Political nonprofits’ blurred lines: 6 changes needed for transparency

The remarkable influence that Transportation Choices Coalition wields over elections, and the paucity of information available about its funding, begs for changes in state and federal disclosure rules.

As I outlined in the first part of this series, the Seattle advocacy group takes credit for winning dozens of ballot measures, raising more than $70 billion for transit projects.

Yet it hasn’t registered as a political organization and doesn’t disclose how much funding it receives from giant construction firms that benefit from the spending.

Transportation Choices says it follows state and federal disclosure rules. But they aren’t working as intended.

Changes are needed to ensure the public knows more about who is influencing their opinion and the outcome of public policy, ballot measures and elections.

Here’s a list for lawmakers and the state Public Disclosure Commission to consider.

1. Grass-roots lobbying and education. Regulations should reflect modern grass-roots lobbying practices that use public-education and outreach efforts to influence opinion, build support and acquire names for campaign mailing lists.

This blurs the line between community education — which is considered a charitable, apolitical activity worthy of tax exemption — and political activity.

 

2. Policy lobbying. The definition of traditional lobbying needs to be broadened in Washington. It currently applies primarily to directly influencing specific legislation, such as a bill in the Legislature.

But lobbyists also influence policy before it becomes legislation and after, when it is implemented.

For example, a lobbyist could work with government officials to develop a policy to replace arterial lanes with trolley tracks. This could coalesce and secure government support before any legislative vote. After the vote, the coalition could influence how the project is implemented and which arterials should receive this treatment first.

Reports of lobbying activity should cover every stage of this process, not just the legislative decision.

An easy fix would be to restore the pre-1990 language in the state public disclosure law, which used to say that lobbying “includes, but is not limited to, the development of legislation or rules, the development of support for or opposition to legislation or rules, and attempts to influence the development of legislation or rules.”

This should apply to professional lobbyists and groups spending significant amounts to influence policy, but not to individuals or groups that have limited or incidental interactions with public officials.

3. Dark money. State Sen. Andy Billig’s proposal to increase disclosure of campaign funding channeled through nonprofits will be reintroduced in 2018. It’s a good vehicle for Washington state to refresh disclosure rules in the spirit of the original 1972 initiative that created them.

4. PDC. Washington should provide more resources to the PDC to improve monitoring and enforcement of political disclosures.

To provide more disclosure about lobbying activities of advocacy groups, PDC disclosure forms should clarify that reporting is required for activities that influence both local and state ballot measures. Some ask only about influencing statewide ballot measures.

This excludes local and regional ballot measures such as Sound Transit 3, the most expensive tax proposal in state history.

This change would reflect that campaign-disclosure reports are almost entirely handled by the PDC, since few counties and cities have this capacity.

More clarity and consistency would benefit both the public and those filing PDC reports.

5. Government funding. The Legislature should restrict public agencies from funding advocacy organizations that are primarily dedicated to influencing government policy.

Even if advocates are careful to spend government donations on things other than lobbying and campaigning, which are already prohibited, the appearance of impropriety remains.

Such accounting maneuvers also create a burden for the public and regulators to track the use of tax dollars and whether they’re being used appropriately.

6. Regulatory. The IRS has a mixed record of tracking political activity by nonprofit groups. Scandal resulting from its biased attempts to screen political groups by searching for conservative terms in 2012 didn’t help.

Since then the IRS updated nonprofit regulations. As of 2016, it requires politically active nonprofits to file more detailed reports. But the rules could be clearer, and public disclosure remains limited.

Attempts by California’s attorney general to learn more about donors to political nonprofits were rebuffed in federal court.

That shouldn’t be the final word. More must be done to bring transparency to the funding of nonprofits with enormous influence over government, especially at the state and local levels.

In the meantime, perhaps the IRS and state campaign reporting agencies could find ways to use each others’ data to validate filings, while maintaining autonomy.

Locally reported spending doesn’t need to match what’s reported to the IRS, since their rules and forms vary. But wild discrepancies should be red flags.

There will always be gaps in enforcement, mistakes and imperfect reporting. But reporting agencies should benefit from each others’ varying levels of scrutiny and authority.

Sound Transit’s $54 billion ballot measure in 2016 is an example how disclosure fell short.

Wealthy, out-of-state interests will make fortunes from the decades of spending it provides. They help fund Transportation Choices, which works to build favorable public sentiment for transit spending and campaigns for new transit taxes.

Yet voters are kept in the dark about the full extent of the companies’ spending, and how it’s used to influence public opinion and voting.

Advocacy by Transportation Choices and others is good — as long as it’s transparent and in the spirit of Washington’s disclosure rules.