[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 

[[Page H 10026]]
     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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