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NAM And Congress Meet Head-On In Dispute Over Disclosing NAM's Big Members Under New Lobbying Law
BY RICHARD McCORMACK
richard@manufacturingnews.com
The National Association of Manufacturers' legal challenge to the last year's Honest Leadership and Open Government Act, which would require the disclosure of NAM members paying more than $5,000 per quarter to pursue lobbying tasks, is headed for a showdown.
In its lawsuit -- NAM vs. Taylor, filed in U.S. District Court for the District of Columbia -- NAM claims that the new law violates the first amendment rights of its members "petitioning for redress of grievances, freedom of speech and freedom of association," according to NAM president John Engler. The law would have a "chilling effect" on an organization like NAM because it would discourage companies and their employees "from exercising their rights to participate in the political process," writes Engler in an op-ed piece that appeared in the March 3 issue of The Hill newspaper. This section of the law (207) "does not apply to groups like labor unions made up of individual members or organizations like the American Association of Justice, i.e., the trial lawyers," writes Engler.
The penalties for trade associations not disclosing the names of their members paying $5,000 or more in dues during the previous quarter for lobbying are $200,000 and up to five years in jail.
Congressional defendants in NAM's suit don't agree with NAM's arguments. NAM's legal claims "are meritless" and should be "rejected, its complaint dismissed and judgment granted in favor of defendants," argue the top lawyers from the House of Representatives and the U.S. Senate in their Feb. 29 opposition filing to the suit. "The Supreme Court rejected a First Amendment challenge to lobbying disclosure more than 50 years ago [in United States v. Harriss 347 U.S. 612], holding that the minimum burdens that such disclosure imposes are far outweighed by the vital national interests in preserving the integrity of our governmental processes," writes the congressional legal team led by Morgan Frankel, the Senate's Legal Counsel and lawyers representing defendant Lorraine Miller, clerk of the U.S. House of Representatives, in its defense of the new law. "As experience under the prior law revealed, the [NAM] challenged provision is integral to achieving the important goals of lobbying disclosure because it prevents organizations from hiding their lobbying activities from public disclosure simply by directing such lobbying through another entity."
The new law does not ban or restrict lobbying by coalitions or associations, but requires that they disclose "the interests behind their lobbying." Engler argues that "everyone knows who we are and which industries we represent" and that the law provides a "classic example of legislators aiming at one target -- stealth lobbying campaigns -- and hitting another. Does anyone really consider the NAM a 'stealth organization'?" he asks.
NAM says it is engaged in lobbying on contentious issues from global warming, nuclear power and labor relations that could "provoke responses beyond civil debates" and could lead to "boycotts, political pressure, shareholder suits of other forms of harassment" if its members involved in such lobbying activities were forced to be disclosed.
Members "will wish to avoid linkage to the association's activities on particular issues," states the NAM lawsuit. "Members that are concerned about the possibility of disclosure...will limit their support for and participation in the NAM to the extent necessary to avoid the risk of being named in the NAM's" lobbying disclosure reports.
NAM members are already "questioning whether continued support for and participation in core petitioning, speech and associational activities will require disclosure," says the NAM lawsuit. NAM "is unable to provide clear guidance to its members as to what activities will or will not require public disclosure."
Lawyers for the House and Senate argue that public laws dating back to 1946 require those attempting to influence the passage of legislation be disclosed by "name and address; the name and address of the client for whom they work; how much they are paid and by whom; all contributors to the lobbying effort and the amount of their contribution..." etc., as explained initially in the Legislative Reorganization Act of 1946 (Public Law No. 79-601). In 1995, Congress overwhelmingly passed the Lobbying Disclosure Act to close loopholes in that law, followed by the 2007 "Honest Leadership and Open Government Act," which included further provisions for the disclosure of "organizations that actively participate in lobbying coalitions and associations."
The provisions of the new law require disclosure by April 15 of this year of all individuals and company members of trade associations that contribute "more than $5,000 to the registrant or the client in a quarter period to fund the lobbying activities of the registrant and actively participates in the planning supervision, or control of such lobbying activities.".
The Senate and House lawyers say NAM's challenge "fails as a matter of law." Under previous court decisions "NAM is capable of determining which of its meetings, committees, and planning sessions involve preparation for lobbying and can appropriately disclose those members organizations that are actively participating in planning, supervision or controlling its lobbying activities as defined by the law. Indeed, for 12 years, the NAM has been required to determine what constitutes 'lobbying activities...' "
The $5,000 quarterly dues paid by NAM members for lobbying means NAM would "surely...not" have to release the names of a majority of its 11,000 members, says the congressional legal brief. "Congress thus carefully narrowed the disclosure requirement to avoid being over inclusive.
"Plaintiff [NAM] has made no showing of any prospect of harassment and retaliation against its organization members that even remotely approaches the evidentiary showings" made in previous cases involving harassment suffered by members of unpopular associations such as the NAACP or the Socialist Workers 74 Campaign Committee, argue the congressional lawyers. "Plaintiff relies on the Declaration of Jan Sarah Amundson, Senior Vice President and General Counsel of the NAM ("Amundson Decl.") in support of its allegations. In that declaration, Ms. Amundson avers that '[t]he NAM regularly lobbies on a variety of hot-button issues...that may lead to adverse consequences for members identified as 'actively participat[ing]' in such efforts." Those allegations "are woefully short of demonstrating the reasonable probability of serious harassment and retribution from disclosure of a member's involvement with the NAM and its lobbying activities," according to the congressional filing.
NAM already discloses 250 of its member companies that sit on its board of directors. "Despite public disclosure of these organizations, the NAM has offered no evidence of past incidents suggesting that being publicly disclosed as a member of the NAM imposes upon a company a substantial risk of serious harassment and retaliation," argue the congressional lawyers.
NAM's suit (No. 08-cv-0208 (CKK)), is brought against U.S. Attorney Jeffrey Taylor, Nancy Erickson, Secretary of the Senate, and Lorraine Miller, Clerk of the House of Representatives. An initial ruling is expected by April 14 by District Court Judge Colleen Kollar-Kotelly.
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