware, of course, 
from being a conferee with me on the Subcommittee on Treasury, Postal 
Service, and General Government, what we have said, I have said it to 
the gentleman from Maryland [Mr. Hoyer] and to the gentleman from 
Colorado [Mr. Skaggs], I have said it to Members of the Senate and the 
House, and conveyed it to White House representatives, that anyone who 
has constructive recommendations to make sure that this legislation is 
put in its best possible form so that it does not have unintended 
consequences, we want to listen to and we want to work with.
  We do have a problem sometimes with some groups, rather than trying 
to make constructive recommendations, they make a knee-jerk reaction 
just opposing it, and, frequently, that comes from organizations that 
are heavily dependent on Federal funds and there is, as the gentleman 
knows, a lot of discussion about it and a lot of representations made 
to people about what is or is not in the bill.
  We want to work with all persons that are concerned, and that will be 
reflected in the final product.
  Mr. EHRLICH. Mr. Speaker, in further answer to my colleague from 
Maryland's inquiry, I recognize my friend, Mr. McIntosh.
  Mr. McINTOSH. And let me say, Mr. Speaker, in the effort of being 
constructive in this, our subcommittee of the Committee on Government 
Reform and Oversight will be having hearings further into the 
application of this bill. One of the hearings will be taking place next 
Thursday. We have invited Mrs. Dole to come and talk with us about 
areas where she thinks she might be hindered in her legitimate 
charitable activities so that we can address that problem.
  We will also be asking if there are areas where she wants to cross 
over into the lobbying area, and is that more than 5 percent of their 
budget or would they be protected with that provision. I think that 
will allow us to build a record there of exactly how this bill would 
work, and, hopefully, reassure her of that.
  I am looking forward to next Thursday and, hopefully, Mrs. Dole will 
be able to join us at that hearing.
  Mr. TATE. Mr. Speaker, would the gentleman yield.
  Mr. EHRLICH. Mr. Speaker, I want to further yield to my colleague 
from Washington, but I think my colleague from Maryland raises a very 
legitimate point. I want to enlarge it, however, because one of the 
prime criticisms of our initiative has been, quote-unquote, defunding 
the left.
  If anything has occurred over the last few weeks, Mr. Speaker, it is 
a fact that groups from the right, the middle, and the left have 
problems with this legislation. I was driven by no particular 
philosophical orientation in becoming a cosponsor, along with these two 
gentleman, of this bill, other than my philosophical orientation to 
give the American taxpayers a break.
  We have groups, I know, on the right who have opposed this bill; now 
we have groups on the left and in the center. I believe the ``defunding 
the left charge'' is now an empty charge. And certainly if we look at 
the groups actively lobbying against this bill, it just does not make 
sense.
  Mr. Speaker, I yield to my colleagues from the State of Washington.
  Mr. TATE. Mr. Speaker, I have two quick questions in response to the 
comments from across the aisle to the chairman of the committee. What 
is the threshold, Mr. Chairman?
  Mr. McINTOSH. The key threshold is that for groups who take no 
Federal money at all, they are not covered by this provision. They can 
lobby. They can do whatever they would like to with their money.
  For those groups who do take a Federal grant, are subsidized by the 
taxpayer in their activities, they can spend up to 5 percent of their 
own funds, no money from the taxpayer but 5 percent of their own funds, 
to lobby, and we are allowing that so they can be advocates at the 
local and Federal level. But when they start becoming predominantly a 
lobbying group and go over that 5-percent threshold, we are asking them 
to give up that taxpayer subsidy.
  They make a choice, Mr. Speaker, they can be a lobbying group or they 
can be a charity, but we are not going to let them lobby with taxpayer 
dollars.
  Mr. TATE. One last question, I guess a two-part question. One is, the 
5 percent, up to the first $20 million. That would work out to be a 
million dollars in lobbying, is what we are talking about. Not exactly 
shutting down lobbying, as we know it. They would still be able to 
lobby. They should be able to get the job done on a million dollars.
  And after that first $20 million, as I understand it, it is 1 percent 
after that. So we are talking about a significant amount of money. We 
have not ended it all together. We are not limiting free speech, but we 
are putting some limits so they cannot abuse the process, if I am not 
mistaken.
  Mr. McINTOSH. That is correct, and if the gentleman will continue 
yielding.
  Mr. EHRLICH. Mr. Speaker, I yield to the gentleman from Indiana.
  Mr. McINTOSH. Let me also point out another key feature of the 
legislation. If a group decides to spend up to a million dollars in 
lobbying, they have to disclose that to their donors, so that we cannot 
have this secret effort on lobbying on the one hand with a group that 
is posing as one that is doing good works in charities when they go out 
to solicit money from the public. I think the donors have a right to 
know about that activity when they are making contributions as well.

[[Page H 9424]]

  Mr. EHRLICH. Mr. Speaker, reclaiming my time, the gentleman just 
analyzed the various categories of recipients, and it is true, is it 
not, that category A, those groups who do not take any Federal grants, 
account for 9 percent of all the groups we are talking about; is that 
correct?
  Mr. McINTOSH. That is correct, although, as the gentleman from 
Oklahoma pointed out earlier, those small percentage who do receive 
Federal funds receive enormous amounts of Federal funds, and yield a 
disproportionate influence.
  Mr. HOYER. Would the gentleman yield?
  Mr. SKAGGS. Would the gentleman yield on that point about who is 
covered?
  Mr. EHRLICH. Mr. Speaker, I yield to my good friend from Maryland.
  Mr. HOYER. I thank my good friend from Maryland, Mr. Ehrlich, who 
makes a point that this legislation was originally perceived as 
defunding, trying to defund the left. He points out correctly that 
those in the middle and those on the right have now raised similar 
concerns to those on the so-called left.
  As a matter of fact, I have in my hand another letter from Fred 
Kammer, Father Kammer, who is president of Catholic Charities of the 
United States of America. I do not know whether the gentleman from 
Maryland puts them on the left or on the right or in the middle. I 
would suggest they probably have a number of views which fall into 
maybe all of those categories at any given time.

  Mr. EHRLICH. Depending on the issue, I guess.
  Mr. HOYER. Depending on the issue. That is the point I make. I would 
suggest this is a very serious issue, and we are discussing it 
seriously, and I think that is important for the American public.
  I have read a number of legal opinions, or CRS reports, including 
Professor Cole from Georgetown University Law Center, the law center 
from which I graduated. I have not seen a case that justifies or 
condones or holds constitutional the proscription of private dollars, 
nonpublic dollars, on lobbying or contact of government or trying to 
impact on policy activities of nonpublic groups.
  Furthermore, let me suggest not only is that why it is a serious 
issue, because whether it is left, right or middle, we believe this is 
violative of the constitutional right to free speech and the right to 
petition one's government, but, in addition to that, I say to my 
friends, who I know feel very strongly about this, that the issue here 
is the reason so many of these groups have public funds is because we 
have decided as a Congress and as a people that it is better to give to 
the American Red Cross or the Catholic Charities or some other group 
funds to solve certain problems.
  They are not necessarily doing us a favor. We are not doing them a 
favor by giving them these resources. In fact, we have judged that 
Catholic Charities does good work, and we want to give them resources 
because we believe they will more effectively distribute those funds 
than will the government.
  So I say to my friend, as he can see, it is not just that, yes, they 
have Federal funds, because we have decided that we believe they can 
apply those funds effectively. As a matter of fact, I think that is 
consistent with some of the philosophy that Members on the other side 
of the aisle have discussed recently.
  Mr. EHRLICH. Reclaiming my time, I intend to yield to the gentleman 
from Oklahoma, who is chomping at the bit over there, but, first, two 
points.
  First of all, the gentleman raises a very legitimate point, again, 
with respect to the mission of these nonprofits and for-profits we are 
talking about, because that also has been lost in this dialog, the fact 
that we also cover under our version of this initiative for-profits.
  Mr. SKAGGS. And individuals, too.
  Mr. EHRLICH. No, no.
  Mr. McINTOSH. Actually, they are expressly exempt.
  Mr. SKAGGS. Wrong.
  Mr. EHRLICH. Mr. Speaker, the gentleman is right. Over the years, 
there has built up a momentum so that certain organizations have not 
only assumed a responsibility for their original mission but also a 
dual responsibility to advocate on behalf of their mission.
  That is the bottom line philosophical question here when we get down 
to it, where that line really should be drawn. We believe that line has 
gone out too far, and I think we have some evidence presented with 
respect to Members of the freshman class, particularly concerning 
advocacy efforts around the country today in support of that point.

  Also, the gentleman from Maryland, being a learned lawyer of good 
reputation, I will have delivered to his office tomorrow a memorandum 
from Professor Harrison, I believe from Virginia concerning the 
constitutionality of the Istook-McIntosh-Ehrlich initiative, which the 
bottom line is that it is constitutional. In fact, government does this 
all the time, attaches specific requirements, and I will yield in a 
moment to the gentleman from Indiana, but I will be glad to engage my 
friend from Maryland in a colloquy after he has an opportunity to read 
that memorandum as well.
  I will at this time yield to my friend from Oklahoma, Mr. Istook.

                              {time}  1700

  Mr. ISTOOK. Mr. Speaker, I thank the gentleman for yielding.
  I would like to address the two points that the gentleman from 
Maryland mentioned, one regarding court decisions. In 1983 the U.S. 
Supreme Court, in the case of Regan versus Taxation With 
Representation, addressed that point when a group wanted to engage in 
lobbying and wanted to have Federal subsidies for that through the Tax 
Code.
  The Court noted that Congress does not have to subsidize lobbying. In 
fact, the U.S. Supreme Court specified that ``The Federal Government is 
not required by the First Amendment to subsidize lobbying. We reject 
the notion that First Amendment rights are somehow not fully realized 
unless they are subsidized by the State.''
  The notion that the government has to buy you a microphone or buy you 
a newspaper or give you funds with which to carry on your lobbying 
activities, I think is blatantly absurd. The taxpayers are not required 
to subsidize lobbying. If a group wants to lobby, that is fine. That is 
their constitutional prerogative, but it is not free speech if they 
say, ``We want the taxpayers' money.'' That is a clear delineation and 
distinction.
  The gentleman also mentioned, of course, Mr. Speaker, something from 
someone at Catholic Charities, U.S.A. He may not be aware, Catholic 
Charities, U.S.A. annually receives from the taxpayers, from the 
government, almost $1.3 billion. It is two-thirds of their operating 
budget. I think there is a bona fide question, anytime an organization 
has that level of funding, whether they are really an organization 
separate and apart from the government, or themselves have become an 
extension of the government.
  If we have that kind of money flowing through the Department of 
Health and Human Services or HUD or the EPA or the Labor Department or 
Education or anything else, we would insist upon safeguards to limit 
its use, to assure it is not used for lobbying or political advocacy.
  When any group has that level of its funding, $1.3 billion, just a 
little under that, two-thirds of its budget coming from the U.S. 
Government, we have a serious question at what point do they cease to 
be a private group and become an extension of the government.
  We are talking about safeguards with taxpayers' money. We are trying 
to be very reasonable and prudent in the approach. We are open-minded, 
we are listening to that, but this is a severe problem that does need 
to be addressed.
  Mr. HOYER. Mr. Speaker, will the gentleman yield?
  Mr. EHRLICH. I yield again, for the third time, to my colleague, the 
gentleman from Maryland.
  Mr. HOYER. I want to thank profusely my colleague from Maryland, 
because I know this is their special order, but this is an important 
issue. We need to discuss it back and forth.
  I would say to my friend, the gentleman from Oklahoma, for whom I 
have a great deal of respect, because he is one of the hardest working 
Members of this House, he has a good intellect and is industrious in 
applying that intellect, but I would say to my friend in this instance, 
he does reference language, but that language refers, as the 

[[Page H 9425]]
gentleman knows, specifically and exclusively to taxpayers' money. The 
gentleman's amendment relates to nontaxpayers money, because it would 
not be necessary, because under present law, taxpayers' money is 
already legally precluded from being spent on lobbying activities.
  The gentleman seeks to get at non-Federal taxpayers' money. That is 
the very significant and important distinction that the Court draws. It 
drew it in Russell versus Sullivan, it drew it in the Regan case that 
you referred to, and it has drawn it in every case that I have 
reviewed.
  Mr. Speaker, I would say to my friend, I thank him for yielding, and 
look forward to reading the memorandum that he is going to provide me 
with, but that is the nub of this issue. We are not talking about 
taxpayers' funds, we are talking about private funds.
  Mr. EHRLICH. There is also a question here with regard to 
fungibility, and I know my colleague is going to address it.
  If you read the Regan case, it was not a question of whether the 
subsidy would be received in the form of a check. The question was 
whether the organization would enjoy the tax-exempt status which, as 
the U.S. Supreme Court said, is a form of subsidy, just as a Federal 
check, a direct payment, would also be a form of subsidy.
  Mr. ISTOOK. Mr. Speaker, if the gentleman will yield further, 
speaking both in terms of money received from private sources but 
protected by the Tax Code, private money but therefore, a form of 
Federal subsidy, or direct payments from the Government and therefore 
also a Federal subsidy, the Court applied the same standard in the 
language of the Regan case to both of them when it mentioned and held 
that taxpayers are not required to subsidize political activity or 
lobbying activity, whether that subsidy came in the form of a direct 
payment from the Government or whether it came in the form of favorable 
treatment through the Tax Code, even though you were talking about the 
use of privately earned money.
  So I would submit to the gentleman that the Court was addressing 
funds from a private source as well as funds directly from a public 
source.
  Mr. EHRLICH. Mr. Speaker, I would say to the gentleman from Maryland, 
I am happy to have had his part of the colloquy. This is a very 
important issue. He has raised some very important questions. I know 
you disassociate yourself from some of the terms that were used to 
describe the three of us during the debate on this floor a few weeks 
ago. That is why I specifically recognized both the gentleman from 
Colorado [Mr. Skaggs] and the gentleman from Maryland [Mr. Hoyer]. They 
are both well respected and we appreciate their input.

  Mr. McINTOSH. Mr. Speaker, will the gentleman yield?
  Mr. EHRLICH. I yield to the gentleman from Indiana.
  Mr. McINTOSH. I thank the gentleman for yielding.
  This is really in response to the question from our colleague, the 
gentleman from Maryland. One of the things we heard in our subcommittee 
over the summer when we had hearings on this was that there are groups 
out there who receive Federal funds and actually violate the provisions 
of their grants, and end up using those funds to, in the case that came 
before us, to conduct a symposium on how to lobby local governments. 
When the agency was notified of this, they did nothing to prevent that 
and did not ask that the grant be repaid and, in fact, were implicitly 
condoning that type of activity.
  Therefore, I think some of the bill's provisions we have are aimed 
at, first, forcing disclosure on how both the private and the public 
sector funds are spent; and second, making it a very, very clear 
demarcation that if you are receiving a Federal taxpayer subsidy, you 
should not be lobbying. That, I think, is a very simple formula that 
underlies all of this effort, and one that I am very convinced the 
American people want to see.
  Some of the editorial boards in my district have been commenting on 
this. By the way, they do not agree with a lot of the things I have 
been trying to do as a freshman Republican in reforming this, but in 
this area they do think we are on the right track, because, quite 
frankly, they did not know this lobbying was going on and they do not 
think it is appropriate to be doing it under the subsidy of a Federal 
taxpayer grant.
  Mr. EHRLICH. It is certainly a new issue, and I think, quite frankly, 
that has been part of the problem. I know the gentleman from Indiana 
would agree with me, that certainly has been part of the problem. 
People were not ready to interpret this issue, to hear the terms of the 
debate. They really did not know what the status quo was. You may have 
received some opposition from your local editorial boards, but it is 
nice to know.
  Mr. McINTOSH. If the gentleman will yield, in this case the editorial 
boards are strongly in favor of it.
  Mr. EHRLICH. That is nice to know, as well.
  Mr. McINTOSH. I will submit for the Record some of the editorials 
they have written. In this case, fairly liberal folks are saying, ``You 
are on the right track, we need to clean up the outfit in Washington 
and end this government subsidy of lobbying.''
  Mr. EHRLICH. In addition to your local editorial boards, it is nice 
to know that groups, highly respected groups like the National 
Taxpayers Union, Citizens Against Government Waste, the National 
Association of Wholesale Distributors, the Eagle Forum, the Competitive 
Enterprise Institute, the 60-Plus Association--in fact, we have two 
senior citizens organizations supporting this initiative--the National 
Association of Manufacturers, and the list goes on and on, a lot of 
these groups appreciate the importance of this particular initiative. 
That is why they have come forward to support us.
  I yield to the gentleman from Oklahoma.
  Mr. ISTOOK. Mr. Speaker, I thank the gentleman for yielding. I 
realize our time is running low. I just want to say that I applaud my 
colleagues for working on this effort, the gentleman from Washington 
[Mr. Tate], the gentleman from Maryland [Mr. Ehrlich], and the 
gentleman from Indiana [Mr. McIntosh]. I think this is an extremely 
important issue.

  Again, the heart of the matter I think was summed up, I am told, and 
I did not witness it, but I am told by a colleague that the President 
was good enough to appear on a local talk show recently while he was 
visiting another State. The first question asked him was how he felt 
about groups that are lobbying receiving Federal grants, taxpayers' 
money being used to subsidize that. His response was to say, ``Well, I 
am in favor of free speech,'' and then changed the subject.
  The essence of this point is it is not free speech. If you have 
organizations sometimes receiving a half a million dollars, $1 million, 
$10 million, $76 million, $100 million, over $1 billion, in one case, 
that is not what we categorize as free speech. We are talking about 
public money which has to have public protection. If there were a 
Federal agency engaging in these matters with taxpayers' money, 
everyone in this body, I would hope, would be outraged. When Federal 
money is being used to more or less have extensions of Federal agencies 
or extensions of a political party to do their bidding, that money 
deserves to have the same safeguards as if it were being spent directly 
through a Federal agency, and we are trying to honor that principle.
  Mr. EHRLICH. What we are really talking about, at a very bottom line, 
fundamentally, is the Federal taxpayer's dollar being spent on direct 
service, actually helping the American people. I congratulate the 
gentleman from Oklahoma [Mr. Istook] for his great leadership on this 
bill as well.
  I yield to the gentleman from Indiana.
  Mr. McINTOSH. The gentleman is exactly right. We are talking about 
using this Federal money for real services that help people, in 
contrast to what our colleague, the gentleman from Washington [Mr. 
Tate] pointed out, where they are funding the big lie and misleading 
the public about very important issues.
  Mr. EHRLICH. What better lead-in to close our colloquy than to yield 
to our friend, the gentleman from Washington [Mr. Tate].
  Mr. TATE. Batting clean-up on this, I just want to thank the 
gentleman from Maryland [Mr. Ehrlich], the gentleman from Indiana [Mr. 
McIntosh], 

[[Page H 9426]]
and the gentleman from Oklahoma [Mr. Istook] for their leadership on 
this particular issue, and once again to reiterate $39 billion every 
single year is spent on lobbying. It comes in many forms, whether it is 
lobbying against the flag amendment, which we recently had on the 
floor, or right back in my own district where they are funding $165,000 
in radio and television commercials spreading the big lie. And once 
again, that is taxpayer-funded, if not directly, indirectly, 
subsidizing the spreading of the big lie.
  What we are trying to do, as the chairman, the gentleman from Indiana 
[Mr. McIntosh], has said, is bring trust back in Government. People 
will know that when money is sent to the Government, it is being spent 
as it is designed, not for partisan politics. It should be spent to 
help the people of the United States and spent wisely. What we are 
trying to do is bring trust and responsibility back to Government, and 
this really puts faith back in Government. I am excited by what you 
folks are doing, and I just want to commend your work on this issue.
  Mr. EHRLICH. Directed to the gentleman from the State of Washington, 
you have helped me to regain some of my faith; not that I have lost 
much, it has been a great 8 months here, but your constituents can 
still discern the difference between the truth on one hand and a lie on 
the other, and I think you will be all the better for it. I thank my 
colleagues very much.

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