Vol. V, No. 3May - June 1997

Nonprofit Leaders Expose Senate “Witch Hunt”
The Senate's investigation into campaign fundraising scandals involving illegal foreign cash contributions and the use of government resources for partisan political gain has now swept in the nonprofit community. Officially, the investigation has been expanded to include allegedly "improper" activities by nonprofits during the 1996 Federal elections.

Some politicians, who do not like citizens involvement in public policy formation, have asserted that issue advocacy is virtually the same as political campaigning. Since campaign finance regulation is an accepted fact of American public policy, this helps these politicians gain control over nonprofits.

The effort to regulate issue advocacy by Americans and advocacy organizations, as part of "campaign finance reform," is a direct attack upon the First Amendment's protection of the freedom speak, associate freely and to petition the government without interference from the government.

On July 8, 1997 the Senate Committee on Governmental Affairs, under the chairmanship of Sen. Fred Thompson (R-TN), began hearings into illegal and improper political campaign activities. Previously, Senator Thompson announced that he would issue subpoenas for documents from five nonprofit organizations as part of the Committee's investigation.

On June 28, 1997 the Washington Post reported that the committee would soon issue 40 additional subpoenas, "many aimed at nonprofit political organizations." According to Committee sources, among the new nonprofits to be subpoenaed are politically diverse:
• The Sierra Club;
• Christian Coalition;
• The Heritage Foundation; and
• National Right to Life Committee.

"This is a classic First Amendment abuse. These nonprofits are being targeted simply because they ran issue advertisements where someone objected to the message. No one has accused them of any illegal act. The message being sent to nonprofits is don't do issue advocacy," said an attorney for one targeted nonprofit.

The initial subpoenas targeting nonprofits supposedly were based on unspecified innuendo that certain organizations spoke too aggressively about the legislative records of certain politicians prior to or during an election cycle. The initial subpoenas were issued to five nonprofits:
• Coalition for Our Children's Future;
• Americans for Tax Reform;
• Citizens for Reform;
• Citizens for the Republic Education Fund; and
• National Policy Forum.

On May 19, 1997, U.S. News & World Report wrote that "[t]he Democrats believe that the GOP's National Policy Forum regularly received foreign money and want to subpoena its donor list now that the forum's nonprofit status has been questioned" (emphasis added). According to other press sources, National Policy Forum was recently informed by the IRS that it wasn't entitled to its tax exemption status because its activities were considered "too Republican."

Paul Clark, Press Secretary to the Senate Committee on Governmental Affairs, told FSC that 25 professional staff members are working on the "Special Investigation" for the Republican members. Additionally, nine FBI agents have been loaned to the Committee. Democratic members have their own Committee staff working on the investigation as well.

Issue advocacy nonprofits have objected to being lumped in with organizations and individuals who allegedly took illegal contributions from foreigners and campaign committees.

Peter Flaherty of Citizens for Reform told FREE SPEECH that the Senate subpoena would require his organization to provide essentially "every piece of paper" produced by the organization. He estimated that it would cost CFR over $100,000 in legal fees to comply.

Hearings began July 8, 1997, and will be held for three days a week in July. After the August recess, the hearings will continue into September. They will be held in the Room 216 of the Hart Senate Office Building, scene of the recent Whitewater hearings held by Senator Alfonse D'Amato (R-NY). Hearings are scheduled to continue sporadically through the end of the year.

Political speech regulation proponents hope to use the committee's hearings to intimidate nonprofits into ceasing issue advocacy, which would be tantamount to waiving their First Amendment rights provide their members and the public with information on the voting record and policy positions of public officials.

Vermont Taxes Lobbying, Limits Political Speech
"We contend the Supreme Court was wrong," announced Anthony Pollina, a lobbyist for the Vermont Public Interest Research Group. Vermont's new campaign regulation law challenges the U.S. Supreme Court's 1976 ruling in Buckley v. Valeo that certain government regulations over political campaign activity violate the First Amendment.

The Vermont law limits political campaign spending and enacts a host of other measures giving the government far-reaching power to direct and regulate the political process.

The Buckley v. Valeo decision affirmed the right of Americans to participate in the political process without government-imposed spending limits. Vermont's new law rejects the U.S. Supreme Court's ruling.

In a matter of great concern to nonprofits, Vermont's law would also attempt to regulate issue advocacy if state bureaucrats determined that informing the public about an official's vote on an issue was done to indirectly affect the election. According to the new law, political advertising is defined as "any communication...which expressly or implicitly advocates the success or defeat of a candidate." [Section 4.17 V.S.A. Chapter 59 subchapter 7 section 2881 (emphasis added)]. Such advertising is subject to severe restrictions, as well as criminal penalties for violations.

The Wall Street Journal reported on April 9, 1997, that a political speech regulation group official said, "While our ultimate goal is reform of the federal system, we're going to first build support in the states." Vermont's attack is the first salvo in the new state-by-state war of the regulators against issue advocacy.

Clinton Administration Seeks End to Buckley Protections
The Clinton Administration is fervently trying to find the right legal case to overturn the 1976 Buckley v. Valeo U.S. Supreme Court decision, which held that government mandated spending limits are unconstitutional. Mike McCurry, White House press secretary, told the Associated Press recently that the Justice Department was actively looking for "the right case."

Campaign and advocacy regulation proponents have a deep-seated hostility to the Buckley decision, in which the U.S. Supreme Court ruled that the congressionally-enacted limitations on campaign expenditures are unconstitutional because they abridge our freedom of speech as guaranteed by the First Amendment.

As Buckley acknowledged, the heart of free speech is the expression of political beliefs.

Consumer Protection or Bureaucratic Racket? Issued by FSC
Many state legislators lack understanding of the negative effects so-called "consumer protection" legislation has on nonprofits. Knowing this, the Free Speech Coalition is now distributing copies of Consumer Protection or Bureaucratic Racket? Why Does More Than $100,000,000 A Year Go To Pay Bureaucrats Rather Than To The Causes For which They Were Intended? This informative FSC brochure has been in the works for the past few months.

Members of FSC's Leadership Group (which span the political spectrum) were involved in writing and editing the document. "When you can get leaders of nonprofits from such diverse groups as the Coalition to Stop Gun Violence, American Conservative Union, Feminist Majority, English First, and others to agree that their free speech rights are being trampled by supposed 'consumer protection' legislation, you know you've achieved critical mass to change the system," commented FSC Membership Director Steve Whitener. The FSC brochures will be distributed over the next few weeks to key state legislators throughout the country.

FEC Seeks Comments on Banning “Soft Money”
The Federal Election Commission is soliciting comments on its proposal to ban "soft money," Five Members of Congress and President Clinton have filed petitions with the FEC to ban or "significantly lessen" the use of unregulated political funds (11 CFR Parts 100, 102, 104, 106, 110, and 114; Notice 1997-10). The proposal can be obtained by calling the FEC at (202) 219-3690. Comments can be filed via mail, email or fax to:

Susan E. Propper, Assistant General Counsel
Federal Election Commission
999 E Street, N.W., Washington, D.C. 20463
email: softmoney@fec.gov; fax: (202) 219-3923

“Being free to engage in unlimited political expression subject to a ceiling on expenditures is like being free to drive an automobile as far and as often as one desires on a single tank of gasoline.”

U.S. Supreme Court in Buckley v. Valeo, 1976

Free Speech Coalition Targeted by Pennsylvania
A Texas based nonprofit has been asked in writing to provide information about a "grant" it gave the Free Speech Coalition. A written missive to the nonprofit (FSC does not identify its members and contributors, unless specifically released to do so) demands that they provide the government of Pennsylvania with "grant proposals" submitted by the Free Speech Coalition. Additionally, Pennsylvania also demanded to know "whether any member of the board of directors of the nonprofit or any of their relatives, are in any way affiliated with the Free Speech coalition." Both the nonprofit and FSC have held firm in not providing any information beyond repeated assurances that their is no conflict of interest and state law has been followed.

As FSC has been active in Pennsylvania, the state's action are clear examples of harassment of a supporter of FSC's efforts to protect nonprofits' free speech rights.

For more information, contact Steve Whitener, Membership Director
Recent cease and desist letters from states' attorney generals offices have awakened nonprofits to the growing regulatory maze that nonprofits face. In Arkansas, Deputy Attorney General wrote a nonprofit and told them to "cease solicitations in the state of Arkansas until such time as your organization is in compliance" with state solicitation rules. The State of Maine goes farther. Marlen McFadden in the Office of Licensing and Registration wrote a nonprofit that nonregistration with her office "may be considered a Class D crime."

The Free Speech Coalition, Inc. is a nonpartisan, nonprofit 501(c)(4) 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.