Lobbying for Nonprofits by The Advocacy Foundation, Inc.

The e-Advocate Quarterly Magazine Ezra 4: 1-24

Lobbying for Nonprofits

“Helping Individuals, Organizations & Communities Achieve Their Full Potential”

Vol. VII, Issue XXIX – Q-3 July | August | September 2021

The Advocacy Foundation, Inc. Helping Individuals, Organizations & Communities Achieve Their Full Potential

Lobbying for Nonprofits Fighting for Changes in the Science of Juvenile Justice Reform

“Helping Individuals, Organizations & Communities Achieve Their Full Potential

1735 Market Street, Suite 3750 | 100 Edgewood Avenue, Suite 1690 Philadelphia, PA 19102 Atlanta, GA 30303

John C Johnson III, Esq. Founder & CEO ______

(855) ADVOC8.0 (855) 238-6280 § (215) 486-2120

www.TheAdvocacyFoundation.org Page 2 of 56

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Table of Contents Lobbying for Nonprofits

Biblical Authority I.

Introduction

II.

Different types of Lobbying

III.

Key Players

IV.

Educators & Advisors

Effectiveness

VI.

Controversy

VII.

Reform

VIII. The Lobbying Disclosure Act IX.

US v. Harriss

Attachments A. What 501(c)(3)’s Need to Know B. Nonprofit Association Lobbying Toolkit (CO) C. General Lobbying Rules for Nonprofit Organizations

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Biblical Authority Ezra 4 (MSG) The Building Stopped: Cease Rebuilding in That City 4 1-2 Old enemies of Judah and Benjamin heard that the exiles were building The Temple of the GOD of Israel. They came to Zerubbabel and the family heads and said, ―We’ll help you build. We worship your God the same as you. We’ve been offering sacrifices to him since Esarhaddon king of Assyria brought us here.‖ 3

Zerubbabel, Jeshua, and the rest of the family heads of Israel said to them, ―Nothing doing. Building The Temple of our God is not the same thing to you as to us. We alone will build for the GOD of Israel. We’re the ones King Cyrus of Persia commanded to do it.‖ 4-5

So these people started beating down the morale of the people of Judah, harassing them as they built. They even hired propagandists to sap their resolve. They kept this up for about fifteen years, throughout the lifetime of Cyrus king of Persia and on into the reign of Darius king of Persia. 6

In fact, in the reign of Xerxes, at the beginning of his reign, they wrote an accusation against those living in Judah and Jerusalem. 7

Again later, in the time of Artaxerxes, Bishlam, Mithredath, Tabeel, and their associates wrote regarding the Jerusalem business to Artaxerxes king of Persia. The letter was written in Aramaic and translated. (What follows is written in Aramaic.) 8-16

Rehum the commanding officer and Shimshai the secretary wrote a letter against Jerusalem to Artaxerxes the king as follows: From: Rehum the commanding officer and Shimshai the secretary, backed by the rest of their associates, the judges and officials over the people from Tripolis, Persia, Erech, and Babylon, Elamites of Susa, and all the others whom the great and honorable Ashurbanipal deported and settled in the city of Samaria and other places in the land across the Euphrates. (This is the copy of the letter they sent to him.) To: King Artaxerxes from your servants from the land across the Euphrates. We are here to inform the king that the Jews who came from you to us have arrived in Jerusalem and have set about rebuilding that rebellious and evil city. They are busy at work finishing the walls and rebuilding the foundations. The king needs to know that Page 6 of 56

once that city is rebuilt and the wall completed they will no longer pay a penny of tribute, tax, or duty. The royal treasury will feel the loss. We’re loyal to the king and cannot sit idly by while our king is being insulted—that’s why we are passing this information on. We suggest that you look into the court records of your ancestors; you’ll learn from those books that that city is a rebellious city, a thorn in the side to kings and provinces, a historic center of unrest and revolt. That’s why the city was wiped out. We are letting the king know that if that city gets rebuilt and its walls restored, you’ll end up with nothing in your province beyond the Euphrates. 17-22

The king sent his reply to Rehum the commanding officer, Shimshai the secretary, and the rest of their associates who lived in Samaria and other places beyond the Euphrates. Peace be with you. The letter that you sent has been translated and read to me. I gave orders to search the records, and sure enough it turns out that this city has revolted against kings time and again—rebellion is an old story there. I find that they’ve had their share of strong kings who have taken over beyond the Euphrates and exacted taxes, tribute, and duty. So do this: Order these men to stop work immediately—not a lick of rebuilding in that city unless I order it. Act quickly and firmly; they’ve done enough damage to kings! 23

The letter of King Artaxerxes was read to Rehum and Shimshai the secretary and their associates. They lost no time. They went to the Jews in Jerusalem and made them quit work. 24

That put a stop to the work on The Temple of God in Jerusalem. Nothing more was done until the second year of the reign of Darius king of Persia.

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Introduction Lobbying in the United States describes paid activity in which special interests hire wellconnected professional advocates, often lawyers, to argue for specific legislation in decision-making bodies such as the United States Congress. It is a highly controversial phenomenon, often seen in a negative light by journalists and the American public. While lobbying is subject to extensive and often complex rules which, if not followed, can lead to penalties including jail, the activity of lobbying has been interpreted by court rulings as free speech and is therefore protected by the Constitution. Since the 1970s, lobbying activity has grown immensely in terms of the numbers of lobbyists and the size of lobbying budgets, and has become the focus of much criticism of American governance. Since lobbying rules require extensive disclosure, there is a large amount of information in the public sphere about which entities lobby, how, at whom, and for how much. The current pattern suggests much lobbying is done by corporations although a wide variety of coalitions representing diverse groups is possible. Lobbying happens at every level of government, including federal, state, county, municipal, and even local governments. In Washington, lobbying usually targets congresspersons, although there have been efforts to

influence executive agency officials as well as Supreme Court appointments. It has been the subject of academic inquiry in various fields, including law, public policy, and economics. While the number of lobbyists in Washington is over twelve thousand, those with real clout number in the dozens, and a small group of firms handles much of lobbying in terms of expenditures. A report in The Nation in 2014 suggested that while the number of 12,281 registered lobbyists was a decrease since 2002, lobbying activity was increasing and "going underground" as lobbyists use "increasingly sophisticated strategies" to obscure their activity. Analyst James Thurber estimated that the actual number of working lobbyists was close to 100,000 and the industry brings in $9 billion annually. Political scientist Thomas R. Dye once said that politics is about battling over scarce governmental resources: who gets them, where, when, why and how. Since government makes the rules in a complex economy such as the United States, it is logical that various organizations, businesses, individuals, nonprofits, trade groups, religions, charities and othersâ&#x20AC;&#x201D;which are affected by these rulesâ&#x20AC;&#x201D;will exert as much influence as they can to have rulings favorable to their cause. And the battling for influence has happened in every organized society since the beginning of civilization, whether it was Ancient Athens, Florence during the time of the Medici, Late Imperial China, and the present-day United States. Modern-day lobbyists in one sense are like the courtiers of the Ancien RĂŠgime. If voting Page 9 of 56

is a general way for a public to control a government, lobbying is a more specific, targeted effort, focused on a narrower set of issues. The term lobby has etymological roots in the physical structure of the British Parliament, in which there was an intermediary covered room outside the main hall. People pushing an agenda would try to meet with members of Parliament in this room, and they came to be known, by metonymy, as lobbyists, although one account in 1890 suggested that the application of the word "lobby" is American and that the term is not used as much in Britain. The term lobbying in everyday parlance can describe a wide variety of activities, and in its general sense, suggests advocacy, advertising, or promoting a cause. In this sense, anybody who tries to influence any political position can be thought of as "lobbying", and sometimes the term is used in this loose sense. A person who writes a letter to a congressperson, or even questions a candidate at a political meeting, could be construed as being a lobbyist. However, the term "lobbying" generally means a paid activity with the purpose of attempting to "influence or sway" a public official - including bureaucrats and elected officials - towards a desired specific action often relating to specific legislation. If advocacy is disseminating information, including attempts to persuade public officials as well as the public and media to promote the cause of something and support it, then when this activity becomes focused on specific legislation, either in support or in opposition, then it crosses the line from advocacy and becomes lobbying.

This is the usual sense of the term "lobbying." One account suggested that much of the activity of nonprofits was not lobbying per se, since it usually did not mean changes in legislation. A lobbyist, according to the legal sense of the word, is a professional, often a lawyer. Lobbyists are intermediaries between client organizations and lawmakers: they explain to legislators what their organizations want, and they explain to their clients what obstacles elected officials face. One definition of a lobbyist is someone "employed to persuade legislators to pass legislation that will help the lobbyist's employer." Many lobbyists work in lobbying firms or law firms, some of which retain clients outside lobbying. Others work for advocacy groups, trade associations, companies, and state and local governments. Lobbyists can be one type of government official, such as a governor of a state, who presses officials in Washington for specific legislation. A lobbyist may put together a diverse coalition of organizations and people, sometimes including lawmakers and corporations, and the whole effort may be considered to be a lobby; for example, in the abortion issue, there is a "pro-choice lobby" and a "pro-life lobby". An estimate from 2007 reported that more than 15,000 federal lobbyists were based in Washington, DC; another estimate from 2011 suggested that the count of registered lobbyists who have actually lobbied was closer to 12,000. While numbers like these suggest that lobbying is a widespread activity, most accounts suggest that the Washington lobbying industry is an exclusive one run by a few well-connected firms and players, with serious barriers to entry for Page 10 of 56

firms wanting to get into the lobbying business, since it requires them to have

been "roaming the halls of Congress for years and years."

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Different Types of Lobbying The Focus of Lobbying Efforts Generally, lobbyists focus on trying to persuade decision-makers: Congress, executive branch agencies such as the Treasury Department and the Securities and Exchange Commission, the Supreme Court, state governments (including governors). Federal agencies have been targeted by lobbyists since they write industry-specific rules; accordingly, interest groups spend "massive sums of money" trying to persuade them to make so-called "carve-outs" or try to block specific provisions from being enacted. A large fraction of overall lobbying is focused on only a few sets of issues, according to one report. It is possible for one level of government to lobby another level; for example, the District of Columbia has been lobbying Congress and the President for greater power, including possible statehood or voting representation in Congress; one assessment in 2011 suggested that the district needed to rethink its lobbying strategy, since its past efforts have only had "mixed results". Many executive branch agencies have the power to write specific rules and are a target of lobbying. Federal agencies such as the State Department make rules such as giving aid money to countries such as Egypt, and in one example, an Egyptian-American businessman named Kais Menoufy organized a lobby to try to halt U.S. aid to Egypt. Since the Supreme Court has the power of judicial review and can render a congressional law unconstitutional, it has great power to influence the course of American life. For example, in the Roe v. Wade

decision, it ruled on the legality of abortion. A variety of forces use lobbying tactics to pressure the court to overturn this decision. Lobbyists represent their clients' or organizations' interests in state capitols. An example is a former school superintendent who has been lobbying state legislatures in California, Michigan and Nevada to overhaul teacher evaluations, and trying to end the "Last In, First Out" teacher hiring processes; according to one report, Michelle Rhee is becoming a "political force." State governments can be lobbied by groups which represent other governments within the state, such as a city authority; for example, the cities of Tallahassee and St. Petersburg lobbied the Florida legislature using paid lobbyists to represent the city's interests. There is lobbying activity at the county and municipal levels, especially in larger cities and populous counties. For example, officials within the city government of Chicago called aldermen became lobbyists after serving in municipal government, following a oneyear period required by city ethics rules to abstain from lobbying.

Paid Versus Free Lobbying While the bulk of lobbying happens by business and professional interests who hire paid professionals, some lobbyists represent non-profits pro-bono for issues in which they are personally interested. Pro bono publico clients offer activities to meet and socialize with local legislators at events like fundraisers and awards ceremonies. Page 13 of 56

Single Issue vs Multiple Issue Lobbying Lobbies which push for a single issue have grown in importance during the past twenty years, according to one source. Corporations generally would be considered as single issue lobbies. If a corporation wishes to change public policy, or to influence legislation which impacts its success as a business, it may use lobbying as a "primary avenue" for this purpose. One research study suggested that single issue lobbies often operate in different kinds of institutional venues, sometimes bringing the same message to different groups. Lobbies which represent groups such as labor unions, business organizations, trade associations and such are sometimes considered to be multiple issue lobbies, and to succeed they must be somewhat more flexible politically and be willing to accept compromise.

Inside vs Outside Lobbying ď&#x201A;ˇ

Inside lobbying, or sometimes called direct lobbying, describes efforts by lobbyists to influence legislation or rule-making directly by contacting legislators and their assistants, sometimes called staffers or aides.

ď&#x201A;ˇ

Outside lobbying, or sometimes indirect lobbying, includes attempts by interest group leaders to mobilize citizens outside the policymaking community, perhaps by public relations methods or advertising, to prompt them to pressure public officials within the policymaking community. One example of an outside lobbying effort is a film entitled InJustice, made by a group promoting lawsuit reform.

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Key Players Lobbyists The number of registered Washington lobbyists is substantial. In 2009, the Washington Post estimated that there were 13,700 registered lobbyists, describing the nation's Capitol as "teeming with lobbyists.". In 2011, The Guardian estimated that in addition to the approximately 13,000 registered lobbyists, thousands more unregistered lobbyists could exist in Washington. The ratio of lobbyists employed by the healthcare industry, compared with every elected politician, was six to one, according to one account. Nevertheless, the numbers of lobbyists actively engaged in lobbying is considerably less, and the ones occupied with lobbying full-time and making significant money is even less. 

Law firms. Several law firms, including Patton Boggs, Akin Gump and Holland & Knight, had sizable departments devoted to so-called "government relations". One account suggested that the lobbying arms of these law firms were not held as separate subsidiaries, but that the law practices involved in government lobbying were integrated into the overall framework of the law firm. A benefit to an integrated arrangement was that the law firm and the lobbying department could "share and refer clients back and forth". Holland & Knight earned $13.9 million from lobbying revenue in 2011. One law firm employs so-called "power brokers" including former Treasury department officials such as Marti Thomas, and former presidential advisers such as Daniel Meyer. There was a report that two law firms were treating their lobbying groups as separate business units, and giving the non-lawyer lobbyists an equity stake in the firm.



Lobbying firms. These firms usually have some lawyers in them, and are often founded by former congressional staffers, legislators, or other politicians. Some lobbying groups have been bought by large advertising conglomerates.

Corporations Corporations which lobby actively tend to be few in number, large, and often sell to the government. Most corporations do not hire lobbyists. One study found that the actual number of firms which do lobbying regularly is fewer than 300, and that the percent of firms engaged in lobbying was 10% from 1998–2006, and that they were "mainly large, rich firms getting in on the fun." These firms hired lobbyists year after year, and there was not much evidence of other large firms taking much interest in lobbying. Corporations considering lobbying run into substantial barriers to entry: corporations have to research the relevant laws about lobbying, hire lobbying firms, and cultivate influential people and make connections. When an issue regarding a change in immigration policy arose, large corporations currently lobbying switched focus somewhat to take account of the new regulatory world, but new corporations—even ones likely to be affected by any possible rulings on immigration—stayed out of the lobbying fray, according to the study. Still, of all the entities doing lobbying in Washington, the biggest overall spenders are, in fact, corporations. In the first decade of the 2000s, the most lucrative clients for Gerald Cassidy's lobbying firm were corporations, displacing fees from the appropriations Page 16 of 56

business. Wall Street lobbyists and the financial industry spent upwards of $100 million in one year to "court regulators and lawmakers", particularly since they were "finalizing new regulations for lending, trading and debit card fees." One academic analysis in 1987 found that firms were more likely to spend on lobbying if they were both large and concerned about "adverse financial statement consequences" if they did not lobby. Big banks were "prolific spenders" on lobbying; JPMorgan Chase has an in-house team of lobbyists who spent $3.3 million in 2010; the American Bankers Association spent $4.6 million on lobbying; an organization representing 100 of the nation's largest financial firms called the Financial Services Roundtable spent heavily as well. A trade group representing Hedge Funds spent more than $1 million in one quarter trying to influence the government about financial regulations, including an effort to try to change a rule that might demand greater disclosure requirements for funds. Amazon.com spent $450,000 in one quarter lobbying about a possible online sales tax as well as rules

about data protection and privacy. Corporations which sell substantially to the government tend to be active lobbiers. For example, aircraft manufacturer Boeing, which has sizeable defense contracts, pours "millions into lobbying": Boeing Co. is one of the most influential companies in airline manufacturing and has continually shown its influence in lobbying Congress ... Between January and September, Boeing spent a total of $12 million lobbying according to research by the Center for Responsive Politics. Additionally, Boeing has its own political action committee, which donated more than $2.2 million to federal candidates during the 2010 Page 17 of 56

election cycle. Of that sum, 53 percent went to Democrats. ...Through September, Boeing's PAC has donated $748,000 to federal politicians. â&#x20AC;&#x201D;Chicago Sun-Times quoting OpenSecrets.org, 2011

Unions One report suggested the United Food & Commercial Workers International Union spent $80,000 lobbying the federal government on issues relating to "the tax code, food safety, immigration reform and other issues."

Other Players Other possible players in the lobbying arena are those who might influence legislation: House & Senate colleagues, public opinion in the district, the White House, party leaders, union leaders, and other influential persons and groups. Interest groups are often thought of as "nonparty organizations" which regularly try to change or influence government decision-making.

Lobbying Methods and Techniques Lobbying has much in common with highly people-intensive businesses such as management consulting and public relations, but with a political and legal sensibility. Like lawmakers, many lobbyists are lawyers, and the persons they are trying to influence have the duty of writing laws. That the disciplines of law and lobbying are intertwined could be seen in the case of a Texas lawyer who had been seeking compensation for his unfairly imprisoned client; since his exonerated-prisoner client had trouble paying the legal expenses, the lawyer lobbied the Texas state legislature to raise the state's payment for unfairly imprisoned prisoners from $50,000 per year to $80,000 per year; it succeeded, making it possible for his newly freed client to pay the lawyer's fees. Well-connected lobbyists work in Washington for years, know the issues, are highly skilled advocates, and have cultivated close connections with members of Congress, regulators, specialists, and others. They understand strategy and have excellent communication skills; many are well suited to be able to choose which clients they would like to represent. Lobbyists patiently cultivate networks of powerful people, over many years, trying to build trust and maintain confidence and friendships. When a client hires them to push a specific issue or agenda, they usually form coalitions to exert political pressure. Lobbying, as a result, depends on trying to be flexible to new opportunities, but at the same time, to act as an agent for a client. As one lobbyist put it: It's my job to advance the interests of my association or client. Period. â&#x20AC;&#x201D;comment by a lobbyist Page 18 of 56

Access is important and often means a one-on-one meeting with a legislator. Getting access can sometimes be difficult, but there are various avenues: email, personal letters, phone calls, face-to-face meetings, meals, get-togethers, and even chasing after congresspersons in the Capitol building: My style of lobbying is not to have big formal meetings, but to catch members on the fly as they're walking between the House and the office buildings. —Lobbyist, commenting on access When getting access is difficult, there are ways to wear down the walls surrounding a legislator. Jack Abramoff explained: Access is vital in lobbying. If you can't get in your door, you can't make your case. Here we had a hostile senator, whose staff was hostile, and we had to get in. So that's the lobbyist safe-cracker method: throw fundraisers, raise money, and become a big donor. —Lobbyist Jack Abramoff in 2011 Lobbyists often assist congresspersons with campaign finance by arranging fundraisers, assembling PACs, and seeking donations from other clients. Many lobbyists become campaign treasurers and fundraisers for congresspersons. This helps incumbent members cope with the substantial amounts of time required to raise money for reelection bids; one estimate was that congresspersons had to spend a third of their working hours on fundraising activity. PACs are fairly easy to set up; it requires a lawyer and about $300, roughly. An even steeper possible reward which can be used in exchange for favors is the lure of a high-paying job as a lobbyist; according to Jack Abramoff, one of the best ways to "get what he wanted" was to offer a high-ranking congressional aide a high-paying job after they decided to leave public office. When such a promise of future employment was accepted, according to Abramoff, "we owned them". This helped the lobbying firm exert influence on that particular congressperson by going through the staff member or aide. At the same time, it is hard for outside observers to argue that a particular decision, such as hiring a former staffer into a lobbying position, was purely as a reward for some past political decision, since staffers often have valuable connections and policy experience needed by lobbying firms. Research economist Mirko Draca suggested that hiring a staffer was an ideal way for a lobbying firm to try to sway their old bosses—a congressperson—in the future. Lobbyists, according to several sources, strive for communications which are clear, straightforward, and direct. In a one-on-one meeting with a lobbyist, it helps to Page 19 of 56

understand precisely what goal is wanted. A lobbyist wants action on a bill; a legislator wants to be re-elected. The idea is to persuade a legislator that what the lobbyist wants is good public policy. Lobbyists often urge lawmakers to try to persuade other lawmakers to approve a bill. Still, persuasion is a subtle business, requiring a deft touch, and carelessness can boomerang. In one instance of a public relations reversal, a lobbying initiative by the Cassidy firm which targeted Senator Robert C. Byrd blew up when the Cassidy-Byrd connection was published in the Washington Post; this resulted in a furious Byrd reversing his previous pro-Cassidy position and throwing a "theatrical temper tantrum" regarding an $18 million facility. Byrd denounced "lobbyists who collect exorbitant fees to create projects and have them earmarked in appropriation bills... for the benefit of their clients." Since it often takes a long time to build the network of relationships within the lobbying industry, ethical interpersonal dealings are important. A maxim in the industry is for lobbyists to be truthful with people they are trying to persuade; one lobbyist described it this way: "what you've basically got is your word and reputation". An untruth, a lie is too risky to the successful development of a long-term relationship and the potential gain is not worth the risk. One report suggested that below-the-belt tactics generally do not work. One account suggest that groping for "personal dirt" on opponents was counterproductive since it would undermine respect for the lobbyist and their clients. And, by reverse logic, if an untruth is told by an opponent or opposing lobby, then it makes sense to publicize it. But the general code among lobbyists is that unsubstantiated claims are bad business. Even worse is planting an informant in an opponent's camp, since if this subterfuge is ever discovered, it will boomerang negatively in a hundred ways, and credibility will drop to zero. The importance of personal relationships in lobbying can be seen in the state of Illinois, in which father-son ties helped push a smart-grid energy bill, although there were accusations of favoritism. And there is anecdotal evidence that a business firm seeking to profitably influence legislation has to pay particular attention to which lobbyist it hires. Strategic considerations for lobbyists, trying to influence legislation, include "locating a power base" or a constituency logically predisposed to support a given policy. Timing, as well, is usually important, in the sense of knowing when to propose a certain action and having a big-picture view of the possible sequence of desired actions. Strategic lobbying tries to estimate the possible responses of different groups to a possible lobby approach; one study suggested that the "expectations of opposition from other interests" was a key factor helping to determine how a lobby should operate. Increasingly, lobbyists seek to put together coalitions and use outside lobbying by swaying public opinion. Bigger, more diverse and deep pocketed coalitions tend to be more effective in outside lobbying, and the "strength in numbers" principle often applies. Interest groups try to build "sustainable coalitions of similarly situated individual organizations in pursuit of like-minded goals". According to one study, it is often difficult for a lobbyist to influence a staff member in Congress directly, since staffers tend to be Page 20 of 56

well-informed and subject to views from competing interests. As an indirect tactic, lobbyists can try to manipulate public opinion which, in turn, can sometimes exert pressure on congresspersons. Activities for these purposes include trying to use the mass media, cultivating contacts with reporters and editors, encouraging them to write editorials and cover stories to influence public opinion, which may have the secondary effect of influencing Congress. According to analyst Ken Kollman, it is easier to sway public opinion than a congressional staff member since it is possible to bombard the public with "half-truths, distortion, scare tactics, and misinformation." Kollman suggests there should be two goals: (1) communicate that there is public support behind an issue to policymakers and (2) increase public support for the issue among constituents. Kollman suggested outside lobbying was a "powerful tool" for interest group leaders. In a sense, using these criteria, one could consider James Madison as having engaged in outside lobbying, since after the Constitution was proposed, he wrote many of the 85 newspaper editorials arguing for people to support the Constitution, and these writings later became the Federalist Papers. As a result of this "lobbying" effort, the Constitution was ratified, although there were narrow margins of victory in four of the state legislatures. Lobbying today generally requires mounting a coordinated campaign, using targeted blitzes of telephone calls, letters, emails to congressional lawmakers, marches down the Washington Mall, bus caravans, and such, and these are often put together by lobbyists who coordinate a variety of interest group leaders to unite behind a hopefully simple easy-to-grasp and persuasive message. It is important for lobbyists to follow rules governing lobbying behavior. These can be difficult and complex, take time to learn, require full disclosure, and mistakes can land a lobbyist in serious legal trouble. Gifts for congresspersons and staffers can be problematic, since anything of sizeable value must be disclosed and generally such gifts are illegal. Failure to observe gift restrictions was one factor which caused lobbyist Jack Abramoff to eventually plead guilty to a "raft of federal corruption charges" and led to convictions for 20 lobbyists and public officials, including congressperson Bob Ney and Bush deputy interior secretary Stephen Griles. Generally gifts to congresspersons or their staffs or federal officials are not allowed, but with a few exceptions: books are permitted, provided that the inside cover is inscribed with the congressperson's name and the name of one's organization. Gifts under $5 are allowed. Another exception is awards, so it is permitted to give a congressperson a plaque thanking him or her for support on a given issue. Cash gifts payable by check can only be made to campaign committees, not to a candidate personally or to his or her staff; it is not permitted to give cash or stock. Wealthy lobbyists often encourage other lobbying clients to donate to a particular cause, in the hope that favors will be returned at a later date. Lobbyist Gerald Cassidy encouraged other clients to give for causes dear to a particular client engaged in a current lobbying effort. Some lobbyists give their own money: Cassidy reportedly donated a million dollars on one project, according to one report, which noted that Cassidy's firm received "many times that much in fees from their clients" paid in monthly Page 21 of 56

retainers. And their clients, in turn, had received "hundreds of millions in earmarked appropriations" and benefits worth "hundreds of millions more". The dynamics of the lobbying world make it fairly easy for a semi-skilled operator to defraud a client. This is essentially what happened in the Jack Abramoff Indian lobbying scandal. There was a concerned clientâ&#x20AC;&#x201D;in this case, an Indian casinoâ&#x20AC;&#x201D;worried about possible ill-effects of legislation on its gambling business; and there were lobbyists such as Jack Abramoff who knew how to exploit these fears. The lobbyists actively lobbied against their own casino-client as a way to ratchet up their fears of adverse legislation as well as stoke possible future contributions; the lobbyists committed other violations such as grossly overbilling their clients as well as violating rules about giving gifts to congresspersons. Numerous persons went to jail after the scandal. The following are factors which can make fraud a fairly easy-to-do activity: that lobbyists are paid only to try to influence decision-makers, and may or may not succeed, making it hard to tell if a lobbyist did actual work; that much of what happens regarding interpersonal relations is obscure despite rather strict disclosure and transparency requirements; that there are sizable monies involvedâ&#x20AC;&#x201D;factors such as these almost guarantee that there will be future scandals involving fraudulent lobbying activity, according to one assessment. A fraud similar to Abramoff's was perpetrated in Maryland by lobbyist Gerald E. Evans, who was convicted of mail and wire fraud in 2000 in a case involving falsely creating a "fictitious legislative threat" against a client, and then billing the client to work against this supposed threat. Lobbyists routinely monitor how congressional officials vote, sometimes checking the past voting records of congresspersons. One report suggested that reforms requiring "publicly recorded committee votes" led to more information about how congresspersons voted, but instead of becoming a valuable resource for the news media or voters, the information helped lobbyists monitor congressional voting patterns. As a general rule, lawmakers must vote as a particular interest group wishes them to vote, or risk losing support. Strategy usually dictates targeting specific office holders. On the state level, one study suggested that much of the lobbying activity targeted the offices of governors as well as state-level executive bureaucrats; state lobbying was an "intensely personal game" with face-to-face contact being required for important decisions. Lobbying can be a counteractive response to the lobbying efforts of others. One study suggested this was particularly true for battles surrounding possible decisions by the Supreme Court which is considered as a "battleground for public policy" in which differing groups try to "etch their policy preferences into law". Sometimes there are lobbying efforts to slow or derail other legislative processes; for example, when the FDA began considering a cheaper generic version of the costly anti-clotting drug Lovenox, the French pharmaceutical firm Sanofi "sprang into action to try and slow the process." Lobbyists are often assembled in anticipation of a potential takeover bid, particularly when there are large high-profile companies, or a large foreign company involved, and substantial concern that the takeover may be blocked by regulatory authorities. Page 22 of 56

An example may illustrate. The company Tyco had learned that there had been discussion about a possible new tax provision that might have cost it $4 billion overall. So the firm hired Jack Abramoff and paid him a retainer of $100,000 a month. He assembled dozens of lobbyists with connections to key congressional committees with the ultimate objective being to influence powerful Senator Charles Grassley. Abramoff began with a fundraising effort to round up "every check" possible. He sought funds from his other lobbying clients: I had my clients understand that just as other clients who had nothing to do with them, would step up and give contributions to congressmen they needed to have some sway with, so similarly they needed to do the same. I went to every client I could, and rounded up every check we could for him. â&#x20AC;&#x201D;Lobbyist Jack Abramoff in 2011

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Educators & Advisors Since government has grown increasingly complex, having to deal with new technologies, the task of writing rules has become more complex. "Government has grown so complex that it is a virtual certainty that more than one agency would be affected by any piece of legislation," according to one view. Lobbyists, therefore, spend considerable time learning the ins and outs of issues, and can use their expertise to educate lawmakers and help them cope with difficult issues. Lobbyists' knowledge has been considered to be an intellectual subsidy for lawmakers. Some lobbyists become specialists with expertise in a particular set of issues, although one study suggested that of two competing criteria for lobbyistsâ&#x20AC;&#x201D;expertise or accessâ&#x20AC;&#x201D;that access was far more important. Lobby groups and their members sometimes also write legislation and whip bills, and in these instances, it is helpful to have lawyers skilled in writing legislation to assist with these efforts. It is often necessary to research relevant laws and issues beforehand. In many instances lobbyists write the actual text of the proposed law, and hire lawyers to "get the language down pat"â&#x20AC;&#x201D;an omission in wording or an unclear phrase may open up a loophole for opponents to wrangle over for years. And lobbyists can often advise a lawmaker on how to navigate the approval process. Lobbying firms can serve as mentors and guides. For example, after months of protesting by the Occupy Wall Street, one lobbying firm prepared a memo to its clients warning that Republicans may "turn on big banks, at least in public" which may have the effect of "altering the political ground for years to come." Here are parts of the memo which were broadcast on the MSNBC network. Leading Democratic party strategists have begun to openly discuss the benefits of embracing the growing and increasingly organized Occupy Wall Street (OWS) movement ... This would mean more than just short-term discomfort for Wall Street firms. If vilifying the leading companies of this sector is allowed to become an unchallenged centerpiece of a coordinated Page 25 of 56

Democratic campaign, it has the potential to have very long-lasting political, policy and financial impacts on the companies in the center of the bullseye. ... the bigger concern should be that Republicans will no longer defend Wall Street companies... â&#x20AC;&#x201D;Clark, Lytle, Geduldig, Cranford, law/lobbying firm, to a Wall Street client

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Effectiveness The general consensus view is that lobbying generally works overall in achieving sought-after results for clients, particularly since it has become so prevalent with substantial and growing

financial downturn of the past few years. A 2009 study by University of Kansas professor Raquel Meyer Alexander suggested that lobbying brought a substantial return on investment. A 2011 meta-analysis of previous research findings found a positive correlation between corporate political activity and firm performance. There is widespread agreement that a key ingredient in effective lobbying is money. This view is shared by players in the lobbying industry. Deep pockets speak; the money trumps it all. â&#x20AC;&#x201D;Anonymous lobbyist, 2002

budgets, although there are dissenting views. A study by the investmentresearch firm Strategas which was cited in The Economist and the Washington Post compared the 50 firms that spent the most on lobbying relative to their assets, and compared their financial performance against that of the S&P 500 in the stock market; the study concluded that spending on lobbying was a "spectacular investment" yielding "blistering" returns comparable to a high-flying hedge fund, even despite the

Still, effectiveness can vary depending on the situational context. One view is that large multiple-issue lobbies tend to be effective in getting results for their clients if they are sophisticated, managed by a legislative director familiar with the art of compromise, and play "political hardball". But if such lobbies became too big, such as large industrial trade organizations, they became harder to control, often leading to lackluster results. A study in 2001 which compared lobbying activity in USstyle congressional against Europeanstyle parliamentary systems, found that in congressional systems there was an advantage favoring the "agendasetters", but that in both systems, "lobbying has a marked effect on policies". One report suggested that the 1,000 registered lobbyists in California were highly influential such that they were called the Third House.

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Studies of lobbying by academics in previous decades painted a picture of lobbying being an ineffectual activity, although many of these studies were done before lobbying became prevalent in American politics. A study in 1963 by Bauer, Pool, & Dexter suggested lobbyists were mostly "impotent" in exerting influence. Studies in the early 1990s suggested that lobbying exerted influence only "marginally", although it suggested that when lobbying activity did achieve political impacts, that the results of the political choices were sufficient to justify the expenditure on lobbying. A fairly recent study in 2009 is that Washington lobbies are "far less influential than political rhetoric suggests", and that most lobbying campaigns do not change any views and that there was a strong entrenchment of the status quo. But it depends on what is seen as "effective", since many lobbying battles result in a stalemate, since powerful interests battle, and in many cases, merely keeping the "status quo" could be seen as a victory of sorts. What happens often is that varying coalitions find themselves in "diametrical opposition to each other" and that stalemates result. There is anecdotal evidence from numerous newspaper accounts of different groups battling that lobbying activity usually achieves results. For example, the Obama administration pledged to stop for-profit colleges from "luring students with false promises", but with this threat, the lobbying industry sprang into action with a $16 million campaign, and their efforts succeeded in watering down the proposed restrictions.

How did the lobbying campaign succeed? Actions taken included: 1. Spent $16 million; 2. Hired "all-star list" of prominent players including Democrats with White House ties; 3. Plotted strategy; 4. Worked with "fund-raising bundler" Jamie Rubin, a former Obama communications director; 5. Won support from influential people including congressperson-turned-lobbyist Dick Gephardt, senator-turnedlobbyist John Breaux, lobbyist Tony Podesta, Washington Post CEO Donald E. Graham, education entrepreneur and University of Phoenix founder John Sperling, others; 6. Key leaders made "impassioned appeals"; 7. Mobilization effort produced 90,000 public documents to the Education department advocating against changes.

And sometimes merely keeping the status quo could be seen as a victory. When gridlock led to the supposed supercommittee solution, numerous lobbyists from all parts of the political spectrum worked hard, and a stalemate resulted, but with each side defended their own special interests. And while money is an important variable, it is one among many variables, and there have been instances in which huge sums have been spent on lobbying only to have the result backfire. One report suggested that the communications firm AT&T failed to achieve substantial results from its lobbying efforts in 2011, since government antitrust officials Page 29 of 56

rejected its plan to acquire rival TMobile. Lobbying is a practical necessity for firms that "live and die" by government decisions, such as large government contractors such as Boeing. A study done in 2006 by Bloomberg News suggested that lobbying was a "sound money-making strategy" for the 20 largest federal contractors. The largest contractor, Lockheed Martin Corporation, received almost $40 billion

in federal contracts in 2003-4, and spent $16 million on lobbying expenses and campaign donations. For each dollar of lobbying investment, the firm received $2,517 in revenues, according to the report. When the lobbying firm Cassidy & Associates began achieving results with earmarks for colleges and universities and medical centers, new lobbying firms rose to compete with them to win "earmarks of their own", a clear sign that the lobbying was exceedingly effective.

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Controversy There is general consensus that lobbying has been a significant corrupting influence in American politics, although criticism is not universal, and there have been arguments put forward to suggest that the system is working properly.

Unfavorable image Generally the image of lobbyists and lobbying in the public sphere is not a positive one, although this is not a universal sentiment. Lobbyists have been described as a "hired gun" without principles or positions. Scandals involving lobbying have helped taint the image of the profession, such as ones involving Jack Abramoff, Randy "Duke" Cunningham, and Bob Ney and others, and which featured words such as "bribery", "lobbyist", "member of Congress" and "prison" tending to appear together in the same articles. Negative publicity can sully lobbying's image to a great extent: high-profile cases of lobbying fraud such as Abramoff's; dubious fatherson exchange-of-favors ties; public officials such as Newt Gingrich being accused and then denying accusations of having done lobbying and earning $1.6 million from "strategic advice". There are a variety of reasons why lobbying has acquired a negative image in public consciousness. While there is much disclosure, much of it happens in hard-to-disclose personal meetings, and the resulting secrecy and confidentiality can serve to lower lobbying's status.

Revolving door Since the 1980s, congresspersons and staffers have been "going downtown"— becoming lobbyists—and the big draw is money. The "lucrative world of K Street" means that former congresspersons with even "modest seniority" can move into jobs paying $1 million or more annually, without including bonuses for bringing in new clients. The general concern of this revolving-door activity is that elected officials— persons who were supposed to represent the interests of citizens—have instead become entangled with the big-money interests of for-profit corporations and interest groups with narrow concerns, and that public officials have been taken over by private interests. Page 32 of 56

In July 2005, Public Citizen published a report entitled "The

Journey from Congress to K Street": the report analyzed hundreds of lobbyist registration documents filed in compliance with

The Lobbying Disclosure Act and The Foreign Agents Registration Act among other sources. It found that since 1998, 43 percent of the 198 members of Congress who left government to join private life have registered to lobby. A similar report from the Center for Responsive Politics found 370 former members were in the "influence-peddling business", with 285 officially registered as federal lobbyists, and 85 others who were described as providing "strategic advice" or "public relations" to corporate clients. The Washington Post described these results as reflecting the "sea [of] change that has occurred in lawmakers' attitudes toward lobbying in recent years." The report included a case study of one particularly successful lobbyist, Bob Livingston, who stepped down as Speaker-elect and resigned his seat in 1999. In the six years since his resignation, The Livingston Group grew into the 12th largest non-law lobbying firm, earning nearly $40 million by the end of 2004. During roughly the same time period, Livingston, his wife, and his two political action committees (PACs) contributed over $500,000 to the campaign funds of various candidates. Numerous reports chronicle the revolving door phenomenon. A 2011 estimate suggested that nearly 5,400 former congressional staffers had become federal lobbyists over a ten-year period, and 400 lawmakers made a similar jump. It is a "symbiotic relationship" in the sense that lobbying firms can exploit the "experience and connections gleaned from working inside the legislative process", and lawmakers find a "ready pool of experienced talent." There is movement in the other direction as well: one report found that 605 former lobbyists had taken jobs working for lawmakers over a tenyear period. A study by the London School of Economics found 1,113 lobbyists who had formerly worked in lawmakers' offices. The lobbying option is a way for staffers and lawmakers to "cash in on their experience", according to one view. Before the 1980s, staffers and aides worked many years for congresspersons, sometimes decades, and tended to stay in their jobs; now, with the lure of higher-paying lobbying jobs, many would quit their posts after a few years at most to "go downtown." And it is not just staffers, but lawmakers as well, including high-profile ones such as congressperson Richard Gephardt. He represented a "working-class" district in Page 33 of 56

Missouri for many years but after leaving Congress, he became a lobbyist. In 2007, he began his own lobbying firm called "Gephardt Government Affairs Group" and in 2010 it was earning close to $7 million in revenues with clients including Goldman Sachs, Boeing, Visa Inc., Ameren Corporation, and Waste Management Inc. Senators Robert Bennett and Byron Dorgan became lobbyists too. Mississippi governor Haley Barbour became a lobbyist. In 2010, former representative Billy Tauzin earned $11 million running the drug industry's lobbying organization. called the Pharmaceutical Research and Manufacturers of America. Many former representatives earned over $1 million in one year, including James Greenwood and Daniel Glickman.

Insider's game A similar concern voiced by critics of lobbying is that Washington politics has become dominated by elites, and that it is an "insider's game" excluding regular citizens and which favors entrenched firms. Individuals generally can not afford to lobby, and critics question whether corporations with "deeper pockets" should have greater power than regular persons. In this view, the system favors the rich, such that the "rich have gotten richer, the weak weaker", admits lobbyist Gerald Cassidy. There is concern that those having more money and better political connections can exert more influence than others. However, analyst Barry Hessenius made a case that the excessive for-profit lobbying could be counteracted if there were more efforts to increase nonprofit lobbying and boost their effectiveness. There is so much money that it has been described as a "flood" that has a "corrupting influence", so that the United States appears to be "awash" in interest groups. If coalitions of different forces battle in the political arena for favorable treatment and better rules and tax breaks, it can be seen as fair if both sides have equal resources and try to fight for their interests as best they can. Gerald Cassidy said: In a lot of areas, the stakes are between big companies, and it's hard to argue that one solution is better than another solution with regard to the consumer's interest ... The issue ... is whether Company A's solution, or Company B's solution, based on their technology or their footprint, is the right one. â&#x20AC;&#x201D;Lobbyist Gerald Cassidy

A related but slightly different criticism is that the problem with lobbying as it exists today is that it creates an "inequity of access to the decision-making process". As a result, important needs get left out of the political evaluation, such that there are no antihunger lobbies or lobbies seeking serious solutions to the problem of poverty. Nonprofit advocacy has been "conspicuously absent" from lobbying efforts, according to one view. Critics suggest that when a powerful coalition battles a less powerful one, or one which is poorly connected or underfunded, the result may be seen as unfair and potentially harmful for the entire society. The increasing number of former lawmakers becoming lobbyists has led Senator Russ Feingold (D-WI) to propose paring back the many Capitol Hill privileges enjoyed by former senators and representatives. His plan would deprive lawmakers-turned-lobbyists of privileges such as unfettered access to Page 34 of 56

otherwise "members only" areas such as the House and Senate floors and the House gym.

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Reform

Critics suggest that Congress has the power to fix itself, but is reluctant to sacrifice money and power. One report suggested that those in control had an "unbroken record of finding ways to navigate around reform laws or turn regulatory standards to their own advantage." There are counterarguments that the system is working as it should, despite being rather messy. According to this line of argument, the Madisonian view of politicsâ&#x20AC;&#x201D;in which factions were supposed to compete with other factionsâ&#x20AC;&#x201D;is working exactly as it should. Competing factions, or in this case, competing interest groups, square off. Battling happens within the federal

government, but instead of by settling arguments by elections, arguments are settled by powerful interest groups fighting each other, often financially. And it might appear to members of groups which lost in a lobbying battle that the reason for their loss was that the other side lobbied unfairly using more money. There are numerous instances in which opposed lobbies stalemate, and instances in which these stalemates have been seen as a positive result. And sometimes powerful financial interests lose the battle. Lobbying brings valuable information to policymakers, according to another argument in favor of lobbying. Since lobbyists often become highly Page 37 of 56

knowledgeable about a specific issue by studying it in depth over years, they can bring considerable expertise to help legislators avoid errors as well as grasp the nuances of complex issues. This information can also help Congress oversee numerous federal agencies which often regulate complex industries and issue highly detailed and specific rulings. Accordingly, it is difficult for Congress to keep track of what these agencies do. It has been argued that lobbyists can help Congress monitor this activity by possibly raising "red flags" about proposed administrative rulings. Further, congresspersons can quickly gauge where they stand about a proposed administrative ruling simply by seeing which lobbying groups support the proposal, and which oppose it. Another argument in support of lobbying is that different interest groups and lobbyists, while trying to build coalitions and win support, often amend or soften or change their positions in this process, and that interest groups and lobbyists regulate each other, in a sense. But a more general sentiment supporting the lobbying arrangement is that every citizen can be construed as being "represented" by dozens of special interests: Every citizen is a special interest... Blacks, consumers, teachers, prochoicers, gun control advocates, handicapped people, aliens, exporters, and salesmen -- are all special interests... There is not an American today who is not represented (whether he or she knows it or not) by at least a dozen special interest

groups. ... One person's special interest is another person's despotism... â&#x20AC;&#x201D;Donald E. deKieffer, The Citizen's Guide to Lobbying Congress, 2007

If powerful groups such as the oil industry succeed in winning a battle in government, consumers who drive gaspowered cars stand to benefit a little bit, according to this view. Even readers of Wikipedia could be conceived as being a special interest and represented by various lobbies. For example, opponents of the Stop Online Piracy Act believed that the act might restrict sites such as Wikipedia; on January 18, 2012, as a form of protest and as a way to encourage readers and contributors of Wikipedia to write their congresspersons, the online encyclopedia was "blacked out for a day as part of an effort to lobby the government. Another view in support of lobbying is that it serves a helpful purpose as helping guard against extremism. According to this view, lobbying adds "built-in delays" and permits and encourages opposing lobbies to battle. In the battling, possibly damaging decrees and incorrect decisions are stymied by seemingly unhelpful delays and waits. A slightly different view is that lobbying is no different from other professions: Lobbying is no more perfect than is the practice of law or the practice of medicine. â&#x20AC;&#x201D;Lobbyist Gerald S. J. Cassidy, 2007

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The Lobbying Disclosure Act The Lobbying and Disclosure Act of 1995 (2 U.S.C. ยง 1601) was legislation aimed at bringing a level of accountability to federal lobbying practices in the United States. The law was amended substantially by the Honest Leadership and Open Government Act of 2007. Under provisions which took effect on January 1, 2006, lobbyists are required to register with the Clerk of the House of Representatives and the Secretary of the Senate. Anyone failing to do so is punishable by a civil fine of up to $50,000. The clerk and secretary must refer any acts of non-compliance to the United States Attorney for the District of Columbia. The LDA defines a number of provisions attempting to maintain a degree of transparency in the activities of lobbyists. The legislation defines a client as "any person or entity that employs or retains another person for financial or other compensation to conduct lobbying activities on behalf of that person or entity. A person or entity whose employees act as lobbyists on its own behalf is both a client and an employer of such employees". The legislation also includes lobbyists that are affected: "The term "lobbyist" means any individual who is employed or retained by a client for financial or other compensation for services that include more than one lobbying contact, other than an individual whose lobbying activities constitute less than 20 percent of the time engaged in the services provided by such individual to that client over a six-month period". Also included in the legislation are the definitions of what actions must be disclosed which includes lobbying to certain members of the Executive Branch who are included on specific payrolls. Also included are members of Congress.

Loopholes The legislation does not include those lobbyists whose "activities constitute less than 20 percent of the time engaged in services", thus failing to regulate grassroots (small donors) lobbying. The LDA includes a number of other "thresholds" that define what must be recorded. Any organization that contributes more than $10,000 towards lobbying activities must also be registered. Amounts even slightly below this threshold are exempt from reporting. The outline for registration includes "name, address, business telephone number, and principal place of business of the registrant, and a general description of its business or activities", as well as for the client. The register must also include a statement of what issues the registrant expects to lobby or what may have already been lobbied. After recording, the records are maintained by the Clerk of the House and the Secretary of the Senate. Due to severe understaffing, these two offices are unable to check for illegal activities or corrupt practices, which is the most glaring shortcoming of the legislation.

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During a hearing before the Senate Committee on Rules and Administration, Senator Christopher Dodd stated that ―[s]".Θ< the Office of Public Records has referred over 2,000 cases to the Department of Justice, and nothing’s been heard from them again‖.

Disclosure and Domestic Regulations Generally, the United States requires systematic disclosure of lobbying, and it may be one of the few countries to have such extensive requirements. Disclosure in one sense allows lobbyists and public officials to justify their actions under the banner of openness and with full compliance of the law. The rules often specify how much a lobbyist can spend on specific activities, and how to report expenses; many of the laws and guidelines are specified in the Lobbying Disclosure Act of 1995. Transparency and disclosure requirements mean that there are volumes of statistics available for all kinds of analyses—by journalists, by the public, by rival lobbying efforts. Researchers can subdivide lobbying expenditures by numerous breakdowns, such as by contributions from energy companies. Sometimes defining clearly who is a "lobbyist" and what precisely are lobbying activities can be difficult. According to the Lobbying Disclosure Act, several authorized definitions include: 



Lobbying activities means "lobbying contacts and efforts in support of such contacts, including preparation and planning activities, research and other background work that is intended, at the time it is performed, for use in contacts, and coordination with the lobbying activities of others." Lobbying contact means "any oral or written communication (including an electronic communication) to a covered executive branch official or a covered legislative branch official".

Still, distinguishing lobbyists from a strategic adviser can be difficult, since the duties of each can often overlap and are hard to define precisely. There have been issues raised about what constitutes the difference between a lobbyist and a bundler; one report described bundlers as "supporters who contribute their own money to his campaign and solicit it from others", and there was a question whether such persons were really lobbyists involved with raising campaign monies for the election of Barack Obama, and whether Obama had broken his own pledge not to receive money from lobbyists. The legal ramifications of lobbying are further intertangled with aspects of campaign finance reform, since lobbyists often spend time seeking donations for the reelection efforts of congresspersons; sorting out these issues can pose ethical challenges. There are numerous regulations governing the practice of lobbying, often ones requiring transparency and disclosure. People paid to lobby must register with the secretary of the Senate and the clerk of the House of Representatives within 45 days of contacting a legislator for the first time, or 45 days after being employed. An exception is that lobbyists who earn less than $3,000 per client for each fiscal quarter, or whose total lobbying expenses are less than $11,500 each quarter, do not need to register. PartPage 41 of 56

time lobbyists are exempt from registering unless they spend more than 20% of their working hours doing lobbying activities in any quarter. If lobbyists have two or more contacts with a legislator as a lobbyist, then they must register. Requirements for registering also apply to companies that specialize in lobbying, or ones that have an inhouse lobbyist, particularly if they spend more than $11,500 on lobbying. Generally, nonprofit organizations, other than churches, are exempt from registering if they hire an outside lobbying firm. Filing must be made each quarter, and a separate file is needed for each of the lobbyist's clients, and include information such as the name and title of the client, an estimate of lobbying expenses, and an estimate of income the lobbyist achieved after doing the lobbying. States, in addition, are moving in the direction of greater disclosure and transparency regarding lobbying activities. California has an online database called Cal-Access although there were reports that it has been underfunded. Money collected from registration fees are often used to pay for the disclosure services such as Cal-Access. There were complaints in Illinois that the disclosure requirements were often not rigorous enough and allowed lobbyists to work "without public notice" and with possible "conflicts of interest". Many local municipalities are requiring legislative agents register as lobbyists to represent the interests of clients to local city council members such as in the swing state of Ohio cities such as Columbus and Cincinnati. Laws requiring disclosure have been more prevalent in the twentieth century. In 1946, there was a so-called "sunshine law" requiring lobbyists to disclose what they were doing, on whose behalf, and how much they received in payment. The resulting Federal Regulation of Lobbying Act of 1946 governed lobbying rules up until 1995 when the Lobbying Disclosure Act replaced it. The Federal Election Campaign Act of 1971, later amended in 2002 as the McCain Feingold Act, had rules governing campaign contributions. Each branch of Congress has rules as well. Legislation generally requires reports containing an accounting of major expenditures as well as legislation that was influenced; the wording of some of the pertinent laws can be found in 2 U.S.C. ch. 26. Lobbying law is a constantly evolving field; the American Bar Association published a book of guidelines in 2009 with over 800 pages. The laws are often rather specific, and when not observed, can lead to serious trouble. Failing to file a quarterly report, or knowingly filing an incorrect report, or failing to correct an incorrect report, can lead to fines up to $200,000 and imprisonment up to five years. Penalties can apply to lobbyists who fail to list gifts made to a legislator. In other situations, the punishment can be light: for example, Congressional aide-turned-lobbyist Fraser Verrusio spent a few hours in jail after pleading guilty to report taking a client to a World Series baseball game and failing to report it. Tax rules can apply to lobbying. In one situation, the charity Hawaii Family Forum risked losing its tax-exempt status after it had engaged in lobbying activity; federal tax law requires charities such as that one to limit their lobbying to 20% of their overall expenditures or else be eligible for being taxed like a for-profit corporation.

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Lobbyists sometimes support rules requiring greater transparency and disclosure: Our profession is at a critical point where we can either embrace the constructive changes and reforms by Congress or we can seek out loopholes and continue the slippery slide into history along side the ranks of snake oil salesmen. â&#x20AC;&#x201D;Lobbyist Gerald S. J. Cassidy, 2007

Scandals can spur impetus towards greater regulation as well. The Jack Abramoff Indian lobbying scandal, which started in the 1990s and led to a guilt plea in 2006, inspired the 'Legislative Transparency and Accountability Act of 2006' (S. 2349). According to Time Magazine the Senate bill: 1. barred lobbyists themselves from buying gifts and meals for legislators, but left a loophole in which firms and organizations represented by those lobbyists could still dole out gifts and perks; 2. allowed privately funded trips if lawmakers got prior approval from a commissioned ethics committee; 3. required lobbyists to file frequent and detailed activity reports and have them posted publicly. The bill was approved in 2006 by a 90-8 vote. In 1995, the 104th Congress tried to reform Lobbying by passing the Lobbying Disclosure Act of 1995 which defines and requires lobbyists who are compensated for their actions to register with congressional officials. The legislation was later amended by the Lobbying Disclosure Technical Amendments Act of 1998. There were subsequent modifications leading to the Honest Leadership and Open Government Act of 2007. The Lobbying Transparency and Accountability Act of 2006 (H.R. 4975) legislation modified Senate rules, although some senators and a coalition of goodgovernment groups assailed the bill as being too weak. The Honest Leadership and Open Government Act of 2007 was a comprehensive ethics and lobbying reform bill, (H.R. 2316), which passed in 2007 in the House and Congress by a large majority. A parallel Senate version of the legislation, (S. 1), passed in 2007 by a nearly unanimous vote. After the House & Senate resolved their differences and passed an amended revision, President Bush signed the enrolled bill into law (Pub.L. 110â&#x20AC;&#x201C;81). Some states have considered banning government employees permanently from lobbying on issues they had worked on. For example, there was a proposal along these lines to prevent county employees in Maryland from ever lobbying on issues they had worked on. The proposal insisted that county officials post financial disclosures as well as prohibit gifts from contractors. Jack Abramoff, emerging from prison, has spoken publicly about lobbying. In his view, regulations designed to rein in the excesses of lobbying have not been effective, and that reforms and regulations have not cleaned up the system "at all". Abramoff said lobbyists could "find a way around just about any reform Congress enacted", and gave an example:

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You can't take a congressman to lunch for $25 and buy him a hamburger or a steak or something like that ... But you can take him to a fund-raising lunch and not only buy him that steak, but give him $25,000 extra and call it a fund-raiser -- and have all the same access and all the same interactions with that congressman. â&#x20AC;&#x201D;Jack Abramoff, commenting on 60 Minutes, according to CNN

A similar view suggested that lobbying reform efforts have been "fought tooth and nail to prevent its passage" since the people with the power to reform would curtail their own powers and income flows.

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US v. Harriss 347 U.S. 612 (1954) United States v. Harriss, 347 U.S. 612 (1954), was a U.S. Supreme Court case applied directly to the Regulation of Lobbying Act. Lobbyists challenged the Regulation of Lobbying Act for being unconstitutionally vague and unclear. In Harriss, the Supreme Court responded by upholding the act's constitutionality, but also by narrowing the scope and application of the act. The Court ruled that the act applies only to paid lobbyists who directly communicate with members of Congress on pending or proposed federal legislation. This means that lobbyists who visit with congressional staff members rather than members of Congress themselves are not considered lobbyists. In addition, the act covers only attempts to influence the passage or defeat of legislation in Congress, and excludes other congressional activities. Further, the act applies to and restricts only individuals who spend at least half of their time lobbying.

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Notes ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ Page 48 of 56

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References 1. http://en.wikipedia.org/wiki/Lobbying_in_the_United_States 2. http://en.wikipedia.org/wiki/Lobbying_Disclosure_Act_of_1995 3. http://en.wikipedia.org/wiki/United_States_v._Harriss 4. http://www.publiccounsel.org/tools/assets/files/cdp_enews_mar2011.pdf 5. http://www.coloradononprofits.org/wp-content/uploads/Colorado-NonprofitAssociation-lobbying-toolkit-v2.pdf 6. http://www.afterschoolalliance.org/documents/Toolbox/General%20Lobbying%20 Rules%20for%20NonProfit%20Orgs%2008%2014%2008.pdf 7. http://www.harmoncurran.com/library/Lobbying%20Rule%20Article%20%20copyright%20HCSE.pdf 8. http://www.peaceaction.org/sites/default/files/AFSC%20Move%20the%20Money%20Toolkit%20Lo bbying%20101.pdf

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Attachment A What 501(c)(3)â&#x20AC;&#x2122;s Need to Know

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Public Counsel's Community Development Project March 2011 E-Newsletter

Budget Cuts, Lobbying and 501(c)(3)s: What Your Organization Needs To Know

PLUS: Register Now for FREE Legal Trainings for Nonprofits Budget Cuts, Lobbying and 501(c)(3)s

In This Issue... Budget Cuts, Lobbying and Nonprofits

It seems like every day brings news of a more drastic budget cut, defunding notification or payment in lieu of tax proposal that will negatively impact our 501(c)(3) clients and the low income individuals that they serve. Nonprofits do not need to be silent in the face of these threats for fear of jeopardizing their tax exempt status. By NOT lobbying for themselves or their clients, 501(c)(3) organizations fail to fully exercise their rights under federal tax laws which allow for generous lobbying limits. In this newsletter we will discuss the basic lobbying rules nonprofits need to know before engaging in lobbying activity. Please note that these rules are applicable to 501(c)(3) organizations classified as public charities. Private foundations are not allowed to engage in lobbying activity (though they are able to indirectly support nonprofits that lobby). "Lobbying" for federal income tax purposes is a communication intended to influence specific legislation (including budgets) at the federal, state or local level. But even if there were no budget legislation pending, asking a legislator to take an action that would require legislation - such as preserving funding for a nonprofit's program - would also qualify as lobbying. So too would the preparation involved in making such an ask be lobbying. The amount of lobbying activity in which a 501(c)(3) organization can engage must be less than a "substantial part" of the charity's overall activity in order to maintain its tax exempt status. There is no fixed percentage of an organization's expenditures above which lobbying activities will be considered a "substantial part" of the overall activities; the IRS and courts will take into account a variety of factors, such as whether the lobbying is a continual or only occasional activity. Fortunately, if a public charity wishes to operate under more concrete lobbying limits, it may elect to be treated under Section 501(h) of the Internal Revenue Code. This 501(h) election requires a one-time filing of IRS Form 5768. Once the charity has made the 501(h) election, its lobbying activities will be measured solely by the amount of funds

Board Orientation Training on 4/9 Form 990 Filing Thresholds Planned Giving Webinar Series Next Nonprofit Formation Seminar on 5/25

Free Board Orientation Training on April 9! We have been working with UCLA School of Law to create a template for a nonprofit board of directors orientation manual. The finished product is going to be presented as a part of a FREE training for nonprofit board members on board duties and responsibilities on Saturday, April 9 at Public Counsel from 9 AM to Noon. Both board members and staff are welcome to attend. To register, contact Sarah Stegemoeller at sstegemoeller@publiccounsel.org .

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expended. Organizations that make the 501(h) election may spend 20% of the first $500,000 of their annual "exempt purpose expenditures" on lobbying, 15% of the second $500,000, 10% of the third $500,000, and 5% of the remainder of exempt purpose expenditures, subject to an overall limit of $1 million. (Note that there is a separate limitation for "grass roots lobbying," i.e., communications that attempt to affect the public's opinion of specific legislation and which urge the public to take action with respect to the legislation. An organization that has made the 501(h) election may spend only up to 25% of its overall permitted lobbying expenditures for lobbying of that type.) A nonprofit can also engage in many effective advocacy tools that are exempt from the federal tax law's definition of lobbying. A tax-exempt entity is permitted to (i) conduct and distribute nonpartisan analysis, study or research, which may endorse a specific viewpoint on legislation as long as it presents an "independent and objective" discussion of the issue so that readers can form their own opinions; (ii) examine and discuss broad social, economic and similar problems (not addressing the merits of specific legislation or encouraging action with respect to legislation); (iii) provide testimony or technical advice or assistance to government bodies or committees if done in response to a written request by the body or committee; and (iv) engage in "self-defense lobbying" related to legislation that would affect the existence, powers, duties or tax-exempt status of the nonprofit or the deductibility of contributions to the nonprofit. (Note that opposing a budget cut would not normally be considered "self-defense" lobbying except in the most extreme of circumstances.) In all cases, careful record keeping of lobbying activities and expenditures is critical in order to support a nonprofit's assertion that lobbying activities were either insubstantial or, in the case of a 501(h) election, within the expenditure limits. All of this information is required to be reported annually on the Form 990 return. In the next newsletter, we'll review the basics of federal, state and local lobbying disclosure.

As you know, Public Counsel recently redesigned its website. Unfortunately, the redesign required us to change the URLs for all of our resources. If your website contains links to our resources, please check those links and update them as necessary. If you have trouble finding a resource on our new website, please call us at (213) 385-2977, x200. Thank you!

Our Legal Services Public Counsel's Community Development Project provides free legal assistance to qualifying nonprofit organizations serving low-income communities and addressing issues of poverty within Los Angeles County. If your organization needs legal assistance, visit our website or call (213) 385-2977, x200. For examples of why your organization may need legal assistance, click here.

Form 990/990-EZ/990-N Filing Thresholds Revised for 2010 Tax Year Good news for small tax-exempt organizations! Starting this year, organizations that normally have annual gross receipts of $50,000 or less may file the simplified IRS Form 990-N ("e-Postcard") for their 2010 tax year. Previously, only organizations with gross receipts of $25,000 or less could file the e-Postcard. However, the filing thresholds for the Form 990 has been revised downward, which means many

mid-sized organizations will no longer be eligible to file the Form 990-EZ. Organizations with gross receipts of $200,000 or more, or total assets of $500,000 or more, are required to file Form 990 for their 2010 tax year. Organizations with gross receipts normally greater than $50,000, but less than $200,000, and total assets less than $500,000 are eligible to file Form 990-EZ for their 2010 tax year. Note that any organization eligible to file a Form 990-N or 990-EZ may choose to file a Form 990 instead. Also, all 501(c)(3) organizations classified as "private foundations" must file a Form 990-PF. For more information about the revised filing thresholds, please visit the IRS website. ANNOTATED 990 (UPDATED FOR 2010) Public Counsel's Community Development Project, with the support of the Annenberg Foundation, has created a guide to aid California nonprofit public benefit corporations in collecting and disclosing the information requested by the recently revised Form 990. In this guide, selected portions of the Form 990, its schedules and instructions are annotated with explanatory endnotes, including citations to applicable federal laws, filing tips and recommended practices. Where appropriate, the annotations also discuss how California law governing nonprofit public benefit corporations relates to the revised Form 990. Public Counsel has updated its Annotated 990 publication to reflect changes made to the 2010 version of the Form 990. To access this resource, and the accompanying sample governance policies, please visit our website.

Planned Giving Webinar Series for Nonprofit Executives & Fundraising Staff Join us for a series of webinars designed to help executive directors, development directors and other marketing and fundraising staff learn how to create and implement a successful planned giving program. In these difficult economic times nonprofit organizations are looking for new sources of funding. However, executives at many organizations choose not to pursue a planned giving program because they believe their organizations are too small and planned giving is too complicated. This webinar series will take the mystery out of planned giving by explaining how even small and midsized organizations can develop a planned giving program. The series will also discuss practical tips about how to get a planned giving program off the ground in order to develop a long-term income stream. WEBINAR SCHEDULE (each webinar will start at 9 AM and last 60 minutes): Wednesday, March 23 - Understanding the Basics This webinar will provide the basic background, statistics and trends found with planned giving. It will also review the pluses and minuses of the three most common planned giving vehicles - wills, life insurance and gift annuities - and what your organization needs to think about when working with them. Wednesday, April 27 - For the More Sophisticated Donors This webinar will review some of the more sophisticated planned giving vehicles such as charitable trusts and donor advised funds as well as less-common planned giving vehicles. It will also discuss how your organization can plan to incorporate these vehicles into its planned giving program. Wednesday, May 25 - Getting Started This webinar will discuss how your organization can develop a planned giving program on a tight or non-existent budget. It will also discuss how you can collaborate with other organizations to reduce costs and still have a vibrant planned giving program. For more information and to register, please visit our website.

Next Nonprofit Formation Seminar on May 25 Are your friends or colleagues interested in forming a nonprofit organization but overwhelmed by the legal process? If so, invite them to Public Counsel's Nonprofit Formation Seminar on Wednesday, May 25. Seminar attendees will be eligible to participate in a "Ask A Lawyer" Nonprofit Formation Clinic (date TBA at the seminar), where they will be able to meet one-on-one with an attorney or supervised law student to discuss specific questions relating to forming a nonprofit and obtaining tax exemption. For more information and to register, click here.

Attachment B Nonprofit Association Lobbying Toolkit (CO)

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Speak for Yourself Nonprofit Advocacy Toolkit

Contents Can Charities Lobby? ................................................................................................................ 3 What Exactly is â&#x20AC;&#x153;Lobbyingâ&#x20AC;? ...................................................................................................... 3 What is Not Lobbying?.............................................................................................................. 4 What are the Financial Limits? .................................................................................................. 4 Making the 501(h) Election...................................................................................................... .5 Record Keeping ......................................................................................................................... 7 Registering as a Lobbyist ........................................................................................................... 7 Funding Lobbying Efforts ......................................................................................................... 8 Nonprofit activities during an election ...................................................................................... 9 Voter and Election Activities All 501(c)(3) Organizations Can Do on a Non-Partisan Basis............... 9 Election Activities 501(c)(3) Organizations CANNOT Do............................................................. 11 Tips for Contacting Legislators ............................................................................................... 11 Tips for Hosting a Legislative Visit.......................................................................................... 12 Lobbying and Advocacy Resources .......................................................................................... 13 Nonprofit Advocacy Resources .................................................................................................. 13 Note: This tool provides general guidelines only and is intended to serve as an overview. Because the application of law is fact-sensitive and context is critical, this toolkit should not be relied upon as legal advice. Organizations should consult with their attorney to receive guidance on special rules governing their conduct. If your organization has specific questions, a resource list is included on page 14.

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Can Charities Lobby? Yes they can - and they should! Contrary to popular opinion nonprofits are legally entitled to lobby and advocate for the causes and constituents they represent. The confusion often results because charitable nonprofits (designated as 501(c)(3) organizations) are prohibited from participating in partisan politics – working for a political party or candidate. But it is imperative that nonprofits get involved in the political process as it affects government funding for their programs and policies that impact their ability to carry out their charitable missions.

What Exactly is “Lobbying” Lobbying is defined by federal tax law as any attempt to influence specific legislation. Lobbying can be done by (1) contacting or urging the public to contact policy makers for the purpose of proposing, supporting, or opposing legislation or (2) by advocating the adoption or rejection of legislation. Regulations divide lobbying into two types, direct and grassroots. Specific rules apply to each type. Policy Makers refers to anyone who has direct influence over the outcome of a piece of legislation and could include: • Legislators • Lt. Governor • Legislative aides • President • Governor • Others In the case of ballot initiatives or referenda, voters are considered policy makers, because they decide the outcome of legislation at the voting booth. Any communications made to members of the general public encouraging them to vote a certain way on ballot measures is direct lobbying. Direct lobbying is any attempt to influence legislation through communication with any member or employee of a legislative body, or with any other government official who may participate in the formulation of legislation. Encouraging your members to express your organization’s position to these individuals is also direct lobbying There is a three part “test” to determine if a specific activity constitutes direct lobbying: 1. The principal purpose is to influence legislation, 2. There is reference to a specific piece of legislation (even if the legislation is not currently under consideration), and 3. A point of view is expressed. Usually, some kind of action is advocated. Grassroots lobbying is a communication with the public that, like direct lobbying, also is intended to influence legislation, makes reference to specific legislation reflects a point of view and includes a "call to action." The difference is that a grassroots lobbying communication encourages members of the general public to contact government officials about legislation. Generally, if a communication does not have a viewpoint or a call to action but provides information on a law to the public, it should not be considered lobbying. Again, if the communication is directed at voters and intended to encourage them to vote a certain way on a ballot measure, it is direct lobbying. There is an exception for paid mass Colorado Nonprofit Association

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media advertisements on "highly publicized legislation,” which are presumed to be grassroots lobbying if they run within two weeks of a vote on legislation, even if the ad does not encourage members of the public to contact government officials.

What is not Lobbying? If your organization makes the 501(h) election, you should be aware that many activities do not count as lobbying, including: 1. Distributing materials and other communications of direct interest to members of your organization that express a point of view on legislation but do not urge action by the members. 2. Making available the results of analysis or research on a legislative issue, as long as the facts are presented fully and fairly. 3. Responding to written requests from a legislative body (not an individual legislator). 4. “Self-defense” lobbying on matters that affect the organization's existence, powers and duties, tax-exempt status, or deductibility of contributions. 5. Discussing broad social issues, without mentioning specific legislation.

What are the Financial Limits? The general rule governing all nonprofits under section 501(c)(3) of the IRS code is that “no substantial part” of their activities may be directed toward influencing legislation. The substantiality rule may be interpreted quite widely and be dependent on the nonprofit’s prominence, perceived impact on public opinion and use of unpaid volunteer labor. An organization with a committed cadre of

volunteers that successfully lobbies to pass or defeat a bill may be considered to have substantially influenced legislation, even though it did not spend any money. In 1976, sections 501(h) and 4911 were added to the Internal Revenue Code to set clear definitions of financial limits and acceptable activities and allow public charities to “elect” to be governed by these regulations instead of the broad “substantiality” rule. (Do note that those organizations supported in large part by government grants are subject to different rules discussed later.) The IRS released the final regulations in August 1990. Nonprofits electing to come under sections 501(h) and 4911 may spend the following percentages of their “exempt purposes expenditures”* on lobbying activities: Budget size* Up to $500,000 $500,000 to $1,000,000 $1,000,000 to $1,500,000 $1,500,000 to $17,000,000 Over $17,000,000

Total annual expenditures that may be spent on lobbying. 20% $100,000 + 15% of budget in excess of $500,000. $175,000 + 10% of budget in excess of $1,000,000. $225,000 + 5% of budget in excess of $1,500,000. $1,000,000

*For most organizations, exempt purposes expenditures are the budget. Exempt purpose expenditures do not include tax on unrelated business, expenses associated with unrelated business, capital expenses for new buildings or permanent improvements, expenses for a separate fund raising unit, or the services of a fund raising consultant. Note that the above amounts are for “direct lobbying.” No more than 25 percent of the permitted amounts may be spent on “grassroots” lobbying. In addition, there is no limit

on the amount of lobbying that may be conducted by volunteers who are not reimbursed.

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Unless your organization is involved in a substantial amount of lobbying, you are unlikely to even come close to the financial limits. The 501(h) election actually allows for much simpler record keeping organizations which lobby under that “insubstantial part test” are required to provide the IRS with a detailed narrative description of their activities.

Even if you do exceed the limits, you are subject to a tax penalty but do not immediately lose your exemption. The excise tax is one quarter of the amount of the excess lobbying expenditures. The IRS uses a four-year averaging period, and only if you exceed the limits by more than 50 percent over the entire period are you in danger of losing your exemption. Lobbying expenses are counted on a rolling average over four years. See sample below:

Making the 501(h) Election To make the 501(h) election, file IRS Form 5768 “Election/ Revocation of Election by an Eligible Section 501(c)(3) Organization to make Expenditures To Influence Legislation” and return it to the IRS before the end of your fiscal year. This is a very simple, one-page form that can be downloaded from www.irs.gov/pub/irs-pdf/f5768.pdf and is included in this packet. If, for some reason, you want to cancel the election and return to being governed by the “substantiality” rule, the IRS must be notified before the beginning of your fiscal year (use the same form).

Colorado Nonprofit Association

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Colorado Nonprofit Association

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Record Keeping Many organizations are understandably concerned that the rules are complicated and require substantial record keeping. Reporting your organization’s lobbying expenditures actually requires very little extra paperwork. The amount of money your organization spends on lobbying each year only needs to be reported in one section of your IRS form 990.

If anyone in your organization is a registered lobbyist with the Colorado Secretary of State, you also need to report your income and expenditures for lobbying expenses to the Secretary of State on a monthly basis. See below in the “Registering as a Lobbyist” section for more details.

Registering as a Lobbyist The Colorado Secretary of State’s elections web page, www.sos.state.co.us/pubs/elections/main.htm, provides the following information about who needs to register as a lobbyist: “Professional Lobbyists are registered through the Secretary of State's office. Lobbyists who receive some form of compensation are required to register prior to engaging in lobbying activity.” “Volunteer lobbyists register with the Chief Clerk of the House of Representatives pursuant to Rule 40 of the Rules of the House of Representatives and Rule 36(c) of the Joint Rules of the House and Senate.” To register as a lobbyist in Colorado From www.sos.state.co.us, click on Elections Center. Go to Lobbyist Information under the Elections Information menu. From this page, you can access lobbyist manuals and directories of registered lobbyists. To register as a lobbyist, click on "Online Lobbyist System" from the menu at the right. Click "Request

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to File Electronically," fill in your information and click Submit. You'll receive an email at the address you specified, confirming your registration and giving you a username and password. Lobbying Disclosure Reporting You will need to file a report of your lobbying income and expenditures every month, even if there were no lobbying income or expenses for that month. You will also need to report on the bills that you are currently tracking for your organization along with any positions taken on those bills. Reports are due by the 15th of the following month; check the Secretary of State's lobbyist calendar for a yearly schedule. To file your lobbyist report online, access the Online Lobbyist System and log in with your username and password. Enter your lobbying expenses for the month, and file your report. In the final step, be sure to click "Submit Report" or it won't be processed! Amendment 41 In 2006, the voters passed Amendment 41 (Colorado Constitution Article XXIX), which prohibits lobbyists from giving any gifts or things of value to elected officials or government employees. Previously, lobbyists had to report any gifts of $50 or more to statewide elected officials. While current lobbying disclosure rules have not been updated yet for the changes made by Amendment 41, lobbyists should be aware of the gift ban provisions particularly as they are interpreted by the independent ethics commission established by Amendment 41. Amendment 41 also places a $50 aggregate limit per year on gifts from individuals or organizations to any government employees and officials. The $50 cap does not apply if the recipient gives â&#x20AC;&#x153;lawful consideration of equal or greater value.â&#x20AC;? While this term is not defined by Amendment 41, it is presumed to include compensation for a good or service, fair trades, and other obligations to be performed in return for the gift. Amendment 41 also has exceptions for campaign contributions, unsolicited items of trivial value and awards, informational material, and gifts from relatives or friends on special occasions. Organizations may pay for a government employeeâ&#x20AC;&#x2122;s admission and meal at a reception or meeting if that person is scheduled to speak. Nonprofits may pay for reasonable expenses for a convention, fact-finding mission, trip, or other meeting if the person is schedule to present or represent government provided that the nonprofit receives less than 5% of its funding from for-profit entities. To ensure compliance with Amendment 41, nonprofits should set up systems to track gifts and things of value provided to government employees each year, particularly elected officials, to avoid exceeding the $50 limit.

Funding Lobbying Efforts Organizations supported wholly or in large part by government grants are subject to the different, more stringent rules of the Office of Management and Budget (OMB) Circular A-122. With three very limited exceptions, nonprofits are not permitted to use federal funds to engage in lobbying activities, although they are permitted to lobby with money from other sources.

The three exceptions are: Colorado Nonprofit Association

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1. Technical and factual presentations to legislative bodies on topics directly related to the grant. (The legislative body must have requested the information.) 2. Lobbying state legislatures to influence legislation that would help to reduce the cost of carrying out program activities, or to avoid the impairment of the organization’s ability to carry out its program activities. (The lobbying must be pragmatic in nature, not ideological.) 3. Lobbying activities specifically authorized in the grant or contract. Private foundations are not permitted to lobby or earmark grants for lobbying. They can make general purpose grants or even grants for a specific initiative with a lobbying component as long as the initiative’s non-lobbying component of the budget is greater than the amount given by private foundations. The IRS sent a letter to the Center for Lobbying in the Public Interest that answers many questions about foundations, funding and lobbying. The letter can be found at ww.clpi.org/doc_pdf/clpiIRS.pdf. Community foundations can earmark grants towards lobbying, but they are subject to the same limitations as other 501(c)(3) nonprofits and any money they give specifically for lobbying counts against their financial limit. The Alliance for Justice, www.allianceforjustice.org, has a publication, “Investing in Change: A Funder’s Guide to Supporting Advocacy” specific rules for foundations to fund nonprofit advocacy efforts.

Nonprofit Activities During an Election There are rules governing what charitable nonprofit organizations can and cannot do leading up to and during an election. The most important thing to remember is that a 501(c)(3) nonprofit must remain nonpartisan at all times. An organization may support or challenge a piece of legislation or an issue, but may not support or criticize an elected official or candidate for office. If a particular issue is a hot partisan item and each candidate has a clear and opposing view on the issue, nonprofits should exercise caution in how outspoken they are about that issue so that they do not appear to be supporting one candidate.

Voter and Election Activities All 501(c)(3) Organizations Can Do on a Non-Partisan Basis Voter registration Voter education on the process of voting (where to vote, information on elections and election process) Voting rights and election reform

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Get Out the Vote (GOTV)– Encourage and facilitate voting of your community and members Federal funds may not be used for voter registration. You may use any other source of funds for voter registration purposes. Nonprofits may target GOTV activities towards traditionally underserved or underrepresented areas or populations; they may not target populations based on their political or ideological leanings. Election day activities – Election Monitors, non-partisan GOTV, etc. Voter education on the candidates and ballot issues

Supporting and opposing ballot questions – These activities are subject to normal lobbying limits. There are no limits on non-partisan voter education on ballot measures that presents both sides of the question. Regular lobbying limits apply if your organization endorses “yes” or “no.”

Publish legislative scorecards – Scorecards must be provided for all officials eligible to vote. Scorecards leading up to an election should be prepared and used in the same manner as in nonelection times. It is best to avoid publishing scorecards leading up to an election if your organization has not regularly published them in the past.

Candidate questionnaires – Questions must be nonpartisan and cover a broad range of topics. If a particular topic is a partisan debate topic, such as abortion, gun control, etc., avoid asking questions about that topic. Reprint the exact answers of the candidates, and give equal opportunities to all candidates to answer and publish answers from all candidates. Candidate forums – All candidates must be invited and equally encouraged to attend. If a majority of candidates cannot attend, Be sure to remain nonpartisan in questions and cover a broad range of topics. If a particular topic is a partisan debate topic, such as abortion, gun control, etc., avoid asking questions about that topic. Candidate education – Educate all of the candidates equally on public interest issues. Rent mailing lists and facilities to organizations, legislators, and candidates – Rentals must be made at fair market value and if made available to members of one party, must be available to members of all other parties. It is best to follow rental procedures established independent of election cycles. Establish a controlled 501(c)(4) organization

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Election Activities 501(c)(3) Organizations CANNOT Do Endorse candidates for public office* Make any campaign contributions* Make expenditures on behalf of candidates Restrict rental of their mailing lists and facilities to certain candidates Ask candidates to sign pledges on any issue (tacit endorsement) Increase the amount of incumbent criticism as election time approaches Publish or communicate anything that explicitly or implicitly favors or opposes a candidate *While nonprofit organizations cannot participate in or contribute to a candidate’s campaign, volunteers, staff or board members of an organization may do so provided that they are acting as individual citizens, not on behalf of the organization.

Tips for Contacting Legislators By Mary Kay Hogan, formerly of Aponté and Hogan (Colorado Nonprofit Association’s lobbyists) Whether it is a phone call or personal letter, communication from constituents is appreciated and welcomed by legislators. Writing an effective letter or email is not a difficult task. Here are a few guidelines. Personal Letterhead Write on personal or business letterhead, if possible, and sign your name over your typed signature. Return Address Be sure your exact return address is on the letter, not just the envelope. Envelopes often get discarded. Even though your address is on the letter, be sure to also state that you are a constituent or that you work in the legislator’s district, if applicable. Identify the Subject Identify your subject matter clearly. State the name and bill number of the legislation you are writing about at the top of the page (e.g. RE: SB 80). State Reason

Colorado Nonprofit Association

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State your reasons for writing. Your own personal experience is your best supporting evidence. Explain how the issue would affect you, your business or your profession, or what effect it could have on your community or the state. NO FORM LETTERS Avoid stereotyped phrases and sentences that give the appearance of form letters. They tend to identify your message as part of an organized pressure campaign, and are often discarded. Make your own letter, in your own style, incorporating your organization’s key message. Be Reasonable Don’t ask for the impossible, don’t threaten, and don’t say “I’ll never vote for you again unless…”. Be Brief All of your letters should be one page, one sided. Attachments to support your views are fine.

Always say thank you! Address style The Honorable ___________, Colorado State Senate or House of Representatives 200 East Colfax Ave. Denver, CO 80203

Tips for Hosting a Legislative Visit By Mary Kay Hogan, Aponté and Hogan (Colorado Nonprofit Association’s lobbyists) Personal visits are an extremely effective means of engaging your legislator(s) on issues of interest to your organization. Legislators want to meet and hear from their constituents, and learn about organizations that help their constituents. However, they are very busy people, so it is crucial to make the most of the time you have with your representatives and senators. The best time to schedule a legislative visit is during the summer and fall, when the legislature is not in session. The Colorado Legislature meets from January through the beginning of May, therefore this is not the optimal time to request a site visit from your legislator. How to learn who your elected officials are: You can learn who represents you personally or the area where your organization is located by calling your county clerk or visiting www.vote-smart.org. Before your visit • Invite your legislator in advance by phone, and follow up with a letter confirming the date and time of the meeting. Expect no more than one hour for a typical site visit. • Make it easy for your legislator to meet with you. Offer several possibilities and do your best to accommodate their schedule. • Prepare a good fact sheet about your organization or legislative issue (tips below). • Learn in advance where your legislator stands on your issue or the mission of your organization. • Be prepared to explain how your organization affects voters in the legislator’s district. • Dress appropriately for the visit – normal business attire is acceptable. Colorado Nonprofit Association

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During the Visit • Be on time, prepared, and polite. • Start by concisely introducing your organization. Include the following information: o Who you are o What your organization does o What you need from your legislator o A reference to the fact sheet you have prepared • Don’t attack the legislator for his/her record on your issue(s), and don’t disparage government or politics. • Don’t use technical terms or acronyms, unless you are certain that your legislator will understand them. • If you don’t know the answer to a question, say you’ll find out and get back to him/her – and follow through. • Before s/he leaves, ask how you can be of help to him/her. • Thank him/her for his/her time. After the visit: Follow up with a thank you note along with any information that you promised during the visit. Keep in touch during legislative session – contact your legislator on issues of interest to your organization, and remind him/her of his/her visit to your facility.

Lobbying and Advocacy Resources Colorado Nonprofit Association 455 Sherman St., Ste. 207, Denver, CO 80203 (303) 832-5710, (800) 333-6554, Help Desk can be reached at extension 222 or info@ColoradoNonprofits.org Colorado Nonprofit Association’s Business Member Directory includes contact information for businesses and consultants that work with nonprofit organizations. www.ColoradoNonprofits.org. State of Colorado information State webpage: www.colorado.gov Secretary of State: www.sos.state.co.us General Assembly: www.leg.state.co.us To find your elected officials www.congress.org or www.vote-smart.org IRS Tax Exempt and Government Agencies www.irs.gov/charities or www.irs.gov/eo (exempt organizations)

Nonprofit Advocacy Resources

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Advocacy Institute 1629 K St, NW, #200 Washington, DC 20006 (504) 364-0051 www.advocacyinstitute.org info@advocacyinstitute.org

Center for Lobbying in the Public Interest 1612 K St, NW, Ste 505 Washington, DC 20006 (202) 387-5048 info@clpi.org www.clpi.org

Alliance for Justice 11 Dupont Circle, NW, 2nd Floor, Washington, DC 20036 (202) 822-6070 www.allianceforjustice.org alliance@afj.org

Independent Sector 1200 18th St NW, Ste 200 Washington, DC 20036 (202) 467-6100 info@independentsector.org www.independentsector.org OMB Watch 1742 Connecticut Ave, NW Washington, DC 20009 (202)234-8494 www.ombwatch.org

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Attachment C General Lobbying Rules for Nonprofit Organizations

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GENERAL LOBBYING RULES FOR NON PROFIT ORGANIZATIONS When it comes to lobbying, there are common misconceptions about what 501(c)(3) organizations can and cannot do. Because of this lack of clarity, many organizations simply avoid lobbying altogether. But 501(c)(3) organizations have every right to express their views through lobbying legislators and mobilizing their supporters. In fact, if they do NOT express their views, an important voice will be missing when policy is formed. For afterschool in particular, the voices of non-profit providers are absolutely indispensible. The information below is meant to help your organization figure out how you can lobby for your program, and all afterschool programs, within the bounds of the law.

What is lobbying? There are 2 types of lobbying Direct Lobbying and Grassroots Lobbying. Direct lobbying is defined as communication with a legislator, an employee of a legislator or legislative body, or any covered executive branch or other government employee who may participate in the formulation of legislation. The communication refers to a specific piece of legislation and expresses a view on that legislation. For example: • You call your Senator to say that you’d like her to increase the amount of funding in the new appropriations bill for the 21st Century Community Learning Center Program; • You write an email to your Representative urging him to support a change in the No Child Left Behind Act that would make Supplemental Education Service funds more accessible to afterschool programs; • You attempt to influence a legislator on a confirmation vote; • You meet with officials of the executive branch to influence testimony on a legislative proposal. Grassroots Lobbying is defined as an attempt to influence specific legislation by encouraging the public to contact legislators about that legislation. A communication constitutes grassroots lobbying if it refers to specific legislation, reflects a view on that specific legislation and encourages the recipient of the communication to take lobbying action. This type of communication is known as a call to action. For Example: • You send a letter to afterschool supporters in your community asking them to contact their state representative to encourage him to support a bill that would provide new state funds for afterschool programs; • You send an email to afterschool supporters in your community asking them to contact their Members of Congress and urge her to sign on to a letter to the President asking him to increase funding for afterschool programs in his budget; • You send an email to the afterschool community encouraging them to ask their legislators to vote for or against a bill. Lobbying is NOT: nonpartisan analysis, study or research, examinations and discussions of broad social, economic and similar problems, promoting and touting the

success of your program, requests for technical advice or assistance, or “self-defense” communications. For Example (these would NOT be considered lobbying): • Sending an email to the afterschool community with an update on or summary of legislation that does not include a call to action (such as a monthly legislative update); • Making the results of an independent and objective nonpartisan analysis, study, or research on a legislative issue available to the public; • Responding to verbal or written requests from a legislative body, committee, or subcommittee for technical advice on pending legislation; • Participating in a discussion of policy issues where the resolution might require legislation, as long as the discussion does not address the merits of specific legislative measures; • Meeting with your Member of Congress to discuss your program, as well as the general need for and benefits of afterschool programs in your community, without referring to a specific legislative proposal; • Planning and hosting a briefing on the unique needs of rural communities when it comes to afterschool programs. Defining Terms What is communication? Communication can be a phone call, letter, email, fax or some other mechanism for conveying a message. Who is a legislator? A legislator is a member of a legislative body OR his or her staff. Members of administrative bodies, such as school boards, housing authorities, zoning boards or other bodies for special purposes, whether elected or appointed, are generally not considered legislators. Who is the public? The public can be defined as anyone except for a legislator or member of an organization. Communication to the members of your organization asking them to contact legislators and express an opinion about a specific bill is considered direct lobbying. Communication to the public is considered grassroots lobbying. A member of your organization is someone who has given more than a small amount of time or money to the organization. For example, you pass an email to your staff or organization members that encourage them to contact their Member of Congress about a specific bill. Though you have not contacted the Member of Congress yourself, this is considered direct lobbying. What is nonpartisan analysis, study or research? Nonpartisan analysis, study or research is a study or research that provides information on all sides of the issue and is made available to at least a segment of the general public or to governmental bodies and employees. It may also be distributed, in part, to Members of Congress as long as it widely distributed. What are examinations and discussions of broad social, economic and similar problems? Examinations and discussions of broad social, economic and similar problems are communications that do not refer to specific legislation or directly encourage the recipients to take action.

What are requests for technical advice or assistance? Requests for technical advice or assistance are not considered lobbying if a legislative body or committee requests in writing that you respond or provide information about a certain piece of legislation. What are “self-defense” communications? “Self-defense” communications are communications from your agency to a legislative body concerning specific legislation that could affect you organization’s existence, powers, duties, tax-exempt status, or the deductibility of contributions to the organization’s existence, powers, duties, tax-exempt status, or the deductibility of contributions to the organization

How do you measure lobbying? 501(c)(3) organizations can choose one of two methods to measure their lobbying: The “Insubstantial Part” Test is the default method. This test requires that lobbying be limited to an insubstantial part of an organization’s overall activity. There are no clear definitions or guidelines as to what constitutes lobbying, what an “insubstantial part” is, or how to measure activities. An organization is subject to this test unless and until it elects otherwise. The 501(h) Expenditure Test is the second method of measuring lobbying activity. This test provides clearer guidelines, defining lobbying, providing an exact dollar-based lobbying limit and measuring lobbying based upon an organization’s expenditures. Under 501(h) rules, you can calculate the overall lobbying limit of your organization as follows: you can spend 20% of the first $500,000 of your budget on lobbying. You can spend 15% of the next $500,000, 10% of the next $500,000 and 5% of the remaining. Of the total amount that you spend on lobbying, only 25% can go towards grassroots lobbying. Be sure to keep track of all lobbying expenditures, differentiating between direct and grassroots lobbying. If you plan to engage in lobbying, we strongly advise you to consider the 501(h) election. It provides much clearer guidelines for how much and what sorts of lobbying you may engage in and the penalties for violating the lobbying limits are less severe under the 501(h) test.

What are considered 501(c)(3)organizations? They are organizations organized and operated for religious, charitable, scientific, testing or public safety, literacy or educational purposes, or for the prevention of cruelty to children or animals. These organizations must file for and receive 501(c)(3) status by filing Form 1023 with the IRS.

Which 501(c)(3)organizations can elect to lobby under 501(h) Those that relate to educational institutions, hospitals and medical research organizations, organizations supporting government schools, organizations publicly supported by charitable contributions or admissions, sales, etc. and organizations supporting certain types of public charities. This does NOT include organizations relating to churches, an integrated auxiliary of a

church or of a convention or association of churches, or a member of an affiliated group of organizations.

What about State and Federal lobbying disclosure laws? In addition to the IRS limitations on lobbying activities, charities are also governed by state and federal lobby disclosure laws which require certain organizations and individuals to register when they begin to engage in lobbying and to file periodic reports on their lobbying activities. If your organization pays anyone—be it a staff member, outside lobbying firm or a volunteer who is reimbursed for expenses—to influence legislation or administrative rules, you should explore the extent to which these laws apply to you. For further information on the thresholds and requirements for registering and filing quarterly lobbying reports under the Federal Lobbying Disclosure Act, please see this website: http://www.senate.gov/legislative/Public_Disclosure/new_thresholds.htm

This document is intended to provide guidance on federal lobbying laws but is not legal advice and we would advise you to consult an attorney if you have specific concerns.

This information was adapted from the Alliance for Justice’s series on non-profit and foundation lobbying and advocacy. Visit www.afj.org for more information.

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