K Street takes aim at Dem ethics reform bill

K Street is stepping up its efforts against House Democrats’ sweeping ethics reform bill that includes tough new restrictions on lobbying.

The measure won’t pass the GOP-controlled Senate, but lobbyists are eager to stamp out proposals they see as overreach and believe would restrict K Street’s ability to advocate on issues.

Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce, called parts of the bill a “blatant unconstitutional attempt to regulate our free speech” in a call with reporters on Tuesday.

{mosads}“I just don’t think that it passes constitutional muster,” Ryan Meyers, deputy general counsel at the Chamber, added.

The wide-ranging bill, H.R. 1, which also includes proposals for electoral reforms and more transparency over campaign finance in addition to the tougher rules for lobbyists, is a major priority for Democrats.

Speaker Nancy Pelosi (D-Calif.) has been touting the bill since the House flipped. This week, she called it “essential” to giving the public “the confidence that we will be able to act without the influence of big, dark money and distortions in the elections caused by the voter suppression that is out there.”

The proposals are also popular with the public, making the bill an important messaging tool for Democrats in the run-up to the 2020 elections. And it comes as the party’s progressive wing has been hammering away at special interest groups and calling for an overhaul of lobbying and ethics rules.

For lobbying groups, H.R. 1 provides an opportunity for them to push back on the criticism and prevent the measures from gaining traction with the public.

Democrats began debate on Wednesday, with a vote expected later this week.

House Democrats are uniformly behind the bill, with all 235 co-sponsoring the legislation. And the bill has united the sometimes-fractious Democratic Caucus. The New Democrat Coalition, made up of pro-business fiscally conservative lawmakers, endorsed the bill as a bloc on Wednesday. 

The legislation has no Republican co-sponsors, but opponents are hoping to minimize any potential GOP defections. While the bill won’t become law this Congress, groups want to prevent the measures from gaining any traction with the public.

“We are looking for and hoping to see bipartisan opposition to this unconstitutional attempt to restrict the free speech rights of Americans,” Bradley told The Hill.

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Like the Chamber, the National Association of Manufacturers will key-vote the bill — the process by which outside groups rate lawmakers based on particular votes — and are urging lawmakers to oppose it, the association first told The Hill. 

K Street is also finding support from outside conservative groups who oppose the bill. Heritage Action on Tuesday said they would also key-vote it, and Americans for Prosperity urged lawmakers to vote against it.

The focus of K Street criticism is a measure that would force groups that engage in some political activities to disclose all donors who gave over $10,000. Business groups say that measure unfairly targets them and could force some organizations to restrict their political activities.

Matt Haller, senior vice president of government relations and public affairs at the International Franchise Association (IFA), said the bill has “overly broad and unconstitutional provisions” in a letter to congressional leaders on Monday.

The IFA stressed that the bill would create an uneven playing field for associations due to reporting requirements.

“Specifically, organizations that have members that join for less than $10,000 will be exempted from the legislation’s proposed reporting requirements,” Haller’s letter said. “This exclusion is designed to carve out labor organizations from disclosure requirements, leaving associations that represent the business community in the crosshairs.”

The Chamber, the nation’s most powerful business lobby, said they worry the bill would dissuade trade associations from trying to advocate on issues.

“When you get into the details of this over 500-page bill … its impact is to try to take the business community and trade associations out of the political process and out of the advocacy process,” Bradley said on the call.

The Chamber is rallying support against the bill. It sent a letter signed by more than 300 different business organizations from 46 states outlining their opposition to the legislation.

The group singled out language in the bill that calls for using the so-called PASO standard when determining political activity. That could cover any communications from lobbying groups that “promote,” “attack,” “support” or “oppose” a candidate or elected official.

“Unlike existing campaign finance law … the vague and overly broad new definition of PASO communications applies year-round and threatens to consume any legislative advocacy that dares mention an elected official,” the letter says.

Other groups are finding problems with different provisions.

The National Association of Business Political Action Committees, which represents corporations and business associations with PACs, criticized the bill for its overhaul of how businesses can interact with campaigns. 

“Many of the provisions, if enacted, could severely restrict the role of the business community and their PACs,” the group declared, calling the bill “potentially onerous” for business lobbies, according to the Center for Responsive Politics. 

The bill’s language would also expand the definition of a coordinated communication, as defined by the Federal Election Commission.

“If you’re a trade group and you meet with a member to discuss an issue, then potentially any communication you would make, even if you don’t discuss an election or what that candidate plans to run on in the election, simply discussing an issue with the official might make any communication you make subsequently a coordinated communication,” Meyers said on the call.

One area of the bill there is broader bipartisan support for is tightening the rules on when lobbyists for foreign interests must register under the Foreign Agents Registration Act, an issue in the spotlight because of special counsel Robert Mueller’s investigation into Russia’s interference in the 2016 election. 

Lawmakers from both sides of the aisle have introduced legislation to crack down on unregistered foreign lobbying and close loopholes that foreign entities use to conceal their work. 

H.R. 1’s measures focus on restricting money from foreign nationals that could influence elections. If a company has even just one foreign national shareholder or executive, it could face new limits on political spending.

But K Street has concerns that goes too far. 

Haller told The Hill the bill would “effectively make any association with an international member a foreign agent,” saying such an outcome was “absurd.”

“For instance, an association that includes a Japanese company with American operations is obviously advocating for that company, not the government of Japan,” Haller said. “At best, this provision is an attempt to solve a problem that doesn’t exist; at worst it’s designed specifically to make it more difficult for businesses to advocate for their interests.”

Senate Majority Leader Mitch McConnell (R-Ky.) has made it clear the bill isn’t going to get a floor vote in the upper chamber.

“House Democrats have wasted no time rolling out a sprawling proposal to grow the federal government’s power over Americans’ political speech and elections,” he wrote in a Washington Post op-ed in January.

And on Tuesday, the White House issued a veto threat. In a statement of administration policy, the White House said the bill “chills free speech by creating requirements that would limit the ability of Americans to participate in advocacy without undue compliance costs and without fear of public reprisals.”

But even though the bill will hit a dead end this year, lobbying groups are not taking the threat they see from the bill’s measures lightly. 

“This purely partisan legislation is an attack on free speech that’s designed to limit the ability of Americans to participate in the political process,” David French, the National Retail Federation’s chief lobbyist, told The Hill. 

“Simply put, it’s a dramatic overreach and very concerning.”

Updated at 4:59 p.m.