Doggett Shines a Light On Stealth Coalitions

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Rep. Lloyd Doggett (D-Texas) was new to the Ways and Means Committee in 2000 when he began to notice a pattern that troubled him: Many of the groups lobbying the panel for tax breaks had seemingly innocuous names but would not disclose who was funding them.

Over the next two years, one such group, the Section 877 Coalition, shelled out $940,000 to protect tax breaks for wealthy people who give up their U.S. citizenship. Another, the Council for Energy Independence, worked to preserve a synthetic fuel credit worth billions of dollars to a select group of manufacturers.

In committee hearings and in an exchange of letters, Doggett locked horns with lobbyists from PriceWaterhouseCoopers, which was representing both coalitions.

“We saw in the Ways and Means Committee this tactic to disguise who was behind some really egregious pieces of legislation,” Doggett said.

In 2002, by leaning on a Treasury official who had worked at the lobbying firm, Doggett learned the Section 877 Coalition was funded by a single family: the Arisons, who made a mint by founding Carnival Cruise Lines. Family patriarch Ted Arison saved millions in taxes by giving up his U.S. citizenship and moving to Israel. To push for the tax break anonymously, the family trust took advantage of a loophole in the 1995 Lobbying Disclosure Act that allows firms to set up “coalitions” that exist only on paper while their funders remain in the shadows.

Now, the practice is getting fresh scrutiny as Congress seeks to tighten ethics rules after a rash of lobbying scandals.

Democratic lawmakers already are moving to impose new transparency requirements on the groups. A little-noticed provision in the ethics reform measure Senators approved last month would require any source exerting substantial control over a coalition to be identified.

Doggett, meanwhile, has reintroduced a bill to tackle the issue that he has been pushing since 2002. It has gathered 49 co-sponsors this year and aides say it likely will be included in a broader legislative package Democratic leadership will unveil as soon as this week.

In the decade since Congress last approved an overhaul of lobbying laws, coalitions have proved an increasingly popular method for corporate interests to streamline single-issue campaigns and, in some cases, sidestep transparency rules. The causes range from the mundane — the Coalition of American Decorative Mirror Importers, for example — to the global, with energy companies using the tactic as they gear up lobbying in the debate over climate change.

Over the previous five years alone, at least 791 such groups have formed, according to a 2006 report produced by the Congressional Research Service. CRS was able to assemble complete membership information for less than 19 percent of those groups. For nearly 53 percent, the researchers were unable to identify any members.

Congressional watchdog groups are campaigning for greater disclosure from the groups. Celia Wexler of Common Cause called it a “no-brainer.”

“If you are going to form a coalition, then the members of that coalition should be identified. Who the heck are we talking about? The public has a right to know,” she said. “And elected officials, if they are making decisions, have a need to know.”

During the last Congress, some of the biggest-ticket lobbying campaigns were launched by coalitions whose public membership rolls were incomplete at best.

The loudest voices in the debate over a proposed trust fund to compensate victims of asbestos-related illnesses formed front groups to organize their efforts. Companies such as Viacom, Pfizer and General Electric in 2005 alone pumped $10 million into the Asbestos Study Group, housed at the firm then known as Swidler Berlin, to help push a bill. They got backing from old-line manufacturers and insurers, who created the Asbestos Alliance, a group created by the National Association of Manufacturers. Companies opposed to the bill contributed to a group called the Coalition for Asbestos Reform, which existed only on paper as a creation of the firm Sonnenschein Nath & Rosenthal.