It appears that the House GOP Leadership may simply allow the Senate bill to pass and send it along to the President. Previously, the House Subcommittee on the Constitution was expected to develop its own bill, to be sent to the full Judiciary Committee, and then to the House. One insider speculated that, regardless of the content, the Leadership wants quick passage of the Senate bill to make the issue go away quickly, and "get those videos of lobbyists and Congressmen in Aruba" off the news.
Congressman John Bryant
(D-TX) has initiated a formal discharge
petition which would require a House
vote on the Senate bill when 218
signatures of Members are obtained. Bryant is the former
Chairman of the House Judiciary's Administrative Law
Subcommittee, which reported out his own version of the
Lobbying Disclosure Act in the last Congress. Nonprofits are
concerned about the definition of lobbying
in the Senate bill, which (because it differs from the IRC
definition of lobbying) would increase the costs and
burdens of recordkeeping and
reporting, while discouraging elected and appointed
officials from taking telephone calls. Lastly, nonprofits
must be concerned about additional efforts to
restrict grassroots lobbying. We will alert you on
the status of the Lobbying Disclosure bill, and any
recommended action necessary on this bill.
NASCO Unresponsive To Nonprofit Communitys
Reports on last year's seminar by FSC and publications such as The Philanthropy Monthly created controversy. For example, FSC reported that the NASCO President, Steve Arter, had informed the audience that he advised Pennsylvanians not to give to nonprofits that solicit through the mail or by telemarketing. (Mr. Arter is no longer in his charitable enforcement position.) FSC also reported that the incoming head of NASCO, Pamela Mann, had told the audience that regulators are not accountable to the nonprofit community.
FSC's September 12 letter was addressed to Ms. Mann (a former Assistant Attorney General in New York), who by that time had been replaced as President of NASCO. A response was received from the current President of NASCO, David E. Ormstedt, Assistant Attorney General of Connecticut. Mr. Ormstedt explained that the non-NASCO attendees were limited and hand-picked due to both the purpose of the seminar and certain space and cost limitations. Mr. Ormstedt further expressed that NASCO's exclusion of charitable representatives from the seminar is not intended to express an unwillingness by NASCO and NAAG members to consider charities' points of view. Clearly, however, NASCO's action does demonstrate that charities' views are not assigned much importance by many regulators and enforcers, as NASCO eliminated what has served as a relatively convenient forum for representatives of nonprofit organizations to express their concerns to regulators nationwide.
It is unfortunate that NASCO has
responded to the controversy created by Mr. Arter and Ms.
Mann by restricting the nonprofit community's access to
state regulators, and to the information provided at the
seminar, rather than addressing the attitudes which created
the controversy. Clearly, the extreme views of Mr. Arter and
Ms. Mann are not held by all state charitable solicitation
officers, yet NASCO has chosen to reduce, rather than
expand, communication between its members and nonprofits.
Such disregard for the nonprofit community can only serve to
create greater mistrust between the regulators and the
Postal Service Changes Eligibility For Special
That overview cautioned FSC members to
be careful in interpreting the new postal
rules. Reliance on Publication 417
or on any general treatment of these
complicated third-class eligibility rules
could be costly. (See, e.g., the
"grocery store" illustration on page 18 of
Publication 417, which, on the information presented, is, at
best, difficult to comprehend.)
Status Of Istook Amendment
The initial Istook amendment adopted a new definition for advocacy, terming it "political advocacy." To be consistent with current law, the act should have adopted the definition contained in the Internal Revenue Code, applicable to all not-for-profit groups which must file IRS Form 990s annually. If the Istook Amendment is adopted in its present form, presumably a new bureaucracy in GSA or OMB or some other federal agency would draft regulations to determine what, from the legislative history of this bill, is meant by "political advocacy."
The FSC is in contact with Hill
staff concerning this matter and will seek clarification of
this issue. Finally, we understand that if the
amendment passes, there may be a court challenge to it.
There have been conflicting legal opinions rendered by
counsel to certain nonprofit groups as to the
constitutionality of the Istook proposal. We will keep you
FTC Regulates Charitable Phone Solicitation To
However, there was no satisfaction
to express for those nonprofits that
communicate with their supporters and the public by
telephone in an effort to mobilize contributions. The new
FTC regulations that will go into effect on December 31 will
require elaborate disclaimers from
commercial solicitors employed by charities to contact
prospective donors disclaimers that would, in the minds of
many, eliminate the practicality of telephone soliciting.
Some still hope that the FTC or Congress will recognize the
legitimate, legal, and non-fraudulent nature of most current
telephone charity solicitations and revise these
Seeking Access To Nonprofits Membership, Other
In this case, Hamilton, et al. vs. Accu-Tek, et al., the plaintiffs have argued that the defendants are liable for the death of two people because, in lobbying Congress and state legislative bodies regarding proposed gun-related legislation, they presented material that was allegedly false. The plaintiffs who apparently are attempting to hold the firearm industry liable for the criminal acts of third parties are now seeking evidence relating to alleged industry-wide efforts to combat legislation which would have affected the distribution of handguns, to try to back up their allegations.
The plaintiffs have subpoenaed records (e.g., tax returns, membership lists, budgets, internal policy discussions, and legislative activities) from and sought to depose non-parties such as ASSC, an Atlanta-based trade association representing the firearm industry. ASSC objected to the subpoenas on a number of grounds, principally its First Amendment privilege to petition the government for redress of grievances; it has asked a federal court in Georgia to quash the subpoena. Noting that "political forces are instrumental in driving the litigation," ASSC argues that invasion of its First Amendment rights should not be permitted.
Even if ASSC were a
defendant to the litigation, its
membership and other confidential files protected
by the First Amendment should be
virtually immune from disclosure. We are
optimistic as to the outcome, but this lawsuit confirms that
eternal vigilance, coupled with an
uncompromising defense of First
Amendment rights, is the price of
AICPA Ignores Flood of Objections, Moves To Adopt
In 1993, the AICPA circulated the Exposure Draft for comment, and by early 1994 received more than 300 sets of written comments in response. Reportedly, 90 percent of the individuals and organizations (and 98 percent of the nonprofit organizations, including FSC and many of its members) filing comments generally opposed the Exposure Draft. Incredibly, despite the overwhelming opposition to the proposal and the long passage of time without any action, the AICPA is still pushing the revision and will forward it to the FASB, who could still refuse to adopt it as an accounting standard.
The nonprofit community
is upset in response. Much of the
opposition to the Exposure
Draft reflected concerns that it
would make financial statements misleading.
Some nonprofits are considering a legal
challenge to any such new accounting standard,
although it is not clear at this time how much
financial support is available for such a
lawsuit. FSC will be writing to the FASB,
and will continue to keep members posted on