Vol. III, No. 1
February 1995
Another FSC Amicus Brief: The Center for Auto
Safety v. Athey
The Free Speech Coalition will file
a friend-of-the-court ("amicus") brief to support the Public
Citizen Litigation Group's efforts to have the U.S. Supreme
Court hear the case Center for Auto Safety v. Athey. The
Center for Auto Safety is a nonprofit public advocacy
organization working to educate and research improvements in
vehicle and highway safety. Less than 6 percent of the
Center's members are in Maryland. The organization's only
contact with the state is through fund-raising by
mail.
The State of Maryland charges fees to
nonprofits (like the Center for Auto Safety) based upon the
total contributions received nationally, not only
contributions from Maryland. The state argues that large
charities' registration forms require more time to review,
therefore it is permitted to calculate fees based on
nationwide contribution receipts. User fees which merely
cover the cost of protecting the public have been upheld
even when the regulated activity involved protected First
Amendment speech.
The Center questions whether Maryland
undertook any analysis of its registration at all, and
describes the fee as a tax. The Center does not challenge
Maryland's right to regulate charities, but it challenges
Maryland's power to impose on regulated organizations
whatever fees it wishes to receive, to support whatever
level of regulation it wishes to impose. Counsel for the
Center, David Vladek, Esquire, argues that high fees have
shut new and small organizations out of the "marketplace of
ideas," and that the problem could worsen.
In its brief, FSC points out to the court
the collective burden imposed by state charitable
solicitation fees across the country. FSC argues that the
fee structure interferes with interstate commerce as well as
with nonprofit organizations' rights of free speech and
petition.
FSC Calls for Arter's Removal
At the January 26, 1995 Legislative
Briefing Breakfast, FSC announced that it is calling for the
removal of Steven Arter, from any position involving
responsibilities over nonprofits in the Pennsylvania
Attorney General's Office. Arter, a recent President of the
National Association of State Charitable Officers (NASCO),
publicly announced in October 1994 that he tells those
citizens that they generally should not give donations to
nonprofits that use direct mail or telemarketing appeals.
FSC views Arter's admitted bias against nonprofits'
legitimate use of legal fundraising methods as rendering him
unfit to regulate this industry.
The issue also affects the economy in
Pennsylvania. As Arter's comments affect the revenues of
nonprofit groups, they will not be able to implement their
charitable, educational, or social welfare programs. As
groups hire fewer people and purchase fewer goods and
services, Arter's bias can affect the livelihood of
taxpayers in Pennsylvania (and other states)who benefit from
services of nonprofits, and even those who make their living
in industries such as printing and marketing.
FSC leaders pledged to follow-up their
call for his removal by educating the nonprofit and business
community in Pennsylvania about Arter, his comments, and
FSC's position.
A New C3: The Free Speech Defense and
Education Fund
On February 7, 1995, the organizational
meeting of the Free Speech Defense and Education Fund was
held. This new group will assume most of the educational and
litigation efforts of the Free Speech Coalition, which is a
IRC section 501(c)(4) organization, and will be tax- exempt
under IRC section 501(c)(3).
The new organization's Board of Directors
are: Mike Beard, Coalition to Stop Gun Violence; Sandy
Butler, United Seniors Association; Dick Dingman, Free
Congress Foundation; Edythe Ledbetter, Center for Marine
Conservation; Ron Robinson, Young America's Foundation; and
Bill Cook, CPA. Edythe Ledbetter will serve as President;
Ron Robinson will be Vice President; Bill Cook will be
Treasurer, and Dick Dingman will be the Secretary. Mike
Beard and Dick Dingman will serve as Co-Chairs of the Board
of Directors.
President Ledbetter announced that the
new Fund will not begin operation until the IRS affirms its
nonprofit status expected in early spring. At that time, she
said, it will establish criteria for its litigation program.
In addition, the Fund will oversee the annual fall
conference that has been sponsored by the Free Speech
Coalition and the Freedom Forum, as well as conducting other
educational efforts. Tax-exempt status under IRC section
501(c)(3) will allow the fund to obtain foundation support
as well as tax-deductible contributions.
Legislative Briefing Breakfast Called "Great
Success"
On a wintry morning, January 26th,
seventeen stories above Tysons Corner, a dozen people
presented briefings of the problems and issues facing the
nonprofit community. Over eighty organizations were
represented at the annual legislative breakfast.
Former Congressman Jim Bilbray (D-NV)
described the ideological diversity of the Coalition as a
great strength. He pointed out that, right now, the Postal
Service is winning the argument with many Congressmen
against continuing special third-class mail rates. Most
people think that nonprofit mail is subsidized and if its
rates are raised, other mail rates could be less.
Howard Segermark, FSC Legislative
Director, reported that Senator Stevens (R-AK) has not
lessened his opposition to nonprofit groups' use of special
third-class rates. His position as Chairman of the Senate
Subcommittee on the Postal Service provides him ample
opportunity to act on his views. Segermark noted that there
is currently no "logical bill on which he might attach an
amendment which would accomplish his goal, but there almost
certainly will be before this session of Congress is over."
FSC will monitor this matter carefully.
Jennie Thompson, with Craver, Matthews,
Smith & Company, serves as co-Treasurer of the
Coalition. She announced that the 1995 budget is
approximately 50 percent larger than 1994, but FSC's
workload will be 100 percent larger.
Harriet Trudell, with the Feminist
Majority, co-chair of the FSC Membership Committee, reported
that membership continues to grow among for-profit and
nonprofit groups.
The burdens on nonprofit organizations,
according to Joe Levin, Southern Poverty Law Center
President and FSC Executive Committee member, require
organizations and individuals to work together. He described
the Free Speech Coalition as the organization most
vigorously attacking the roots, branches and leaves of
over-regulation. He urged groups to make the Coalition
bigger and more active in 1995.
Federal Trade Commission Attaches Burdensome Fines on
Late Premium Deliveries
The Federal Trade Commission (FTC)
issued proposed regulations which heavily burden all those
who use premiums as an incentive to solicit contributions.
The FTC regulations would require solicitations which
promise premiums to deliver those premiums to the solicited
person within thirty days or clearly mention the time those
premiums will be received by the persons solicited.
If a premium is not received within the
stated time frame, or within thirty days, the FTC can file
deceptive competition charges against that organization.
Fines can total $10,000 per incident. Katherine Boland,
Esquire, at Bayh, Connaughton, Fensterheim, and Malone,
P.C., reminds FSC members that the $10,000 fine applies to
each violation. If ten books arrive late into the hands of
contributors, the fines could total $100,000, $10,000 for
each violation charged by the FTC.
Comments on the proposed regulations are
due by March 31. Please call the FSC legislative office at
202-547-2222 for a copy of the proposed regulations.
Lobbying Registration and Disclosure
It's back. Senator Bill Cohen (R-ME)
introduced S. 101, which is nearly identical to the lobbying
disclosure bill the House-Senate Conference reported in the
last Congress. The bill contains the double-reporting
requirements that FSC fought in the 103rd Congress, but it
has dropped the list-disclosure requirement that led to the
bill's defeat in October.
Congress may consider some kind of gift
ban after it concludes consideration of the provisions of
the GOP's Contract With America. Early action in the Senate
is not expected. However, such action may have been
accelerated when the President called for lobbying reform
legislation in his State of the Union address and received a
sustained standing ovation.
Around the States
The State of California
The Attorney General's office in California agreed in
writing not to enforce a new state regulation restricting
fundraising, set to take effect January 1, 1995, until a
lawsuit challenging it has been settled. Represented by
Errol Copilevitz, Esquire, the National Federation of
Nonprofit Mailers is suing the state of California,
contesting the controversial limit on fundraising costs to
50 percent of the fundraising campaign. The new state law
would effectively shut the door on prospect mailing.
Particularly new and small organizations would face a
massive barrier to entry if the limit were allowed to remain
in place.
The City of Columbus & the State
of Ohio
A Columbus, Ohio, ordinance prohibits fundraising within
the city unless the charity registers, pays an annual fee,
and files annually. Professional fundraisers must file a
$5,000 bond to solicit contributions in the city. The law in
Columbus is additional to the Ohio statute requiring
registration. The state of Ohio requires a $25,000 bond for
all professional fundraisers. Like Maryland and other
states, Ohio charges all fundraisers a fee, based on
contributions received nationally, rather than statewide
receipts. Charities and professional fundraisers must
separately file and register under both the Ohio statute and
the Columbus code.
The State of Hawaii
Since January 1, 1995, the state of Hawaii has required
nonprofit organizations to inform individual donors of their
right to have their names deleted from nonprofits' lists
before the lists are sold, traded, or rented. The statute
has effectively made it impossible for nonprofit
organizations to sell or rent mailing lists with Hawaii
names. The state attorney general's office claimed the
statute protected Hawaiian residents from mainland charities
that take dollars away from Hawaiian charities. However, the
law also requires that all charities raising money in Hawaii
_ including those in the islands must have the donor's
permission, in advance, to be solicited, stifling all
charities.
Bureaucratic Baloney
With some frequency, the Free Speech
Coalition learns of bureaucratic arrogance, idiocy, or just
plain stupidity. We would like to hear from all FSC members
and friends of their run-ins with regulators and
regulations.
The Free Speech Coalition, Inc. is a
nonpartisan, nonprofit organization which educates, lobbies,
and litigates to defend the rights of advocacy organizations
and their members. FSC needs your support to continue its
fight to protect the rights of citizens to associate
together and exercise their First Amendment right to
petition their government for redress of their grievances.
Contributions to the Free Speech Coalition, Inc. are not
tax-deductible. For information on FSC legislative programs
and membership, please call 202-547-2222.
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