Nonprofit groups and congressional Republicans yesterday took up battle positions once again.
The nonprofits contended that legislative provisions, known as "riders," in a Senate appropriations bill would chill their activities. Aides to Sen. Christopher S. Bond (R-Mo.), the author of the provisions, disagreed and said he simply wants to ensure that taxpayers' money is used as intended.
The riders restate current rules, which forbid nonprofits to use federal funds for lobbying and litigation against the government, but they also would create two new requirements that have drawn the ire of a wide array of nonprofits.
The first would require nonprofits to maintain separate bank accounts for federal funds and charitable donations, apparently aimed at ensuring that nonprofits do not mix such funds. The second would bar any nonprofit that violated lobbying rules or did not keep separate bank accounts from receiving federal funds for five years.
Nonprofits attacked the five-year debarment proposal yesterday as unnecessary and portrayed it as an unprecedented attempt at "blacklisting."
Under current practices, nonprofits found through audits to have violated lobbying rules are ordered to repay any money inappropriately used. If the nonprofit sought to defraud the government, fines and penalties can be levied. If the government encounters persistent problems with a nonprofit, grant money can be withheld.
"This is just incredibly draconian," said Gary D. Bass, executive director of OMB Watch. "There are no procedures in place for redress. Even the slightest accounting error would put you into the five-year blacklist."
The provisions would apply to funds covered by the fiscal 2000 spending bill for the departments of Veterans Affairs and Housing and Urban Development, the Environmental Protection Agency, and other federal agencies. Bond chairs the Senate subcommittee that writes the annual bill.
In some ways, the skirmishing over the riders seems like a replay of previous maneuvers aimed at stopping nonprofits from using federal funds for lobbying.
President Ronald Reagan launched the first battles in the early 1980s when new accounting rules were put in place for nonprofits. Republicans returned to the fray in 1995 when Reps. Ernest J. Istook Jr. (R-Okla.) and David M. McIntosh (R-Ind.) unsuccessfully proposed restrictions on the "advocacy" activities of federal grant recipients.
As in some of the previous fights, the nonprofits have created an umbrella group, Let America Speak, to coordinate the opposition. The coalition is being led by Nan Aron of the Alliance for Justice, Matthew W. Hamill of Independent Sector, and Bass at OMB Watch. The Alliance represents a number of environmental, civil rights, mental health, women's and children's groups. Independent Sector promotes philanthropy from a broad-based membership that includes the American Red Cross, the Boy Scouts of America and the Ford Foundation. OMB Watch focuses on public interest issues, such as access to government information.
Bond believes that his provisions are needed because congressional auditors and agency inspectors general have strongly criticized accounting controls and grant management at the EPA and HUD as inadequate, the senator's aides said.
They said the riders do not stop nonprofits from using their private money for advocacy work, and they noted that three other appropriations bills carry similar provisions.
But the House version of the spending bill does not include such provisions. The nonprofits hope the Clinton administration will back their effort to strike the riders when House and Senate negotiators meet, probably next week.