SPEAKERS CONTENTS INSERTS
Page 1 TOP OF DOC
26–911 PDF
2006
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
Page 2 PREV PAGE TOP OF DOC
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://judiciary.house.gov
COMMITTEE ON THE JUDICIARY
F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois
HOWARD COBLE, North Carolina
LAMAR SMITH, Texas
ELTON GALLEGLY, California
BOB GOODLATTE, Virginia
STEVE CHABOT, Ohio
DANIEL E. LUNGREN, California
WILLIAM L. JENKINS, Tennessee
CHRIS CANNON, Utah
SPENCER BACHUS, Alabama
BOB INGLIS, South Carolina
JOHN N. HOSTETTLER, Indiana
MARK GREEN, Wisconsin
RIC KELLER, Florida
DARRELL ISSA, California
JEFF FLAKE, Arizona
MIKE PENCE, Indiana
Page 3 PREV PAGE TOP OF DOC
J. RANDY FORBES, Virginia
STEVE KING, Iowa
TOM FEENEY, Florida
TRENT FRANKS, Arizona
LOUIE GOHMERT, Texas
JOHN CONYERS, Jr., Michigan
HOWARD L. BERMAN, California
RICK BOUCHER, Virginia
JERROLD NADLER, New York
ROBERT C. SCOTT, Virginia
MELVIN L. WATT, North Carolina
ZOE LOFGREN, California
SHEILA JACKSON LEE, Texas
MAXINE WATERS, California
MARTIN T. MEEHAN, Massachusetts
WILLIAM D. DELAHUNT, Massachusetts
ROBERT WEXLER, Florida
ANTHONY D. WEINER, New York
ADAM B. SCHIFF, California
LINDA T. SÁNCHEZ, California
CHRIS VAN HOLLEN, Maryland
DEBBIE WASSERMAN SCHULTZ, Florida
PHILIP G. KIKO, General Counsel-Chief of Staff
Page 4 PREV PAGE TOP OF DOC
PERRY H. APELBAUM, Minority Chief Counsel
Subcommittee on the Constitution
STEVE CHABOT, Ohio, Chairman
TRENT FRANKS, Arizona
WILLIAM L. JENKINS, Tennessee
SPENCER BACHUS, Alabama
JOHN N. HOSTETTLER, Indiana
MARK GREEN, Wisconsin
STEVE KING, Iowa
TOM FEENEY, Florida
JERROLD NADLER, New York
JOHN CONYERS, Jr., Michigan
ROBERT C. SCOTT, Virginia
MELVIN L. WATT, North Carolina
CHRIS VAN HOLLEN, Maryland
PAUL B. TAYLOR, Chief Counsel
E. STEWART JEFFRIES, Counsel
HILARY FUNK, Counsel
KIMBERLY BETZ, Full Committee Counsel
DAVID LACHMANN, Minority Professional Staff Member
Page 5 PREV PAGE TOP OF DOC
C O N T E N T S
APRIL 4, 2006
OPENING STATEMENT
The Honorable Steve Chabot, a Representative in Congress from the State of Ohio, and Chairman, Subcommittee on the Constitution
The Honorable Jerrold Nadler, a Representative in Congress from the State of New York, and Ranking Member, Subcommittee on the Constitution
WITNESSES
Mr. Kenneth A. Gross, Partner, Skadden, Arps, Slate, Meagher & Flom, LLP
Oral Testimony
Prepared Statement
Mr. John H. Graham, IV, President and Chief Executive Officer, American Society of Association Executives
Oral Testimony
Prepared Statement
The Honorable Chellie Pingree, President and Chief Executive Officer, Common Cause
Oral Testimony
Page 6 PREV PAGE TOP OF DOC
Prepared Statement
The Honorable Bradley A. Smith, Professor of Law, Capital University Law School, on behalf of Center for Competitive Politics
Oral Testimony
Prepared Statement
APPENDIX
Material Submitted for the Hearing Record
Testimony of Mark J. Fitzgibbons, President of Corporate and Legal Affairs, American Target Advertising, Inc.
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.
Page 7 PREV PAGE TOP OF DOC
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.
Page 8 PREV PAGE TOP OF DOC
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.
Page 9 PREV PAGE TOP OF DOC
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.
Page 10 PREV PAGE TOP OF DOC
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.
Page 11 PREV PAGE TOP OF DOC
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.
Page 12 PREV PAGE TOP OF DOC
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.
Page 13 PREV PAGE TOP OF DOC
[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.
Page 14 PREV PAGE TOP OF DOC
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.
Page 15 PREV PAGE TOP OF DOC
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.
Page 16 PREV PAGE TOP OF DOC
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.
Page 17 PREV PAGE TOP OF DOC
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.
Page 18 PREV PAGE TOP OF DOC
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.
Page 19 PREV PAGE TOP OF DOC
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.
Page 20 PREV PAGE TOP OF DOC
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.
Page 21 PREV PAGE TOP OF DOC
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.
Page 22 PREV PAGE TOP OF DOC
[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.
Page 23 PREV PAGE TOP OF DOC
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.
Page 24 PREV PAGE TOP OF DOC
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.
Page 25 PREV PAGE TOP OF DOC
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.
Page 26 PREV PAGE TOP OF DOC
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.
Page 27 PREV PAGE TOP OF DOC
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.
Page 28 PREV PAGE TOP OF DOC
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.
Page 29 PREV PAGE TOP OF DOC
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.
Page 30 PREV PAGE TOP OF DOC
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.
Page 31 PREV PAGE TOP OF DOC
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.
Page 32 PREV PAGE TOP OF DOC
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.
Page 33 PREV PAGE TOP OF DOC
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.
Page 34 PREV PAGE TOP OF DOC
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.
Page 35 PREV PAGE TOP OF DOC
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.
Page 36 PREV PAGE TOP OF DOC
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.
ATTACHMENTS
CPA0001.eps
CPA0002.eps
CPA0003.eps
CPA0004.eps
CPB0001.eps
CPB0002.eps
Page 37 PREV PAGE TOP OF DOC
CPB0003.eps
CPC0001.eps
CPC0002.eps
CPC0003.eps
CPC0004.eps
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.
Page 38 PREV PAGE TOP OF DOC
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.
Page 39 PREV PAGE TOP OF DOC
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.
Page 40 PREV PAGE TOP OF DOC
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.
Page 41 PREV PAGE TOP OF DOC
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.
ATTACHMENT
SMH0001.eps
Page 42 PREV PAGE TOP OF DOC
SMH0002.eps
SMH0003.eps
SMH0004.eps
SMH0005.eps
SMH0006.eps
SMH0007.eps
SMH0008.eps
SMH0009.eps
SMH0010.eps
SMH0011.eps
SMH0012.eps
SMH0013.eps
SMH0014.eps
Page 43 PREV PAGE TOP OF DOC
SMH0015.eps
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.
Page 44 PREV PAGE TOP OF DOC
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?
Page 45 PREV PAGE TOP OF DOC
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.
Page 46 PREV PAGE TOP OF DOC
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?
Page 47 PREV PAGE TOP OF DOC
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.
Page 48 PREV PAGE TOP OF DOC
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——
Page 49 PREV PAGE TOP OF DOC
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.
Page 50 PREV PAGE TOP OF DOC
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.
Page 51 PREV PAGE TOP OF DOC
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.
Page 52 PREV PAGE TOP OF DOC
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?
Page 53 PREV PAGE TOP OF DOC
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.
Page 54 PREV PAGE TOP OF DOC
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.
Page 55 PREV PAGE TOP OF DOC
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.
Page 56 PREV PAGE TOP OF DOC
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?
Page 57 PREV PAGE TOP OF DOC
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——
Page 58 PREV PAGE TOP OF DOC
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?
Page 59 PREV PAGE TOP OF DOC
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.
Page 60 PREV PAGE TOP OF DOC
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.
Page 61 PREV PAGE TOP OF DOC
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?
Page 62 PREV PAGE TOP OF DOC
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.
Page 63 PREV PAGE TOP OF DOC
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?
Page 64 PREV PAGE TOP OF DOC
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.
Page 65 PREV PAGE TOP OF DOC
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.
Page 66 PREV PAGE TOP OF DOC
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.
Page 67 PREV PAGE TOP OF DOC
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.
Page 68 PREV PAGE TOP OF DOC
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.
Page 69 PREV PAGE TOP OF DOC
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.
Page 70 PREV PAGE TOP OF DOC
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.
Page 71 PREV PAGE TOP OF DOC
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.
Page 72 PREV PAGE TOP OF DOC
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.
Page 73 PREV PAGE TOP OF DOC
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
Page 74 PREV PAGE TOP OF DOC
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;
Page 75 PREV PAGE TOP OF DOC
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.
Page 76 PREV PAGE TOP OF DOC
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.
Page 77 PREV PAGE TOP OF DOC
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.
Page 78 PREV PAGE TOP OF DOC
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.''
Page 79 PREV PAGE TOP OF DOC
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.
Page 80 PREV PAGE TOP OF DOC
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.
Page 81 PREV PAGE TOP OF DOC
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
Page 82 PREV PAGE TOP OF DOC
American Target Advertising, Inc.
9625 Surveyor Court, Suite 400
Manassas, Virginia 20110
(703) 392-7676, mfitzgibbons@americantarget.com