NONPROFIT PRIVILEGE: DC Fiscal Policy Institute and Other Organizations Could Be Violating DC Government Lobbying Laws Daily With Impunity

June 7, 2018

IN 2016, staff of the DC Fiscal Policy Institute, including its founding director Ed Lazere, lobbied the District government--Mayor Muriel Bowser, several deputy mayors, agency directors, DC Council members and their staff--more than 100 times either in person, by telephone, or by written correspondence, including electronic mail. The organization reportedly spent $9,580 on its lobbying activity.

 

In 2017, DCFPI amped up its efforts to persuade officials to either approve, implement or introduce various public policies or make certain spending decisions. DCFPI, an organization that has advocated for more rules governing lobbyists and private contractors, spent more than $12,000 that year lobbying DC officials, according to government documents.

 

Each year the District government is lobbied by dozens of nonprofit organizations, labor unions, advocacy groups and social service providers, like Public Citizen, Jews United for Justice and the DC Chapter of National Organization for Women, among others. The lobbying often is done directly by the nonprofit corporation. There are times, however, when lobbying is conducted by others on behalf of the nonprofit: Arent Fox LLP was the lobbyist for the Washington Drama Society/Arena Stage, the National Public Radio and the Spanish Education and Development Center. Nelson Mullins Riley & Scarborough LP has represented the International Health Racquet and Sports Club Association and The Meyer’s Group was a lobbyist for Emory Beacon of Light Inc., according to records provided to TBR by the Board of Ethics and Government Accountability through a Freedom of Information Act request.

 

Most private sector lobbyists must pay as much as $250 to register in the District. A nonprofit lobbyist is required to pay only $50, however, although there is not much difference in the mission or approach of the two.

 

The media frequently have focused on private sector lobbyists, often accusing them of attempting to influence the government through lobbying activities or donations to campaigns and so-called constituent services funds. I have written my share of articles about well-known influence-peddlers who are frequent visitors at the John A. Wilson Building. The decision by Lazere to run for DC Council chairman in the June 19 Democratic Primary caused me to examine his advocacy and tenure as executive director of DCFPI. (I have written three previous articles about Lazere and the council race for the TBR blog and the Hill Rag). During that research, I discovered the world of nonprofit lobbying, including the District’s dual system of registration and its lax enforcement of rules when nonprofit corporations are involved.

 

The DC Fiscal Policy Institute was allowed to register as a nonprofit lobbyist. In the Budget Support Act of 2016, a nonprofit organization was defined as 501 (c) 3 tax-exempt corporation, according to Janet Foster, who at the time of my interview was an attorney advisor for the DC Board of Ethics and Government Accountability.

 

For decades the DCFPI has walked like a duck and acted like a duck. It is, in fact, not a duck. It is not a nonprofit organization. It is not even a full-fledged corporation. It is a division of the Center for Budget and Policy Priorities.

 

Lazere has been on leave from DCFPI since he launched his campaign in late January 2018. A spokesperson for the Center acknowledged in an email said DCFPI is not a federally tax-exempt nonprofit. In fact, in a letter to the Darrin Sobin, then-director of the government ethics board, Lazere made clear that “DCFPI has no separate legal status distinct from the Center.”

 

That point was recently echoed by Susan Steinmetz, the Center’s executive vice president for program management and development. In an email to TBR, she wrote that “Because DCFPI is located in the same city as the Center, and because it is more cost effective and efficient for it to make use of some of the administrative infrastructure of a larger organization, it has operated as part of the Center.”

 

Interestingly until TBR asked a series of questions, DCFPI was listed as a tax-exempt organization on the Center’s website. “Though we think the relationship is clear from the language on the bottom of each page of the website, we have updated the language on the “Donate” page of the website to be more precise,” Shannon Buckingham, the Center’s communications director told me.

 

“DC Fiscal Policy Institute is literally violating the rules,” said Eric Jones, associate director of government affairs for Associated Builders and Contractors of Metro Washington. “BEGA ignores what they are doing. No one is making an issue of it.”

 

Steinmetz said that “BEGA explicitly agreed with us that, in the interest of transparency and helping the public access information on lobbyists, the registrant name should remain as “the DC Fiscal Policy Institute”, since it is the name that would be most readily known by those likely to seek this kind of information.”

 

The records published by the BEGA includes the name of the lobbyist and the client. It’s likely there would not have been any confusion. Further, the law isn’t about who knows whom or who recognizes whom. It is clear: only a federally tax-exempt organization can register as a nonprofit lobbyist.

 

“Mr. Lazere and his team have done a lot of lobbying. It’s a doubled standard; [council members] are comfortable with it because he fits their agenda,” said Jones. “They see Lazere as a good actor going against the big bad business community.”

 

Are there other organizations paying the reduced rate that also are not nonprofit corporations as defined by law? Are they, too, getting away with violating the law because they comport with some social or political agenda?

 

Who knows.

 

Brent Wolfingbarger, executive director of the Office of Government Ethics and Government Accountability, did not respond to an email requesting an interview; he has been in the post since Dec. 11, 2017. When TBR called his office on Tues. June 5, he told a staffer to tell me that he would call back in 45 minutes. After two hours, TBR called his office again and left a voicemail message. Wolfingbarger did not return that call either.

 

 

     Undoubtedly, nonprofit organizations have the right to petition their government. Lobbyists shouldn’t be confused with ordinary citizens who occasionally show up to testify at public hearings, however. They are not people who write a letter every now and again about some disturbance in their community that they believe the government should address.

 

Lobbyists, including nonprofit lobbyists, are on a mission; sometimes they have a vested interest: laws or programs that could benefit themselves or their clients.  Nonprofit lobbyists have not been any different from those in the private sector. They, too, have swarmed city hall, hoping to influence politicians and government managers.

 

“They come in droves [asking] for funding around budget time; but it’s often the same group of folks,” said one long-time council staffer who requested anonymity to speak freely.

“It’s like peeling an onion,” said Jones, who has been a registered lobbyist in the city for more than a decade.  

 

Dorothy Brizill, long-time government watchdog and director of DC Watch, has tracked the legislative process and the inner workings of the Wilson Building. She said the council’s effort to reform campaign finance laws, including ending 'pay-to-play' politics in the District by restricting donations by businesses and government contractors to political campaigns, has ignored the involvement and influence of nonprofit corporations in government policy and spending. “If the council is honest about what it’s doing it has to include unions and nonprofit organizations in any campaign finance reforms,” Brizill added.

 

She’s right. A corporation may be a registered nonprofit; that doesn’t mean it doesn’t make money or doesn’t want to make money.

 

The Center of the Budget and Policy Priorities—DCFPI’s parent corporation-- reported in 2016 total revenues of more than $51 million on its federal tax report (990), a copy of which was provided to TBR. It paid out nearly $16 million in salaries and benefits; at least five employees received combined compensation and benefits of $200,000 or more. Lawrence J. Haas, a media consultant pulled in $300,000.  Steinmetz said he is “extensively involved in writing and editing a wide range of Center publications, papers and speeches, none of which are DCFPI products.”  (How does the Center make that distinction when DCFPI is one of its divisions?)

 

After expenses the Center’s income was about $23 million. Its total assets and fund balances were $90 million—up from $66 million the previous year--according to the organization’s 2016 tax return.  The Center reported that DCFPI had a budget of $1 million.

 

Lazere has said that he’s not in the game for the money. But he has consistently pushed for more spending by the District government on various programs. The DCFPI may not stand to benefit directly, but some of the members of the coalition of nonprofit organizations Lazere has helped to lead and on whose behalf, he sometimes has lobbied certainly do.

 

Consider that each year, the District government, a $14.5 billion corporation, contracts with private sector companies and nonprofit businesses to provide various services. Jones said compared to the influence of nonprofit organizations, his members and other businesses have experienced only “moderate success. If this is winning, I don’t want to see losing.”

 

There may be some truth to his complaint: The city, according to information provided by the Office of the Chief Financial Officer, spent more than $135 million of its local funds to provide shelter to homeless individuals and families in 2017; much of that money went to nonprofit organization.  DC also spent $65 million of local funds for contracting services around behavioral health. Charter schools-- those independent educational institutions over which the District government has minimal control--were paid a total of more than $758 million of local tax dollars in 2017, according to the OCFO.

 

In other words, those nonprofits who converged on the John A. Wilson each spring have not been walking away with empty cups. That also could be because they are not afraid to put full pressure or the threat of full pressure on local politicians. Earlier this year, Jews United for Justice announced it would begin publishing a report card on elected officials, highlighting how they voted on issues of interest to that organization and its supporters.

 

As TBR was preparing this report, she received a press release from Jews United for Justice Campaign Fund announcing its endorsements for the upcoming primary elections in DC and Montgomery County. Surprise Surprise: it has endorsed Lazere for council chairman. Jews United for Justice was launched only three years ago, in 2014, to “give the progressive Jewish community and its allies a new way to hold elected officials accountable for their leadership; it is the only grassroots Jewish organization in the country that endorses candidates for local office.” It has been a consistent member of the coalition that has worked with DCFPI on a variety of issues. 

 

“The JUFJ Campaign Fund believes that our elected leaders need to listen to ordinary people,” said Jacob Feinspan, executive director of the JUFJ Campaign Fund. “These candidates will work to un-rig the system that is manipulated by wealthy developers and lobbyists and will prioritize working families who have been shut out of democracy and opportunity.”

 

Wait, wait…isn’t Jews United for Justice a registered lobbyist in DC?

 

Silverman who also won endorsement for her reelection, although she won’t appear on the ballot until November, said she was “honored.” No surprise there either. Before winning her seat on the council, she was a member of the group.

 

All of this helps to underscore Brizill’s fears about the influence of DCFPI and its posse of nonprofits. Jones raised additional concerns about another nonprofit close to Lazere. Last year, as lawmakers were debating the merits of paid family leave, the Working Families Party sent out regular updates with a “Donate” button at the end of each missive. “That was a coordinated campaign,” added Jones. Should they have registered with the Office of Campaign Finance.

 

Wesley Williams, a spokesperson for the OCF, said that because the WFP was focused on legislation before the council, rules governing its activities would fall under those related to lobbying. That means the BEGA would be involved. But, of course, Wolfingbarger isn’t talking.

 

There is no question that WFP has been involved in politics since its creation. Earlier this year, it endorsed Cynthia Nixon for New York Governor in the Democratic Primary against incumbent Andrew Cuomo. Lazere told TBR his campaign manager is from the WFP.

 

Additionally, some people have suggested that Lazere used the donor list from the Center and the DCFPI to generate contributions for campaign for council chairman. That disgraced Missouri Governor Eric Greitens was accused of using a donor list from a veterans charity he established to help fund his 2016 campaign. While such action is considered a felony in Missouri, it’s not a criminal offense or a violation of campaign finance laws in DC, said Williams.

 

Say what?! Missouri state government is more ethical than the District government?

 

Brizill said she is more concerned about the influence DCFPI has in the government. “It has so many people implanted in the DC government; they are in very important positions.” She cited as examples Mayor Muriel Bowser’s budget director and Silverman who are both DCFPI alums. Further, Brizill wondered about that coalition of nonprofits with whom Lazere has worked for years. Will members of that group influence decisions he would make if he is elected chairman?

“Pay to play isn’t just limited to the private sector,” noted another council staffer

 

            THE crucial question is this: Who will call out unethical or illegal behavior by nonprofits? In the past BEGA has seemed to turn the proverbial blind eye. Consider that the District law requires when a lobbyist fails to file the requisite report a meager $10 per day fine is levied. But the agency can waive such a penalty for “good cause.” Over the years and through multiple directors, the definition of “good cause” has been somewhat subjective.

 

In February 2017, the Children’s National Health System was fined $300 for failing to file appropriate reports. Aisha Braveboy told then Bega Director Sobin that the person responsible was no longer with the organization and notices to file had gone to the wrong address. That excuse seemed comparable to the dog-ate-my-homework. Nonetheless, the BEGA waived the entire penalty.

 

If DCFPI’s report is any indication, the BEGA hasn’t questioned the accuracy of spending reports filed by nonprofit lobbyists. For example, in its January 2018 report, DCFPI indicated the only expense incurred during its lobbying was a fraction of each of staffer’s salary. There were no office expenses, according to the report. No money was spent for transportation. No money was spent for “personal sustenance.”

Further, there was no evidence in the records received by TBR that the BEGA tracked whether nonprofits have exceeded their spending cap on lobbying as imposed by the federal government.  Underscoring yet again, DCFPI bogus nonprofit status, the Center’s spokesperson told me via email that “DCFPI does not have an individual lobbying cap under IRS rules because it is not a separate organization. “

 

The blatant violations didn’t stop there, however. The DC code expressly states that “No lobbyist or registrant or person acting on behalf of the lobbyist or registrant, shall provide legal representation, or other professional services, to an official in the legislative or executive branch, or to a member of his or her staff, at no cost or at a rate that is less than the lobbyist or registrant would routinely bill for the representation or service in the marketplace.”  And yet, nonprofit lobbyists, including Lazere’s DCFPI, seemed to have done just that for several council members and/or their staff.

 

In its report covering the period of January 2016 through June 30, 2016, the DCFPI indicated it had conducted “strategizing” sessions on various legislation with At-large Council member Elissa Silverman (I) and Ward 1 Council member Brianne Nadeau (D).

 

Developing a strategic plan for passage of public policy is an actual task often performed by outside consultants. Lazere and his team provided that service to select council members for several pieces of legislation including the Paid Family Leave Act and extension of the Temporary Aid to Needy Families (TANF).

 

There was no evidence in the records reviews by TBR that they were fined. BEGA director Wolfingbarger isn’t talking, which adds credibility to the assertion made by folks like Jones and Brizill: Nonprofit lobbyists with close ties to officials in the government have been getting special treatment. I could get worse, if Lazere is elected council chairman.

 

 

 

 

 

 

 

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