Anti-advocacy provision attached to housing finance bill.

When H.R.1461 was introduced in the House Committee on the Judiciary, its supporters were optimistic it would move through sans the inclusion of nonprofit anti-advocacy language. They were ill-founded hopes.

The bill that made it to the House floor did so with a weighty gag provision, similar to the infamous 1995 Istook anti-advocacy amendment that Rep. Ernest Istook of Oklahoma attached to anything that moved.

The Federal Housing Finance Reform Act of 2005, which would strengthen oversight of government-sponsored enterprises (GSEs) Fannie Mac and Freddie Mac, now includes the Affordable Housing Fund (AHF) provision. This provision--which would require Fannie Mae and Freddie Mac to contribute 5 percent of their after-tax income to the AHF--was originally intended to provide funds for affordable housing in low-income communities, particularly to benefit victims of hurricanes Katrina and Rita.

According to Michael DiResto, press secretary to Rep. Richard Baker, R-La., Financial Services Capital Markets Subcommittee chairman, one of the bill's cosponsors, the reason for the possible modification of the language is due to a desire to quell concerns in a divided House.

"I think that when Congressman Baker proposed that priority be given in the housing fund," said DiResto, it was to benefit "victims of the recent natural disasters." Added DiResto,"(Baker) has been sympathetic all along to concerns that these monies will not be used specifically for housing but for other aims, and he's been trying to figure out a way that those concerns could be put to rest."

At the behest of the Republican Study Committee (RSC), a group of conservative House members, language has been added to the AHF provision that would restrict nonprofits that engage in voter registration and other nonpartisan voter participation activities, as well as certain lobbying activities, from applying for or receiving grants under the fund. Prior to the addition, the RSC had opposed the AHE reasoning that it would harm private enterprises and that money from the fund would be used to "finance third-party advocacy groups that have agendas far beyond simply increasing affordable housing for low-income Americans--agendas that are antagonistic to the free market principles that we value," according to a letter sent to then-Majority Leader Tom Delay, R-Texas, and signed by 35 House Republicans.

An opponent of the anti-advocacy AHF provision, Gary Bass, executive director of OMB Watch, a nonprofit watchdog organization in Washington, D.C., contends that the bill, while narrowly tailored to affordable housing grant applicants, has huge implications for the broader nonprofit sector.

In a letter to Financial Services Chairman Michael Oxley, R-Ohio, who, along with Baker penned the AHF provision, Bass wrote, "Charities and religious organizations ... make up the only nonpartisan sector of society. This makes our voter engagement and advocacy work all the more valuable. It is not intended to influence the outcome of elections, but to strengthen democracy. These groups should not be disqualified for applying for affordable housing development grants because they promote the right to vote or provide a vehicle for civic engagement on the issues of the day."

And while Nan Aron, president of the Alliance for Justice, a national legal advocacy association in Washington, D.C., believes prohibiting the use of federal dollars for lobbying activities is a reasonable trade-off for accepting federal grant monies, she is strongly opposed to what the Alliance calls a "stealth attack on nonprofit advocacy organizations."

The provision would restrict even those organizations whose nonpartisan voter engagement activities are paid for using private funds. Of this, said Aron, "it is not only unacceptable, it is also unconstitutional."

Although at press time DiResto noted the language in the provision had yet to be finalized, whatever the prose, many of its opponents claim that if passed, the RSC-modified AHF provision will set the bad precedent of limiting a nonprofit's ability to advocate for anything. Noted Aron, "It is especially noteworthy that this provision would only apply to nonprofits."

In an opposition letter to chairman Oxley, the nonprofit advocacy protection coalition, NonprofitAdvocacy.org, writes, "We understand the intent of AHF is to provide grants for new affordable homebuilding and believe the current language of H.R.1461 reflects and reinforces that goal. Our opposition to the reported RSC provision arises from the chilling effect it would have on free speech and association rights protected by the First Amendment."