<DOC>
[109th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:26911.wais]
LOBBYING ACCOUNTABILITY AND
TRANSPARENCY ACT OF 2006
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON THE CONSTITUTION
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
ON
H.R. 4975
__________
APRIL 4, 2006
__________
Serial No. 109-96
__________
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://judiciary.house.gov
______
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COMMITTEE ON THE JUDICIARY
F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois JOHN CONYERS, Jr., Michigan
HOWARD COBLE, North Carolina HOWARD L. BERMAN, California
LAMAR SMITH, Texas RICK BOUCHER, Virginia
ELTON GALLEGLY, California JERROLD NADLER, New York
BOB GOODLATTE, Virginia ROBERT C. SCOTT, Virginia
STEVE CHABOT, Ohio MELVIN L. WATT, North Carolina
DANIEL E. LUNGREN, California ZOE LOFGREN, California
WILLIAM L. JENKINS, Tennessee SHEILA JACKSON LEE, Texas
CHRIS CANNON, Utah MAXINE WATERS, California
SPENCER BACHUS, Alabama MARTIN T. MEEHAN, Massachusetts
BOB INGLIS, South Carolina WILLIAM D. DELAHUNT, Massachusetts
JOHN N. HOSTETTLER, Indiana ROBERT WEXLER, Florida
MARK GREEN, Wisconsin ANTHONY D. WEINER, New York
RIC KELLER, Florida ADAM B. SCHIFF, California
DARRELL ISSA, California LINDA T. SANCHEZ, California
JEFF FLAKE, Arizona CHRIS VAN HOLLEN, Maryland
MIKE PENCE, Indiana DEBBIE WASSERMAN SCHULTZ, Florida
J. RANDY FORBES, Virginia
STEVE KING, Iowa
TOM FEENEY, Florida
TRENT FRANKS, Arizona
LOUIE GOHMERT, Texas
Philip G. Kiko, General Counsel-Chief of Staff
Perry H. Apelbaum, Minority Chief Counsel
------
Subcommittee on the Constitution
STEVE CHABOT, Ohio, Chairman
TRENT FRANKS, Arizona JERROLD NADLER, New York
WILLIAM L. JENKINS, Tennessee JOHN CONYERS, Jr., Michigan
SPENCER BACHUS, Alabama ROBERT C. SCOTT, Virginia
JOHN N. HOSTETTLER, Indiana MELVIN L. WATT, North Carolina
MARK GREEN, Wisconsin CHRIS VAN HOLLEN, Maryland
STEVE KING, Iowa
TOM FEENEY, Florida
Paul B. Taylor, Chief Counsel
E. Stewart Jeffries, Counsel
Hilary Funk, Counsel
Kimberly Betz, Full Committee Counsel
David Lachmann, Minority Professional Staff Member
C O N T E N T S
----------
APRIL 4, 2006
OPENING STATEMENT
Page
The Honorable Steve Chabot, a Representative in Congress from the
State of Ohio, and Chairman, Subcommittee on the Constitution.. 1
The Honorable Jerrold Nadler, a Representative in Congress from
the State of New York, and Ranking Member, Subcommittee on the
Constitution................................................... 5
WITNESSES
Mr. Kenneth A. Gross, Partner, Skadden, Arps, Slate, Meagher &
Flom, LLP
Oral Testimony................................................. 3
Prepared Statement............................................. 4
Mr. John H. Graham, IV, President and Chief Executive Officer,
American Society of Association Executives
Oral Testimony................................................. 7
Prepared Statement............................................. 9
The Honorable Chellie Pingree, President and Chief Executive
Officer, Common Cause
Oral Testimony................................................. 11
Prepared Statement............................................. 13
The Honorable Bradley A. Smith, Professor of Law, Capital
University Law School, on behalf of Center for Competitive
Politics
Oral Testimony................................................. 27
Prepared Statement............................................. 28
APPENDIX
Material Submitted for the Hearing Record
Testimony of Mark J. Fitzgibbons, President of Corporate and
Legal Affairs, American Target Advertising, Inc................ 61
LOBBYING ACCOUNTABILITY AND TRANSPARENCY ACT OF 2006
----------
TUESDAY, APRIL 4, 2006
House of Representatives,
Subcommittee on the Constitution,
Committee on the Judiciary,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:06 a.m., in
Room 2141, Rayburn House Office Building, the Honorable Steve
Chabot (Chairman of the Subcommittee) presiding.
Mr. Chabot. The Committee will come to order. This is the
Judiciary Committee Subcommittee on the Constitution. I am
Steve Chabot, the Chairman of the Committee. We will be joined
shortly here by the Ranking Member, Mr. Nadler, and I want to
welcome all the other Members for being here as well. We have
one witness, I believe that is running a little bit late, but
that shouldn't really affect us significantly at this time.
I want to thank everyone again for being here at the
Subcommittee on the Constitution. This is the legislative
hearing on H.R. 4975, the ``Lobbying Accountability and
Transparency Act of 2006.'' As an original cosponsor of the
1995 Lobbying Disclosure Act, this issue has always been an
important one to me.
Today the Subcommittee on the Constitution will examine
legislation that would require lobbyists to disclose more
information more frequently. It would require that these
increased disclosures be made available to the public on the
Internet as soon as practically possible in a form that can be
easily sorted and searched by the average citizen. The bill
would also require registered lobbyists to disclose their past
government employment over the previous 7 years to allow for
the spotting of possible conflicts of interests. The bill also
requires lobbyists to disclose contributions to Federal
candidates, leadership and other PACs and political party
committees and to disclose the recipient and amount of any gift
that counts toward the cumulative annual limit of $100 as
provided for under House rules.
The bill doubles to $100,000 the civil penalty for a
failure to report under these requirements. The bill also
requires that the Clerk of the House give notice to Members and
staff of the 1-year post-employment ban on lobbying activities
and prohibits registered lobbyists from accompanying Members on
corporate flights. The bill also requires random audits of
lobbying reports filed by lobbyists by the House Inspector
General, and permits the Inspector General to refer violations
by lobbyists to the Department of Justice for prosecution,
which puts more teeth into the enforcement of current law.
These reforms are necessary and prudent.
Throughout history people have paid other people to help
them make their views known. The United States Constitution
grants everyone the right to petition their Government for
redress of their grievances, and today, organizations such as
the American Association of Retired Persons, the American
Cancer Society, the Boy Scouts, and all manner of nonprofit
organizations also hire lobbyists. While there is nothing wrong
with hiring help to communicate one's views, there is also much
good in requiring that financial, political contributions by
such organizations be made known to the American public so they
can decide for themselves what to make of them.
More disclosure means more information, and more
information is always welcome in a vibrant democracy such as
ours. This hearing today, with the help of our invited
witnesses, will examine H.R. 4975, which seeks in a very
practical and accessible way to provide greater transparency
and accountability in the lobbying profession without
infringing on people's essential right to speak freely to their
elected officials.
Members in this body serve in what has always been known as
``the people's House.'' The House of Representatives is unique
among all branches and bodies of the entire Federal Government
because its Members must always be elected, and they serve
limited 2-year terms so their service can be frequently
evaluated by the voters they represent. As James Madison wrote
in ``America'', ``The people may publicly address their
Representatives, may privately address them, or declare their
sentiments by petition to the whole body.'' Those rights are
safe in this legislation.
But it is also often said that the price of liberty is
eternal vigilance. This legislation is designed to allow the
American people to maintain that vigilance as easily as
possible by providing them with more information and greater
access to it.
No one has a monopoly on good ideas and I look forward to
hearing from our panel of witnesses, and also hearing from our
colleagues on the Committee during the course of this hearing.
I would now be happy to yield to the gentleman from
Virginia for the purpose of making an opening statement if he
should like to do so.
Mr. Scott. Mr. Chairman, I ask unanimous consent that the
Ranking Member be able to make a statement when he arrives.
Mr. Chabot. Without objection, we'll do it. If not
necessarily right when he arrived, at an appropriate point
then.
Does any other panel Member wish to make an opening
statement? If not, we will get to our witnesses and I will
introduce them at this time. As I mentioned before, we have one
witness that will be coming shortly.
Our first witness is Mr. Ken Gross, who heads the political
law practice at Skadden, Arps, Slate, Meagher & Flom. Mr. Gross
is a recognized expert in the field of government ethics and
disclosure, particularly in the context of lobbying disclosure.
Roll Call has named Mr. Gross among the outstanding lawyers in
the who's who among the Congressional Ethics Bar. Mr. Gross is
a graduate of the University of Bridgeport, and received his
law degree from the Emory University School of Law.
We welcome you here this morning, Mr. Gross.
Mr. Gross. Thank you, Mr. Chairman.
Mr. Chabot. Our second witness is Mr. John Graham,
President and CEO of the American Society for Association
Executives. ASAE provides educational resources for its
members, and promotes the goals and interest of the association
profession. Prior to joining the ASAE, Mr. Graham served as CEO
of the American Diabetes Association and held several executive
positions with the Boy Scouts of America. Mr. Graham holds a
bachelor's degree from Franklin and Marshall College, and we
welcome you here this morning, Mr. Graham.
Mr. Graham. Good morning, Mr. Chairman.
Mr. Chabot. Our third witness is the Honorable Chellie
Pingree, President and CEO of Common Cause, which advocates for
open and accountable government. Prior to joining Common Cause,
Ms. Pingree served 8 years in the Maine Senate and was the
Democratic candidate for the United States Senate for that
State in the year 2002.
And our fourth witness, which, again, hasn't arrived, but I
will go ahead and introduce him now, our fourth and final
witness is the Honorable Bradley Smith, Professor of Law at
Capital University Law School. Professor Smith served 5 years
as Commissioner, Vice Chairman and Chairman of the Federal
Election Commission. As Chairman of the Commission from January
2004 until August 2005, Professor Smith oversaw the
administration of the Bipartisan Campaign Reform Act of 2002,
and as such, is intimately familiar with the role that
disclosure plays in an open democracy. He graduated from
Kalamazoo College and received his juris doctor, cum laude,
from Harvard Law School.
Again, we'd like to welcome all the witnesses for their
testimony here. Before we start, I'd like to bring to your
attention the lights that you see before us. We have what's
called the 5-minute rule here, which means that you all can
testify for 5 minutes, and then there will be questions up
here, and each of us is also limited to 5 minutes. The green
light will be on for 4 minutes, the yellow light remains on for
1 minute to let you know that things are kind of winding down,
and then when the red light comes on, your time is up. I won't
gavel you down immediately, but we'd ask you to stay within
that timeframe if at all possible.
And it's the practice to swear in all witnesses before it,
so if you would please rise and raise your right hands.
[Witnesses sworn.]
Mr. Chabot. All witnesses have indicated in the
affirmative, and you can all, please, be seated. Again, we
appreciate your testimony here this morning, and, Mr. Gross,
you're recognized for 5 minutes.
TESTIMONY OF KENNETH A. GROSS, PARTNER, SKADDEN, ARPS, SLATE,
MEAGHER & FLOM, LLP
Mr. Gross. Thank you, Mr. Chairman. I am here to discuss
4975. Make no mistake about it, these are difficult times for
Congress. Today's news certainly brings added stress to the
situation, and I am pleased that this bill has many provisions
in it that will begin hopefully to turn the tide of the process
here in Washington that will make it a system with greater
disclosure.
When we're talking about regulation of lobbying, we're
talking about first amendment protected activity, core
political speech. So the only way that we can regulate it is
through the disclosure process. And what this bill does, as you
had mentioned in your opening statement, is it really does
three things: it increases disclosure, it increases
accessibility and the timeliness, with quarterly reports. With
a much tighter lag time, that's a very helpful thing, just
getting the information out on the street.
In terms of disclosure of gifts, in terms of disclosure of
political contributions right on the report, those are, I
think, very useful pieces of information in the entire process
of the transparency of lobbying, and all gifts are in this
bill, those who are over $10 disclosed right on the lobby
report. The electronic filing, obviously, is something that is
a significant improvement. So all that, I think, brings greater
transparency, and I support it.
In terms of enforcement, I know that there have been
proposals for stronger enforcement, other, you know, Office of
Public Integrity, et cetera. What this bill does with the
Inspector General I think will certainly be sufficient in terms
of getting lobby disclosure out on the table. My experience
representing many lobbyists is that they're not disclosure shy.
Obviously, we have bad apples, but the overwhelming percentage
of lobbyists is that they tell me what the rule--tell me what
the rule is. We'll put it out on the report, and we'll get it
out in a timely fashion.
With the specter of random audits, if it is done properly,
and it becomes a real part of the enforcement process, that
should do it in terms of quality enforcement. It's not going to
take--this is a handful of provisions. We're talking about
title I, title IV in this bill. It's going to take more than
just a handful of provisions. This Committee has limited
jurisdiction, but this is a piece of the puzzle. You know,
there are other critical elements, the lawmaking process
itself, the disclosure, the transparency of earmarking, et
cetera. These provisions should fit well into those provisions
and hopefully begin to turn the tide and restore confidence to
the American people in the process.
[The prepared statement of Mr. Gross follows:]
Prepared Statement of Kenneth A. Gross
Good morning Chairman Chabot, Ranking Member Nadler, and Members of
the Judiciary Subcommittee on the Constitution. Thank you for the
opportunity to appear before you today to discuss the merits of H.R.
4975, the ``Lobbying Accountability and Transparency Act of 2006.''
My name is Ken Gross. I am a partner at Skadden, Arps, Slate,
Meagher & Flom LLP, where I head the firm's political law practice. I
specialize in compliance with campaign finance, lobbying, and ethics
laws. Prior to Skadden, I was head of enforcement in the General
Counsel's Office of the Federal Election Commission.
H.R. 4975 is, overall, a constructive step toward positive reform
of the federal lobbying law. By emphasizing increased disclosure, the
bill succeeds in effecting practical change in the way lobbying
activities are reported and monitored in our nation's capital without
infringing upon our First Amendment rights as citizens to petition our
government for a redress of grievances.
The bill undertakes to increase the transparency of lobbying by
requiring more frequent disclosure with shorter lag time (days between
the end of a reporting period and the report's due date), and by
requiring more substantive disclosure--for example, requiring lobby
registrants, their political action committees, and their lobbyists to
disclose federal political contributions; requiring the reporting of
certain gifts to Members and legislative staff made by lobby
registrants and their lobbyists; and increasing the number of years
that current lobbyists who are former federal officials must be
disclosed as such on lobby reports.
H.R. 4975 also takes great steps to increase the transparency of
governmental decision-making by making electronic filing the standard
and requiring reports to be searchable, sortable, and posted quickly
for the benefit of the public.
Although the bill does not create an independent enforcement body,
it does increase the penalties for violations of the lobbying law, and
it gives substantive powers to the House Office of Inspector General.
For example, the Inspector General will conduct random audits of lobby
reports to ensure compliance, will have the authority to refer
potential violations to the Department of Justice, and will review and
report on the progress of the lobbying reform in action. These changes
are very important because without a functioning enforcement mechanism,
you can change rules but the effect of the reforms will be weakened.
These changes only address part of the puzzle, but the regulation
of lobbying activity is a delicate process. Lobbying is a protected
core First Amendment right. Effective disclosure is the only viable
method of regulation and this bill addresses shortcomings in the
current law. I do not want to see the response to Cunningham and
Abramoff to simply result in a lot more rules and forms for lobbyists.
You can shine the car on the outside but if the engine is leaky inside
you have a piece of junk. The engine is the legislative process itself.
Some of the institutional reforms that relate to the legislative
process are outside of this Committee's jurisdiction, but the aspects
of reform that are before this Committee are a very constructive step
in improving the current system. It is my sincere hope that with the
changes proposed in H.R. 4975 under discussion here, supplemented by
those under consideration in other Committees, it will start the
process of restoring public confidence to a system that is currently
under great strain.
Mr. Chabot. Thank you very much.
Mr. Graham, you're recognized for 5 minutes.
I'm sorry. I'll tell you what, if you wouldn't mind, we
won't go into your time now, but the Ranking Member is here, so
we're going to go ahead and let him make his opening statement.
Then we'll get to you.
Mr. Graham. Fine.
Mr. Nadler. Thank you, Mr. Chairman.
Today we examine an issue that goes part way to the very
heart of this institution's credibility and integrity, the
urgent need to curtail the corrupting abuses and influence
peddling that have become pervasive among some of those who
attempt to influence Congress, and unfortunately, some of the
Members they hope to influence. This issue's not about free
speech, though it could be--but hopefully it isn't--or the
right of citizens to petition their Government for redress of
grievances. It is about the corrupting influence of money and
our democratic process.
All citizens should have an equal voice in speaking to
Congress, whether for personal enrichment or for the means to
acquire political power, money distorts our democracy and
renders what we do here, at best, suspect. The recent
indictments, convictions and resignations of leading Members of
Congress and their staff, up to and including the former
Majority Leader, Mr. DeLay, have cast a pall over this
institution and over every one of us, whether we like it or
not, whether any of us have done anything improper or not.
Unless this Congress acts and acts effectively and with
credibility, the public will rightly judge this institution and
its Members harshly. The public will become only more cynical.
One place we could start, which is not really addressed in
any of these reform bills, is to open up our legislative
process and adhere to our rules of procedure. Bills hundreds of
pages long, written in the dead of night and brought to a vote
with little or no examination by the Members, will always be an
invitation to disaster and to corruption, because they are an
invitation to payoffs for campaign contributions when no one is
looking. There was a time when legislation was actually the
result of a deliberative and bipartisan process. That is,
regrettably, becoming the exception rather than the rule in
this Congress. It creates a bad policy and innumerable
opportunities for mischief.
I must add that this lobbying reform, as mild as this bill
is--and it's, frankly, a very halfhearted bill--or as good as
an lobbying reform could be if we did a stronger bill, is
totally useless without reform of the campaign finance system.
In the film ``Braveheart,'' which our former colleague, Mr.
Gephardt, always used to refer to, there's a scene in which the
two armies are lined up preparing for battle, and the committee
goes out, the king and a few of his friends on one side, and
the rebels on the other. And they meet in the center of the
battlefield and they negotiate, and if they come to an
agreement, everybody goes home and there's no battle, if not,
they go back and they have the battle. If there were only one
army lined up on the field, one of those negotiating groups
would have little negotiating leverage.
The lobbying is an extension of the campaign finance
system. If we don't have a strong system of public finance and
get the hundreds of millions or billions of dollars given to
buy legislation out of the system, then what we're talking
about today is totally irrelevant.
I do not believe that Members are corrupted by a $50 or $75
dinner. They are corrupted by the necessity to raise large sums
of campaign finance from private sources. If we want people to
really have confidence in our legislative process again, we
have got to clean up not only lobbying--that's the minor
problem--the major problem is the campaign finance system,
which is a metastasized cancer on our democratic system today.
I really believe that if we don't clean it up, if we don't
enact some sort of public finance system like the clean
election system, then historians will eventually write, as they
do of the Roman Republic, that they had a good 200, 250 year
run with democracy, and then it evolved into a different
system, and that's the direction we're heading today.
Plainly, this legislative effort could stand--even on this
bill--could stand a bit of openness and deliberation. We seem
to be moving down the road again toward another partisan ``take
it or leave it'' bill.
Tomorrow the Committee will vote on this bill and vote to
report it, no Subcommittee consideration. That's no way to
bring sunshine to an institution that sorely needs it, not only
no Subcommittee consideration, no time after this hearing till
the markup tomorrow. The hearing is a formality just to say we
had a hearing. There's no time for the public to digest it, for
people to comment on the testimony, for people to incorporate
in the bill anything that may come out of this hearing or out
of comments that people make as a result of the hearing. The
hearing's a sham. It's designed to say we had a hearing, but
the markup is tomorrow. It's preordained.
I hope I'm proved wrong, but I doubt I will be.
I welcome our witnesses and their expertise. I hope that
your suggestions will receive serious consideration by the
Members of this Committee, since--obviously, they won't since
the bill is written and will be passed as written tomorrow--and
that we'll be able to work together to rescue our democracy,
and again, that we will be able to work together toward a
decent campaign finance bill, without which this is all
meaningful.
I thank you, Mr. Chairman, for your indulgence.
Mr. Chabot. Thank you.
Mr. Nadler. Excuse me--without which, this is all
meaningless, I meant to say.
Mr. Chabot. Do any of the witnesses still want to testify
after that? [Laughter.]
Mr. Graham, you're recognized for 5 minutes.
TESTIMONY OF JOHN GRAHAM, IV, CAE, PRESIDENT AND CHIEF
EXECUTIVE OFFICER, AMERICAN SOCIETY OF ASSOCIATION EXECUTIVES
Mr. Graham. Thank you, Mr. Chairman. And, Congressman
Nadler, thank you, I think. No, I thank you for the opportunity
to be here, and other Members of the panel.
My name is John Graham. I'm President and CEO of the
American Society of Association Executives, ASAE. We represent
roughly 22,000 members, the majority of whom are CEOs and other
association professionals representing the predominantly large
trade professional and philanthropic organizations.
ASAE supports true reform that will provide for meaningful
disclosure activity, needed reporting changes and elimination
of abuses. We ask only that in its consideration of more
stringent disclosure requirements and other reforms, Congress
not inadvertently impede the ability of associations to carry
out their primary missions for the public good, that Congress
preserve its access through associations to firsthand
information about the issues of the day and how they
potentially impact vast constituencies of individuals across
the country.
Associations can be a tremendous public information source
for Congress and other audiences. The last thing we want to see
happen is the promulgation of new rules that effectively stymie
access, and hence, these vital lines of communication.
To this point in the continuing discussion of lobby reform,
ASAE has focused its public comments on one proposal in
particular, the proposed ban on privately funded travel, which
we feel poses a serious threat to the exchange between Congress
and associations at educational programs and conferences around
the country. Realizing the jurisdiction of the House Judiciary
and its Subcommittees, however, I will confine my remaining
remarks to the provisions in H.R. 4975 on enhancing lobbying
disclosure, enforcement, slowing the so-called revolving door,
and prohibiting lobbyists on corporate flights.
Enhancing lobby disclosure. ASAE is not opposed to
quarterly filing requirements so long as the reporting
processes are not overly burdensome from an administrative
standpoint, and that the filing system is uniform for both the
House and the Senate. Also, requiring electronic filing seems
both appropriate and conducive to the goal of increased
transparency. ASAE supports making all lobby disclosure forms
publicly accessible to increase the public perception and
understanding of the legislative process and the role of
associations and other organizations engaged in advocacy
efforts on behalf of their constituents.
Enforcement. ASAE is supportive of disclosure, but
disclosure does little good without enforcement. A good example
of this is the IRS which has oversight of 1.8 million nonprofit
organizations. The vast majority of tax-exempt organizations
faithfully comply with the spirit and letter of the law in
carrying out their important missions, but the IRS has also
identified enforcement in the tax-exempt sector as a key
objective, and yet, does not have the resources to enable that
enforcement. Random audits of lobbying disclosure seem a
responsible safeguard against complacency or incomplete
reporting.
ASAE supports increased oversight and enforcement of lobby
reports, but suggests the House and Senate designate one
oversight body to report violations by lobbyists for
prosecution in the interest of avoiding duplicative, time-
consuming activities that could result in increased
administrative compliance for association and other lobbyists
as well. This designated oversight body could issue annual
reports to both chambers of Congress.
Slowing the revolving door. The term ``revolving door'' has
been commonly used in discussions of lobby reform, but it
implies to me that there are an endless number of former
Members of Congress or staffers who leave their positions to
take jobs as lobbyists for associations or other multi-client
firms. I know that does happen, but it's not the norm. It's
been my experience in 30 plus years in association management,
including 13 as the CEO of the American Diabetes Association
before joining ASAE, that governing boards hire the best people
for the job. The vast majority of association CEO positions are
filled by experienced association executives or someone with
expertise in the industry or profession that the association
represents. ASAE has no objection though to maintaining the 1-
year cooling off period in cases where a former Member of
Congress is hired.
Prohibiting lobbyists on corporate flights. ASAE supports
the proposal in H.R. 4975 to prohibit registered lobbyists from
accompanying Members of Congress on corporate flights because
it cures a public concern about extravagance. I do want to
reiterate, however, the value we see in Members of Congress
getting outside of Washington, D.C. and engaging in truly
educational dialogue with members of the association community
or other constituencies with real concerns and information to
share. ASAE believes that there should be a clear distinction
between trips on corporate jets to exotic locales where the
agenda is more socially or recreationally driven, and
educational trips to an association meeting or a conference
where an association might pay for an elected official's
domestic plane or train ticket.
We have suggested in our communications to Congress on this
issue that a preapproval and disclosure process for privately
funded congressional travel would be an amenable solution to
the concerns about travel, while still preserving the valuable
perspectives gained when Members of Congress attend legitimate
educational meetings around the country.
In conclusion, I want to thank Congress for recognizing the
need to enhance accountability and public trust, and for
avoiding a rush to judgment on any one proposal that may have
resulted in unintended consequences for us all.
H.R. 4975 is a comprehensive bill that represents input and
feedback from a lot of Members of Congress, constituents and
outside experts. ASAE is confident Congress will pass a good
bill.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Graham follows:]
Prepared Statement of John H. Graham, IV
Chairman Chabot, Congressman Nadler, and other distinguished
members of the subcommittee, thank you for the invitation to testify on
the important issue of lobbying reform.
I am John Graham, president and CEO of the American Society of
Association Executives (``ASAE''), a 501(c)(6) tax exempt organization
founded in 1920 and representing roughly 22,000 members, the majority
of whom are the CEOs or senior staff professionals of trade,
professional or philanthropic organizations in the U.S. and in 50
countries worldwide. Among the services provided by ASAE to its members
are education and knowledge resources, credentialing, industry
research, and advocacy on issues that impact or threaten to impact the
success of the association and nonprofit community.
Lobbying is of course an important part of our political process
and an essential function of many associations responsible for
communicating the interests of groups of individuals, corporations,
charitable institutions and others potentially impacted by legislation.
According to a ``Value of Associations'' study conducted by ASAE in the
last six months with Harris Interactive Inc. the average association
dedicates about 14 percent of their budget to advocacy. The balance of
a typical association's budget is heavily weighted toward education and
public information, meeting planning, standard setting, and so on.
Recently of course, we have all followed the media coverage about
abuse of existing lobbying rules, and hence, we fully understand the
need to reexamine these rules to ensure public accountability and trust
in the political process. ASAE supports true reform that will provide
for meaningful disclosure activity, needed reporting changes, and
elimination of abuses. We ask only that, in its consideration of more
stringent disclosure requirements and other reforms, Congress not
inadvertently impede the ability of associations to carry out their
primary missions for the public good, and that Congress preserve its
access through associations to firsthand information about the issues
of the day and how they potentially impact vast constituencies of
individuals across the country. Associations can be a tremendous public
information source for Congress and other audiences. The last thing we
want to see happen is the promulgation of new rules that effectively
stymie access, and hence, these vital lines of communication.
To this point in the continuing discussion of lobbying reform, ASAE
has focused its public comments on one proposal in particular--the
proposed ban on privately funded travel--which we feel poses a serious
threat to the exchange between Congress and associations at educational
programs and conferences around the country.
Though the issue falls outside the interest of this subcommittee, I
do want to commend Congress for its careful deliberations on the travel
ban and other lobbying reform proposals. While recognizing the need for
action in this area, Congress has avoided any rush to judgment that
might result in unintended consequences for elected officials or the
many associations who invite lawmakers and Hill staff to speak with
their members.
Realizing the jurisdiction of the House Judiciary and its
subcommittees, however, I will confine my remaining remarks to the
provisions in H.R. 4975 on enhancing lobbying disclosure; enforcement;
slowing the so-called ``revolving door''; and prohibiting lobbyists on
corporate flights.
ENHANCING LOBBY DISCLOSURE:
ASAE is not opposed to quarterly filing requirements so long as the
reporting processes are not overly burdensome from an administrative
standpoint, and that the filing system is uniform for both the House
and Senate. Requiring electronic filing seems both appropriate and
conducive to the goal of increased transparency. A uniform, online
filing system would seem to support Congress's goal of creating an
Internet database that is easily searchable by the public and reducing
criticism that Congress and lobbyists seek to operate in a covert
environment. ASAE supports making all lobbying disclosure forms
publicly accessible to increase public perception and understanding of
the legislative process and the role of associations and other
organizations engaged in advocacy efforts on behalf of their
constituencies.
H.R. 4975's emphasis on increased disclosure instead of imposing
federal limitations on lobbying offers a balance between the public's
need to know what interests are active in various policy debates, and
the First Amendment rights of individuals and associations to petition
government.
ENFORCEMENT:
ASAE is supportive of disclosure, but disclosure does little good
without enforcement. A good example of this is at the IRS, which has
oversight of 1.8 million nonprofit organizations in the U.S. The vast
majority of tax-exempt organizations faithfully comply with the spirit
and letter of the law in carrying out their important missions. But the
IRS has also identified enforcement in the tax-exempt sector as a key
objective, to deter abuse and misuse of these organizations by third
parties for tax avoidance or other unintended purposes. We certainly
support efforts to curb abuse in our sector, but the IRS in many ways
lacks the resources it needs to properly enforce the laws on the books.
If the IRS had the resources to scrutinize the nonprofits that
disgraced lobbyist Jack Abramoff had involvement with, and whether
contributions to these groups were used to influence lawmakers, we
might not be having this hearing today. Lobbying is necessary, but like
any activity, it requires regulation and enforcement to ensure that
everyone is playing by the same rules.
Random audits of lobbying disclosures seem a responsible safeguard
against complacency or incomplete reporting. ASAE supports increased
oversight and enforcement of lobbying reports, but suggests the House
and Senate designate one oversight body to report violations by
lobbyists for prosecution in the interests of avoiding duplicative,
time-consuming activities that could result in increased administrative
compliance for associations and other lobbyists as well. This
designated oversight body could issue annual reports to both chambers
of Congress.
SLOWING THE `REVOLVING DOOR':
The term ``revolving door'' has been commonly used in discussions
of lobbying reform, but it implies to me that there are an endless
number of former members of Congress or staffers who leave their
positions to take jobs as lobbyists for associations or multi-client
firms. I know that does happen, but it's not the norm.
It's been my experience in 30+ years in association management,
including 13 years as CEO of the American Diabetes Association before
joining ASAE, that governing boards or executive search committees hire
the best person for the job. Association executives should be hired for
their leadership abilities and professional acumen.
The vast majority of association CEO positions are filled by an
experienced association executive or someone with expertise in the
industry or profession that the association represents. ASAE has no
objection though to maintaining the one year ``cooling off'' period in
cases where a former member of Congress is hired.
PROHIBITING LOBBYISTS ON CORPORATE FLIGHTS:
ASAE supports the proposal in H.R. 4975 to prohibit registered
lobbyists from accompanying members of Congress on corporate flights
because it cures a public concern about extravagance. Lobbyists should
certainly be free to communicate a legislative agenda, but any
restrictions that put that activity on a level playing field seem
warranted and ultimately beneficial to the political process.
I do want to reiterate, however, the value we see in members of
Congress getting outside Washington, DC, and engaging in truly
educational dialogues with members of the association community or
other constituencies with real concerns and information to share. ASAE
believes there should be a clear distinction between trips on corporate
jets to exotic locales where the agenda is more socially or
recreationally driven, and educational trips to an association meeting
or conference, where an association might pay for an elected official's
domestic plane or train ticket.
We have suggested in our communications to Congress on this issue
that a pre-approval and disclosure process for privately funded
congressional travel would be an amenable solution to concerns about
travel, while still preserving the valuable perspectives gained when
members of Congress attend legitimate, educational meetings around the
country.
CONCLUSION:
In conclusion, I want to thank Congress for recognizing the need to
enhance accountability and public trust in our legislative process, and
for avoiding a rush to judgment on any one proposal that may have
resulted in unintended consequences for us all.
H.R. 4975 is a comprehensive bill that represents input and
feedback from a lot of members of Congress, constituents and outside
experts, and ASAE is confident Congress will pass a good bill.
Thank you again for the opportunity to share the perspectives of
the association community, and please consider ASAE a ready resource in
your continued deliberations.
Mr. Chabot. Thank you very much.
Ms. Pingree, you're recognized for 5 minutes.
TESTIMONY OF THE HONORABLE CHELLIE PINGREE, PRESIDENT AND CHIEF
EXECUTIVE OFFICER, COMMON CAUSE
Ms. Pingree. Thank you very much, Mr. Chair, and
Congressman Nadler, Members of the Committee.
Mr. Chabot. Chellie----
Ms. Pingree. Oh, sorry. Thank you again, Mr. Chair,
Congressman Nadler, Members of the Committee. I'm very grateful
for the opportunity to speak in front of you today, and also
for the privilege of being the President of Common Cause, where
our motto is ``holding power accountable.'' I know on Capitol
Hill we're also called Common Curse and it's often thought that
we're never happy and that we often treat Members of Congress
with disdain and finger pointing. But I really want to be here
with a slightly different perspective today and speak to you in
a humble in that perspective.
As you heard earlier, I have spent much of my life myself
as an elected official from the local school board all the way
up to the Majority Leader of the Maine Senate. And two things I
uniquely understand, our own ability to function as elected
officials comes from our dependence on the public's faith in
the work that we do, and that we are usually uniquely in charge
of policing the bodies in which we work.
Today I have the privilege of speaking for the many members
of Common Cause, and I also want to convey that we strongly
believe in the work and the purpose of our democracy and our
Government, and we are, again, here today not just to
criticize, but also in the hope that we can help offer
suggestions as you think of ways to restore the faith in
government.
I want to remind us again that the public is very concerned
about the current climate in Washington, and mention one fact.
You know, 87 percent of the American public today is deeply
concerned about the war in Viet--in Iraq. [Laughter.]
And they're still worried about Vietnam too. But 85 percent
is worried about the corruption of elected officials. That's
not much lower. And there's a considerable amount of talk in
Congress--Congressman Nadler just talked about it--about
whether or not this Congress will ignore the headlines--and
they can't be much bolder than they are this morning--and not
get in a dialogue with the public about how to change what's
going on in Washington. This dialogue is going to continue
through November, and as hard as it is to make these changes,
and how much your colleagues would prefer that you did nothing
here, I want you to remember those members of the public who
are deeply concerned today.
I don't think at this moment I have to remind you about the
significant scandals that are going on, and the numbers of
Members who are being questioned, the headlines, the Members
who are now facing potential major challenges, and I can't
focus on all aspects of the ethics laws, but let me talk about
two things that are of greatest concern.
The first, to reform groups, is certainly the questions
that have come about based on our deep concern that the House
Committee on Standards and Official Conduct, the Ethics
Committee, is again stalled, all of last year worked in
suspended animation, and appears to be deadlocked again, unable
to agree on which cases to pursue. Clearly, this is a body that
has failed to enforce the rules of conduct for Members of this
chamber. And I want to again emphasize that the public views
this as Congress protecting their own, a lack of action which
is clearly inexcusable, perhaps the greatest factor in the low
approval ratings for Congress and our public officials. This is
often looked at by the public as an old boy network instead of
a judicial body.
We have proposed, and are happy to give you more
information, and provided more information today, a similar
model that is implemented in several States of an outside body.
Kentucky, Florida, nearly 30 State legislators have these
independent bodies, and we have answered many of the questions
in our backup documentation today that have been raised. This
is not unconstitutional. It does not provide a permanent
outside counsel, and in fact, it offers an opportunity to
remove the adversarial relationship and the difficulties that
often come from being inside the Ethics Committee and needing
to act on the concerns about your fellow Members.
We also are concerned that there is no opportunity for
organizations such as ours to file outside complaints, and we
know that that needs to be changed.
One other matter I want to address, again, because of the
limited scope of this particular Committee, is this issue of
lobbyists on corporate flights. Again, this does not get to the
concern. Lobbyists are not the problem on the jets. This is
something of value given at a lower cost and the public does
not feel this looks right. This also allows for the opportunity
that a lobbyist would not be on the flight, but a CEO. It does
not solve the problem.
In general, we do not feel that the House yet has tackled
or gone far enough on many of the issues that we care about.
This bill comes closest in looking at disclosure, but does not
deal with the tie of lobbyists as fund raisers. The trip ban is
only temporary. The gifts and revolving doors, I could go on
for a long time about the things that we think are important.
We've give you backup documentation on that.
Let me just end by saying two things that we think are
important, that is about the essence of what truly needs to
change. This morning we're looking at headlines about the
leader of this body leaving in disgrace. Untold staff, possibly
Members, will be touched, behavior which now to the public
looks as if it's become commonplace.
I want to ask two things of you. I know that you have to
think about in your public face how you discuss this with your
colleagues, with your constituents, but I also want to ask you
how this feels in your heart. Is your behavior or your
colleague's behavior one that affects a strong character and
good judgment? Do we have the system available to us that is
required to enforce? You on this Committee have the unique
power and ability to restore Americans' faith in our elected
leaders, to return the democracy to a place where not only can
we be proud to be role models for this country around the
world, but also where the American people feel that they want
to be engaged to vote, to participate, to care.
And I speak lastly as a mother and a father, a person who
in America has to talk to their children about a career that
they should choose. And I am fortunate to have a daughter who's
a State legislator. I don't want to say to her, ``You know, I
think you should go to Congress. It's great there. You can fly
for free on corporate jets. There's a lot of free lunches.
You'll get to know lobbyists. You can spend your time raising
endless amounts of money and making decisions that you don't
feel good about.'' I want to be able to say to her, ``This is
honorable. It's public service. You have the kind of character
that makes you belong in that place, where you can be part of a
system that operates in a way that makes people proud, and you
can make the tough decisions and do the right thing.''
Thank you very much.
[The prepared statement of Ms. Pingree follows:]
Prepared Statement of the Honorable Chellie Pingree
Chairman Chabot, Ranking Member Nadler and members of the
Subcommittee, I appreciate the opportunity to appear before you today
to discuss the Lobbying Accountability and Transparency Act of 2006.
The House of Representatives is about to consider a difficult
matter. Unlike most issues that come before you, the issue of lobbying
and ethics reform directly impacts the lives of members of Congress and
their staff. I understand how difficult this can be having served as a
State Senator in Maine for a number of years.
Nevertheless, I am here today to give my candid view of the
Lobbying Accountability and Transparency Act and the ways in which I
think it can be improved.
I do not need to remind the members of this committee of the
circumstances surrounding this debate: one member of Congress recently
sentenced to more than eight years in prison; a recent guilty plea from
a top aide to the former Majority Leader, who himself has been indicted
in a different matter; a lobbyist sentenced to almost six years in
prison and awaiting further sentencing; and at least six members of
Congress currently being investigated by the Department of Justice.
It should be no surprise that the goal of this legislation is
nothing less than restoring the public's confidence in this
institution. Thanks to the misconduct of perhaps a handful of members
of Congress and at least one lobbyist, most Americans consider
corruption to be one of the major problems facing our country--in
league with the war in Iraq.
Let me repeat that: many Americans believe that corruption in
Congress is as much of a problem as the war in Iraq.
Since this is all public knowledge, I am surprised by the response
of some members in both the House and the Senate to this situation.
Unlike these legislators, I am not concerned that Congress is
overreacting by passing lobbying and ethics reform legislation. But
rather, I am concerned that Congress' credibility problem is going to
continue beyond this election year.
With this in mind, let me share with you some of the policy
positions Common Cause has advanced in lobbying and ethics reform as
you consider the legislation we have come here to discuss.
According to a recent article, the House Committee on Standards of
Official Conduct (Ethics Committee) is once again stalled. After
spending all of last year in a state of suspended animation, the Ethics
Committee appears deadlocked again, unable to agree on which cases to
pursue.
I think I speak for the entire reform community when I say: the
House Ethics Committee, despite the hard work of some of its members--
notably former-Chairman Joel Hefley--has failed to enforce the rules of
conduct for members of this chamber. This is the biggest problem you
face, and it needs to be fixed.
The Lobbying Accountability and Transparency Act will have little
effect on the problem of enforcement.
I propose that this committee consider the reasonable and widely
utilized model adopted by many state legislatures to deal with this
problem. That is: inject some level of independence into the process of
investigating possible ethics violations by members of this body.
The simple truth is that the public sees the House and Senate as
protecting their own. The lack of action by both the House and the
Senate involving the widely publicized misconduct of several members
and staff is simply inexcusable. I believe it is the single biggest
reason that the public approval ratings for Congress are as low as they
are.
Common Cause supports the legislation introduced in the Senate by
Senator Barack Obama, which would create an independent ethics
enforcement commission modeled on commissions that already exist in a
number of states.
Recently, several members of the Tennessee state legislature where
targeted in a federal corruption sting. The Governor called a special
session, and the legislature created an independent ethics commission
in response to the scandal. According to the National Conference of
State Legislatures, more than 30 states have some form of independent
ethics commission with jurisdiction over the legislature.
Some have argued that an independent ethics enforcement commission
in Congress is unconstitutional. Many legal scholars, however, believe
that it is constitutional. You will find included with my written
testimony a memorandum written by former general counsel to the House
of Representatives Stan Brand, which sets forth the arguments as to why
an independent ethics enforcement commission is indeed consistent with
constitutional requirements.
Unless this Congress deals with the failed system for enforcing its
rules by seeing to it that its own members are held accountable, I
suspect that it will not be long before we are back here talking about
this same problem.
I would like to also briefly discuss Section 303 of the Lobbying
Accountability and Transparency Act, which would prohibit registered
lobbyists on corporate flights.
I think this legislation misses the mark on the problem of
registered lobbyists traveling around with members on charted company
jets. The lobbyists are not the problem, the jets are.
Here again, the public perception is critical. Most Americans never
have and never will fly on a chartered jet, much less a fancy corporate
jet complete with wet bar and leather couches. So when members of
Congress constantly fly around on corporate jets and pay only the cost
of a commercial ticket, it contributes to the corrosive public
perception that members of Congress are more like the fat cats of Wall
Street than they are like the rest of us.
Besides, even if lobbyists are not on the flight, someone from the
company, like the C.E.O., will be on board to discuss the company's
legislative agenda in their place.
Members who travel on private corporate jets are being subsidized
by the companies that own those jets. The difference in price between a
first class commercial ticket and the price of chartering a plane is
enormous, and has the appearance of a gift to the member. This
legislation would do nothing to change that.
A recent Washington Post editorial about the lobby reform bill
recently passed by the Senate includes this passage:
If the Senate bill is disappointing, though, the House is
poised to do even worse. A proposal unveiled last month by the
Republican leadership would do nothing to restrict gifts from
lobbyists. It would merely impose a temporary moratorium on
privately funded travel while the ethics committee studies what
to do--or, more cynically, while members wait for the storm
over Jack Abramoff to blow over. It suffers from the same
shortcomings as the Senate measure in terms of enforcement and
corporate jets.
I have touched on just two provisions in the legislation that is
before this committee today. But there are many other areas where this
bill fails to make the necessary changes that are needed if it is going
to assure the American people that when it comes to dealing with
corruption, this Congress ``gets it.''
Again, I appreciate the opportunity to appear before the committee
today and, of course, will answer any of your questions about this
issue.
Thank you.
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Mr. Chabot. Thank you.
And, Professor Smith, you're our next witness. You've
already been introduced, and I already said nice things about
you. You weren't here, however, when we swore the panel in, so
if you wouldn't mind standing and raising your right hand.
[Witness sworn.]
Mr. Chabot. The witness has indicated in the affirmative.
I welcome you here, Professor Smith. Have you testified
before Committees before
Mr. Smith. I have.
Mr. Chabot. So you're probably familiar with the 5-minute
rule then, and that the clock will be on. Yellow light comes on
when you got 1 minute remaining, and a red light means 5
minutes are expired. So you are recognized for 5 minutes.
TESTIMONY OF THE HONORABLE BRADLEY A. SMITH, PROFESSOR OF LAW,
CAPITAL UNIVERSITY LAW SCHOOL, ON BEHALF OF CENTER FOR
COMPETITIVE POLITICS
Mr. Smith. Very good. Thank you, Mr. Chairman, Ranking
Member Nadler and Members of the Committee. I apologize for
arriving late. We had a delay in our flight out of Columbus due
to mandatory rest time for the crew. In any case, I'm pleased
to be here and back in this beautiful room.
I do believe that what Members of Congress do is an
honorable profession, and I think it's important that as policy
is made we begin with the understanding and the recognition
that perception is not necessarily reality, and just as a good
guide in the desert doesn't take people to the mirage, he takes
them to where there's actually water, good policymaking begins
with focusing on reality and not losing track of reality for
perception.
We have a number of scandals that have been wracking this
city. They're loosely dubbed ``the Abramoff scandals.'' They
cover a number of things which are unrelated to Abramoff and
some that are related to Abramoff, the common basis being that
they're scandal. The last I looked, all the people at the heart
of these scandals have in fact been sentenced or under
investigation. So the fact that people broke the law and are
being punished for doing it, does not suggest, generally
speaking, that a vast new web of law is necessary. And for that
reason, I think 4975 deserves credit as a bill that seeks to
improve the system without panicking, without taking sort of
panicky measures or infringing on the rights of citizens to
petition their Government for redress, an important
constitutional right.
It is, for example, easy to complain about Members flying
on corporate aircraft, including even rotten, little crummy
turboprops. But it is easy to say that travel like this should
be banned. That's an easy thing to do. But making it more
difficult for Members to visit their districts, making it more
difficult for Members to attend multiple functions in sprawling
rural districts, and placing added demands on a Member's time,
something that we are repeatedly told, I think correctly, is
the most valuable commodity that Members have. It's hard to
explain, if we want to think about what is really substantively
good policymaking.
So along those lines, I think that this bill wisely takes
an approach of improving the disclosure system, not only
through more frequent disclosure, but through a disclosure
system that citizens can use more frequently.
The key to disclosure is that citizens should have
information about their Government. It is not necessary for the
Government to collect information about the citizens. For that
reason I think that 4975 also wisely resists requests that have
been made to limit grass roots lobbying, which is efforts to
get citizens involved in contacting Members of Congress, and
that grass roots lobbying is really exactly the kind of thing
we ought to be encouraging. It doesn't really matter in the end
why a citizen decides to contact a Member of Congress, the
point is, a citizen has to decide that the issue is important
to him or her, and take the step to actually call or contact
the Member. And in that respect, grass roots lobbying therefore
breaks the nexus between lobbyists and between Members of
Congress that makes some people concerned that certain
interests get special favors.
So I think that 4975 has taken the right approach there,
and I urge the Committee to reject any attempt to go beyond
that. I think it's a good bill that's balanced, that makes the
improvements that are necessary, and that will help to make
sure that the types of scandals that have gone on and that are
already in fact generally being punished and investigated, are
discovered more quickly and investigated more quickly.
Thank you very much. I look forward to any questions from
the Committee.
[The prepared statement of Mr. Smith follows:]
Prepared Statement of the Honorable Bradley A. Smith
Mr. Chairman and members of the Committee:
Thank you for inviting me here to testify today on the important
issue of lobbying reform. By way of introduction, I am currently
Professor of Law at Capital University in Columbus, Ohio; Senior
Advisor to the Center for Competitive Politics, a non-profit 501(c)(3)
organization formed to educate the public on the political process and
the benefits of political competition; and Of Counsel to the law firm
of Vorys, Sater, Seymour & Pease. From 2000 to 2005 I served as
Commissioner on the Federal Election Commission, including a term as
Chairman in 2004. In this latter capacity, I was privileged to travel
and speak throughout the country with ordinary Americans concerned
about corruption in government and the perceived remoteness of
Washington to their everyday concerns. Although Vorys, Sater, Seymour
and Pease represents many clients before the government, I am not a
registered lobbyist. I address the Committee today on my own behalf and
that of the Center for Competitive Politics, and not the law firm of
Vorys, Sater, Seymour & Pease or Capital University.
I want to begin by congratulating the drafters of H.R. 4975 for
producing a carefully targeted bill that aims to restore public trust,
and prevent lobbying abuses, while minimizing the burden on the vast
majority of lobbyists who are honest, dedicated individuals helping
citizens to exercise their fundamental Constitutional Rights of Free
Speech and the Right to Petition the Government for Redress of
Grievances. These are among the most important rights guaranteed by our
Constitution. Yet all too often in the past, we have allowed isolated
incidents of improper behavior--scandal--to stampede us to hastily
conceived, ill-considered measures that restrict these important
Constitutional rights while doing little to address the abuses that
allegedly justify the restrictions. All of us here know that lobbyists
can provide a valuable function, providing members with useful,
important information on public opinion, and also with the information
needed to craft wise, beneficial, effective legislation. We know that
abuses exist, but that they are the exception, not the rule. Thus, it
is important to pass serious, balanced legislation, that addresses
specific and real problems, rather than to engage in populist
grandstanding. I think that H.R. 4975 largely achieves that goal.
In particular, H.R. 4975 wisely avoids restrictions on efforts to
encourage citizens to be in contact with members of Congress--citizen
political participation sometimes referred to as ``grassroots
lobbying.''-- that is vital to reducing the types of scandals at issue
in the Abramoff and Cunningham cases. The attached Policy Primer,
written by myself and Stephen Hoersting for the Center for Competitive
Politics, lays out general principles that we hope will guide Congress
in this area. In particular, we focus on the important role of
disclosure in preventing abuses of the right to petition the
government. H.R. 4975 largely adopts that approach. It is important to
remember that the purpose of disclosure is to provide information to
citizens about their government--not to provide government with
information about the activities of its citizens, which raises serious
First Amendment issues and may discourage contact between ordinary
citizens and congress.
Thus, in my view H.R. 4975, by carefully tailoring added
disclosure, accompanied by added penalties for violations, to the type
of activity that created has created the current situation, has hit the
mark. H.R. 4975 is particularly beneficial in requiring improvements to
disclosure that make the information about government more readily
available and useful for ordinary citizens around the country.
Thank you.
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Mr. Chabot. Thank you, Professor. We will now take 5
minutes each to answer questions--or ask questions ourselves,
and I'll begin with myself. I'm recognized for 5 minutes to ask
questions.
I'll address this to the whole panel so you can all take a
few moments to comment on it if you'd like to. Would you
comment on the potential benefits created by the legislation's
enhanced disclosure? Anybody that would like to comment upon
that, I'd be happy to take them. Mr. Graham?
Mr. Graham. Well, I think two aspects. Number one, moving
from semi-annual to quarterly, I think, increases transparency,
and I think moving to electronic allows, as it does with 990's
in terms of tax reform--in terms of tax reports for nonprofit
exempt organizations. It increases transparency and the ability
of the public to access those disclosures.
Mr. Chabot. Thank you.
Mr. Gross?
Mr. Gross. One of the more interesting provisions in this
bill is the disclosure of gifts. Up till now we really had no
disclosure of gifts. If you entertained a congressman, you were
under a $50 or $100 annual limit, but it was just the part of
an aggregate disclosure on a semiannual report that may say
$840,000 spent on lobbying. Here, this identification of any
entertainment, lunch, meal of over $10 or more showing up on
the report should be interesting information, and I think would
be helpful in the disclosure process, along with the political
contributions, which is already on the FEC reports, but this
will put it right on the lobby report, not only contributions
made by the lobbyists, but probably more importantly, by a
political action committee connected to the employer of the
lobbyist. So that is a meaningful improvement right there.
Mr. Chabot. Let me ask a second question then, and again,
I'll leave this open to anybody that would like to comment on
it. Are there other provisions within the jurisdiction of the
Judiciary Committee that any of the panel members think would
improve the legislation that's perhaps not in here now that
they think should be considered?
Mr. Gross. Well, this may be Chellie's province more, but I
think that these reports would be helped with even more
breakdown of the information. You're still having an aggregate
number. I think it would be, perhaps, helpful if you had the
portion of the number that was for in-house lobbying, and the
portion of the number that represented trade association dues
for lobbying, and the portion of the number that reflected
payments to outside lobbyists. You're already going to have the
travel and entertainment. It would be just an additional
breakdown of information that's on there that I think would
help promote compliance and would be more--more information, I
think, is always helpful.
Mr. Chabot. Thank you.
Do any of the other panel members want to touch on that?
[No response.]
Mr. Chabot. Okay. I'll go to my next question then. H.R.
4975 will require greater disclosure, as we've mentioned, on
the part of lobbyists, and grant the independent Inspector
General's Office the authority to author--excuse me--to audit
those disclosures and check for compliance, and refer potential
violations to the Department of Justice. How will these further
reforms in H.R. 4975 help authorities spot potential corruption
earlier than they might have otherwise, or help them with
investigations generally? Ms. Pingree?
Ms. Pingree. Well, we certainly applaud the idea of random
audits, and in fact, more disclosure, because those are two
concerns that we think will help to provide more information to
organizations like ours and then the public generally, Members,
constituents and others. I will say though, again without
sounding like a broken record, that a random audit, in our
opinion, doesn't do as much as an external office of public
integrity, or some sort of functioning body that does a more
thorough investigation, both of what's contained in these
reports, and some level of oversight.
There was some suggestion that the Department of Justice
was adequate to do this, and again, I would argue that this is
a function of the Congress itself, and that the current system
has not been functioning in such a way that's provided enough
oversight. You know, many of the scandals, Professor Smith has
talked about, they've been taken to a certain level, and we're
probably likely to hear more about them, should have come to
light far before they had to go to the Department of Justice.
And so I would just suggest that there's far more need for
enforcement than just a random audit process.
Mr. Chabot. Mr. Graham, did you want to comment?
Mr. Graham. Just to support that and build on those
previous comments, I think, clearly, the devil's in the detail.
And I use the example of the IRS enforcement and their use of a
similar mechanism, random audits, et cetera, in terms of
policing the exempt organizations, and, you know, that system
just is not very effective. And so I would really encourage if
we're going to go to an enforcement system, that the resources
be put forward to make sure that we can have effective
enforcement.
Mr. Chabot. Thank you. My time has expired.
The gentleman from New York, Mr. Nadler, is recognized for
5 minutes.
Mr. Nadler. Thank you. I have a number of questions. I'm
not sure who will take the first one. The bill before us
restates current rules that Members may not condition official
acts based on the employment decision of an outside entity. The
Democratic bill makes the same thing a criminal offense, as
well as a violation of the House rules. Now, both bills are
referring to the actions of Mr. DeLay and Mr. Blunt, Mr.
Boehner, and various others. The admitted actions, for example,
a number of years ago when a former Democratic Congressman
named Dave McCurdy was announced to be the new president of the
Electronics Industry Association, DeLay and company got up and
said, ``This is an insult. How dare you hire a Democrat. You
better not.'' They threatened him, and they ultimately said,
``If you insist on hiring him, we will take two bills that
you're interested in off the House floor that were going to
pass, and kill them,'' and they did.
Now, my question is first--now, the Republican bill here is
suggesting that we ought to restate current House rules again,
and that that action by the House Republican leadership was a
violation of House rules. The Democratic bill is suggesting
that it ought to be a criminal offense.
My question is, isn't that already a criminal offense? If
you take official action, pulling two bills off the floor,
conditioned on a promise of somebody doing something else,
hiring somebody, not hiring somebody, making a campaign
contribution, whatever, isn't that bribery if you do that, if
you demand that someone take an official action and threaten to
do that? Isn't that extortion?
Professor Smith?
Mr. Smith. Well, now, first, you promise that you didn't
know that he was going to take--no, I appreciate it.
I won't venture a particular legal opinion without knowing
all of the details. Certainly, an argument can be made that
express quid pro quos in some circumstances.
Mr. Nadler. Can an argument be made that express quid pro
quos are not bribery or extortion?
Mr. Smith. Well, the point is, what I'm saying is I don't
know all of the details as to what was said or what was done
or----
Mr. Nadler. Well, never mind the details of that instance.
The legislation before us, I mean that--one of my criticisms of
the Clinton administration is that they should have prosecuted
Mr. DeLay and everybody else involved when they bragged about
doing that, but that's in the past. My question now is, if
someone were to do what the bill talks about, if someone were
to say that I will condition an official act based on who you
hire or don't hire, isn't that a crime?
Mr. Smith. Mr. Nadler, what I think you've really landed on
is that it's often not necessary again to add a web of added
laws. Many things that we're concerned about, again, are
already against the law, and people are already being
prosecuted and so on.
At the Center for Competitive Politics, on whose behalf I
am testifying this morning, we really think this effort to
criminalize political activity is bad. There are certain types
of things, as you suggest, may rise to the level of criminal
activity under traditional bribery laws, and we don't need to
pass sort of vague, expansive----
Mr. Nadler. Well, I'm sort of interested in that this bill
restates current rules against what the definition says are
clearly crimes. I hope it doesn't imply that they're no longer
crimes, merely rules violations.
Let me change the topic. Somebody said a few minutes ago--I
don't remember who--that you're against the grass roots
provisions or--not in this bill but in some other bills. Now,
if someone--when we had the debates on a number of--
increasingly, it's a tactic, I should say, to set up
organizations, Citizens for Honest Government, completely
controlled by--well, let's put it this way, Citizens for the
Clean Environment, completely controlled and bankrolled by some
oil company, let's say. And they lobby in favor of an oil
company. But of course, they don't admit that they're lobbying
in favor of an oil company. And you have hearings where someone
is sitting there and saying, ``Well, on behalf of Citizens for
a Clean Environment, the best environmental thing to do is A, B
and C,'' where really they're saying that the best thing to do
is on behalf of the oil companies, A, B and C. Shouldn't that
be disclosed, Ms. Pingree?
Ms. Pingree. Absolutely. We have supported proposals where
there's increased disclosure. The public has a right to know
the difference between a consumer organization and a public
advocacy organization with members, and one whose support
significantly comes from one industry attempting to----
Mr. Nadler. And by the same token, if we are suddenly
inundated with a lot of post cards or phone calls because some
oil company--and I don't want to demonize the oil companies,
they're just ones that come to mind--but some oil company,
let's say, or if you can think of some other company, let me
know, but some oil company, let's say decides to form Citizens
for a Clean Environment, and Citizens for a Clean Environment
calls up 10,000 people and says, ``In order to have a clean
environment, support the Clean Water legislation,'' that in
fact pollutes everything. Shouldn't we know who's financing
that?
Ms. Pingree. Yes. And, again, you know, we just published a
report on astroturf lobbying around the Telecom Act, so we're
watching this in a variety of venues, and we do think the
public has the right to know some disclosure about where the
funds come from.
Mr. Nadler. That's the grass roots lobbying that Professor
Smith said we shouldn't do anything about.
Why shouldn't the public, Professor, know, or why shouldn't
Congress, frankly, know that this outpouring of support for
this legislation is paid for by somebody?
Mr. Chabot. The gentleman's time has expired, but the
gentleman can answer the question.
Mr. Smith. Thank you, Mr. Chairman. Thank you, Mr. Nadler.
I would think two things. First, again, as I suggested
earlier, ultimately people, average citizens, are calling you.
Now, that's an average citizen and he's decided this is
important to him and he's going to call. He may be misinformed.
He may be misinformed because of a campaign by a union which is
going on in central Ohio where I live, or a big oil company
which may be going on someplace in America that I haven't heard
of. But either way, it's an average citizen who's taking that
step----
Mr. Nadler. Right, but shouldn't we know if someone is
informing him or misinforming him?
Mr. Smith. Mr. Nadler, I cannot----
Mr. Nadler. It's his judgment and our judgment whether he's
being informed or misinformed, but if someone's paying for that
campaign, why shouldn't we know that?
Mr. Smith. I cannot imagine----
Mr. Chabot. The gentleman's time has expired, but the
gentleman can answer the question.
Mr. Smith. I cannot imagine that there is a Member of this
Committee who doesn't know whether there's an orchestrated
grass roots lobbying campaign going on in his district, and I
would think that anybody who doesn't, needs to get back to
their district more often. From what I can tell, everybody
knows who's paying for these ads that are going around in
central Ohio now. Everybody knows who's doing these things.
Mr. Chabot. The Chair recognizes himself for a point of
personal privilege for just a moment. I might note that there
are groups with names like America Working and We the People,
and a number of other motherhood and apple pie names, which
are, as we speak, making phone calls in the districts of
certain Members of this Committee, who are distorting their
records and saying they voted for the Medicare Prescription
Drug Bill when they actually voted against it, and some other
things. So I would argue that the campaigns out there, where
one does not disclose the true nature of calls being made, for
example, are unfortunately, or fortunately on both sides, and
there are abuses which are occurring which aren't necessarily,
unfortunately, remedied in this bill, but we're trying to make
an effort here to clean up something which is long overdue to
be cleaned up in this city.
Mr. Nadler. Mr. Chairman?
Mr. Chabot. Yes?
Mr. Nadler. I appreciate your pointing out the necessity of
what I was just saying. I gather you would agree with me that
the true sponsorship ought to be disclosed, rather than with
Professor Smith, who assumes that everybody in the Congress
known the true sponsorship or that everybody in the public
knows the true sponsorship.
Mr. Chabot. Yeah. I would say, as one Member of Congress, I
definitely agree that it's good for the public to know how is
behind ads or phone calls so that there's true disclosure,
whether it's a corporation or whether it's a labor union or
whomever. I think public--we ought not to shut off free speech,
and there ought to be both sides, but people ought to know
where the calls are coming from and who's paying for the calls,
whether it's George Soros, or whether it's a particular oil
company or whomever.
Mr. Nadler. Exactly. I appreciate the Chairman agreeing on
this point, and maybe we'll have an amendment tomorrow on this
point.
Mr. Chabot. We're going to listen very intently and closely
to every amendment offered by both sides, and I appreciate the
gentleman, Mr. Nadler's input on everything, as usual. We
actually agree on some things.
The gentleman from Arizona is recognized for 5 minutes.
Mr. Franks. Thank you, Mr. Chairman. Thank you all for
being here.
As you probably know, the bill that we're discussing here
today is a little broader than some of the things that are
specifically before you because of the jurisdiction limitations
of this Committee.
Having said that, I'd like to get a reaction from each of
you as to whether you think that there are any significant
flaws in the overall bill, and whether or not you feel like
there are any significant omissions that you think are of
particular consequence. I'll start with you, Mr Gross.
Mr. Gross. Are you talking about the provisions that are in
the jurisdiction of this Committee?
Mr. Franks. Yes, sir. I would like for you to go ahead and
be, if you're comfortable, be as broad as you like. What do you
think that we're--are we failing to address something here that
needs to be addressed, or are we addressing something
improperly?
Mr. Gross. Well, you know, to focus on the provisions of
the Committee, I do think the bill is a significant advancement
on the current law. We could debate grass roots. I think if you
do get into grass roots, you really have to define what it is.
You know, we're not talking about people just expressing their
rights, whether it's a concerted, sophisticated effort, there
may be ways to define professional grass roots, if you will. In
fact, 30 States have some disclosure of grass roots lobbying.
When it comes to, I think, the law-making process itself, which
is what I was suggesting in my opening comments, that this is a
piece of the puzzle, what is before this Committee today, and I
certainly support the provisions that are before this Committee
today.
But when we get into the earmarking provisions, which are
outside of this Committee's jurisdiction, that is where the
rubber meets the road. That is the lawmaking process itself.
The transparency of that process is, I think, probably the most
critical provision in the bill, and where I would, you know, be
focusing my attention if it were in that Committee's
jurisdiction.
Mr. Franks. Thank you.
Mr. Graham?
Mr. Graham. Well, as I indicated in my comments, we're very
concerned about even a temporary travel ban. You know, we think
that a preapproval process is a much better and a much more
effective method to be disclosive about Member travel. We think
that the vast majority of Member travel is very appropriate.
You know, getting on a train and going to Philadelphia for a
convention of the American Diabetes Association, for example,
my previous role, you know, to me is not an abuse, and more to
the point, really enables constituents to interact with Members
of Congress, or the administration, for that matter, and really
understand better the fight against diabetes in that case.
So I think that, you know, Members of Congress should be
encouraged to travel. I think they should be out there visiting
with constituencies. Clearly, a disclosure about where they're
going and preapproval to go there, I think is very appropriate,
and just encourage you to be very, very careful about even a
temporary ban and what slope that takes us down.
Mr. Franks. Thank you.
Ms. Pingree?
Ms. Pingree. Thank you, Mr. Franks. I guess the concern
from Common Cause in terms of the overall bill is that it
doesn't go far enough in the areas that we are particularly
worried about. Kind of going back to my original remarks, I
think the goal here is to restore the faith of the American
public in the behavior of Congress, and we don't see this as a
significant enough step.
A couple of the points that are particularly important to
us, as I mentioned before, the significance in the House can't
be overlooked of an Ethics Committee that just has not been
functioning, and many of the concerns that people have already
suggested, might have been illegal, might have been unethical,
not being brought to life early enough--brought to light early
enough. And we believe there should be an independent office of
public integrity, and there are a variety of ways of
structuring that.
A second point for us is doing more to break this nexus
between lobbyist money and lawmakers. There are 79 Members of
Congress who have a lobbyist who serves as their treasurer, a
registered lobbyist, and it just doesn't pass the straight-face
test on the part of the public, the influence of money in the
political process.
Mr. Franks. Ms. Pingree, with your permission, I'm going to
have to stop you right there. I'm about out of time.
Ms. Pingree. I don't want to use it up.
Mr. Franks. But I appreciate the viewpoints.
Professor Smith, let me go ahead and broaden my question
just a little bit to you. I was intrigued by the name of your
group being Competitive Politics. One of the experiences we've
had in Arizona, in adopting a clean elections process, is that
that process itself became very politicized and very kind of
difficult to really ascertain for the public. They just really
didn't know what was going on. It became, in my judgment, a
terrible mistake for us, and we've seen that in some of the
appointed politics. So can you address--related to the whole
independent ethics commission, do you think that that may cause
more problems for us in the long run in terms of actually
helping the public know what their public officials are doing?
Mr. Chabot. The gentleman's time's expired, but you can
answer the question.
Mr. Smith. I would just suggest that I think people in both
parties have come to realize that the idea of the independent
counsel was not a very good idea, and it sounds to me an awful
lot like you're talking about setting up a permanent, ongoing,
never-ending independent counsel for all 435 Members of the
House and 100 Senators.
Mr. Chabot. The gentleman's time has expired.
The gentleman from Virginia, Mr. Scott, is recognized for 5
minutes.
Mr. Scott. Thank you, Mr. Speaker.
Ms. Pingree, you know, sometimes we state a problem and
then pass a bill and forget to recognize that the bill really
didn't address the problem. What problems are we curing with
this legislation?
Ms. Pingree. Well, I think that's a very good question.
Mr. Scott. Okay. Well, let me ask Mr. Gross. [Laughter.]
What would this legislation do to the K Street Project?
Mr. Gross. Well, the K Street Project is something that I
think really played a negative role in what's going on in
Congress today. I do think that the provisions that are in here
that address it--and again, they're not part of the
jurisdiction of our discussion today, but the provisions will,
hopefully, break that bond or that back and forth between----
Mr. Scott. What in the bill will adversely affect the K
Street Project?
Mr. Gross. Well, the 1-year cooling off is the same. The
provisions that Congressman Nadler talked about are somewhat of
a tightening of those provisions. I mean if you're talking
about extortion, that is a crime today. You don't need an
additional law. If someone says, ``I will not pass''----
Mr. Scott. Which provision in the bill will adversely
affect the K Street Project?
Mr. Gross. Well, I think the--what is it, 30--the
provisions that were discussed before, 303 or 304, the section
there about Members--well, there's two provisions, one, first
of all, about making it clear to people when they leave
Congress as to what their responsibilities when they're outside
of Congress; and the other provision concerning the duties on
Members not to intimidate people concerning lobbyists who they
hire?
Mr. Scott. Is that in the bill?
Mr. Gross. Well, it's in the section that we discussed.
Mr. Scott. You mentioned transparency on earmarks. Do any
lobbyists charge percentage-contingent fees to get earmarks in
bills?
Mr. Gross. Contingency fee lobbying is something that goes
on. It is----
Mr. Scott. Is there anything in the bill which exposes that
practice?
Mr. Gross. No, there is no contingency fee prohibition in
this bill.
Mr. Scott. And there's no transparency about a contingent
fee in the bill.
Mr. Gross. You would not have to specially disclose a
contingent fee. You would disclose the amount you were paid to
lobby, but it wouldn't be identified as a contingent fee,
that's correct.
Mr. Scott. What's the going rate for contingent fees on
getting earmarks in bills?
Mr. Gross. I don't know. The worst example of it,
obviously, was in the Cunningham case.
Mr. Scott. That was a contingent crime. That wasn't----
Mr. Gross. Contingent bribe. In my experience, many of the
contracts out there are not contingent fee contracts.
Mr. Scott. But there are some?
Mr. Gross. Certainly there are some, yes.
Mr. Scott. Is there anything--now, for Members, when you're
negotiating to try to get a job with a firm, is there anything
that prohibits getting a job for Members or staff if the job is
not lobbying?
Mr. Gross. No. The restrictions here are on lobbying.
Mr. Scott. So if you're negotiating a job that does not
include lobbying, that's not covered by the bill.
Mr. Gross. I don't recall any provision in the bill
specifically in there to that effect. You would have certain
responsibilities, ethical responsibilities beyond the bill if
you are negotiating for a job while you had legislation from
that entity before you.
Mr. Scott. Mr. Graham, when your organizations have
conventions, do you routinely pay the expenses of people who
are speaking at the convention?
Mr. Graham. Yes.
Mr. Scott. Including travel, hotel and meals?
Mr. Graham. Typically, yes.
Mr. Scott. Whether they are an elected official or not?
Mr. Graham. Typically, yes. Obviously, we're not paying
honorariums to elected officials.
Mr. Scott. Right. And these conventions are generally held
in exotic places to get the attendance, not just the speakers?
Mr. Graham. The vast majority of these conventions are held
in cities across the United States like Chicago, Detroit, St.
Louis.
Mr. Scott. New York City, Virginia Beach, Williamsburg?
Mr. Graham. Yes.
Mr. Scott. But certainly not Cincinnati, Ohio?
Mr. Graham. There's a lot of meetings held in Cincinnati,
Ohio. [Laughter.]
Mr. Chabot. The gentlemen's time has expired. The gentleman
yields back.
The gentleman from Iowa, Mr. King, is recognized for 5
minutes.
Mr. King. Thank you, Mr. Chairman. I want to thank the
witnesses for their testimony. I was out of the room for most
of it, but I have gone through your testimony prior to your
presentation. I sit here and listen to the testimony, and what
we're seeking to accomplish here, and I'm a little bit
undecided as to what we're trying to accomplish. But I look
back at my morning this morning, and I had a meeting this
morning that lasted for an hour in my office with about six
bankers from different areas of the banking industry. And I
left and came in what would be normally earlier than one would
on a Tuesday morning to do that, so that they could have access
to me and I could have access to the information that we would
exchange.
I would say that we can't function around this Congress if
we don't have real good solid reliable information that's
readily available and presented to us on a voluntary basis from
the members of the lobby.
And so it would occur to me that if I had the chance--the
choice between being on a plane ride for an hour, going
somewhere and expediting my time, or perhaps on a train and
expediting my time, and at the same time having a meeting while
I'm traveling, if that could be facilitated by a lobbyist, I'm
wondering what kind of influence, unnecessary influence that
might be, why the travel becomes part of it rather than the
access. I have often thought that a $50 meal or a $50 gift, why
is that a limit, and why would anyone even want to have a
debate on whether one's vote were for sale for 50 bucks of
anything, when the same person that's there perhaps buying the
meal or presenting the gift, could also hand a check over for
that election cycle for $2,100 bucks or maybe he even controls
a PAC. They could attach a check to that for $5,000. How far
off base are we on this being influential? Isn't money more
influential than a grueling ride in travel to go somewhere to
an event that may be a repetition of something we've done in
the past?
So I guess I'd like to direct my question first to Mr.
Graham because I think the tone of your testimony probably fits
more closely with my attitude about this. But is there anything
wrong with private travel? Could you give an example, perhaps
of when--just that question itself. What's the philosophy on
private travel?
Mr. Graham. We don't think there's anything wrong with
private travel. We think it's very appropriate for Members of
Congress to visit with representatives from various
constituencies, industries, professions, about concerns that
they have with their Government and their representatives. And
so we don't see any problem with that at all. In fact, our
concern would be if the travel were banned, that the travel
that would be permitted is the very travel you just alluded to,
that is, fund raising travel. So the same Member could be
invited to go to the same meeting, call it a fund-raising trip,
receive contributions and come back again. So we are concerned
about that. That, we believe, would be an unintended
consequence of legislation that would ban travel.
Mr. King. What would your comments then be, Mr. Graham, on
transparency?
Mr. Graham. Transparency ought to be fully--everything
should be fully disclosed. I think that travel could be
preapproved if the body so thinks so, and we don't have any
problem with preapproval of travel, and that should be a very
transparent process. So-and-so is going to X meeting to talk to
X number of people about these issues, and to me, that's pretty
clear.
I think there's a very big distinction between somebody
who's flying to the Caribbean Islands for a 5-minute speech and
a 2-day trip, than somebody who's flying to Cincinnati--I'll
use Cincinnati as an example--for a convention of physicians.
To me they're very, very different.
Mr. Chabot. I would just take note that many people fly to
Cincinnati for glorious vacations, and I would encourage them
to do so. [Laughter.]
See the Reds, opening day yesterday.
Mr. Graham. I was responding to Mr. Scott's comment.
[Laughter.]
Mr. King. I thank the Chairman for his intervention there,
that levity that he brought into this process. Let me see if I
can reshape my question then.
Would it be your judgment that the voters would be able to
discern appropriate travel from inappropriate travel if we had
transparency?
Mr. Graham. Absolutely.
Mr. King. Thank you.
I'd direct my next question to Mr. Gross, and you have some
testimony about transparency, and in your testimony, as I pull
it out, it seems to reference searchable, sortable databases,
and the way I read that--and I would ask if you would agree
with me--will that information that would be presented by the--
by filed by the lobbyist in that electronic searchable,
sortable, and downloadable database, would that be something
could be indexed to the FEC reports to check the--to check our
filing to match up to the lobbyist's filing?
Mr. Gross. You could certainly create a link right to the
FEC report, and if there were discrepancies, they would be
ascertainable, because as I read this legislation, much of the
information that would be going on the lobby report would
mirror what's on the FEC report, but it would just be in a more
convenient, accessible format right there on the lobby report.
Mr. King. If I might ask for----
Mr. Chabot. The gentleman's time is expired.
Mr. King.--one more minute?
Mr. Chabot. Without objection, the gentleman is granted an
additional minute.
Mr. King. Thank you, Mr. Chairman.
Just quickly, the follow-up question then is, would you be
of the opinion that a searchable, sortable electronic filing
for Members of Congress and the FEC under the same type of
format would be an appropriate solution as well?
Mr. Gross. Absolutely.
Mr. King. Thank you.
Thank you, Mr. Chairman. I yield back.
Mr. Chabot. Thank you. The gentleman's time has expired.
The gentleman from Maryland, Mr. Van Hollen, is recognized
for 5 minutes.
Mr. Van Hollen. Thank you very much, Mr. Chairman.
Let me also thank all the witnesses here this morning, and
as Ms. Pingree and others have said in their statements, I
think what we're trying to do here is begin to restore the
faith and confidence of the American people in the process we
have here for making the laws that govern the Nation.
If that's the test, I have to say I do think this bill
falls way short. I think it's an anemic bill in many ways. And
I think the questions on both sides of the aisle have really
exposed the primary weakness of this bill, which is that it
does not address the fundamental issue of the nexus between the
campaign finance system and lobbying. I don't think anywhere in
this bill, regardless of what Committee of jurisdiction we're
talking about, do we seriously address campaign finance reform
issues. And I would like to associate myself with the comments
in that regard by Mr. Nadler at the outset, because I do think
that is a fundamental piece of this, and I think ultimately our
system needs a healthy dose of a public finance system.
And I think that if--we've heard the example, the fact that
a lobbyist can't fly on the jet, and at the same time that
lobbyist could be chairman of the leadership PAC. Is that
right? I mean, there's nothing that would bar that same
lobbyist from being the chairman of the leadership PAC, nothing
in this legislation does this.
But let me just delve a little bit into an issue that is in
the jurisdiction of this Committee that does involve the nexus
between lobbying and the fund raising piece. This bill has a
provision that simply says that the lobbyists now must disclose
their contribution, not only with the FEC, but as part of their
filing report. But how about getting at the issue that
lobbyists do play a role in essentially bundling contributions?
I mean, lobbyists hold fund raisers. They invite their friends.
They invite their colleagues. They invite their business
associates. Why not have a provision in this bill that in
addition to requiring the disclosure by the lobbyist of his or
her individual contribution, also discloses that lobbyist's
role in the bundling process in the holding of a fund raise.
If we could begin with Ms. Pingree? But I would like to get
everyone's view on that.
Ms. Pingree. We would certainly be in favor of that, and
again, you kind of got to the heart of what the question is
here. I would just say that we are very anxious to see Congress
move forward on those things that really will be able to
restore the faith in the public, and a lot of it has to do with
nexus between the influence of money and the political process.
And many of these things, like a gift ban and a travel ban,
it's true will not go far enough to making a significant
difference. Some of it has to do with the fact that people are
negotiating for fund raising when they're having a meal, when
they're having a trip, and that's why this alliance and
association is so important.
So we would be in favor of things that look much more
closely at the role that lobbyists play in fund raising,
bundling, soliciting contributions, holding campaign events.
You know, any hour of the day in this city you can pretty much
find an event somewhere where someone's trying to raise money
for their next election, and that's part of what needs to
change.
Mr. Van Hollen. Right.
Mr. Graham? In the interest of full disclosure, everyone
say the more disclosure the better. Why not add a provision to
this bill that gets at that issue?
Mr. Graham. We would have no problem with that. We're
interested in full disclosure as well.
Mr. Van Hollen. Good, thank you.
Mr. Gross?
Mr. Gross. I don't oppose the provision. However, this is
regulated conduct already under the Federal Election Commission
rules, and not widely understood in this city, as a matter of
fact. If you are a lobbyist for a corporation, you're not
permitted to bundle contributions on behalf of others in your
company. The PAC makes a contribution, but collecting checks
and handing them over in a bundle is not allowed unless you're
somehow acting as an agent of a candidate. So, obviously, these
provisions go together. The campaign finance provisions and the
lobby provisions go together. When you try and regulate one
area, they're going to manifest themselves in another. But if
we're going to start to regulate the movement of political
contributions in this lobby bill, it is going to complicate
things. I think that probably is more in the province of the
Federal Election Commission.
Mr. Van Hollen. Well, as you pointed out, I think that many
people in this town would be surprised to find out exactly what
you said, because I think this has been a little enforced
provision, and probably a very little understood provision. I
think--and wouldn't you agree though--that from the lobbyist's
perspective, if you move that requirement to the Lobbying
Disclosure Report, where the lobbyist then has an obligation to
report his or her activities, you're going to be much more
likely to get compliance in reporting than if you have to just
deal with the FEC process.
Mr. Gross. You know, it sounds good. It's just a tough
thing to start to regulate at this place, because the movement
of money is supposed to be regulated by the Federal Election
Commission. There have been a few recent cases in this area. If
you hold a fund raiser, I suppose you could identify on the
bill, ``I held a fund raiser on April 15th at the Sheraton.''
Now, trying to track the contributions that came in as a result
of that fund raiser may be a difficult thing to do.
Mr. Van Hollen. No, I understand the issue, and there are
details here that would need to be worked out. But I think, I
mean, I think the comments on both sides of the aisle, again,
reflect the fact that, you know, when you try and look at one
particular area and ignore the whole campaign finance
component, we are really doing a disservice to the public to
suggest that we're really dealing with the issue in a serious
way, because the campaign finance piece, I think as everybody
up here knows, is the big dog in the room, and I would look
forward to working with you to try and develop something that
addresses this issue.
Mr. Chabot. The gentleman's time has expired.
Mr. Van Hollen. Thank you, Mr. Chairman.
Mr. Chabot. I would just note, however, the Chair would
note that we did pass campaign finance reform not too long ago,
which was, I think, made things in many ways worse than they
were now--they were prior to that time.
The gentleman from----
Mr. Nadler. I would simply point out that that's an
opinion.
Mr. Chabot. The gentleman from Florida, Mr. Feeney, is
recognized for 5 minutes.
Mr. Feeney. Thank you, Mr. Chairman.
Professor Smith, I guess I'll start with you. You know, you
focused on a couple things, and you alluded to the ambiguity of
some of the rules, and that's a big problem I have. I mean, I
want to see universal open disclosure by everybody involved in
the process as early as possible, put on the Internet within 24
hours. But the other thing that concerns me is the lack of
black and white lines at times. I mean the whole travel
situation that--we've had the witnesses talk about how critical
it is that Members not be here in the dark and in ignorance.
There's so much and this is a--we're the one superpower on the
globe right now, and to be honest with you, if Members are
going to sit here in the dark and try to make guesses about
what's the best for America's future, then I'm really worried
about the future of Congress. A very different world than when
our Founding Fathers were protected by 6 or 8 weeks between
what it took on a boat to get from England or Europe, for
example, to the shores of the United States. We have threats
that are potentially devastating to American way of life that
can get to us within a matter of seconds or minutes or at least
hours.
So what type of bright lines can we do with respect to
gifts, dinners, travel, that would be helpful in giving the
public confidence that we're not running around selling our
votes, but we are doing everything we can to get information
from executives with different types of businesses in terms of
how they'll be affected by a complicated bill. Nurses and
doctors when we deal with a hospital issue, or funding
formulas. These are very complicated. How do we draw those
bright lines so that Congressmen can actually make intelligent
decisions, and yet give the American people confidence that
their Members are not being unduly influenced by relationships
or dealings that they may have with the folks out in the lobby?
Mr. Smith. Thank you, Mr. Feeney. Let me start with
something I was thinking about in the context of Representative
Van Hollen's last question. One thing that I saw in the bill
that's moving through the other house is language talking about
requiring disclosure of fund raisers that lobbyists or others
may host. And by the way, I echo everything that Mr. Gross said
on that. But one bit of language in there is something to the
effect of ``or otherwise sponsored,'' which is the kind of what
the heck does that mean? Did the person host it or co-host it?
What's it mean ``or otherwise sponsored?''
And so I think one of the first things you simply need to
do is, as you look at language in this bill, look at amendments
to this bill or amendments that are offered to add to the bill,
think about each thing, do you know what it means? Do the
Members sitting up here on this panel feel like they know what
it means? Are you comfortable that somebody won't accuse you of
doing something along those lines? I think having the
disclosure function will serve some role there because it will
keep things in the public eye, and that always plays a role in,
I think, making sure that people decide simply not to cut
corners, and it makes sure that the cases get discussed enough
if nothing else.
What happens when law falls into sort of desuetude, is that
people begins to lose track of what the accepted definitions
are. So this is a very weak answer, I feel. I don't have a good
clear one for you. What I would have to say is we need to look
at specific provisions of the bill, say what is it that you
want to accomplish, and then look at that exact language and
make sure that it doesn't have the kind of gray area that can
be used by an independent prosecutor, essentially, to just
start going after whomever he or she wants.
Mr. Feeney. I want to talk about some gray areas. Maybe Ms.
Pingree is the best--you know, we talk about disclosure for
people that want to contribute $100 or $1,000 to my campaign,
but there are entities out there spending hundreds of
thousands, in fact, millions of dollars, that are very shadowy
and are not very accountable. One of the things that we've done
is to disempower the major parties in the country. They've got
all sorts of limits now and restrictions, what they can accept,
what they can spend in specific areas, and yet you've got these
527 groups, after McCain-Feingold, that are totally
unaccountable. And as the Chairman said, I happen to be victim
of the same call--although they might have done me a favor--
telling people in my district that I voted for the Medicare
Bill. In fact, I had voted against the Medicare bill.
And yet, this group can establish a nice-sounding name, The
Committee to Save the Children of the World, or whatever.
Nobody knows who they are. They can start a new corporation for
every election cycle. There's totally no accountability.
If the Democratic Party wants to attack Tom Feeney, people
in my district will take with a grain of salt some of the
things that they say. Some people will tend to believe what the
Democratic Party wants to say, some people will tend not to
believe them. But the 527 loophole is really embarrassing.
And then finally, Ms. Pingree, if you can also address the
education loophole. Common Cause, for example, for the first
time in 100 years, Republicans were in the majority when we did
redistricting in Florida in 2002. All the Democratic
leadership, all the Democratic leaders in the House and the
Senate, all the Democratic Party apparachiks, they opposed what
we did; naturally, it's a part of the political process.
Common Cause actually--talk about bundling money--bundled
money from their Washington affiliate, sent it to their Florida
affiliate. And so what type of responsibilities do you think
you have as a so-called educational--I mean in that case Common
Cause is going up against all of the Republican leadership of
the House, the Senate, the Governor and the party, and they're
taking a partisan side, and yet, they tend to be immune from
the types of constraints that we're trying to put on other
participants in the process.
Ms. Pingree. All very good questions, and I'll try to give
you some answers. First off, on the issue of redistricting in
Florida, we tackle the questions around redistricting and our
belief that there should be panels outside of the legislative
process to make it a nonpartisan process. We do this on a
nonpartisan basis. We were just as active in California where
the Democrats didn't like what we were doing, as we were in
Ohio last year where the Republicans didn't like what we were
doing. The same in Florida. We believe this is a process issue,
and we are supported by hundreds of thousands of members from
around the country, and did our best to disclose where our
sources of income came from in the State of Florida, and work
in a seamless way with our State organizations, as well as our
national organizations.
On the issue of campaign finance reform, I'd be thrilled to
come back anytime and talk about a whole variety of issues. I
think you do make a good point, and others have, about whether
or not we can solve all the problems of the influence of money
in politics through regulation, or whether we need to look at
more publicly financed systems, as we have in Maine and
Arizona. And I may disagree with Mr. Franks, in Maine, we think
that's been a very successful process.
I'd also like to say that, generally, I think on the
questions that you were asking earlier, we also think that
there should be some significant change. I know my time is
running out, but I'd be happy to come back any time and talk
more thoroughly about some of these other issues.
Mr. Chabot. The gentleman's time has expired. Did any of
the other panel members want to touch that?
[No response.]
Mr. Chabot. All the Members at this point have asked their
5 minutes, and so we want to thank the members of the witness
panel for their testimony here this afternoon. As was
mentioned, there is a markup on this topic in the full
Committee tomorrow. You have helped us in many ways in thinking
about this and considering the ramifications of this
legislation.
I want to thank all the Members for their attendance here
today.
If there's no further business to come before the
Committee, we're adjourned. Thank you.
[Whereupon, at 11:26 a.m., the Subcommittee was adjourned.]
A P P E N D I X
----------
Material Submitted for the Hearing Record
TESTIMONY OF MARK J. FITZGIBBONS, PRESIDENT OF CORPORATE AND LEGAL
AFFAIRS, AMERICAN TARGET ADVERTISING, INC.
Proposed Grassroots Reporting Regulation
Far from What Proponents Represent It to Be
The purpose of this testimony is to refute the public
justifications of attempts to include regulation of the grassroots as
part of lobbying reform legislation. I am president of corporate and
legal affairs of a direct marketing agency specializing in direct mail
and other means of public policy communications. I thank the
Subcommittee on the Constitution for the opportunity to submit these
comments.
The press releases of some Members of Congress and certain
proponents of regulating the grassroots as part of congressional ethics
and lobbying reform tout their attempts as targeted at paid
professionals and what's been called ``Astroturf'' lobbying
(professionally created grassroots efforts supporting K Street lobbying
efforts).
The stated justifications for regulating the grassroots are not
true because:
1. the legislation would apply to speech by small, low-funded,
community based causes, even those that rely on volunteers;
2. those who do not employ Washington lobbyists nor make
political contributions would be required to report;
3. the legislation would make ``accidental'' lobbyists out of
those who publish books, blogs and many other publications;
4. the legislation would result in punishment of innocent
political and faith-based speech and publication;
5. the legislation would actually foster more Jack Ambramoff-
style corruption.
Senate-passed legislation (S. 2349, the Lobbying Transparency and
Accountability Act (LTA)) and sister attempts in the House would likely
create the most expansive and inclusive regulation of political and
faith-based speech and publication in history. Intent to publish books
and blogs would trigger requirements to register and report, and would
create accidental lobbyists. Such publication would be in violation of
law unless congressional ``permission'' is obtained. Failures to
register and report would be punishable as ``committing lobbying''
through speech and publication to the general public.
Even editorials in newspapers, such as the one from the Committee
to Defend Martin Luther King, the subject of one of the great civil
rights and First Amendment cases in U.S. history (New York Times v.
Sullivan, 376 U.S. 254 (1964)), would be regulated and subject to
quarterly disclosure and reporting to Congress.
All of the various legislative proposals to regulate the grassroots
expressly target non-harmful, core political and faith-based speech and
publication to the general public, which is an unconstitutional
restraint on First Amendment rights.
Proposals to regulate the grassroots would amend the Disclosure of
Lobbying Activities Act, 2 USC 1601 ``et seq.'' (DLA), which was passed
to regulate professional lobbying conducted in Washington. The DLA
regulates professional lobbyists retained or employed by clients. In
addition to regulating what have come to be known as ``K Street''
lobbyists, the DLA regulates the in-house lobbying efforts of the many
associations representing trade and industry groups. Such employees of
associations are lobbyists under the DLA. 2 USC 1602(5).
The DLA regulates lobbying defined most simply as (1) lobbying
``contacts,'' which are oral or written communications with Members of
Congress, their staff, and certain government agency and White House
officials (``covered'' government officials) (2 USC 1602(8)), combined
with (2) lobbying ``activity,'' which is the research, strategy and
other background support for the lobbying efforts. 2 USC 1602(7).
A ``lobbyist'' is someone employed by a client, who has more than
one lobbying contact, and who spends at least 20 percent of his/her
time on lobbying activities for the client. 2 USC 1602(10). A lobbying
client is any person or entity who retains professional lobbyists or
who employs in-house lobbyists. 2 USC 1602(2).
I shall reference provisions of the Senate-passed bill (S. 2349)
because legislative proposals in the House have nearly identical
provisions, and the effects and consequences would be nearly identical
as well.
Proposals to regulate the grassroots turn the formula of what is
``lobbying'' subject to registration and reporting on its head by
making communications to the public a lobbying ``activity.'' Proposed 2
USC 1602(7) amended.
Communications to as few as 500 people would meet the threshold of
lobbying activity if the communications are intended to ``stimulate''
citizens to contact covered government officials to urge policy
actions. Proposed 2 USC 1602(18)(A) and (B). Communications prepared
in-house do not need to meet the $25,000 threshold applicable to what
would be ``grassroots lobbying firms.'' Therefore, communications
subject to proposed regulation of grassroots lobbying need not be
prepared by professionals, nor need to come from (or be prepared on
behalf of) large clients who already retain Washington-based lobbyists.
The proposals to regulate the grassroots would result in startling
consequences. Claims that efforts to regulate professional and
Astroturf lobbying are easily refuted. Examples may best demonstrate
these conclusions.
1. Communications Prepared In-House by Small, Community Based
Causes
The following example disproves that proposals to regulate the
grassroots would apply only to professional efforts.
A local animal rescue operation has a staff of five paid
employees and relies mainly on volunteers. They barely makes
ends meet, and certainly can't afford to hire a lawyer, let
alone pay for a lobbyist. A low-paid staffer in charge of
communications and community outreach spends 50% of his time
managing their web site and blog. On behalf of the rescue
group, he writes two letters to Congress urging Congress to
pass an animal protection law. Those are lobbying ``contacts.''
He continues to do research, and heavily promotes the
legislation online. That would be lobbying ``activity'' subject
to reporting and compliance. Also, he is now a ``lobbyist.''
Failure to track his time, register, and report quarterly to
Congress could result in fines up to $100,000. Proposed 2 USC
1606 amended.
These local, community based causes need not spend $25,000 in a
three-month period to be subject to the lobbying disclosure laws under
the legislative proposals to regulate so-called ``paid'' grassroots
communications. The in-house efforts of many such small, community
based and under-funded causes cannot afford the adverse publicity and
stigma of violating federal law, but S. 2349 would surely create many
examples such as this.
2. Creating ``Accidental'' Lobbyists from Publication of Books
Not just community-based blogs, but books and other press
publications can trigger the registration and reporting rules under the
LTA. For example:
A doctor affiliated with a medical university specializes in
treating autistic children. She discovers a link between
instances of autism and a medication used commonly by pregnant
and nursing women. She writes to the Food and Drug
Administration and several Members of Congress that the
medication must either be banned or come with a warning not to
be prescribed to pregnant or nursing women. Those are lobbying
``contacts.''
The pharmaceutical company that manufactures the medication has
its lobbyists oppose the doctor's efforts. One congressman
writes back telling the doctor that there is not enough
evidence to ban the medication.
As part of her university job, the doctor writes a book about
autism that also demonstrates the link between the medication and
autism, and ``influences'' the general public to contact Congress to
urge a ban on the medication. Publication of that book is a lobbying
``activity,'' and the doctor is now a ``lobbyist.''
The university retains and pays a copy editor $25,000 to help
the doctor write the book, and retains a publicist who agrees
to spend $25,000 over three months publicizing the book. These
paid efforts make the copy editor and publicist ``grassroots
lobbying firms'' under proposed 2 USC 1602(19), and they must
register and report to Congress as such.
In promoting her book over the next six months, the doctor
makes appearances on television and radio talks shows. Since
that is part of her salaried employment with the university,
these are ``paid'' communications to more than 500 people, thus
lobbying ``activity.'' The doctor must log her time, and report
the expenses and income from her publicity tour.
3. Proposals Target More than Astroturf Lobbying, and Will
Promote Washington-Style Corruption
Regulation of grassroots speech and publication is not only
unconstitutional, but also would help protect corruption in Washington.
Regulation would have the effects of blunting and even censoring
citizen-critics of government through expense of regulation compliance,
fines and fear of fines. But the following example will help
demonstrate how such regulation will even foster the culture of
corruption in Washington.
The medical university in the example above does not hire
lobbyists. The doctors and administration there are politically
aloof, and none makes political contributions.
Lobbyist ``Jack'' has been soliciting the medical university as
a client for years, with no success. Jack raises money for many
Members of Congress, and has an informal information-sharing
arrangement with several. From his home, Jack has an
``unpaid,'' anonymous blog called The Good Citizen, which
provides gossip-like information about Washington. The
Congressman from the university's district and Jack are angry
that the university's administration won't ``pay to play'' the
Washington game.
The Good Citizen blog chooses to take sides with the
pharmaceutical company, and opposes the ban on the medication.
Since the medical university does not hire lobbyists, neither
the administrators nor the autism doctor even thinks that the
doctor's book publication activity required them to register
under the DLA. The Good Citizen blog reports that the
university and doctor are apparently violating the lobbying
laws.
The U.S Attorney sees the blog, investigates and concludes that
a violation occurred. No penalties are assessed since this is a
first-time violation, but the U.S. Attorney issues a press
release that the university and doctor violated the law in
urging a ban on the medication. That results in the program
losing funding from private sources.
4. The Grassroots Proposals Would Regulate Faith-Based Speech
The grassroots provisions would even apply to faith-based
communications, as the following example demonstrates.
A Catholic priest has a weekly talk show with a substantial
audience. He comes to Washington to meet with White House and
congressional leaders. He expresses the Catholic Church's views
urging action against stem-cell research legislation and
against certain immigration restrictions included in
legislation being pushed by the White House. Those are lobbying
contacts. In his weekly show, in his sermons, and in written
editorials for newspapers and faith-based publications, the
priest expresses the Church's views on these faith and policy
matters, and ``influences'' his audience to write Congress and
urge action consistent with the Church's positions. Those are
lobbying activities subject to tracking, registration and
reporting with Congress.
None of the activities in the above-stated examples come anywhere
near what proponents of grassroots lobbying legislation describe as the
targeted activity subject to the lobbying reporting and disclosure
laws.
The proposed regulation of the grassroots targets low-paid speech
and publication under $25,000, not the highly paid lobbying efforts
described by proponents. The legislation would regulate communications
prepared in-house by those who do not use Washington-based lobbyists
and who do not make political contributions, thus claims of targeting
merely high-paid ``Astroturf'' lobbying and those who influence
elections are false. The legislation would regulate faith-based
communication, and would even foster more Jack Ambramoff-style
corruption, while making innocent publication a violation of law for
``committing lobbying.''
These attempt to regulate the grassroots manage to turn the
definition of lobbying on its head by regulating speech and publication
to the general public, and are unconstitutional. Even in describing so-
called congressional ethics reform, some Members of Congress and
certain Washington-based special interest proponents of ``reform'' have
managed to portray their proposals incorrectly. The lobbying reform
bills must not include efforts to regulate the grassroots.
Respectfully submitted,
Mark J. Fitzgibbons
President of Corporate and Legal Affairs
American Target Advertising, Inc.
9625 Surveyor Court, Suite 400
Manassas, Virginia 20110
(703) 392-7676, mfitzgibbons@americantarget.com
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