posted on: Wednesday, March 22, 2006

Let’s all thank the National Federation of Independent Business for some refreshing candor. The senior VP of NFIB, Dan Danner, said that the lobbying reforms staggering through Congress won’t really affect the big lobbyists because of the charity loophole that NCRP has decried so often.
As Danner put it, “Between charitable events and fundraising events, there will be lots of ways to get in front of members [of Congress].” (Jeffrey H. Birnbaum, “Lobbyists Foresee Business as Usual: Post-Abramoff Rules Expected to Be Merely a Nuisance”, The Washington Post, March 19, 2006, http://www.washingtonpost.com/wp-dyn/content/article/2006/03/18/AR2006031801305.html?sub=AR).

Nice to know that there is some straight talk among lobbyists, notably the NFIB which has been indefatigable in its lobbying for the permanent repeal of the estate tax. You don’t need a lobbyist’s contribution to trigger the ethical problem. The fact that lawmakers can hide behind charities, and both lobbyists and the special interests they represent can contribute without public disclosure. As Hamlet said, ay, there’s the rub! It’s the charity loophole, protecting donors to public charities from having their identities and largesse revealed to the American taxpayer.

Charities and foundations established or controlled by lawmakers or by their campaign staff are ready made for special interests to use as camouflage for the buying and selling of access and influence. From the legislator’s perspective, the donors provide some cash that the legislator can disperse as philanthropy to interested parties in the manner of latter day Franklin and Eleanor Roosevelts.

For the special interests and lobbyists, their contributions are largely anonymous, protected from public disclosure by 501(c)(3) nonprofit rules. But they are certainly known to the lawmakers in question, and they get the bennies of having contributed to the lawmakers’ own charitable ATMs in return for some invaluable face time.

In the incredible shrinking lobby reform movement, virtually no one has focused on the charity loophole. As long as members of Congress get to play the role of penny ante philanthropists, we’ll continue to see the likes of DeLay, Frist, Stevens, Santorum, and others wrapping themselves in charitable togas as they collect dollars from the special interests.

There’s probably no way of stopping their ilk from posturing as philanthropists, but there is one way to make their special interest charity bake sale less conducive to lobbying abuses: Require full public disclosure the names of all donors, not just lobbyists, and the amounts they donate to the charities controlled by members of Congress or their campaign operatives. Disclosure doesn’t stop wrongdoing. But in this case, it would reveal to the American taxpayer how some powerful federal lawmakers use tax exempt charities as shills for special interest lobbying.