Republicans trying to gag nonprofits

Dear MoveOn member,

Are you involved in a local or national
non-profit or public interest organization? As
a leader or board director or member? Please
read this message carefully, because your
organization could be facing a serious threat.

The Republican National Committee is pressing
the Federal Election Commission ("FEC") to issue
new rules that would cripple groups that dare to
communicate with the public in any way critical
of President Bush or members of Congress.
Incredibly, the FEC has just issued -- for
public comment -- proposed rules that would do
just that. Any kind of non-profit --
conservative, progressive, labor, religious,
secular, social service, charitable,
educational, civic participation,
issue-oriented, large, and small -- could be
affected by these rules.

By the way, one thing FEC's proposed rules do
not affect is the donations you may have made in
the past or may make now to MoveOn.org or to the
MoveOn.org Voter Fund. They are aimed at
activist non-profit groups, not donors.

Operatives in Washington are displaying a
terrifying disregard for the values of free
speech and openness which underlie our
democracy. Essentially, they are willing to pay
any price to stop criticism of Bush
administration policy.

We've attached materials below to help you make
a public comment to the FEC before the comment
period ends on APRIL 9th. Your comment could be
very important, because normally the FEC doesn't
get much public feedback.

Public comments to the FEC are encouraged by
email at

politicalcommitteestatus@fec.gov

Comments should be addressed to Ms. Mai T. Dinh,
Acting Assistant General Counsel, and must
include the full name, electronic mail address,
and postal service address of the commenter.

More details can be found at:
http://www.fec.gov/press/press2004/20040312rulemaking.html

We'd love to see a copy of your public comment.
Please email us a copy at FECcomment@moveon.org.

Whether or not you're with a non-profit, we also
suggest you ask your representatives to write a
letter to the FEC opposing the rule change.

Some key points:

- Campaign finance reform was not meant to gag
public interest organizations.
- Political operatives are trying to silence
opposition to Bush policy.
- The Federal Election Commission has no legal
right to treat non-profit interest groups as
political committees. Congress and the courts
have specifically considered and rejected such
regulation.

In a non-election year, this kind of
administrative overreach would never find
support. It goes far beyond any existing law or
precedent. It is a serious threat to the
fundamental checks and balances in our system.
But because of an unholy alliance between a few
campaign reform groups and GOP partisans, this
rule change could actually happen if we don't
act now.

I've attached more details below, prepared by
our attorneys and by the FEC Working Group -- a
group of more than 500 respected non-profit
organizations.

If you run a non-profit, don't assume this
change doesn't apply to you. First check out
the EXAMPLES OF SPECIFIC CONSEQUENCES FOR
NONPROFIT GROUPS section below. It's
outrageous.

Thanks for all you do,

-Wes Boyd
MoveOn.org
March 30, 2004

________________


EXAMPLES OF SPECIFIC CONSEQUENCES FOR NONPROFIT
GROUPS

Under the proposed rules, nonprofit
organizations that advocate for cancer research,
gun and abortion restrictions or rights, fiscal
discipline, tax reform, poverty issues,
immigration reform, the environment, or civil
rights or liberties - all these organizations
could be transformed into political committees
if they criticize or commend members of Congress
or the President based on their official actions
or policy positions.

Such changes would cripple the ability of groups
to raise and spend funds in pursuit of their
mission and could be so ruinous that
organizations would be forced to back away from
meaningful conversations about public policies
that affect millions of Americans.

If the proposed rules were adopted, the
following organizations would be treated as
federal political committees and therefore could
not receive grants from any corporation, even an
incorporated nonprofit foundation, from any
union, or from any individual in excess of
$5,000 per year:

- A 501(c)(4) gun rights organization that
spends $50,000 on ads at any time during this
election year criticizing any legislator, who
also happens to be a federal candidate, for his
or her position on gun control measures.

- A "good government" organization <§501(c)(3)>
that spends more than $50,000 to research and
publish a report criticizing several members of
the House of Representatives for taking an
all-expense trip to the Bahamas as guests of the
hotel industry.

- A fund <§527> created by a tax reform
organization to provide information to the
public regarding federal candidates' voting
records on budget issues.

- A civil rights organization <§501(c)(3) or [br />§501(c)(4)] that spends more than $50,000 to
conduct non-partisan voter registration
activities in Hispanic and African-American
communities after July 5, 2004.

- An organization devoted to the environment
that spends more than $50,000 on communications
opposing oil drilling in the Arctic and
identifying specific Members of Congress as
supporters of the legislation, if those Members
are running for re-election.

- A civic organization <§501(c)(6)> that spends
$50,000 during 2004 to send letters to all
registered voters in the community urging them
to vote on November 2, 2004 because "it is your
civic duty."

Other potential ramifications include the
following situations:

- A religious organization that publishes an
election-year legislative report card covering
all members of Congress on a broad range of
issues would be unable to accept more than
$5,000 from any individual donor if the report
indicated whether specific votes were good or
bad.

- A 501(c)(3) organization that primarily
encourages voter registration and voting among
young people will be required to re-create
itself as a federal PAC.

- A 501(c)(4) pro-life group that accepts
contributions from local businesses would break
the law by using its general funds to pay for
any communications critical of an incumbent
Senator's position on abortion rights after the
Senator had officially declared himself for
reelection more than a year before the next
election.

- A 501(c)(3) civil rights group that has been
designated as a political committee can no
longer hold its annual fundraiser at a
corporate-donated facility, and it must refuse
donations or grants from donors that have
already given $5,000 for that year.

BRIEFING ON THE PROPOSED RULE CHANGES

Under federal campaign finance laws, federal
"political committees" must register and file
reports with the FEC and can accept
contributions only from individual persons (and
other federal committees), and only up to $5,000
per year from any one donor ("hard money"). The
FEC is now proposing to redefine "political
committee" to include any group that:

1. Spends more than $1,000 this year on
nonpartisan voter registration or get out the
vote activity or on any ad, mailing or phone
bank that "promotes, supports, attacks or
opposes" any federal candidate; and

2. Supposedly has a "major purpose" of election
of a federal candidate as shown by:
(a) Saying anything in its press releases,
materials, website, etc. that might lead
regulators to conclude that the group's
"major purpose" is to influence the election
of any federal candidate; or
(b) Spending more than $50,000 this year or
in any of the last 4 years for any
nonpartisan voter registration or get out the
vote program, or on any public communication
that "promotes, supports, attacks or opposes"
any federal candidate.

What's more, any group that gets turned into a
federal "political committee" under these new
rules has to shut down all its communications
critical of President Bush (or any other federal
candidate) until it sets up "federal" and
"non-federal" accounts; and raises enough hard
money contributions to "repay" the federal
account for the amounts spent on all those
communications since the beginning of 2003.

These proposed rules would apply to all types of
groups: 501(c)(3) charitable organizations,
501(c)(4) advocacy organizations, labor unions,
trade associations and non-federal political
committees and organizations (so-called "527"
groups, as well as state PACs, local political
clubs, etc.).

The new rules, including those that apply to
voter engagement, cover all types of
communications -- not just broadcast TV or radio
ads -- but messages in any form, such as print
ads, mailings, phone banks, email alerts like
this one, websites, leaflets, speeches, posters,
tabling, even knocking on doors.

The FEC will hold a public hearing on April 14 &
15. Written comments are due by April 5 if the
group wants to testify at that hearing;
otherwise, by April 9. The FEC plans to make
its final decision on these proposed rules by
mid-May and they could go into effect as early
as July, right in the middle of the election
year, potentially retroactive to January 2003.

It's clear that these rules would immediately
silence thousands of groups, of all types, who
have raised questions and criticisms of any kind
about the Bush Administration, its record and
its policies.

SOME TALKING POINTS

- The FEC should not change the rules for
nonprofit advocacy in the middle of an election
year, especially in ways that Congress already
considered and rejected. Implementing these
changes now would go far beyond what Congress
decided and the Supreme Court upheld.

- These rules would shut down the legitimate
activities of nonprofit organizations of all
kinds that the FEC has no authority at all to
regulate.

- Nothing in the McCain-Feingold campaign reform
law or the Supreme Court's decision upholding it
provides any basis for these rules. That law is
only about banning federal candidates from using
unregulated contributions ("soft money"), and
banning political parties from doing so, because
of their close relationship to those candidates.
It's clear that, with one exception relating to
running broadcast ads close to an election, the
new law wasn't supposed to change what
independent nonprofit interest groups can do,
including political organizations (527's) that
have never before been subject to regulation by
the FEC.

- The FEC can't fix the problems with these
proposed rules just by imposing new burdens on
section 527 groups. They do important issue
education and advocacy as well as voter
mobilization. And Congress clearly decided to
require those groups to fully and publicly
disclose their finances, through the IRS and
state agencies, not to restrict their
independent activities and speech. The FEC has
no authority to go further.

- In the McConnell opinion upholding
McCain-Feingold, the U.S. Supreme Court clearly
stated that the law's limits on unregulated
corporate, union and large individual
contributions apply to political parties and not
interest groups. Congress specifically
considered regulating 527 organization three
times in the last several years - twice through
the Internal Revenue Code and once during the
BCRA debate - and did not subject them to
McCain-Feingold.

- The FEC should not, in a few weeks, tear up
the fabric of tax-exempt law that has existed
for decades and under which thousands of
nonprofit groups have structured their
activities and their governance. The Internal
Revenue Code already prohibits 501(c)(3)
charities from intervening in political
candidate campaigns, and IRS rules for other
501(c) groups prohibit them from ever having a
primary purpose to influence any candidate
elections -- federal, state, or local.

- As an example of how seriously the new FEC
rules contradict the IRS political and lobbying
rules for nonprofits, consider this: Under the
1976 public charity lobbying law, a 501(c)(3)
group with a $1.5 million annual budget can
spend $56,250 on grassroots lobbying, including
criticism of a federal incumbent candidate in
the course of lobbying on a specific bill. That
same action under the new FEC rules would cause
the charity to be regulated as a federal
political committee, with devastating impact on
its finances and perhaps even loss of its
tax-exempt status.

- The chilling effect of the proposed rules on
free speech cannot be overstated. Merely
expressing an opinion about an officeholder's
policies could turn a nonprofit group OVERNIGHT
into a federally regulated political committee
with crippling fund-raising restrictions.

- Under the most draconian proposal, the FEC
would "look back" at a nonprofit group's
activities over the past four years - before
McCain-Feingold was ever passed and the FEC ever
proposed these rules - to determine whether a
group's activities qualify it as a federal
political committee. If so, the FEC would
require a group to raise hard money to repay
prior expenses that are now subject to the new
rules. Further work would be halted until debts
to the "old" organization were repaid. This rule
would jeopardize the survival of many groups.

- The 4 year "look back" rule would cause a
nonprofit group that criticized or praised the
policies of Bush, Cheney, McCain, or Gore in
2000, or any Congressional incumbent candidate
in 2000 or 2002, to be classified as a political
committee now, even though the group has not
done so since then. This severely violates our
constitutional guarantees of due process.

- These changes would impoverish political
debate and could act as a de facto "gag rule" on
public policy advocacy. They would insulate
public officials from substantive criticism for
their positions on policy issues. They would
actually diminish civic participation in
government rather than strengthen it. This would
be exactly the opposite result intended by most
supporters of campaign finance reform.

- The FEC's proposed rule changes would
dramatically impair vigorous debate about
important national issues. It would hurt
nonprofit groups across the political spectrum
and restrict First Amendment freedoms in ways
that are unhealthy for our democracy.

- Any kind of nonprofit -- conservative,
liberal, labor, religious, secular, social
service, charitable, educational, civic
participation, issue-oriented, large, and small
-- could be affected by these rules. A vast
number would be essentially silenced on the
issues that define them, whether they are
organized as 501(c)(3), 501(c)(4), or 527
organizations.

- Already, more than five hundred nonprofit
organizations - including many that supported
McCain-Feingold like ourselves - have voiced
their opposition to the FEC's efforts to
restrict advocacy in the name of campaign
finance reform.

FOR MORE INFORMATION

Resources on FEC Proposed Rule Changes
Threatening Nonprofit Advocacy Prepared by the
FEC Working Group
http://www.pfaw.org/pfaw/general/default.aspx?oId=14670

>From two prominent reform organizations:

Soft Money and the FEC
Common Cause
http://www.commoncause.org/news/default.cfm?ArtID=282

Public Campaign Statement regarding FEC Draft
Advisory Opinion 2003-37
Public Campaign
http://www.publiccampaign.org/pressroom/pressreleases/release2004/statement02-17-04.htm