WASHINGTON — It is a fact of life on Capitol Hill that new lobbying coalitions
sprout almost every day to try to influence everything from electricity policy
to bankruptcy law to health care legislation.
But the rising popularity of such coalitions goes beyond simply a desire to
influence policy. Thanks to a loophole in the federal lobbying law, some companies
and individuals — especially those pursuing controversial or potentially embarrassing
causes — are using coalitions to conceal their identities.
"You can have unpopular causes such as a tobacco interest or one of these
corporations that have renounced its American citizenship hide their interests
through this device," said Representative Lloyd Doggett, Democrat of Texas. "You
can have foreign interests, if they combine with others, hide their involvement
through this device."
The Congressional Research Service, a part of the Library of Congress, recently
examined lobbyist registration forms, Congressional testimony and media databases
and found 135 lobbying coalitions for which it could find only limited information
or none at all.
One such group, the Section 877 Coalition, has been largely dedicated to keeping
Congress from tightening the section of the tax law applying to the estates of
wealthy individuals who gave up their American citizenship.
The coalition paid more than $760,000 to two firms in 2000 and 2001 to press
its case, disclosure forms filed with Congress by the coalition's lobbyists show.
But the reports give no clue about precisely who wanted to protect expatriates,
and some of the group's lobbyists have hardly been forthcoming.
"It is our policy not to comment on client matters, except to note that with
respect to the registration of these entities, we are in full compliance with
the letter and the spirit of the law," said Steven Silber, a spokesman for PricewaterhouseCoopers,
which had been one of the lobbying firms for the Section 877 Coalition. This year,
the accounting firm sold its federal tax lobbying operation.
Only in recent days, after repeated inquiries from a reporter and a request
from a former lobbyist who now is an official at the Treasury Department, did
lobbyists say that the coalition was made up of trusts for members of the Arison
In the 1990's, Congressional Democrats used Ted Arison, the founder of Carnival
Cruise lines who saved millions in taxes by renouncing his United States citizenship
and returning to Israel, as a case study of why the tax law should be rewritten.
Mr. Arison was one of the richest men in the world when he died in 1999. A spokesman
for the Carnival Corporation, whose chairman
is Micky Arison, a son of Ted Arison's, referred questions about why the Arison
family trusts had operated through the Section 877 Coalition to one of the lobbying
firms, Alcalde & Fay.
At the firm, Hector Alcalde said he had listed the client as the Section 877
Coalition for "simplicity's sake," because PricewaterhouseCoopers had already
done so. "There's no hidden agenda," Mr. Alcalde said
Many businesses say they lobby in coalitions not to conceal their identities
but because it is far more effective to show lawmakers that their cause has large
numbers of supporter, or because it allows them to pool resources. But the more
secretive coalitions appear to have been spurred in part by Congressional efforts
to open lobbying activities to more public scrutiny.
In 1995, Congress passed the first major law to tighten lobbying regulation
in 49 years, requiring thousands more lobbyists to report who pays them, how much
they are paid and what issues they work on. President Bill Clinton hailed the
measure as one that "will help restore the trust of the people in their government."
But the law had an exception involving coalitions. In such cases, lobbyists
were required to disclose the names of the coalitions that hired them, but not
the members, except under certain circumstances. Members had to be named only
if they contributed more than $10,000 to the lobbying activities in a semiannual
reporting period and exercised substantial control over the coalition's activities.
Seven years later, as coalition lobbying has proliferated, it has turned out
to be easy for interests to find their way around these disclosure requirements
simply by spreading out the control of a coalition.
"They don't want to be recognized," said Matt Keller, the legislative director
of Common Cause, a group that had pushed for more stringent lobbying law.
To be sure, many coalitions do not seek to shield their identities, and their
lobbyists say they would have a hard time making their case without telling members
of Congress whom they are representing.
"I want them to know," said Jeff Tassey, a lobbyist for the Coalition for
Responsible Bankruptcy Laws, a group composed largely of credit card companies,
lenders and financial institutions that want to make it harder to declare bankruptcy.
"I worked on the Hill for a while. I had no use for anybody who wouldn't tell
me who their client was."
Another lobbying powerhouse, the Health Benefits Coalition, which has fought
Democrats' efforts to regulate managed care, calls itself "one of the largest
employer-based health care coalitions ever formed," with a membership list including
major business trade groups and the insurance industry.
Other coalitions, however, shy from public disclosure. Mr. Doggett, a member
of the tax-writing Ways and Means Committee, says he became interested in the
issue because of the number of groups he calls "stealth coalitions" he has seen
lobbying on provisions of tax law.
The Center for Responsive Politics, a nonpartisan group that analyzes campaign
and lobbying spending, says that on business tax issues alone it identified 28
coalitions that paid $5.4 million in 2000 for lobbying and revealed little to
nothing about their members.
All but 4 of the 28 groups used what were then known as the Big Five accounting
firms as their lobbyists. Lawrence Noble, the executive director of the policy
center, said the lack of disclosure took on particular significance in light of
the recent corporate collapses.
"One of the questions after Enron
is, How did we get here?" Mr. Noble said. "You're naturally led then to see who
is behind legislation, who has fought various kinds of legislation. That brings
you to the lobbying disclosure act and these coalitions, and they become a wall
that you can't get behind."
Arthur Andersen, the accounting firm recently found guilty of obstruction
of justice for impeding an investigation into the Enron Corporation, was paid
more than $250,000 in lobbying fees from 1999 to 2001 by the Coalition for the
Fair Taxation of Business Transactions, lobbying forms show. The reports say the
Andersen lobbyists worked on corporate tax shelter provisions and Treasury regulations,
but they do not say who belonged to the coalition.
"These folks were working to ensure that any legislation did not impact routine
business tax planning," Patrick Dorton, a spokesman for Andersen, said. "They
were not involved in any way in advocating the preservation of any loopholes or
tax shelter provisions."
The coalition was made up of Andersen clients, Mr. Dorton said, but he added
that he could not identify them, in part because employees have been leaving the
Until PricewaterhouseCoopers, another accounting giant, sold its tax lobbying
shop, the office was headed by Kenneth J. Kies, one of Washington's best-known
tax lobbyists, and represented an array of coalitions with undisclosed clients.
One of the firm's lobbyists for several of the groups was Barbara M. Angus,
who is now international tax counsel at the Treasury Department. Ms. Angus appeared
last winter before the Ways and Means Committee, where Mr. Doggett questioned
her about who were members of the coaltions she lobbied for. She said that she
could not recall the clients but that she would get back to him.
This week, at Ms. Angus's request, more than four months later, PricewaterhouseCoopers
wrote to Mr. Doggett that the Section 877 Coalition included four trusts for members
of the Arison family.
Alcalde & Fay, the other firm representing the coalition, also initially refused
to identify its members to a reporter. But it later said the client was the Arison
family office in Florida. Mr. Alcalde said the firm had not provided any more
information on its lobbying reports because "there's no requirement" to do so.
But Mr. Alcalde said he would always tell a lawmaker whom he was representing.
Otherwise, he said, "how can you make the case for your issue?"
Mr. Doggett is preparing legislation to require more disclosure from those
coalitions that are involved in no other activities except lobbying. The bill
will try to distinguish between genuine membership organizations and shell coalitions
set up to avoid disclosure, he said.
He is likely to encounter substantial opposition.
When the lobbying law was written, Republicans objected to greater disclosure
requirements for coalitions, calling it an effort to chill activism by groups
like the Christian Coalition. Groups across the political spectrum, including
the American Civil Liberties Union, also objected.
Copyright 2002 The New York Times Company