[Congressional Record Volume 141, Number 158 (Thursday, October 12, 1995)]
[House]
[Pages H10024-H10026]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ISTOOK AMENDMENT TO HAVE FAR-REACHING EFFECTS
The SPEAKER pro tempore. Under the previous order of the House, the
gentleman from Colorado [Mr. Skaggs] is recognized for 5 minutes.
Mr. SKAGGS. Mr. Speaker, today I circulated to my colleagues in the
House the following document entitled ``The Istook Amendment, New
Regulation of Your Business.''
One of the myths about the so-called Istook-McIntosh-Ehrlich proposal
is that it has only to do with nonprofit organizations. In fact its
reach will be much broader than that. I think my colleagues ought to be
aware of exactly how extensive and pervasive and perverse that reach
would be.
This fact sheet outlines what businesses could expect under the
regime that would be imposed by the Istook amendment. Many people think
it has only to do with grants. Of course grants do go to many
businesses. Just to point out a few, Lockheed Martin gets research
grants from the Defense Department; Chrysler, Ford, W.R. Grace from the
Commerce Department. Thousands of others would be affected by grants.
But because of the other language in this proposal, many, many other
companies would also be subjected to its extraordinary regulatory
regime. That is because not only do direct payments count but also the
receipt of, quote, anything of value.
So, for instance, a farming business that gets irrigation water from
the Federal Government would be included, as would, in my part of
Colorado, several major businesses who happen to get irrigation water
from Bureau of Reclamation projects.
Farmers getting emergency livestock feed during severe weather would
be affected, and some other things that you really would not think of
initially as a thing of value until you examine carefully.
For instance, publishers of newspapers and magazines getting second
class mailing permits, a benefit from what would otherwise be their
mailing costs. Broadcasters getting television or radio licenses,
companies getting patents, and so on. Many, many things that do not
necessarily occur to you right off the bat as being a grant or a thing
of value would suck you into the regulations.
How would that affect your business? Well, it would mean that you
would be restricted from spending even your private business resources
to protect your private business interests whenever the government was
involved. Because anything you might do to try to change or influence
or reverse any decision by any level of government that might affect
your business would be subjected to this restriction against your use
of your private money, if you got any grant or thing of value from the
Federal Government.
So appealing a State administrative or local administrative decision
would count as political activity that would be restricted.
Participating in any kind of campaign, even a local referendum
affecting the business climate, would be covered.
But much more significantly than that, you would have to find out not
only accounting for your own political activity, but you would have to
find out about the political activity of anybody with whom you did
business, your employees, your vendors and so forth. Because if they
were hyperactive politically, if they happened in one year or another
to exceed a 15-percent limit, then anything you spent with them would
count against your own limit. If you exceeded your own limit, then you
would be in violation of the law and, among other things, would be
subject to a kind of vigilante lawsuit that is authorized under this
bill by incorporating the Federal False Claims Act.
It is much broader, as I say, than just a regulation of the lobbying
activities of nonprofits getting Federal grants. That is the mask
behind which the proponents of this language wish to hide. In fact, it
is entirely likely that the Istook-McIntosh-Ehrlich proposal would
affect virtually all businesses in this country in one way or another.
Mr. Speaker, I include the following document for the Record:
The Istook Amendment: New Regulation of Your Business
To stifle critics of their political agenda, House
Republicans have come up with what may be the most intrusive
regulatory scheme ever. Although often described as applying
just to nonprofit organizations, the ``Istook amendment'' \1\
is written so broadly that it would regulate many (or even
all) American businesses.
\1\ The Istook amendment is title VI of H.R. 2127, the House-
passed Labor-HHS-Education appropriations bill. House
conferees have also proposed it as a conference-committee
addition to the Treasury-Postal Service-General Government
appropriations bill.
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are you regulated:
With few exceptions, your business will be regulated if it
gets money or any ``thing of value'' from the federal
government.
The only relevant exceptions: you wouldn't be regulated for
receiving payments for property or services you provide ``for
the direct benefit or use of the United States,'' or for
receiving ``payments of loans, debts, or entitlements.''
Does your business get federal grants? Then you're
regulated.
Lockheed-Martin (Defense Department research grants); Ball
Corporation (NASA); Alcoa, Amoco, Chrysler, Food, General
Motors, W.R. Grace & Co., Dow Chemical, and U.S. Steel (all
Commerce Department); and thousands of other companies would
be regulated.
Other federal payments? You're regulated.
Agricultural exporters in the Market Promotion Program,
fishermen compensated
[[Page H 10025]]
when offshore oil and gas drilling reduces their catch, and
shipbuilders getting merchant marine subsidies would all be
regulated.
Get something tangible from the government? You're
regulated.
Getting Bureau of Reclamation water makes your regulated.
Besides farmers and ranchers, one project's water users
include IBM, Hewlett-Packard, Eastman Kodak, a Chevrolet
dealer, a dry cleaner, banks, construction companies,
insurance companies, and manufacturers--all examples of the
unexpected reach of the amendment.
Farmers getting emergency livestock feed would be
regulated.
Something intangible? Apparently you're regulated, too.
An intangible item can be a ``thing of value.''
Publishers getting second-class mailing permits,
broadcasters getting television or radio licenses, and
companies getting patents appear to be regulated.
Have a federal loan? You're apparently regulated.
The exemption for ``payments of loans'' seems to apply only
when the federal government repays funds it has borrowed--for
example, redeeming a savings bond. Borrowing money from the
government doesn't seem to be exempted.
So, businesses getting loans from the Small Business
Administration, the Farmers Home Administration, or other
agencies would be regulated. Even getting a disaster-
assistance loan for rebuilding after the Oklahoma City
bombing or Hurricane Opal would get you regulated.
Buy something from the government and pay full price?
Believe it or not, even that gets you regulated.
There's an exemption for contractors getting paid for goods
and services provided to the federal government ``for the
direct benefit or use of the United States.'' But that quoted
phrase keeps the exemption from applying to items you receive
from the government for your benefit or use, even if fully
paid for.
So, the regulations would hit businesses buying or leasing
surplus government property, national forest timber, oil or
gas on public lands, electricity from the Tennessee Valley
Authority, or conceivably even stamps from the U.S. Postal
Service.
restrictions on advocacy for your business interests
If you're regulated, the amendment restricts how much of
your own money you can spend in certain ways--even on your
essential business interests.
The restrictions apply to your ``political advocacy,''
which includes (1) influencing any federal, state, or local
legislation; (2) influencing or appealing any federal, state,
or local agency's administrative actions; (3) influencing
public opinion on federal, state, or local legislation or
agency action; (4) suing federal, state, or local
governments; and (5) participating in any campaign for any
federal, state, or local office.
This covers everything from seeking a rezoning to opposing
tax increases, from applying for a building permit to doing
studies to support Food and Drug Administration (FDA)
approval of a new medicine, from advising your employees of
pending legislation to addressing public concerns about the
location of a new office building, and from seeking judicial
relief when an agency misapplies the law to posting a
campaign sign in your shop window.
The term also includes derivative ``political advocacy:''
buying goods or services from a person or organization that
in the previous year spent over 15 percent of its own funds
on ``political advocacy.''
Derivative ``political advocacy'' doesn't depend on your
activities, but on the activities of those with whom you do
business. It can even be triggered by a series of business
transactions. Say a start-up pharmaceutical company spent 15
percent of its budget in 1994 on studies to support FDA
approval of a new medicine. It's then a ``15-percenter,''
contaminating anybody that buys something from it in the next
year. If such a purchase pushes a second company's overall
1995 spending on ``political advocacy'' over 15 percent and
your business buys something from the second company in 1996,
that is ``political advocacy'' by your company.
Of course, compliance would be impossible. As IBM has
commented, ``We have no way of knowing what the situation
might be with the literally thousands of vendors to whom IBM
may have made disbursements.''
If your business has already received money or something of
value from the Federal Government, it can spend no more than
one to five percent of its own funds in any one year on
``political advocacy.'' And spending more than that on
``political advocacy'' makes your business ineligible to get
Federal funds or items for the next five years.
The limit would be five percent of a business' first $20
million, and one percent beyond that. So a $1 billion
corporation would have a 1.08 percent limit.
A family-farm partnership with a $200,000 budget could
spend no more than $10,000 a year, in total, on:
Buying goods or services from businesses that are ``15-
percenters.''
Hiring employees who are ``15-percenters.''
Suing to challenge an environmental regulation as a
``taking'' of property.
Applying for crop-price supports. (They are an entitlement,
and receiving them doesn't make you regulated; but applying
for them is ``political advocacy.'')
Applying for permits and licenses (such as section 404
clean water permits, building permits, and tractor
registrations); doing studies to support them; responding to
public criticisms of them; and appealing any denial of them.
Paying dues to a Chamber of Commerce or a farmers'
association.
Having any contact with a member of a city council, state
legislature, or Congress, or their staff, about land use or
farm policies.
Opposing citizen-initiated ballot measures to preserve open
space.
Making contributions to candidates for public office.
Informing employees about proposed legislation that would
affect them.
In addition, a business receiving Federal funds could not
spend any of those funds on ``political advocacy.''
A defense contractor couldn't use research-grant funds to
buy something from a ``15-percenter.'' A company receiving a
joint grant with a ``15-percenter'' firm couldn't make any
payments to its partner. The only way out of these situations
is if Congress later passes a specific bill to lift the
prohibition.
indirect regulation of possible ``15-percenters''
Even if your business is not directly regulated, you will
be substantially affected if you do business with, or try to
do business with, a regulated company.
Under penalty of law, a regulated company has to determine
if all organizations and individuals it makes payments to are
``15-percenters,'' so it knows whether to count and report
those payments as ``political advocacy.''
Obviously, regulated companies will try to avoid doing
business with ``15-percenters,'' because payments to them
count against the spending limits. (This seems to be the
intent of the amendment.) There will also be a chilling
effect on regulated companies doing business with those
claiming they aren't ``15-percenters,'' because if that
claim's inaccurate the regulated company is liable.
recordkeeping and reporting requirements
Your business, whether directly regulated or indirectly
affected, will have to track its spending on ``political
advocacy'' on the basis of the Federal fiscal year.
All calculations under the Istook amendment must be based
on the Federal fiscal year--both for a regulated business to
track its compliance with the spending limits, and for a non-
regulated business to determine whether it's a ``15-
percenter.''
All employees will have to keep records of the time they
spend on ``political advocacy.''
The appropriate share of payments for salaries and benefits
has to be counted as ``political advocacy.'' Again, this is
true for both regulated businesses (to comply with the
spending limits) and non-regulated businesses (to be able to
show whether they are ``15-percenters'').
Regulated businesses have to follow ``generally accepted
accounting principles'' in tracking funds or items received
from the Federal Government.
Even a family farm must follow these standards in
accounting for its use of emergency livestock feed or
irrigation water.
Regulated businesses are subject to Federal audits.
The audits will be made available to the public, even if
they contain information that otherwise would be kept
confidential under the Freedom of Information Act.
Regulated businesses will have to file certified annual
report describing their ``political advocacy'' activities and
the money spent on them.
Apparently every contact with federal, state, and local
government officials, every attempt to influence the opinion
of any group on a policy matter, and every purchase from a
``15-percenter'' will have to be listed, even if no money was
spent on it. For those with a cost, the amount of money spent
will have to be listed.
These reports will be made available to the public; a
national political registry containing all annual reports
will go out on the Internet.
All applications for funding or items from the government
will be made available to the public.
The applications will be released even if they contain
information that would be kept confidential under the Freedom
of Information Act.
presumption of guilt
If your compliance with the law is challenged, you have the
burden of proving that you have complied.
This reverses a hallowed American principle: the
presumption of innocence.
To prove your innocence, you would have to present ``clear
and convincing evidence'' of your compliance.
This is the toughest standard in civil litigation. This
two-part, unprecedented stacking of the legal deck applies
even to matters impossible to prove, such as whether another
business is a 15-percenter.
harassing lawsuits
A regulated business can be sued by the federal government
or a person acting as a ``private attorney general,''
claiming the business failed to comply.
Anyone found in violation has to repay three times the
value of whatever was received from the government, plus
fines. A
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person bringing a ``private attorney general'' lawsuits gets a share of
this money--obviously inviting and even financing harassment
lawsuits and vigilantism.
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