Lobbying reform for nonprofits might be just starting to develop

|
Business,Dee Ann Divis

An amendment to the lobbying reform package now before the Senate aims to keep politicians from using nonprofits to pay for political expenses such as consulting and campaign events. Though tightly focused on organizations where senators exert an element of control, nonprofit experts are concerned the amendment is only the first in a series of measures that could tighten regulations on all charities.

Proposed by Sen. Max Baucus, D-Mont., the amendment to Senate bill S.1 would throw up a wall between senators and charities over which they or a spouse have "substantial influence."

If approved, members of staff and the senator’s family — including everyone from great-grandparents to great-grandchildren and their spouses — would be barred from working for such a charity. The senator and his or her staff would also have to report any charitable contribution of more than $200 of which they are aware and the charity could not make payments to an organization also working with the member’s campaign.

If passed and signed into law, it is highly likely that the House would adopt parallel rules for its members.

The amendment would not impact the larger community of nonprofits, said Rick Cohen, a spokesman for the National Committee for Responsive Philanthropy, but only the very small number of charities controlled by members of Congress.

Insiders, however, say the proposal may be only the first among several that could force changes across the nonprofit community.

While Baucus was inspired to write the current amendment because of organizations like World of Hope, organized by former Senate Majority Leader Bill Frist, he also issued a report last fall on the separate issue of misuse of nonprofits by lobbyist Jack Abramoff.

That report suggested a series of reforms including extending the definition of lobbying to include lobbying of federal agencies and applying the proxy tax to nonprofits — making nondeductible a certain percentage of any donation.

Just figuring that percentage — which is based on the portion of the charities budget spent on allowable lobbying activities — could be quite burdensome for a small charity.

"We never want to see laws that have a chilling effect," said Elizabeth Heagy, president of the Center for Lobbying in the Public Interest, which generally supports lobbying reform.

There is no language yet on any future proposals, and a call to Baucus’ office for comment was not returned. But industry insiders have been expecting proposals since the report came out last year.

"If Baucus holds true to what he recommended in that report," said Cohen, "he will have to come up with a set of regulatory proposals to deal with those problems.

Dee Ann Divis is the business editor of The Washington Examiner. Contact her at ddivis@dcexaminer.com

View article comments Leave a comment