The Internal Revenue Service (IRS) has cleared the United Church of Christ (UCC), concluding that the denomination did not violate the section 501(c)(3) ban on political campaign intervention when Senator Barack Obama (D-IL) addressed its national meeting in June 2007. In February the UCC publicly announced that the IRS was investigating whether Obama's speech, while he was already a presidential candidate, violated restrictions on political activity of 501(c)(3) groups. Based on the church's response to its inquiry, the IRS found that the activity was not intervention or participation. The factors that the IRS considered included the fact that Obama was invited to speak in May 2006, before he announced his candidacy, and that he spoke in a noncandidate capacity.

The May 13 determination letter from the IRS noted that the UCC had taken the necessary steps to avoid Obama's appearance from being political in nature. The UCC "verbally communicated to those in attendance that Senator Obama was there as a member of the church and not as a candidate for office, that the audience should not attempt to engage in any political activities, and that the church's legal counsel had advised Senator Obama's campaign of the ground rules for his speech. . . . [T]he [UCC] did not authorize (or have any power to authorize) campaign volunteers for Senator Obama to set up tables near the entrances of the Hartford Civic Center . . . and that the activity was conducted on public property outside the control of the synod and therefore was not attributable to the church."

The Washington Post On Faith section reports that UCC Nationwide Special Counsel Donald C. Clark said that before an IRS inquiry or investigation even begins, the IRS should notify the entity, "with its attendant costs and chilling effect on constitutionally protected associational rights [. . . ] However, that currently is neither a Congressional mandate nor IRS practice, and was not done in this case." The posting further observes, "We need an Internal Revenue Service that is clear in its guidelines for tax-exempt religious organizations and we need the IRS to follow those guidelines. Otherwise, we are only left to conclude that there is either an organized or even a disorganized effort to repress certain faith voices while giving others a free pass."

Senate Homeland Security and Governmental Affairs Committee Chairman Joseph Lieberman (I-CT), has asked Google to remove Internet video content distribution of material produced by terrorist groups through YouTube. According to Lieberman's press release, the videos "show assassinations, deaths of U.S. soldiers and civilians, weapons training, incendiary speeches by al-Qaeda leadership, and other material intended to encourage violence against the West." Lieberman references the recently released report by the committee that details how dangerous the Internet can be as a way to spread support for terrorist activities.

In a letter Lieberman explains that removing offensive content "should be a straightforward task since so many of the Islamist terrorist organizations brand their material with logos or icons identifying their provenance." He also asks that Google explains how it will enforce YouTube "community guidelines to address violent extremist material."

According to The Hill Google rejected this request, "claiming the action would stifle the 'free speech' the Google-owned site YouTube encourages. . . . 'YouTube encourages free speech and defends everyone's right to express unpopular points of view,' the company replied. 'We believe that YouTube is a richer and more relevant platform for users precisely because it hosts a diverse range of views, and rather than stifle debate we allow our users to view all acceptable content and make up their own minds."

Pastor Wiley Drake of First Southern Baptist Church in Buena Park, CA has reportedly been cleared by the Internal Revenue Service (IRS) of allegations that he violated the ban on election intervention. Drake made it public that he was being investigated by the IRS in February for endorsing presidential candidate Mike Huckabee in a press release on his church's letterhead and on his radio program.

The IRS letter announcing that he is no longer under investigation, and did not violate the tax code, was provided to local media. The letter states; "the press release date August 11, 2007 was a personal endorsement by the church's pastor . . . sent from Rev. Drake's personal email account and sent to personal acquaintances and was not sent to any of the church's congregants. . . . Based on these facts, the IRS has concluded that Buena Park First Southern Baptist Church did not engage in prohibited political campaign intervention in violation of the requirements of IRC section 501(c)(3)."

Drake's counsel was from the Alliance Defense Fund (ADF) and is part of ADF's "Pulpit Freedom Sunday".

Millions of Americans, especially in rural and low-income urban areas don't have high speed Internet access. The Communications Workers of America (CWA) is running a public policy and awareness campaign, Speed Matters, advocating for a national high speed network. Last year OMB Watch helped spread the word about the Speed Matters project. Speed Matters used thousands of online speed tests from regular Americans across the country to develop a state-by-state report on Internet connection speed. In preparation for CWA's second annual speed test report this summer, they need as many people as possible to take the speed test. The report will be released around the time of the Democratic and Republican National Conventions to make sure high speed Internet access is on both parties' agendas.

In the 21st century with new Internet capabilities, civic participation is enhanced with advanced high capacity communications networks. With the Internet, Americans can get informed of important issues from their backyard, to across the world, and then act on those of importance to them. Not only do voters rely on the Internet, but the government relies on it to provide information and forms and those without access to such information are, in effect, penalized.

As CWA describes; "The emergence of a new communications system — one based on high speed interactive networks designed for voice, data, and video communications — opens up tremendous opportunities for improving the quality of our economic, civic, and personal lives. A true high speed digital network offers advantages far beyond increased entertainment choices; it will accelerate business development and innovations in telemedicine, interactive distance learning, and e-government."

Please take the speed test now. Or visit www.speedmatters.org for more information. And tell your friends and family about the speed test!

The Internal Revenue Service (IRS) will be holding a free phone forum on Rules for Tax-Exempt Organizations During An Election Year. The Forum is scheduled for June 9, 2008, and will be repeated the following day. Space is limited and will be reserved on a first-come basis, and organizations may register as a group. According to the IRS, the forum will discuss the distinctions between political activity, lobbying and general advocacy, and which activities are permissible by 501(c)(3) charities, 501(c)(4) social welfare organizations, 501(c)(5), 501(c)(6), and 527 political organizations. Participants can submit questions, in advance, to be answered during the sessions.

The session on June 9 is scheduled for 10:00-11:00 a.m. (EST) and on June 10 for 1:00-2:00 p.m. (EST). For information on how to participate and to reserve a spot, click here.

BNA Money and Politics ($$) reports that the Internal Revenue Service (IRS) is considering a project to look at 501(c)(4) organizations. During the American Bar Association Section of Taxation conference session on election issues for tax-exempt organizations, Judith Kindell, a tax law specialist in IRS's rulings and agreements section, addressed the issue of 501(c)(4)s. "Immediate contact does not work well for 501(c)(4)s, she said, because the issue for them is 'are they paying the appropriate amount of tax?; do they have an activity that is their primary activity that is in furtherance [of their tax-exempt purposes?] You can't just look at one activity, you have to look at the full scope of their activities, so we do have some plans to do that look-back.' she said." Kindell recommended that lawyers report to the IRS if they witness (c)(4)s that exceed their permitted activity. 501(c)(4) organizations may engage in partisan political activities, as long as it is not their primary purpose.

Greg Colvin of Adler & Colvin, who moderated the panel on election issues, said reporting on political candidate campaign activity includes describing the activities, indicating the amount of money spent, and reporting volunteer hours. Now that the information must be revealed, it could be the basis for IRS determining that some organizations, such as 501(c)(4)s, have violated the prohibition on political activity not being their primary purpose, he said. The reporting will be intense if you are a 501(c)(4), 501(c)(5), or 501(c)(6) and engaged in some political activities, he said. Organizations will have to jump through hoops involving a separate segregated fund or political action committee and the Section 162 nondeductible business tax, to name a few.

The Alliance Defense Fund (ADF), an Arizona nonprofit, has started an effort to encourage ministers to "use their pulpits to preach about election candidates this September." 501(c)(3) nonprofits, including churches, are prohibited from endorsing or publicly opposing political candidates or intervening in candidates' elections. The group would like if one sermon prompts an Internal Revenue Service (IRS) investigation that becomes a court battle, leading towards an outcome ruling the tax provision unconstitutional.

The ADF press release states; "The new initiative will equip, protect, and defend pastors who wish to exercise their First Amendment right to openly discuss the positions of political candidates and other moral and social issues from the pulpit. Participating pastors across the country will deliver a sermon along these lines in their own churches Sept. 28."

The Wall Street Journal reports; "Alliance fund staff hopes 40 or 50 houses of worship will take part in the action, including clerics from liberal-leaning congregations. About 80 ministers have expressed interest, including one Catholic priest, says Erik Stanley, the Alliance's senior legal counsel."

Americans United for Separation of Church and State (AU) responded with a press release denouncing the initiative, saying the "Religious Right group's plan to ask churches to violate federal tax law on electioneering is deplorable."

"Yet, the congressional officials in charge of implementing the new disclosure system have provided no guidance, forms, or even computer passwords that thousands of lobbyists will need to comply with the new disclosure system required by the Honest Leadership and Open Government Act of 2007."

This reporting will apply not only to lobbying firms and organizations with in-house lobbyists; individual lobbyists also will have to report their campaign contributions and payments to charities linked to officials. Lobbying organizations and individual lobbyists will use the new forms to report their contributions, as well as payments for events honoring government officials, or charitable contributions to entities linked to members of Congress.

An article in the Washington Post shows an interesting connection; campaign spending and influence on policy. The National Association of Home Builders, one of the biggest corporate donors to politicians, stopped its campaign contributions "as a protest" until they considered that Congress was adequately regarding the weak housing market. "The decision showed how closely interest groups tie their donations to the actions they hope lawmakers will take on their behalf — a connection lobbyists do not want to flaunt for fear of legal and political repercussions."

According to the Center for Responsive Politics, the top ten Political Action Committees' (PACs) campaign contributions increased 9.3% from the 2001-2002 cycle to the 2005-2006 cycle. Unfortunately, to get favorable legislative results, withholding campaign contributions could be an effective strategy for the privileged. If only the less wealthy or even groups that do not make contributions, and perhaps even voters, can have such an influence.

On May 1, 2008, in a 2-1 decision the Court of Appeals for the Fourth Circuit ruled a North Carolina law prohibiting political action committees from accepting individual contributions of more than $4,000 to be unconstitutional.

In North Carolina Right to Life v. Leake, the Court of Appeals found that the contribution limit as applied to committees making only independent expenditures did not further the state's interest in preventing corruption, therefore burdening the right of political association. As in the Supreme Court's Wisconsin Right to Life decision, the Fourth Circuit Court also found that it was unconstitutional to rely on contextual factors to determine whether a communication "supported" or "opposed" a candidate. The opinion states such "standards typically lead to disputes over their meaning and therefore litigation."

[A]ny attempt to identify communications as election-related without focusing on words that explicitly label them as such threatens to infringe on protected First Amendment liberties. . . . Therefore, . . . a communication can be deemed the "functional equivalent of express advocacy only if [it] is susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate." The purpose of this requirement is to avoid chilling political expression by forcing a speaker to have to defend his communication from regulation.

Some consider the case to be an "issue that is surely headed to the Supreme Court either in this case or in another case, such as the SpeechNow.org case." SpeechNow.org is challenging federal campaign finance law as too restrictive of independent political groups and as a violation of the First Amendment.

An article in BNA Money and Politics ($$) reports that the new Form 990 requires organizations to provide more information to the Internal Revenue Service (IRS) on their political activities.

Referencing a recent court decision that determined that the IRS should not have revoked the tax exempt status of a 501(c)(4), Craig Engle of the law firm Arent Fox, commented that the "IRS has a mixed record in being able to back up its efforts in court. . . . [the decision] might encourage similar [501(c)(4)]groups to increase their political involvement."

The four-page Schedule C of the new Form 990 requires filers to describe their "direct and indirect political campaign activities." It also asks for detailed information about Section 527 political organizations to which a filer has contributed. Another part of the schedule asks for detailed information about a filer's lobbying activities, including direct lobbying to influence legislation, as well as "grass roots" lobbying to influence public opinion.

When the draft Form 990 was released OMB Watch submitted comments on the political activities section, Schedule C.

Despite their continued appeal, the National Association of Manufacturers (NAM) revealed the names of 65 members on its website. Originally NAM filed a lobbying report that cited the pending case. NAM is opposed to a provision in the Honest Leadership and Open Government Act that requires groups to disclose those that contributed at least $5,000 each during the first quarter of the year and actively participated "in the planning, supervision or control of such lobbying activities." NAM argues that the requirement violates their First Amendment rights.

NAM continues to challenge the requirement in a case pending at the U.S. Court of Appeals for the D.C. Circuit. According to BNA Money and Politics ($$); "NAM said at that time that it would continue to pursue an appeal of the court decisions upholding HLOGA. The U.S. Court of Appeals for the District of Columbia Circuit granted April 28 NAM's request for an expedited appeal process . . . The move by the D.C. Circuit to allow an expedited appeal could permit a decision before the next lobbying-disclosure filing deadline date of July 21, according to a NAM lawyer."

For more background; from the latest OMB Watcher, "Court Upholds Stealth Lobbying Disclosure".