Eric Wang

New Sanders Group Illustrates Legal Compliance Challenges
Politicians looking to operate 501(c)(4) groups had better lawyer up

Since concluding his presidential campaign in July, Vermont Sen. Bernie Sanders has been planning and raising money for Our Revolution, a new advocacy group, to continue championing the issues he ran on.

From a legal standpoint, the organization is aptly named, as its relationship with a sitting U.S. senator raises novel questions of law. Furthermore, a “revolution” literally means a circular motion, and the complex convergence of campaign finance, tax, and congressional ethics rules at play here will cause even the most experienced lawyers’ heads to spin. Other politicians looking to replicate this model are advised to retain a “yuuuge” army of attorneys.

A Constitutional Right to Incumbency? | Commentary

Imagine if, 20 years ago, Congress had passed a law limiting each car manufacturer or retailer to spending no more than a certain amount per year on research and development or expanding its operations. Large, established institutions like General Motors or Walmart might have done just fine. But startups like Tesla and would never have been able to make the capital-intensive investments to get off the ground, and consumers would have been worse off for it.

A Not-So-Bright 'Fix' for the IRS | Commentary

As Congress and the Department of Justice continue investigating the IRS scandal, there is growing recognition in Congress of the need to fix the laws or regulations that facilitated the agency’s targeting of ideological nonprofit groups. Recently, a panel of experts calling itself the Bright Lines Project presented a 32-page recipe for reform (“Finding Congressional Solutions to the IRS Scandal,” June 14). Despite its apparent good intentions, in practice, the proposal would insulate elected officials from public opinion and pressure. Members of Congress committed to the First Amendment should reject this guidance, which would make a bad situation worse.

As the name suggests, the Bright Lines Project purports to provide clear rules for the IRS to delineate the types of political activities that are restricted or off-limits for nonprofits. Currently, the agency relies on a nebulous “facts and circumstances” test for determining when a charity engages in prohibited “political intervention,” or when a social welfare group, union or trade association exceeds its limit on the same. When asked what constitutes “political intervention,” the IRS basically answers, “it depends on the facts and circumstances.” It’s easy to see how this could be a source of rampant abuse.

Political Intelligence: The New Oxymoron | Commentary

There used to be a time when “military intelligence” was a prime example of an oxymoron. But as our brave men and women in uniform have prosecuted two major wars over the past decade so valiantly and selflessly, dumping on our military has fallen out of fashion. So what, nowadays, can we cite as the prototype of an oxymoron? May I suggest “political intelligence,” which seems to be the distraction du jour on Capitol Hill.

“Political intelligence” first became a major issue last year, when Congress was debating the STOCK Act, which was meant to address concerns that members were benefiting from trading in companies that were subject to their jurisdiction. Sen. Charles E. Grassley, R-Iowa, sponsored an amendment that would have imposed registration and reporting requirements on “political intelligence” professionals akin to the requirements for lobbyists. The amendment was watered down to require a Government Accountability Office study on the issue, which the agency issued last month.

Wang: DISCLOSE Act Causes Less Disclosure

The wisdom of the ages tells us the road to hell is paved with good intentions. And so it is with the so-called DISCLOSE Act. Ever since the Supreme Court issued its Citizens United ruling in 2010, self-styled reformers have tried repeatedly to push the bill through Congress, including in the most recent session. The overly broad proposal has sucked all of the oxygen out of the air for any realistic legislation to address concrete, statutory issues resulting directly from Citizens United.

Take, for example, the recent controversy over certain contributions to the Restore Our Future and FreedomWorks for America super PACs. Last September, a Knoxville, Tenn., attorney formed two companies, Specialty Group and Kingston Pike. One week later, the companies began giving several million dollars to FreedomWorks for America. By Election Day, the two entities had sent $12 million to the super PAC — more than half of its total contributions last year. When asked about the companies’ line of business, the attorney, William Rose Jr., said cryptically that it was a “family secret.”

Wang: When It Comes to Campaign Cash, There Will Be Scandal

In 2007, Hollywood portrayed the upheaval brought on by the California oil rush in a movie aptly titled, “There Will Be Blood.” As we head into the 2012 elections, critics are predicting similar turmoil from the rush of money in politics brought on by the Supreme Court’s Citizens United decision.

This year, political spending is expected to total $11 billion — more than double the $5.3 billion spent in the 2008 presidential cycle. One Congressional champion of controls on campaign cash has been buzzing around with unsubstantiated allegations of “major scandals.”

Wang: Lobbyist Association Content to Tread Water

As one of his first acts in office, President Barack Obama issued an executive order prohibiting lobbyists from serving in key administration positions. Next, the administration banned lobbyists from talking to officials about stimulus funding. To cap things off, the Obama White House forbade lobbyists from serving on federal advisory committees. Many in Washington dubbed this populist offensive a “war on lobbyists.”

For a while, it appeared the American League of Lobbyists, the most prominent professional association for K Street, was standing its ground and pushing back against the attacks. Recently, however, ALL has proposed a series of legislative changes that purport to tighten regulation over the profession. After publicly unveiling the proposals, ALL’s first step was, of course, a good old-fashioned campaign at lobbying Congress to enact the changes.

Wang: A Time for Reflection, Not Legislation

Barely 24 hours after a lone, deranged gunman shot Rep. Gabrielle Giffords (D-Ariz.) and others attending a constituent event, the recriminations had already begun. Never mind that there was “no evidence that the [gunman] ... was influenced by inflammatory political rhetoric,” as Washington Post reporter Robert Barnes noted. The denunciations of contemporary political discourse immediately began to resemble the supposedly toxic rhetoric itself. The local sheriff excoriated his fellow Arizonans for creating a “mecca for prejudice and bigotry,” while MSNBC’s Keith Olbermann blamed Sarah Palin for “amplifying violence and violent imagery in politics.”

Beyond verbal condemnation, some have also proposed legislative responses. Rep. Robert Brady (D-Pa.) announced he would introduce a bill to extend the current provision in the criminal statute addressing threats against the president to also cover Members of Congress. In Brady’s words, “[W]e are trying to criminalize behavior that puts bull’s-eyes over Members of Congress and their districts” — a reference to Palin’s “hit list” of incumbents whom she had targeted for defeat.

Wang: New Members Show Living at Work Possible

Over the next few weeks, more than 100 fresh-faced Members will prepare for their arrival on the Hill. They will set up their offices, assemble staff and steel themselves for the monumental legislative issues facing the 112th Congress.

They will also have to deal with some more mundane tasks, such as where to live.

Wang: Close Oil-Government Ties Are Unremarkable

As investigations continue into the Gulf Coast oil spill, the oil industry's ties with the government have come under scrutiny. Stories abound about former Congressional and agency staffers becoming industry lobbyists and about the close personal relationships that they maintain with government officials. Without minimizing the ethics issue, it is important for Congress not to turn ethics into a bogeyman that distracts from genuine structural reforms.

[IMGCAP(1)]To begin with, the fact that the government and the oil industry are closely associated is unremarkable; by law, they are joint venturers. The federal government owns and administers the Outer Continental Shelf on which the oil rigs drill. Through leases, the government collects 37.5 percent of the oil revenue. Thus, the government has a direct financial stake, not to mention secondary interests in maintaining affordable oil prices and keeping tens of thousands of workers off unemployment.

Wang: ‘Swing Door' Is Good for the Political System

The past few months have not been good ones for consumer and worker safety. The recall of millions of potentially runaway Toyotas and the tragic deaths at a West Virginia coal mine that had been cited for hundreds of safety violations have cast a cloud of scrutiny over the National Highway Traffic Safety Administration and the Mine Safety and Health Administration.

[IMGCAP(1)]In the wake of both events, the Washington Post ran front-page articles citing the hundreds of former NHTSA, Transportation Department, MSHA and Congressional officials and staffers who are now employed as lawyers, consultants and lobbyists for the auto and coal industries. Conversely, the Post cited many former industry employees who now work as regulators or policy staff overseeing their erstwhile employers. In Congress, some Members have called for stricter revolving-door regulations to address these concerns.

Wang: ‘Firewall' Needed for Contributions and Earmarks

There was a time when Members of Congress up for re-election could fall back on the tried-and-trusted argument that they "bring home the bacon." But runaway deficits and perceived earmarks abuses in recent years — from the infamous "Bridge to Nowhere" to Members of Congress allegedly trading earmarks for campaign cash — have made federal spending toxic.

[IMGCAP(1)]While both parties in the House have pledged a moratorium on earmarks, sooner or later the allure of spending the public dime will be too strong to resist (consider it lawmakers' equivalent of "retail therapy"). Already, several GOP House Members have requested earmarks (albeit mostly for public works projects), notwithstanding their caucus' one-year moratorium on all earmarks, and the Senate has rejected a two-year moratorium. To the extent Members are continuing to earmark, Congress may wish to consider some internal controls to reduce the appearance or threat of corruption sometimes associated with the practice.

Wang: In Health Debate, Don't Shoot the Messengers

Supreme Court Justice Louis Brandeis' famous maxim, that "sunshine is the best disinfectant," has long been the basis for our nation's government ethics laws requiring disclosure. This principle is not true in all contexts, however. Sometimes, sunshine can create a glare that distracts or blinds us from the really important issues. Such may be the case with issue advocacy groups, like the ones that have played such an important role in the current health care debate.

[IMGCAP(1)]Groups on both sides with innocuous-sounding names, like Health Care for America Now or Partnership to Improve Patient Care, have come under question for not being required to disclose their funding sources that allow them to run expensive ad campaigns. Unlike campaign contributions or lobbying, which must be publicly disclosed on detailed reports, most issue advertising is not subject to the same requirements.

Wang: A Bull Market for Donkeys and Elephants?

Most Beltway insiders are familiar with the saying, “In Washington, first you do good, and then you do well.— Recently, some Members of Congress have been questioned for not properly following that sequence with their investments. Specifically, several Members of both parties with stock in medical device firms were criticized for voting against a multibillion-dollar tax increase on medical devices to help fund the costs of health care proposals. Essentially, they were accused of not voting to do good, but to do well for themselves.

[IMGCAP(1)]The Washington Post ran a mildly alarmist front page article on these potential conflicts of interest, but it followed the typical story line by presenting only one side of the issue. Like bacteria or cholesterol, of which there are both good and bad varieties, many Members’ investments can actually be beneficial to the body politic. An “investment— can serve not only a remunerative purpose, but a societal one as well. To the extent lawmakers are investing in business and innovation, they are stepping outside the Washington bubble and into the shoes of millions of other Americans.

Administration Promotes Lobbyist ‘Brain Drain’

Within hours of taking office, the Obama administration indiscriminately banished lobbyists from executive branch service, and soon thereafter prohibited them from even speaking with officials on important matters. But the White House soon realized it had cut off its own nose to spite its face, when it had to exempt registered lobbyists appointed to key posts. Instead of dropping the knife, the administration has now also expelled lobbyists from federal advisory committees, thereby lopping off its own ears. At this rate, even the most comprehensive health care overhaul cannot heal these wounds.

On Sept. 23, White House Special Counsel Norm Eisen announced on his blog that, beginning Oct. 30, registered lobbyists could no longer serve on the approximately 1,000 federal advisory committees. These committees, which were formalized by law in 1972 (but which trace back to the committee that advised President George Washington during the 1794 Whiskey Rebellion), are established to ensure that federal agencies are informed by crucial real-world perspectives.

Ground Rules Needed for the Overnight Lobby

‘What can Brown do for you?— Besides delivering packages, the men and women in UPS uniforms now have lobbying as part of their portfolio. Depending on which side of the story one believes, UPS either has requested or ordered its employees to write thousands of letters to Members of Congress in the increasingly ugly death match with archrival FedEx over labor regulation. The epic clash highlights the important laws that corporations must consider when corralling rank-and-file employees into their lobbying campaigns.

First, some context: UPS, which started out as a truck-based service, falls under the jurisdiction of the National Labor Relations Act. Its rival FedEx is subject to the Railway Labor Act, which makes unionization, bargaining and striking tougher. UPS, having lost its earlier round of lobbying to be placed under the RLA like FedEx, is now lobbying for Congress to revoke FedEx’s competitive advantage and to similarly hamstring it under the NLRA.

White House Intensifies War on Lobbyists

Imagine if Congress passed legislation without ever having a floor debate or taking phone calls from constituents. Imagine if the Senate, the “world’s greatest deliberative body,— confirmed appointees without ever meeting with or hearing from the nominees. Imagine if judges or executive agencies decided matters without ever holding a hearing.

That is now the gist of the Obama administration’s continuing (and worsening) war on lobbyists. The collateral damage is not only to Americans’ freedom of speech but also to reasoned and informed decision-making, which goes hand-in-hand with free speech.

Executive Order on Lobbying All Sound and Fury

If Shakespeare were writing a play about the Obama administration, it would inevitably include an executive order proclaiming: “The first thing we do, let’s kill all the lobbyists.”

As a candidate, Barack Obama signaled his disdain for K Street by prohibiting lobbyists from contributing to, and generally from working on, his campaign. As one of the first acts of his presidency, Obama signed an executive order expanding “revolving-door” and gift restrictions applicable to lobbyists. Yet the nomination of former Sen. Tom Daschle (D-S.D.) (itself a Shakespearean tragedy) and other top appointments have exposed Obama’s war on lobbyists as too broad and, at the same time, too narrow.

Federal Campaign Regulations Are as Clear as Fudge

"I scream, you scream, we all scream for ice cream." So it seemed, when Ben & Jerry’s heartily endorsed Sen. Barack Obama (D-Ill.) with a new confectionary flavor to complement (and compliment) his campaign theme of “change.”

Given the unprecedented excitement and participation in this year’s presidential campaign, many corporations may be similarly tempted to jump into the fray. But before they do, they had better review election laws, which may leave them screaming from indigestion.