Tuesday, December 4, 2007
WHAT'S NEW IN PUBLIC AFFAIRS
"You better not cheat, you better comply. You better be clean, I'm telling you why. Ethics and lobbying law watchdogs are coming to town." And they are barking. According to The Hill, several government watchdog groups, including Common Cause, Public Citizen and the Campaign Legal Center, are pressuring House Clerk Lorraine Miller and Secretary of the Senate Nancy Erickson to push through more rigorous enforcement of the new ethics and lobbying disclosure requirements. The Hill also notes that other watchdog groups are complaining that proposals being considered by the Federal Election Commission could create loopholes that badly weaken the Supreme Court's recent ruling on the Bipartisan Campaign Reform Act of 2002, which spell out what kinds of so-called "issue ads" can be funded by corporations or unions in advance of primaries and general elections. Finally, Time Magazine reports that some nonprofit entities are increasing their political activity despite the fact that such activity could threaten their tax exempt status. Time notes that in the 2006 election cycle the IRS found that 26 charities had engaged in political activity beyond what is legal for nonprofits, and the IRS is currently investigating 60 other nonprofits. These stories and more in this edition of the Public Affairs News Monitor.
HEADLINES AT A GLANCE
"Lobbying Watchdogs Push Enforcement"
"Nonprofits Want Campaign Voice"
"Waiting for Tax Winners"
"How Companies Dig Deep"
"New Lobbyist Rules Alter D.C. Atmosphere"
"FEC Decision Could Launch Attack Ads, Watchdogs Warn"
"Loophole Allows Overseas Trips"
"Solve the Succession Crisis by Growing Inside-Outside Leaders"
UPCOMING CONFERENCES
www.pac.org/conferences
Public Affairs Institute
January 6-10, 2008 - Surf & Sand Resort, Laguna Beach, California
The annual Public Affairs Institute is the nation's foremost educational and career building program for rising public affairs professionals. Class sessions are led by faculty members who are distinguished in their particular fields of expertise in a mix of large group lectures and small group discussions, allowing for an interactive, personal learning setting. Beyond the classroom, the Institute creates unparalleled networking opportunities, as each class group meets with faculty members, takes meals and enjoys free-time activities together. Institute participants commit to attending one week-long session every year for three consecutive years. Completion of the Public Affairs Institute strengthens participants' abilities as a strategic analyst, as a counselor to senior management, and as a liaison with governmental policy makers, business and community leaders.
National Grassroots Conference
January 13-16, 2008 - Key West, FL
Register by December 8 to receive the early bird discount!
The largest and most comprehensive conference for grassroots professionals brought to you exclusively by the Public Affairs Council. Join us for world-class speakers, interactive breakout sessions, countless networking opportunities and lessons from the top grassroots programs in the nation. Be part of one of the Council's longest running yearly events and learn the latest grassroots techniques and strategies from the country's best association and corporate grassroots managers.
National PAC Conference
February 24-27, 2008 - St. Petersburg, FL
Register by January 11 to receive the early bird discount!
The Council's highly rated conference offers best practices, tested by the most prominent experts in the field of political involvement. This conference is a unique opportunity to learn more than just administering a PAC and understanding FEC laws. This is a forum where you can make your political efforts their most effective and powerful through crafting your message and developing a cutting-edge program.
COUNCIL SERVICES
Did you know that you can find job postings on the Council's Web site? Learn more at www.pac.org/jobs
copyright 2007
INFORMATION, INC.
Public Affairs News Monitor may be reproduced in hard copy form or electronically for internal circulation to Public Affairs Council member companies and associations.
"Lobbying Watchdogs Push Enforcement"
The Hill (11/28/07); Crabtree, Susan
House Clerk Lorraine Miller and Secretary of the Senate Nancy Erickson are being pressured by government watchdog organizations to push through more rigorous enforcement of new lobbying disclosure reforms via guidance materials they are to release in December. These materials will provide lobbyists with instructions for complying with the ethics and lobbying reform bill's disclosure requirements, which go into effect on Jan. 1. Democracy 21, the Campaign Legal Center, Common Cause, the League of Women Voters, Public Citizen, and U.S. PIRG sent a letter last week emphasizing that the reforms should be deployed "in a manner that is consistent with the language and purpose of the statute, and with the intent of Congress to provide the public with broad disclosure of the money being raised and spent by lobbyists to influence Congress." The groups want assurance that lobbyists are required to detail direct as well as indirect spending on behalf of members of Congress, and they are worried that a loophole could result if Miller and Erickson loosely interpret a new rule requiring lobbyists to disclose payments made for the cost of an event honoring a legislative or executive branch official. The watchdogs also want a guarantee that the rule covers events honoring multiple members, and they also cite a need to take an aggressive stance on "stealth coalition" disclosure requirements. Finally, these watchdog groups want Miller and Erickson to demand additional funding to handle their new enforcement duties.(www.thehill.com)
"Nonprofits Want Campaign Voice"
Time (11/20/07); Kingsbury, Kathleen
Despite the fact that their tax-exempt status restricts their political involvement, an increasing number of nonprofits aim to sway the opinions of presidential candidates. Indeed, several nonprofit leaders are using 2008's early primaries as a springboard for advancing their agendas on a national level. The Gates Foundation, for example, lobbied presidential contenders in October 2007 to pledge to expand the President's Malaria Initiative. While nonprofits' clout is far less than that of unions and other, more established interest groups, nonprofits made progress in 2004 when the Global AIDS Alliance in Iowa persuaded all Democratic contenders to commit to fighting AIDS. However, by doing so, nonprofit groups risk estranging donors who provide key operating funds. More importantly, excessive political involvement is illegal for nonprofits, which are formed under Section 501 of the IRS code. The stipulation grants nonprofits tax-exempt status if they consent to steering clear of politics. As well, only one-fifth of a nonprofit's budget can be put toward lobbying or political work, which must be primarily educational in nature. Indeed, the IRS told 26 charities that they had crossed the line in the 2006 election cycle, and it is probing 60 other nonprofits. Nevertheless, the current election cycle is already feeling the influence of a more aggressive nonprofit sector.(www.time.com)
"Waiting for Tax Winners"
National Journal (11/17/07); Vaida, Bara; Vaughan, Martin
The business community remains skeptical of the proposal to overhaul the U.S. tax code that Rep. Charles Rangel (D-N.Y.) unveiled on Oct. 25, 2007. In early November, lobbyists representing about 70 industries and business associations gathered at the U.S. Chamber of Commerce to determine the best strategies for defeating the bill. Rangel, chairman of the House Ways and Means Committee, wants to lower the corporate tax rate from 35 percent to 30.5 percent; allow small businesses to expense up to $125,000 a year on a permanent basis; and repeal the alternative minimum tax, all of which businesses should favor. However, there are concerns that the bill would eliminate some key corporate tax benefits, raise taxes for high-income individual filers, repeal a special deduction for U.S. manufacturing income, and bar the LIFO accounting method. Rangel's bill also leaves unresolved the issue of President Bush's first-term tax cuts, which are set to expire in 2010. Aerospace, defense, technology, and service sectors are among the potential winners of the legislation in its present form. Still, lawmakers and aides who helped write the bill say it is very early in the process and that trade-offs could help produce a flatter, fairer corporate code system.(www.nationaljournal.com)
"How Companies Dig Deep"
Business Week (11/26/07) No. 4060, P. 52; Wilson, Conrad
To identify the most generous companies of fiscal year 2006, BusinessWeek polled organizations in the Standard & Poor's 500-stock index and discovered that many companies are following through on their claims of robust corporate citizenship. The most charitable in-kind giver was Oracle, a departure from the pharmaceutical companies that typically rank highest. Between fiscal year 2004 and 2006, Oracle's donations surged from $151 million to $1.9 billion. However, the jump can be explained in part by a change in Oracle's method of valuing software donations, with the current technique producing a higher valuation. In addition, the company has expanded the philanthropy programs of the firms it has bought and has enhanced its education programs. Harrah's Entertainment was found to have donated the most as a percentage of pretax profits, with its cash donation of $76.8 million equaling 9.2 percent of the company's pretax profit. Interestingly, Harrah's operating subsidiaries in five states made donations and reinvested a portion of profitsthrough charitable or governmental groupsback into the community. Many of the surveyed companies have also found a way to embed philanthropy more deeply into their corporate models, a trend that is even evident in some organizational charts. Moreover, some corporate givers have found a way to make money from their philanthropy, a scenario that is likely to result in greater generosity. At IBM, one technological innovation created for the philanthropy program generated more than $100 million in revenue in 2006 after becoming available to paying customers. (www.www.businessweek.com)
"New Lobbyist Rules Alter D.C. Atmosphere"
Atlanta Journal-Constitution (11/25/07) P. 1F; Malone, Julia
New lobbying rules were a hot topic at the recent lobbyist seminar hosted by the Bureau of National Affairs. Beginning in July, lobbying firms must make twice-a-year certifications that all employees understand the rules, with violators facing jail terms of up to five years and a $20,000 civil fine. The rules impose limitations on the value of gifts given to lawmakers and their aides, require quarterly disclosures of clients and billings, and mandate that political campaign donations be disclosed every six months. Only one-day trips for lawmakers can be financed by lobbyists, prompting a 40 percent drop in privately sponsored travel, according to Public Citizen. Under the rules, lawmakers are forced to disclose earmarks, which, as a result, dropped to $13 billion from $27 billion in 2005. While some lobbyists support enhanced transparency, others worry that the public will grow more skeptical about lobbying. However, the new rules do not prevent lobbyists from covering the costs of tickets to charity events for lawmakers, spouses and children, and eating at upscale restaurants is still allowed as part of official campaign fund-raising events. Private briefings and receptions are allowed if light snacks or hors d'oeuvres can be eaten standing up with only a toothpick, and universities and local governments do not have to abide by the gift rules. (www.ajc.com)
"FEC Decision Could Launch Attack Ads, Watchdogs Warn"
The Hill (11/20/07) P. 1; Crabtree, Susan
The U.S. Federal Election Commission (FEC) must incorporate a recent U.S. Supreme Court decision regarding the Bipartisan Campaign Reform Act of 2002 (BCRA) into its regulations before the January presidential primaries, which means the rules must be in place by the beginning of December. According to the U.S. Supreme Court ruling in FEC v. Wisconsin Right to Life (WRTL), advertisements funded by corporations or unions cannot be banned 30 days before a primary or 60 days before a general election, "as long as the ads do not directly advocate for the election or defeat of a candidate or engage in the 'functional equivalent' of doing so." However, the rule reform proposals offered by the FEC are tantamount to creating a loophole in the BCRA, according to free-speech advocate James Bopp, Obama for President Counsel Bob Bauer, and other groups. For instance, any advertisement with a public policy issue urging voters to contact candidates would be permitted, even if they slight the character or campaign of the candidate in the process. One of the rules also appears to eliminate disclosure requirements regarding who funds the advertisements, and critics claim the latest rule proposals differ significantly from the original proposal issued just after the Supreme Court's ruling.(www.thehill.com)
"Loophole Allows Overseas Trips"
Roll Call (11/26/07) P. 1; Van Dongen, Rachel
Despite new lobbying rules that restrict gifts and travel, lawmakers and staffers can receive trips to foreign countries paid for by their governments for cultural exchange programs under the Mutual Education and Cultural Exchange Act (MECEA) of 1961, also called the Fulbright-Hays Act. It remains to be seen whether the loophole in the new lobbying rules has resulted in an increase in such travel, as costs must be disclosed only by the highest-ranking staffers. The rules do not require ethics committees to approve the trips or impose restrictions on a trip's length. Moreover, the rules do not prohibit lobbyists from planning the trips or traveling with lawmakers and staffers. Problems arise if the trips are the result of payments by private entities to foreign governments, says ethics attorney and former House counsel Stan Brand. "If the real party and interest is a private group and they're just using it as a ruse of palming it off on the government to pay for it you just have the same problem as you had before under a different name," explains Brand.(www.rollcall.com)
"Solve the Succession Crisis by Growing Inside-Outside Leaders"
Harvard Business Review (11/07) Vol. 85, No. 11, P. 91; Bower, Joseph L.
Joseph L. Bower of the Harvard Business School has a theory that companies can improve their leadership by cultivating "inside-outsiders," internal candidates who have maintained a fresh, external perspective on the company. The CEO's role is increasingly challenging and CEO turnover around the world is mounting as well, says Bower. Boards of directors are often inclined to replace a leader who produced disappointing results with an outsider, but outsider CEOs who swoop in and cut costs typically do not succeed in the long term, according to research by Booz Allen. However, internal candidates often lack the requisite experience in running a company. Though it is difficult, organizations must dedicate themselves to grooming leaders from within the company who are ready to govern in both favorable and adverse circumstances. According to Bower, the best leaders are often those who have operated outside the company's mainstream and therefore have retained an outsider's objectivity. To develop a pipeline of future inside-outsider leaders, companies must draw from a diverse pool of talented individuals who have shown managerial potential. These high-potentials must then be given a set of increasingly complicated assignments so they have the opportunity to manage an entire business early on in their careers. Performance evaluation is key, as is mentoring, particularly when a high-potential leader proposes an outside-the-box idea. (http://www.harvardbusinessonline.hbsp.harvard.edu/)
PAC/Campaign Finance 
