After news that U.S. Agency for International Development (USAID) was holding off implementation of the Partner Vetting System (PVS) until the agency reviews comments, more news reveals that the program will be altered to only target aid recipients in the West Bank and the Gaza Strip. USAID officials met with some of the nonprofit organizations who submitted comments. At the meeting the changes to the proposed program were announced, and that it is operational but has not been implemented. USAID presented the nonprofit representatives with a power point presentation explaining the program. According to the Washington Post the materials defending the program included a reference to a report by the Palestinian Media Watch, an Israel-based organization. The report said that Al-Quds Open University (a USAID recipient) "hosts branches of the Hamas and Islamic Jihad terror organizations."

The organization said the university had received in $100,000 in 2006 in "in-kind" aid from USAID, and it also complained that USAID planned to provide $2.4 million in scholarships for about 2,000 Palestinian students without a guarantee that recipients are not "members of the Hamas or Islamic Jihad student unions, have participated in their events, or have given any support to Hamas or Islamic Jihad, including voting for them in the council elections."

The fact that the U.S. government is responding to the appeals of an organization which is concerned about the political beliefs of students who receive scholarship funds from U.S. funds and may or may not have voted for Hamas is disturbing. This politicizes aid and violates the principle of a secret ballot.

In addition, if the program is about stopping money from going to terrorists, or those associated with terrorist, shouldn't such a vetting program be applied to contractors as well?

The Federal Election Commission (FEC) will continue to regulate independent 527 political groups on a case-by-case basis. A federal judge ruled in favor of the FEC in a lawsuit brought by Rep. Christopher Shays (R-CT) and then-Rep. Martin Meehan (D-MA) and campaign reform groups asking that the FEC be forced to write a rule requiring that groups registered with the Internal Revenue Service (IRS) as a political organization under section 527 also register with the FEC as a federal political committee. The groups that called brought the lawsuit may now appeal the case and call on Congress to pass 527 reform legislation. The Court determined that the FEC's February 2007 explanation for their approach to enforcing 527s is sufficient. Citing fines the FEC has placed on 527 groups, the judge said, "the case-by-case approach can be at least somewhat effective."

The Center for Competitive Politics chairman responded to the Court's decision; "Forced rulemaking by the FEC would have turned thousands of citizens' organizations into highly regulated 'political committees.'" While OMB Watch opposes one-size-fits-all regulation of 527 groups, the case-by-case approach has its own problems. It is time consuming, complex, does not provide clear guidance and will only become more problematic if more cases and 527 groups appear in the coming 2008 Presidential election, leaving many groups facing legal questions. As Bob Bauer precisely comments; "Contrary to the views of reform critics, no better outcome was ever possible, nor more quickly: the law remains a riddle, and the FEC has chosen to leave it that way."

According to the FEC press release; "In reaching this decision Judge Emmet G. Sullivan agreed with the Commission that judgments about whether the major purpose of an organization is influencing federal elections are complex and therefore the FEC's decision not to draft a general rule but rather to consider this question on a case by case basis is within the agency's discretion. The Court also noted that "the FEC has successfully brought enforcement actions against 527 groups since the [Court's] 2006 opinion. . ."

The Federal Election Commission (FEC) announced that it reached a settlement with America Coming Together (ACT), ruling that the group violated federal campaign finance laws during the 2004 Presidential election. ACT agreed to pay $775,000 to settle charges that it used soft money to pay for federal campaign expenses. In 2004 the Campaign Legal Center, Democracy 21, and the Center for Responsive Politics filed a complaint against ACT for illegally spending soft money to influence the 2004 presidential campaign. ACT raised $137 million for get-out-the-vote and voter registration drives, and of that total the FEC "concluded that even for the approximately $30 million in disbursements that could properly be characterized as administrative and generic voter drive expenses, ACT should have used at least 90% federal and 10% non-federal funds." ACT should have paid for these activities with "hard money" because the FEC deemed its main purpose was to defeat President Bush. The Campaign Legal Center was pleased with this action, but disappointed that it took three years to do so.

Both the long delay in resolving the ACT case and the relatively small fine imposed on ACT for almost $100 million in illegal expenditures make a powerful case for why case-by-case enforcement by itself will not work and why without proper regulations and prohibitive fines the illegal activities of 527 groups in federal elections will continue to undermine the nation's campaign finance laws.

Nearly two years have passed since Hurricanes Katrina and Rita and now is a perfect time to look at the charitable work in the area in terms of what has been accomplished, what needs to be done, and how charities point out the inequities that remain. The Chronicle of Philanthropy ($$) spotlights this discussion of charities and the hurricane recovery through a series of articles. An important point to discuss two years later is that charitable funds are still drastically needed.

In examining the giving so far, the Chronicle ($$) notes that "charities who are still working with storm survivors say even the unprecedented outpouring of charitable giving may not be enough to meet the continuing housing and social-service needs they see in the Gulf Coast — needs, they say, that may worsen in the coming year as federal support for survivors decreases and many of the poorest evacuees, lacking the resources to return home, settle permanently in the cities to which they originally escaped the disaster."

One article discusses the unique way the Rockefeller Foundation has helped New Orleans plan the development of the city. By helping to come up with the Unified New Orleans Plan, Rockefeller is looking towards strengthening local housing and philanthropic institutions so that they will be able to take on the rebuilding effort that is going to last for years. Nonprofits are worried about getting funders involved in the long-term recovery. As a newly released research project from the Foundation Center has found, "institutional donors may have their most important role to play after initial relief efforts have taken place and the attention of individual donors has moved on to other topics."

Another article focuses on the Mississippi Center for Justice, a nonprofit public interest law firm, which is working to provide legal assistance to residents who are facing trouble with contractors or other legal issues. And one exciting new organization that has applied for tax exempt status is the New Orleans Kid Camera Project. Children use disposable cameras to document life after Katrina creating powerful images. There is also an updated list of fund raising efforts for Hurricane Katrina.

And this interesting article from Salon points out that federal funding provided to Mississippi has largely been given out to the wealthy. "Under the Department of Housing and Urban Development's Community Development Block Grant program, 70 percent of the funds are supposed to be allocated to low- and moderate-income people. But the governor successfully lobbied to waive that requirement, undercutting its impact on Katrina survivors. As a result, only 25 percent of the money has reached the poorer segments of the population."

Possibly because of last week's publicity that opposition to the proposed U.S. Agency for International Development (USAID) Partner Vetting System from charitable organizations was increasing caused the Bush administration to postpone the start of the program until the agency reviews comments. The Washington Post reports that representatives of USAID's security office will meet with organizations that sent comments in response to the July 17 notice. This would be the first time that the program is actually discussed with a group of representatives who will be affected.

USAID's acting deputy administrator, James Kunder said even though the notice in the Federal Register said yesterday was the last day for organizations to comment on the proposal, comments will be accepted through the end of next month. "Kunder said in a telephone interview that it 'would be effective, but not operational' until there is 'a systematic review' of the views of the private organizations involved." However, the The Chronicle of Philanthropy ($$) reports that Harry Edwards, a spokesman for the Agency for International Development, could not confirm Kunder's comments.

Most unfortunate is the fact that groups who are rejected would not be told why. This secrecy was part of the focus covered by OMB Watch in comments submitted to USAID. The Washington Post article also cited Kunder to have said that whether the agency could confirm or deny that individuals passed the screening is still being considered. OMB Watch comments also focused on the problems with using watchlists for the vetting.

The Federal Election Commission (FEC) issued a proposed rulemaking, which will be published in the Federal Register next week, to implement the Supreme Court decision in Wisconsin Right to Life v. FEC (WRTL). The FEC has put forth two alternative proposals and seeks comments on many questions; asking, "Does WRTL II require the Commission to revise or repeal any portion of its definition of express advocacy?" Both alternatives would establish safe harbors for grassroots lobbying communications based on the analysis of the specific ads at issue in the WRTL case. The deadline for public comment will be October 1, 2007 and the FEC will hold a hearing on October 17, 2007 with a final rule by the end of November. Bob Bauer discusses how ambitious this timeline is. Check back for an analysis on the proposed rulemaking from OMB Watch. Read the FEC press release here and the proposed rulemaking here.

Almost a year ago FBI agents raided the Muslim charity Life for Relief and Development, taking away computers and records while nobody has yet been charged with anything and the charity continues operation. Understandably, Life for Relief is now asking for the return of nearly 200 boxes of paperwork critical to its operations. The U.S. Attorney's Office is willing to provide the records, but only if Life for Relief pays copying charges of between $21,000 and $115,000. Those charges are so high because the copies were made inside FBI offices by a company with a U.S. security clearance. The organization needs its files to complete required audits and file its tax return due in April. Further disconcerting is the fact that the government holds sealed documents that only the judge can look at which supposedly provide reasons why the charity and not the government should pay for the copying charges. Here we have a nonprofit that is working to provide humanitarian aid, and instead of using money for its intended purpose, the government is forcing them to pay for the FBI copies.

The Washington Post reports on a very alarming notice posted in the Federal Register on July 17. All organizations and nonprofits that receive or apply for U.S. Agency for International Development (USAID) funds would be required to screen all who work with the charities and provide the information to the government, this includes phone numbers, date and place of birth, e-mail addresses, nationality, gender, profession, citizenship, and government issued identification (such as social security number and passport number.) The information will be collected to make sure that no one has any connection with individuals or groups associated with terrorism. The program is outlined as the Partner Vetting System (PVS). The notice is quite vague, and it leads to a number of questions. Such as, will this some day extend to all government grantees, and what is the information being screened against? The government may deny an organization based on the collected information, but may not tell the group why; another way of saying, because the government says so. In addition, the program goes into affect the day comments are due (Aug. 27), suggesting that the agency will not take into account concerns of the nonprofit community. OMB Watch plans to submit comments. The Global Health Council also opposes the PVS.

InterAction, a coalition of U.S.-based foreign aid groups including many that receive USAID funding, will have to deal with this head on and has sent a letter to the Chief Privacy Officer at USAID asking that the plan be withdrawn. The letter also points to the other numerous concerns, such as the possible infringement upon privacy laws in other countries and the possibility that the lives of those working in some areas may be put at risk. "If they are perceived to be extension of the U.S. intelligence community, terrorist attacks against them can only increase."

The InterAction letter also addresses there has not been any verified need for the program. "USAID has not demonstrated a need for such a system. There is no evidence that USAID funds are flowing to terrorist organizations through NGOs. The Office of the Inspector General has reported repeatedly that it has found no such diversion in exercising its oversight of programs in USAID's sensitive West Bank/Gaza portfolio. Nor has it reported finding such diversions elsewhere. Neither has any other competent authority. There is no statutory basis for the PVS or any similar system outside of, arguably, the West Bank and Gaza. The fact that Congress has not required such measures elsewhere indicates the proposed system has not been deemed necessary by our national legislature. Nor is it required by Executive Order 13324."

The Pentagon has said it will shut down its TALON anti-terrorism database that had been criticized for including information on antiwar protesters and other peaceful activists. "The Quakers can sleep easier." Read the ACLU press release here.

Seen but not Heard: Strengthening Nonprofit Advocacy, provides new research findings about the extent of nonprofit advocacy while also detailing the barriers and incentives for nonprofits seeking to engage in various types of policy activities. OMB Watch's Gary D. Bass and Kay Guinane co-authored the book with David Arons and Matthew Carter, with assistance from Susan Rees. Seen but not Heard was published in August by the Aspen Institute.

To order a copy, click here.

In June the American Civil Liberties Union (ACLU) released the October 2002 "Presidential Advance Manual" which outlines instructions for staff to deter potential protestors from President Bush's public appearances. The Washington Post is just now reporting on the manual the ACLU obtained as part of a lawsuit filed on behalf of two people arrested for refusing to cover their anti-Bush T-shirts at a Fourth of July speech.

It directs the White House advance staff to ask local police "to designate a protest area where demonstrators can be placed, preferably not in the view of the event site or motorcade route." . . . To counter any demonstrators who do get in, advance teams are told to create "rally squads" of volunteers with large hand-held signs, placards or banners with "favorable messages." Squads should be placed in strategic locations and "at least one squad should be 'roaming' throughout the perimeter of the event to look for potential problems," the manual says

As reported last month, the Federal Election Commission (FEC) plans to issue a proposed regulation some time in August in light of the June Supreme Court ruling in the Wisconsin Right to Life case. The Washington Post now discusses the intricacies of doing so. The FEC is likely to use the Court's opinion as a guide to make clear when an ad is permitted issue advocacy, and when an ad crosses the line into electioneering. The article discusses a debate that has unfolded between two election law specialists, Robert Bauer and Richard Hasen.

How the FEC will tilt is hard to predict, [Richard] Hasen said, especially because the commission is in some disarray, with a vacancy, a member whose tenure has expired and four who are awaiting Senate confirmation. Any new regulations require the votes of at least four members to take effect.

The Internal Revenue Service (IRS) released nearly 300 pages of public comments about the revised Form 990. When the draft was released the IRS asked for comments quickly and now the IRS has posted on its website what they have received through Aug. 12. The comments vary; to read through them, visit the IRS web site. Organizations may send in comments about the 990 changes to the IRS up until the Sept.14 deadline.

BNA Money and Politics ($$) now reports that President Bush is expected to sign the lobbying and ethics reform bill, S.1. "The officials, who asked not to be identified, told BNA that Bush still believes the measure is 'far from perfect,' but he is not likely to veto it when congressional Democratic leaders send him the measure in September. " This comes after earlier suggestions that the President may veto the bill. The bill is expected to be sent to the White House shortly after Labor Day. And if possible, check out this BNA ($$) special report, "New Rules for Lobbyists and Lawmakers," which analyzes S.1 section by section. And this Washington Post editorial, 'Expected to Sign.'

The Campaign Legal Center has updated its side-by-side comparison of the lobbying reform bills.

Three years ago Citizens for Responsibility and Ethics in Washington (CREW) filed a complaint with the Federal Election Commission (FEC) against the 527 organization Empower Illinois Media Fund (EIMF). Now, the FEC has fined EIMF $3,000 finding that they failed to register as a political committee and knowingly accepted individual contributions of over $5,000. The group violated the Federal Election Campaign Act (FECA) by running ads during the 2004 Illinois Senate race urging voters to vote against Barack Obama. For more information and all of the documents in the case, see CREW's website.

This decision is legally significant because it is the first time that the FEC has determined that a 527 that operated a web site that distributed information critical of a federal candidate's record could be required to register as a political committee. In other words, this decision could be read as requiring any organization that raises funds specifically to establish and operate a web site to disseminate information critical of a federal candidate's record to register as a political committee and raise money within the prohibitions and limitations of FECA.

Bob Bauer responds; "This urge to bring the Internet under control can be expected to continue. And this is not because Internet politics is causing all sorts of trouble for an election law now having to struggle harder to fight off corruption. Apparently, what is at work is an unwillingness to accept that this space should not be regulated like all others."

An editorial in Ohio's Columbus Post Dispatch encourages support for the role nonprofits play in registering voters, and applauds the Ballot Integrity Act of 2007. The measure prohibits states from passing any laws that hinder voter-registration drives.

The case involving government spying on the charity, Al-Haramain Foundation has received a lot of blog coverage in light of the contradictory and perplexing claims made by the government lawyers. For example, how can the argument be accepted that national security concerns require that the lawsuits be dismissed when, as Judge Margaret McKeown accurately stated that a lot is known about the surveillance program; "We know quite a lot." And as the Washington Post reported, late in the proceedings, McKeown complained of feeling "like I'm Alice in Wonderland." Read the New York Times story here.

Meanwhile, in a separate case involving the same defunct Islamic charity, the former director pleaded not guilty to federal conspiracy and tax fraud charges after returning voluntarily to the United States to fight the allegations. A federal lawsuit has been filed seeking to remove the Oregon chapter of Al-Haramain from the federal terrorism list.

The National Association of Muslim Lawyers, the National Association of Criminal Defense Attorneys, and Muslim Advocates sent a letter to Attorney General Alberto R. Gonzales objecting to the U.S. government's decision to create and publish a large list of unindicted co-conspirators in the Holy Land Foundation trial. Releasing the names goes against the Department of Justice's guidelines. The letter said that the list could certainly hinder charitable donations to Muslim organizations, further damaging Muslim Americans role in civil society. Many are unsure how to proceed with legal recourse to have their name or organization removed from the list. Furthermore, those on the list have not been charged with anything. Consequently the publication of the list has created a public smear campaign of these individuals and organizations and could potentially be damaging in the future especially if Holy Land is convicted.

The New York Times addresses the letter in this article, Muslim Groups Oppose a List of 'Co-Conspirators'". "Before the judge's order, however, the prosecution, while acknowledging that the list was unusually long, maintained that the names of the organizations would have come up in the trial anyway. Defense lawyers accused the Justice Department of using the list to create the aura of a vast conspiracy where none existed."

The letter sent to Attorney General Gonzales states, "Of particular concern is the apparent categorization of persons and entities based on activities that are facially protected under the constitution --- freedom of association and freedom to exercise religious belief --- for supporting the charitable activities of a registered 501(c)(3) nonprofit organization that, until the Fall of 2001, was perceived as a mainstream, legitimate charitable institution in the United States by its donors and volunteers. Therefore, it appears that well-intentioned persons and entities could very well be unfairly implicated in the government's prosecution of the Holy Land Foundation, without notice and an opportunity to challenge the allegations."

In addition, the Council on American-Islamic Relations, or CAIR, which is on the list, has filed a brief charging that the listing violates the uncharged parties' First and Fifth Amendment rights and asks for its name and all others to be removed from the list. "By publicizing CAIR and other Muslim advocacy groups as unindicted co-conspirators, the government has significantly impaired groups engaging in protected free-speech activities by depriving those named groups of any due process rights that they would have had at trial." And read this editorial which cites the list as a "McCarthyite political move."

Americans United for Separation of Church and State (AU) filed a complaint with the Internal Revenue Service (IRS) asking for the investigation of the First Southern Baptist Church of Buena Park, California. AU Executive Director Barry Lynn said that the church's pastor, Dr. Wiley Drake, issued a news release on church letterhead Aug. 11 endorsing Republican presidential candidate Mike Huckabee which leaves the church at risk for violating federal tax law barring electioneering by non-profit groups. Drake also endorsed Huckabee on a church-affiliated radio show and featured a Huckabee campaign official. AU questions the relationship between the church and the radio show, given that they share the same telephone number indicating that resources are also shared. Read the AU press release and its complaint here.

"Use of church letterhead to endorse a candidate for public office appears to violate the provisions of federal tax law that prohibit non-profit intervention in political campaigns," Lynn wrote. "Drake's endorsement of a candidate on a church-based radio show raises the same concerns."

And the following day AU criticized the church pastor "who has urged followers to pray for the demise of staff members of the religious liberty watchdog group."

The American Civil Liberties Union (ACLU) and the ACLU of Louisiana filed a lawsuit asking a federal judge to stop the payments of state taxpayer money to two Louisiana churches, asserting that the state's budget bill violates the Establishment Clause. There was no explanation of the purpose of the funds in the earmark to two churches and no restrictions are placed on permissible use of the grants, then theoretically the money could be used for religious purposes.

According to the ACLU press release; The state's general appropriations bill, HB1, signed into law last month, unconstitutionally directs taxpayer dollars in the amounts of $100,000 to Stonewall Baptist Church in Bossier City and $20,000 to Shreveport Christian Church. The grants were not subject to any oversight or competitive bidding process, and the bill offers no purpose or justification for the challenged earmarks. According to the ACLU, while the state can, in certain circumstances, provide funding to religious organizations for some programs that provide non-religious social services, the First Amendment squarely bars the government from funneling direct, unrestricted, cash payments to churches.

During a conference on rural philanthropy in his home state, Senator Max Baucus (D-MT) commented that cracking down on charitable abuses or imposing new regulations on nonprofit groups such as hospitals are not among his main concerns. According to the Chronicle of Philanthropy ($$) he said; "That's not at the top of my list." This may be surprising considering the report that his staff released last year with broad legislative recommendations for the nonprofit sector. During the conference last week Baucus urged foundations to double their grants to rural areas within five years. Baucus helped to set up the conference along with its host, the Council on Foundations.

Mr. Baucus also said he favored extending a law that allows people to give money from their individual retirement accounts to charity without paying any taxes, which expires at the end of this year. But he is not sure that expanding the provision to allow more types of groups to accept such gifts and increasing the amount donors can give — ideas advocated by nonprofit and foundation leaders — is politically feasible given Congress's vow to rein in the budget deficit."

The Internal Revenue Service (IRS) has proposed rules that would make more documents relating to tax-exempt organizations publicly available, including rulings that deny or revoke an organization's exempt status. "IRS said the rules affect organizations with exemptions under Sections 501(a) or 527, as well as groups that have been denied an exemption or have had their tax-free treatment revoked." To read the proposed rulemaking, click here.

Jon B. Eisenberg who is suing the government on behalf of the charity Al-Haramain Islamic Foundation, had to write an appellate brief in a government office supervised by a Justice Department security officer. The charity Al-Haramain says they were illegally wiretapped by the National Security Agency (N.S.A). Al-Haramain and two of its lawyers were mistakenly given proof that their international communications were the subject of N.S.A. eavesdropping in the spring of 2004, and that document is the center of an appeal that will be heard on Wednesday by a panel of three federal judges. How the court deals with the document, which the government quickly recovered leaving the lawyers with a "mental copy," may have great ramifications on future rulings on the legality of the wiretapping program. A New York TimesSelect ($$) article, "A Case So Shielded One Side Is in the Dark," describes the high level of security that Eisenberg and others have experienced.

''We were not allowed to keep a copy of what we wrote,'' Mr. Eisenberg continued. ''Our drafts were retained by the security officer for shredding. We were allowed to print out five copies of the final document: one for each judge, one for the government attorneys, and one to be retained'' in a Justice Department safe. ''Not even the judges' staff attorneys will be permitted to see the document.''

So, it's like this,'' he said in the e-mail message. ''Yesterday, under the auspices and control of my litigation adversaries, at their offices and on their computer, I wrote a brief, of which I was not allowed to keep a copy, responding to arguments which I was not permitted to see, which will be met by a reply which I will not be permitted to see.

Read the USA Today coverage which states; "The charity's lawyer scoffs at the often surreal lengths the government has taken to keep the Document under wraps."

Yesterday the Hudson Institute's Bradley Center for Philanthropy and Civic Renewal hosted a forum titled, "Should Nonprofit Organizations Play an Active Role in Election Campaigns?" Nonprofit leaders Pablo Eisenberg and Robert Egger both wrote separate opinion pieces in The Chronicle of Philanthropy that initiated the forum where the two continued this debate that developed into a discussion on the state of the nonprofit sector.

Egger, president of the D.C. Central Kitchen, said charities should be allowed to openly endorse candidates for political office, while Eisenberg, a Georgetown University scholar, said doing so would not be tolerated by taxpayers who expect the money they donate to charities to go to causes and not politics. Accurately, Eisenberg commented that nonprofits can in fact become involved in issues that are related to elections and the law allows some lobbying. Unfortunately many are either scared to cross the line, unacquainted with the laws so they simply do not lobby, and many of the foundations that fund nonprofits discourage such advocacy. Nonprofits can be blamed for not utilizing the means available to become politically engaged. Egger wants a discussion on innovation, to use any means possible to bring about change. The two actually agreed on a great deal, and one of the most distinguishing points was that Egger wants charities to be able to explicitly endorse candidates. Both agreed that charities need visionaries and new leadership as the discussion grew to address the future of the sector. A transcript of the forum will be available online by Aug.16.

Shortly before Congress left for their August recess, Rep. Zack Wamp (R-TN) introduced HR 3348, the United Nations Economic and Social Council Accountability Act of 2007. The bill calls on the Secretary of State to withhold funds from the UN unless it removes consultative status for all charitable organizations with any terrorist connections. While it directs the UN to investigate such organizations, it seems to conclude that the designation of an organization by the US or the UN is irrefutable. This should point the discussion back to the problem that there is a lack of due process and transparency in the designation process. The U.N. NGO committee is now reviewing the matter.

According to the New York Sun; "The effort comes amid reports that a humanitarian organization awarded 'consultative status' by the U.N. Economic and Social Council, the Saudi Arabia-based International Islamic Relief Organization, has separately been designated by the Treasury Department and the United Nations as being a front for Al Qaeda."

According to BNA Money and Politics ($$) the lobbying and ethics bill, the Honest Leadership and Open Government Act of 2007, is being further delayed until September because of concerns that President Bush may veto it. Your reaction may now be excuse me, a veto, after all this time? According to the article, a White House spokeswoman said the White House is reviewing the bill and there are some concerns with the provisions on earmarks, the revolving door, and the higher payments for air travel by federal officeholders and candidates.

Other sources said Democratic leaders are delaying sending the enrolled, final bill cleared by Congress to Bush in order to ensure there would be a chance to vote to override a veto, should it occur. If the measure were sent to the White House now and vetoed, it might not be returned to Congress for an override vote because lawmakers are adjourned until after Labor Day.

Reportedly the administration is concerned because Senators and excutive officials including the vice president would face a two year ban on direct lobbying after leaving office. The White House is also concerned with a provision that would require presidents running for re-election to pay charter air rates for campaign travel on Air Force One. All parties should make sure this bill becomes law, despite the debate on whether or not the earmark provisions go far enough. Hopefully the reform measure will become law shortly after Congress returns from recess and any suggestions of a veto are quickly dissipated.

Do you or your organization need help in training community organizers, or in particular, advice on the fundamentals of door knocking? At www.organizinggame.org, you will find resources that support face-to-face training for residents and community leaders. This interactive game (the "Organizing Game") innovatively teaches skills of door knocking, one of the most essential strategies for local community organizations.

We have found that the game is most effective when used in a group learning environment. You can use it as a fun addition to an already developed training or use it as the basis to create your own training (we will have instructor guides for the Toolkit soon). As a group you can discuss particular issues or questions that the game raises to apply the learning to your group's particular situation.

These materials have been used to train activists from many organizations in California and a Spanish version will eventually be released. I encourage you to visit www.organizinggame.org and click on "the game" on the right to play.

If the Internal Revenue Service (IRS) plans to look to the web sites that nonprofits link to for any prohibited campaign intervention, how would the IRS respond to organizations that have created election related web sites that have links to information on the candidates' positions on issues and the official candidates' sites? The Chronicle on Philanthropy ($$) directs us to two specific sites, www.health08.org and www.247townahll.org. While not endorsing any candidate, Health08.org was created by the Kaiser Family Foundation to provide health-care information and a comparison of the candidates' positions and proposals. The One Economy Corporation, a 501(c)(3) dedicated to fighting poverty, organized a national forum called "Poverty in America" on its web site 247townhall.org. I am curious how the IRS would respond to this considering they consider nonprofits to be responsible for the content on the sites it links to, and wants groups to review the web site connections.

Working Assets, the phone company that helps people donate to nonprofit groups when they use their services, has begun a nationwide effort to register new voters. Working Assets has partnered with nonprofits Women's Voices. Women Vote. - WVWV - (www.wvwv.org) and Project Vote (www.projectvote.org) to register new voters in 2008. This partnership is meant to reach a diverse population to increase voter registration and participation. "With the presidential campaigns heating up earlier than ever before, the stakes have never been higher, so it's important that people have a say in the outcome."

The campaign gives members easy ways to make a contribution to reach single women, minorities, and the poor -- three groups that have traditionally lagged behind other Americans in the democratic process -- just by adding a tax-deductible donation to their August bill payment. Additionally, anyone can make a donation online at WorkingAssets.com/onemillion. All contributions made through phone bills and online are matched 100 percent, up to $500,000.

To register to vote, GOVOTE.ORG: Online Voter Registration from Working Assets and Mobile Voter

The Friday Aug. 3 OMB Watch panel on the pros and cons of an Internal Revenue Service (IRS) bright line rule for campaign activities for charities and religious organizations has gained some press attention. From BNA Money and Politics: ($$)

During an OMB Watch forum on the pros and cons of bright line rules for campaign activities, attorneys said they are often left not knowing how to advise their clients on taking positions on political candidates, other than to say "be wary," and that caution is keeping some charities from achieving their core mission. The panel suggested that the nonprofit sector should come together to formulate draft rules to present to IRS that would make clear that exempt organizations cannot lose their tax exemption for engaging in prohibited political activity, although they could still be subject to excise taxes if they cross the line.

Friday's discussion successfully prompted a constructive discussion on whether the nonprofit sector would benefit from a bright line rule that defines what is and is not prohibited partisan intervention in elections. Four lawyers who specialize in nonprofit issues discussed these issues in great detail and discussed the problems that arise with the current "facts and circumstances" test which allows the IRS to apply their interpretation of the standard on a case by case basis. A suggested strategy was for the nonprofit sector to put forth and promote a bright line test because the IRS is unlikely to provide clarity otherwise. "The time is ripe for a small group of charitable practitioners to develop a draft rule referencing Internal Revenue Code Section 4965 and Section 162, Marcus Owens, an attorney with Caplin & Drysdale, said." The Wisconsin Right To Life Supreme Court decision was also addressed and its possible implications for 501(c)(3) organizations.

And from the coverage in the Chronicle of Philanthropy: ($$) "But panelists at an Aug. 3 forum organized by OMB Watch, a Washington advocacy group, said the tax agency's increased enforcement is stifling legitimate political discussions by nonprofit groups because the agency has yet to offer clear definitions about what is off limits. 'We really don't know how to comply with the ban on partisan political activities,' said Kay Guinane, director of OMB Watch's Nonprofit Speech Rights Program. 'The uncertainty surrounding these rules makes our job difficult."

And read this article on the panel from the latest Watcher.

Well now that the lobbying and ethics bill is awaiting the President's signature, many are now asking how much the legislation will actually change the way business is done. An article from today's Washington Post is appropriately titled, "Draining the 'Swamp' Is Not So Easy." For example, now that lobbyists can't buy dinner for a member of Congress, will this only force them to spend more money at political fundraisers instead?

Government watchdogs and ethics lawyers generally agree that the bill would shed new light on the Washington influence game but wonder how those who don't play ball would be found and punished. Without an effective bureaucracy for managing the flow of new disclosures provided by the law, they say, the legislation won't mean much.

And the New York Times reviews the concerns now being expressed among lobbyists and their exposure to increased risk.

By requiring them to certify the good behavior of their employees, the law puts lobbyists at new legal risk and could subject them to new pressure from prosecutors. And new centralized disclosures of lobbyists' campaign contributions, fund-raising activities and even their achievements — in the form of Congressional earmarks in spending bills — make it only easier for federal investigators to paint unflattering portraits of lobbyists' influence.

Today OMB Watch has released a new report on the role of nonpartisan, nonprofit organizations in elections. How Nonprofits Helped America Vote: 2006 describes nonprofits' electoral engagement during the 2006 election and their preparation for upcoming elections. The work of nonprofits is vital to increase civic participation, and nonprofits should be encouraged to continue this type of activity as the election season looms near.

Read How Nonprofits Helped America Vote: 2006

We have followed the Chiquita Brands International case and its intentional funding of Colombian terrorist organizations because of the apparent double standard that is applied to for profit companies compared to charities. More news has now surfaced which unfortunately details that the U.S. Justice Department knew of the company's payments. In April 2003 a board member of Chiquita disclosed to Michael Chertoff, then assistant attorney general and now secretary of homeland security, about the company's payments and clear violation of anti-terrorism laws. Allegedly, Chertoff told the Chiquita representatives that the activity was illegal, but they should wait for more feedback; "Chertoff acknowledged that the matter was complicated, and said that he would get back to them after conferring with other administration officials." Chiquita's executives were convinced that after the meeting with Chertoff and lacking any further response, the government had not clearly demanded that the payments stop. Now federal prosecutors are deciding whether or not to charge many former Chiquita company officials for approving the illegal payments. Lawyers for Chiquita claim that their clients did not intentionally break the law, but believed they were waiting for an answer from the government officials.

So here we have to greatly reiterate an important point, stressing the clear disparity in regards to the treatment of charities suspected of having links to terrorism and a company that admitted to funding terrorists. Federal action in cases involving the three largest U.S.-based Muslim charities appears to be based on questionable evidence. What is even more distressing is that with the case of Chiquita, the U.S. government knew about the payments. The attorney general of Colombia, Mario Iguaran denied claims that the company was a victim of extortion and said the company knew its payoffs were used to fund operations against peasants and union workers.

This afternoon, the Senate passed the Honest Leadership and Open Government Act of 2007, by a vote of 83-14. Among the significant reforms included in the bill are the following earmarks disclosure requirements:

• all earmarks in bills, resolutions, conference reports and managers' statements must be identified and posted on the internet at least 48 hours before a vote
• Senators must certify that they and their immediate family will not financially benefit from any earmarks they've requested
• new earmarks in a conference report -- i.e., not approved by either House -- are now subject to a 60-vote point of order

As OMB Watch wrote in a release yesterday, the bill mandates "important earmark disclosure ... that, for the first time ever, will allow the public to view the sponsors of congressional earmarks on the Internet." In fact, the debate surrounding the bill has prompted members of Congress to go further on their own -- two dozen of them began posting their earmarks requests this spring, also a first and close to unthinkable as recently as a year ago.