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Mr. Chairman, members of the Committee:
I appreciate the opportunity to testify before the Subcommittee on efforts to reform the 1946 Federal Regulation of Lobbying Act.
I am appearing on behalf of Common Cause, a registered citizens' lobbying organization with more than 250,000 members. I also appear as an individual who has been a registered lobbyist since 1975.
Common Cause has pressed for comprehensive lobbying disclosure almost from the beginning of our organization 25 years ago. It was clear then and is clear now that the 1946 Federal Regulation of Lobbying Act simply does not work.
Changing Business-as-Usual
The last two election cycles have seen candidates elected on a mandate to change the way business is done in Washington. This promise of change was a key element in the victories of the 1994 freshman class in the 104th Congress.
To change business-as-usual in Washington and to restore the faith of Americans in their political leaders, there must be a fundamental change in the special-interest money culture that dominates Washington. Central to that money culture is the way lobbyists and others engage in the business of influencing government decisions by providing campaign contributions and other financial favors and benefits to the elected officials who make those decisions.
In spite of the good intentions of many elected officials, when you add up all the money flowing in Washington in all the various ways to benefit elected officials, the result is a corrupting way of life.
The overriding issue in bringing about change in the Washington access-and-influence buying game is to enact real campaign finance reform.
Breakthrough bipartisan legislation is being introduced in the Senate today by Senators John McCain (R-AZ), Russ Feingold (D- WI), and Fred Thompson (R-TN). The bill, which would provide for voluntary spending limits to restrain out-of-control spending, provide free television time to candidates, ban PACs and end the corrupting soft money system, provides a genuine opportunity for passage of campaign reform during this Congress.
Reform of the campaign finance system is also receiving support in the House. For example, freshman Representatives Linda Smith (R-WA) and Sam Brownback (R-KS) are pressing for campaign finance reform as is a bipartisan group of reformers led by Representative Chris Shays (R-CT).
Meaningful lobby reform is also important to changing the way business is done in Washington. Legislation is needed to end the lobbyist gift system and to provide the public and legislators with the necessary information to understand how public policy is being influenced.
As you remember, gift ban and lobby disclosure legislation passed both the House and Senate last year, but the conference report was killed by a Senate filibuster. The defeat of this measure was a serious setback for reform efforts.
Let me make clear that I believe lobbying can play a legitimate role in the political process. It is a constitutionally protected right that can educate and aid policy makers, facilitate the exchange of information and ideas, and expand citizen participation.
But what is wrong with lobbying today is the way lobbyists use money to gain access and influence, and the secrecy that surrounds it.
Gift Ban is Essential
In addition to campaign contributions, one of the ways that lobbyists and others use to gain access and influence to Members of Congress is by providing financial benefits to Members and staff in the form of free meals, subsidized vacation trips, and other gifts.
In July, the Senate passed a strong new gift ban rule that prohibits Senators and their staffs from accepting from a single source gifts, including meals, valued at more than $50. Gifts worth more than $10 aggregate toward an overall $100 annual limit.
The bill also contains new restrictions on reimbursements of privately financed travel and curbs special-interest financed vacation trips. It also prohibits lobbyists from contributing to Senators' legal defense funds, to entities maintained or controlled by Senators, and to charities at the direction of a Senator.
We urge members of this Subcommittee to push for immediate House passage of a House gift ban rule like that passed by the Senate. The Senate-passed rule is a significant reform which should be brought directly to the House floor for passage. Efforts in the House to pass a weaker gift ban bill or to postpone action will only further reduce public confidence in a system that has lost public credibility.
Enacting Effective Lobby Disclosure Legislation
Apart from the gift ban reform, the existing lobbying disclosure laws must also be rewritten. Current law is widely ignored and provides little or no useful information.
With Senate passage of S. 1060, the Lobbying Disclosure Act of 1995, the House has a crucial opportunity to enact meaningful lobby disclosure legislation. We note the hard work of Representative John Bryant (D-TX) on this issue in the 103rd Congress.
We also commend Representatives Shays and Paul McHale (D-PA) and the other members of the bipartisan reform group for introducing lobby disclosure legislation. Using last year's bill as a starting point, the McHale-Shays bill demonstrates solid support for a meaningful rewrite of the obsolete 1946 law. The Shays group deserves credit for continuing to push for House action on this and other reform issues.
S. 1060 consolidates into one comprehensive statute the several lobby disclosure laws currently in effect. The bill provides an objective test for triggering registration and for semi-annual disclosure of aggregated lobbying expenses, including expenses for lobbying of Members of Congress and staff, as well as executive branch officials.
This measure, which passed the Senate unanimously, was the result of hard bipartisan bargaining. Senators Carl Levin (D-MI) and Bill Cohen (R-ME) deserve much credit for this effort and for their long-time commitment to lobby disclosure reform. As in previous years, efforts to strengthen lobby disclosure legislation have met with strong behind-the-scenes opposition.
Common Cause believes that the Senate-passed bill is an important reform but that it should be strengthened to include grassroots disclosure and more effective enforcement. We believe that this Subcommittee has an opportunity to strengthen the bill in these areas. We also urge you to oppose any effort to weaken S. 1060 or to sidetrack congressional passage of lobby disclosure legislation this year.
Grassroots and "Astroturf" Lobbying
We believe that effective lobby disclosure legislation should require meaningful disclosure of major grassroots lobbying. Grassroots lobbying is one of the fastest growing means used to influence government. However, despite the enormous amounts of money spent by lobbying organizations on grassroots lobbying campaigns, these costs are rarely disclosed under current law because the relevant language in the 1946 Act is widely ignored.
We believe that grassroots lobbying expenditures are, in fact, required to be disclosed under current law. The 1946 Act covers attempts "[t]o influence, directly or indirectly, the passage or defeat of any legislation". Further, as the U.S. Supreme Court found in U.S. v. Harriss (1954):
The legislative history of the [1946] Act makes clear that, at the very least, Congress sought disclosure of such direct pressures, exerted by the lobbyists themselves or through their hirelings or through an artificially stimulated letter campaign.
However, in practice, very few grassroots lobbying costs are disclosed.
We supported last year's conference report which included disclosure of grassroots lobbying. A misinformation campaign against this provision, waged to raise fears about its intention and impact, misled many citizens and too many Members of Congress, and ultimately led to the defeat of the bill.
S. 1060 as passed by the Senate fails to provide any disclosure of grassroots lobbying. Grassroots lobbying should be covered by the new law, but at a minimum, the new law should require disclosure of this new breed of grassroots lobbying in Washington known as "astroturf" lobbying.
"Astroturf" lobbying refers to individuals or groups who often do not directly lobby themselves, but act as "hired guns" to generate pressure from home. According to a March 27, 1993 article in National Journal, "[T]hese grass-roots consultants are often the last line of defense [for their clients], called in when other lobbying, advertising and public relations efforts have been exhausted," sometimes for fees described as running more than $1 million per project.
Lobbying activities during the House's recent consideration of the telecommunications bill provide a glimpse of the magnitude of this artificially stimulated astroturf lobbying.
According to an August 4 article in The Washington Post, "A massive telegram campaign by the lobbying arm of the long-distance telephone industry has landed nearly half a million messages on Capitol Hill in the last 10 days." A number of the telegrams reportedly bore the names of people who were deceased or who said they had not authorized the telegram, The Washington Post reported. The telegram campaign was reportedly orchestrated by a firm under contract with long-distance telephone companies. The Post reported that the firm had 500 operators in Lynchburg, Virginia calling around the country, asking people if they were in favor of fair competition in the phone market. If the respondents said yes, operators then offered to send their Member of Congress, free of charge, multiple telegrams opposing the telecommunications bill, according to The Washington Post.
The money spent on this type of lobbying activity will escape disclosure under S. 1060. This points up a fundamental weakness in that bill.
Certainly, reasonable people would agree that these telegrams were a blatant attempt to lobby Congress. Members of Congress and the public deserve to know about it -- who funded this activity and how much it cost.
We believe grassroots lobbying should be disclosed and, at a minimum, S. 1060 should be strengthened to include a provision requiring disclosure of astroturf lobbying -- a provision that was contained in the Levin-Cohen substitute offered when the Senate first took up the bill this year. This provision would define lobbying activities to include paid efforts by the employees or contractors of a person who is otherwise required to register, to stimulate grassroots communications of lobbying contacts by registered lobbyists.
This provision would ensure that these huge, expensive and influential "astroturf' efforts do not remain hidden from public view.
Mr. Chairman, I also would request, that a series of articles about astroturf lobbying be placed in the record with my statement.
18 U.S.C. Section 1001
The telecommunications telegram deluge has raised another issue which the Judiciary Committee should urgently address -- that is the impact of a recent U.S. Supreme Court opinion in Hubbard v. United States which held that 18 U.S.C. Section 1001, the federal anti-pedury statute, does not apply to statements made to Congress. Citing Hubbard, federal prosecutors recently declined to pursue allegations of fraud involving the astroturf telegrams.
Hubbard raises serious questions about the proposed enforcement mechanism in S. 1060. S. 1060 directs lobby registration and reports to be filed with the Clerk of the House and Secretary of the Senate. Under the Hubbard ruling, Section 1001 might not penalize false statements made in these reports, or in other filings made with Congress, such as Members' financial disclosure statements -- the cornerstone of the Ethics in Government Act.
We urge the Committee to address the gap in enforcement that results from the Hubbard ruling and to report out a bill that makes clear that false statements to Congress are punishable under the perjury laws.
Enforcement
Any successful lobby disclosure bill requires an effective enforcement method. The 1946 Act only provides criminal penalties, which are almost never enforced. No government agency has been granted sufficient powers to enforce existing laws, nor does any agency have a clearly defined statutory responsibility for doing so. At most, after nearly 50 years, only a handful of charges of alleged failure to comply with the 1946 Act have ever been brought.
The enforcement provisions of the Senate-passed bill should be strengthened to ensure that reform efforts are not undermined or rendered meaningless. Under S. 1060, lobby registration and reports are to be filed with the Clerk of the House and the Secretary of the Senate, both of which have no power to enforce or audit the registration or reports. While the Clerk and the Secretary are authorized to make referrals to the Justice Department, they clearly are not suited for, nor structured to, undertake meaningful enforcement of this type of law.
Past efforts to create an independent lobbying disclosure office or to create an office within the Justice Department have failed.
We believe enforcement should not be left to the Clerk of the House nor the Secretary of the Senate, and that a better repository for registrations and reports is the Office of Government Ethics (OGE). OGE has experience in providing guidance on these types of issues. OGE should have the power to refer cases to the Justice Department, which also should have the power to seek injunctive relief.
Conclusion
Mr. Chairman, we again want to thank you for holding these hearings. Following the well-established. principle that the business of government should be conducted in public, legislation that will bring the process of organized, professional lobbying into the sunlight is a necessary step in restoring public confidence in government. We strongly urge members of this Subcommittee to ensure that effective lobby disclosure legislation is signed into law before the end of this year.