Feb 6, 2008 -- The Hill: Manufacturing group sues over new lobbying disclosure rules
By: Kevin Bogardus

The National Association of Manufacturers (NAM) is suing the federal government over the new lobbying and ethics law, saying the measure infringes on its First Amendment rights by requiring disclosure of its private membership list.

The suit, announced by NAM President and Chief Executive Officer John Engler at a press conference Wednesday, is the first legal challenge to the Honest Leadership and Open Government Act, one of the signature pieces of legislation passed by the new Democratic majority last year. NAM is also seeking a preliminary injunction to prevent enforcement of the provision.

The complaint, filed in the U.S. District Court for the District of Columbia, relates to a section of the law that establishes new disclosure rules on groups that lobby Congress. The provision was designed to provide more transparency of so-called "stealth coalitions" — ad hoc groups that use nondescript names to anonymously represent and lobby for specific industries in Washington.

Critics say lawmakers may have cast a wider net than intended. NAM argues the new law could force trade associations like it to disclose their member lists for the first time. Members of groups that spend more than $5,000 a quarter on lobbying and "actively" participate in the planning, supervision or control of "such lobbying activities" would have to be disclosed under the new law.

"It shouldn't be any doubt, after a century or so, who the National Association of Manufacturers represents," said Engler, a former Republican governor of Michigan.

NAM worries members may quit instead of having their names become public. Companies could face new public relations headaches by being publicly tied to controversial positions taken by NAM that they may not even support. For NAM and other groups, failing to comply with disclosure requirements could lead to criminal penalties under the new law.

In its complaint, NAM is asking the court to void the provision.

Jan Baran, a partner at Wiley Rein who is representing NAM in its suit, said the clause violates First Amendment protections against the infringement of free speech and association as well as the right to petition the government.

NAM lobbied against the provision as it was being drafted in Congress last year. Once the measure was signed into the law, the trade group joined the U.S. Chamber of Commerce and the American Society of Association Executives (ASAE) in writing a letter in November to Senate Secretary Nancy Erickson and House Clerk Lorraine Miller asking for clarification in regard to the law.

But Engler said the response was not helpful.

"The guidance document they produced didn't come close to answering the questions or addressing the concerns that were on our mind," Engler said. He said the guidance only confirmed that the law was "vague and defective."

NAM officials said they have reached out to the Chamber and other trade groups to join with them on the lawsuit, potentially through an amicus brief. Those discussions are still ongoing.

Jim Clarke, vice president for public policy at ASAE, said his group would monitor the lawsuit. But he also indicated that ASAE believed the clarification provided in response to the November letter addressed his group's main concerns, although ASAE continues to believe the new disclosure rules were unnecessary.

Erickson and Miller, as well as the U.S. attorney for the District of Columbia, Jeffrey Taylor, are listed as plaintiffs in the suit. Those three individuals were named because of their positions in administering and enforcing the new ethics law.

Adam Holmes, manager of operations at the House Clerk's Office, said the office does not comment on ongoing litigation. The Secretary of the Senate's Office also declined to comment on the lawsuit. "We have to review it before we ultimately make a determination on how we will respond," said Charles Miller, a Justice Department spokesman.

Several public interest watchdog groups that lobbied aggressively for the new ethics law are already in talks in how best to protect the clause from NAM's lawsuit. One option would be to file an amicus brief supporting the amendment.

"I am already in discussion with our litigation team," said Craig Holman, campaign finance lobbyist for Public Citizen.

"It is fair to say the reform community will make sure the rationale behind this particular amendment will be heard and understood by the court," said Meredith McGehee, policy director for the Campaign Legal Center.

McGehee said the amendment targeting "stealth coalitions" was carefully drafted and is simply about disclosing groups' members. She disputed NAM's contention that the language would conflict with the First Amendment.

"It is making sure citizens have information, and then they can make up their own minds," she said about the provision.

But Brett Kappel, of counsel to Vorys, Sater Seymour and Pease, said NAM's lawsuit may have merit because lawmakers did not intend for the clause in question to require trade associations to disclose their membership lists.

Nevertheless, NAM might have a tough time in court because the new ethics law was drafted in response to scandals on Capitol Hill.

"Preventing corruption or the appearance of corruption is a compelling governmental interest. First Amendment rights have been constrained in the past in such cases," Kappel said.

NAM would have to disclose its membership by April 21 this year under the new law. Engler said he would like to see court action before then.

"We hope the seriousness of the issues at stake here [is sufficient] that the court would enjoin enforcement while it sorts out what we believe are some interesting questions," said the NAM leader.