IRS & FEC say "Shut up"; we take lemons and make lemonade

Dear Friends,

I'm writing to share three bits of news . . .

• What we've learned from inside Congress about how easy it would have been to stop Bush's Prescription Drug boondoggle.

• How the FEC and the IRS are working together to suppress political dissent.

• Why this may be the last letter you receive from RealCampaignReform.org, and why that's good news.

The $534 billion program that we could have stopped

Medicare is bankrupting America, so why not make it bigger? President Bush just did by signing a Prescription Drug benefit that will cost half a trillion dollars in the next decade.

But we could have stopped it!

I recently learned the behind-the-scenes truth from two Congressional insiders. A majority of representatives, organized by Congressman Ron Paul, opposed this new boondoggle but . . . 

House Republican leaders kept a 15-minute vote open for 3 hours until the wee hours of the morning.

Plus President Bush was personally calling members until 1am, emphasizing he needed their vote, that their party was watching them -- in this election year. Presidents almost never personally lobby members of Congress like this. The pressure on Republican members of Congress to capitulate was enormous.

And there were other . . . more subtle . . . more menacing pressures. The implied threat of loss of funding for district projects . . . difficulty resolving problems for constituents . . . a well-funded opponent in the next primary . . . well, I think you get the point.

Finally, two bitter opponents of the drug entitlement, members of Ron Paul's caucus, succumbed and switched sides. This turned the tide and the bill passed by a small handful of votes.

Just two (2) Representatives made the difference!!!

No one outside of Ron Paul's caucus was urging them to hold the line. They were isolated, exposed, unsupported. My sources on The Hill tell me this kind of thing happens all the time. Representatives often want to vote right, but are only lobbied to vote Big Government.

There is no outside resource bolstering Congress to "just say no" to more government. My sources also tells me many proposals to expand government could be defeated if there was even a small group asking Representatives to resist.

Could we become that small outside force, and win a few victories for a change?

I think we can, but there are some big legal barriers that have to be overcome first. I'll get to those in a minute, after I deal with the most obvious objection.

We're too small to make a difference.

That's what I thought, until I talked to these congressional insiders. Now I think otherwise.

Wouldn't a few victories -- for a change -- lead to even more support? A larger force for liberty?!

You don't have to start big to have a big impact

Consider the example of MoveOn.org, a powerful liberal advocacy group.

• Their online "primary" put an unknown named Howard Dean on the political map.

• They made news when CBS refused to run an anti-Bush ad during the Super Bowl. Now, they're in midst of raising $10 million to keep their ads on air during this election year.

• They generated 300,000 online petitions asking Congress to censure Bush for lying us into war with Iraq.

Now, that all sounds big, but the point is MoveOn.org didn't start out that way.

• It started with an email message to about one hundred people during the Clinton impeachment only six years ago, asking Congress to censure Clinton and "Move On."

• And it grew like wildfire because it used the Internet to give people a way to influence their government.

Doesn't the libertarian movement need its own version of MoveOn?

There are actually people on Capitol Hill who think so. People who want help to resist the growth of government, even if they don't agree with us on every issue every time. Shouldn't we help these people resist the growth of big government, making common cause whenever and wherever we can?

MoveOn.org now has 2.4 million people supporting them online. Couldn't we do something similar using the low cost networking power of the Internet to find people who want to Downsize DC?

Vision -- One Million Americans telling Congress to "Downsize DC"

We want to become the libertarian version of MoveOn.org, by . . . 

• Using Internet tools to network and harness the force of "one million freedom-lovers."

• Buy advertising to expand our reach and our freedom-network.

• And give sympathetic Representatives the courage to resist, rather than giving in to the big government lobbyists.

This is the new direction we want to take, but there are two giant, sinister hurdles standing in our way.

The FEC and the IRS

Groups like ours have always had to steer a narrow course between the campaign finance laws (enforced by the FEC) and the non-profit tax laws (enforced by the IRS). Say the wrong thing in the wrong way and we could find ourselves facing fines or the loss of our non-profit tax status.

Now things have gotten worse. Thanks to the Bipartisan Campaign Reform Act (BCRA) the risks we face now include criminal prosecution and prison. BCRA restricts our ability to criticize incumbents, or even mention them by name.

And, as if these incumbent-protection measures weren't bad enough, the IRS has just published proposed IRS Revenue Ruling 2004-6, which "creates a broad new set of ambiguous standards" that non-profit organizations like ours must follow to the letter.

These IRS rules go far beyond the BCRA (McCain-Feingold) restrictions. Unlike BCRA, the proposed IRS rule . . . 

• Would not be restricted to broadcast ads. Newspaper ads . . . e-mail alerts . . . messages like this . . . all would be subject to the IRS Thought Police.

• Would contain no fair standards for compliance. Every newsletter or email alert would have to be published with the realization that the government, after the fact, could apply its vague criteria and determine it was "impermissible."

The aim is clear -- to outlaw criticism of big government politicians. This leaves us with two options. We can . . . 

1. Fold our tent and go home

2. Change our legal structure so we can continue to speak

I choose option number two -- to become the pro-freedom equivalent of MoveOn.org.

MoveOn.org and many other advocacy groups are structured as parallel organizations:

• A 501(c)(3) that can accept tax-deductible contributions from foundations and individuals [like the U.S. Justice Foundation] and engage in general libertarian outreach.

• A 501(c)(4) that can take positions on specific legislation [like RealCampaign Reform.org]. Contributions to 501(c)(4) organizations are not tax-deductible.

Partnering with a 501(c)3 organization, like we did with the U.S. Justice Foundation in challenging BCRA, offers a number of advantages. Most critically, it enables our team to accept grants from foundations and from individuals for whom tax-deductibility is an important consideration in the decision to donate.

Our board has decided to accept an offer from the American Liberty Foundation, the 501(c)(3) organization that we rented staff and office services from during the BCRA lawsuit, to ally with them to create a pro-freedom alternative to MoveOn.org.

The last letter from RealCampaignReform.org

Legal documents are being drawn up to join our two organizations as "Downsize DC" -- a short, direct title clearly defining our new vision.

• The American Liberty Foundation will become the Downsize DC Foundation.

• RealCampaignReform.org will become DownsizeDC.org.

We'll be able to accomplish far more together than apart.

How we'll raise ourselves from failure to success in Downsizing DC

The new DownsizeDC.org, like RCR, will speak out on issues involving pending legislation -- issues that 501(c)3 organizations like the American Liberty Foundation are legally barred from addressing.

The new DownsizeDC Foundation will speak out on those issues, including petitioning members of Congress, that it is legally permitted to address. Typically, this excludes pending legislation.

DownsizeDC: the pro-liberty alternative to MoveOn.org. It's a powerful vision. But to achieve that vision we must change our structure to account for the new powers of the FEC and the IRS.

Our pro-freedom lawyers are willing to handle the legal work at greatly reduced fees. However, even with their generosity, the transition will cost about $7,000, with each organization responsible for half. That may seem like a lot, but failing to do this right could cost us far more.

The same is true for our accounting procedures. Both organizations have managed to get by for three years with an embarrassingly, rudimentary accounting system.

But now, we need to make sure neither Downsize DC organization improperly pays for the activities of the other -- assuming we want to stay out of jail and keep our non-profit status. More complex accounting is another price of exercising so-called First Amendment rights in the brave new world of BCRA and IRS Revenue Ruling 2004-6.

This new system will cost less than $1,500 (again, each organization paying half), which includes a year of support and updates.

The third item we need is a way to tackle hot, timely issues. Remember, hot, timely issues are the "Move On" way to get people involved. The right tools will transform DownsizeDC.org into the pro-liberty alternative to MoveOn.org.

MoveOn-style campaigns are much harder to execute today than they were five years ago. Congress has erected barriers to thwart online "lobbying-by-spam," but the free market is developing creative ways around these barriers.

We want to take advantage of this new technology to exercise our right to communicate with our representatives, as well as to the group whose influence and power has increased the most under BCRA -- the institutional media.

Toward this end, we're working with a very talented website developer. She was one of the 100 people who received the original MoveOn.org message in 1998. She knows how to do what we need done.

Building and maintaining the system will cost $6,700. This system is slick. The user just enters their zip code and they're told who their Representative is. Then they can send a customized letter that actually gets through the Congressmen's barriers.

This will be a powerful tool for both organizations. The DownsizeDC Foundation can use it to persuade, educate, and convert with campaigns that don't, in any way, attempt influence the outcome of elections or affect specific legislation. They can even lobby below certain thresholds. DownsizeDC.org, on the other hand, can use it to support or oppose specific bills in Congress, such as the recently passed Medicare drug bill.

A perfect example of what the foundation will be able to do comes from the Libertarian Party. In 1999 they helped defeat the FDIC's proposed "Know Your Customer" bank spying regulation. That online campaign, DefendYourPrivacy.com, generated over 175,000 emails to Congress and built an email list of over 140,000 people.

What it will take before we can Downsize DC

The example of MoveOn.org shows how this kind of system, combined with advertising and the right legal structure, will . . . 

• Increase visits to the Downsize DC websites,

• Expand the number and percentage of people who join you and me,

• Increase our ability to fund bigger ad campaigns,

• And begin winning on Capitol Hill.

Here again, we need our attorneys and our new accounting system to make sure our ads and online lobbying stay clear of the new legal impediments against free speech.

I didn't get involved in this fight to deal with lawyers, accounting systems, or computer software. I got involved to help create a freer country for my children and their children. I suspect you're involved for similar reasons.

But it can't be helped if we want to stay in the fight. We need to raise . . .

• $7,000 to change our legal structure,

• $1,500 for a new accounting system,

• $6,700 to put in place the technology needed to become the MoveOn for liberty.

That means we need to raise $15,200 immediately. Do you want a MoveOn organization for liberty that will help people in Congress do the right thing, instead of the wrong thing? Bad new big government proposals are coming up, and need to be fought:

• The Patriot Act expires next year. Bush wants to make it permanent. Many in Congress oppose this. Will they stand firm? Can we help? Will we?

• Democrats want to expand the new drug benefit. If members of Congress are deluged with calls for more spending -- and don't hear from you and I -- it stands a good chance of passing. I've been told, by people who know, we could make the difference. Will we?

The American Liberty Foundation has developed the ability to create and broadcast new radio ads within 48 hours, a powerful capability that DownsizeDC.org will be able to buy access to. With the right legal structure and accounting systems to safely run them, and a MoveOn-style lobbying system to take the fight to Capitol Hill, we'll have a real shot at stopping legislation that takes away our liberty - legislation like the recently-enacted Medicare prescription drug entitlement.

Will we do it? Do you like our new approach? If so, we need your help now.

• A single contribution of $7,000 would fund our share of either the transition legal expenses or the online petition/lobbying mechanism.

• $1,500 would pay for our share of the new accounting system.

But we can't count on finding individuals to fund these amounts single-handedly. It's going to take hundreds of individuals, each doing what he or she can, to transform RealCampaignReform.org into DownsizeDC.org -- the pro-liberty alternative to MoveOn.org.

Can I count on you to make a "founding" contribution today of $1,000 . . . $500 . . . $250 . . . $125 . . . $76 . . . or $35? The sooner we raise the $15,200 the sooner we'll be ready to stop the next big-government boondoggle and start making real, sustainable progress toward a freer America.

If you join us as one of the "Founders of Downsize DC," we'll recognize your support and say thanks.

If you can give $7,000 or more in a one-time contribution -- paying for either the lobbying mechanism or the legal expenses -- we'll acknowledge your donation by . . .

• A permanent listing of you as a PATRON Founder at the Downsize DC website. Patrons will be at the top of the Founder's list.

• A handsome certificate, suitable for framing.

• Copies of any radio ads or Audio Guides we produce for the next two (2) years.

For those of you who give $1,000 or more, or $100/mo. in a credit card pledge will receive an exclusive listing as a SPONSOR at the Downsize DC website, a certificate, and a CD copy of any radio ads we produce this year.

If you're level of support is $200 or more, or you pledge $20 per month via credit card, you'll be listed as an ASSOCIATE Founder at the website, and you'll get a CD copy of the first set of radio ads we produce this year.

Basic Founders, those who give $76 or more, or pledge $10 or more, we'll receive a CD copy of the next set of radio ads we produce.

My friend Larry Pratt of Gun Owners of America says something like,

"The State tries to slow us down with regulation. But if we use our God-given talents, we can take what they meant for harm and devise a more creative solution we otherwise would never have dreamed of."

Take government lemons and make Freedom Lemonade

In this letter, we've urged you to join in FOUNDING the new Downsize DC. With the plan laid out in this letter, I believe we're taking the bitterest lemons and making the sweetest lemonade. This new approach gives us the chance to start over, but this time with three years hard-earned experience.

Please, don't let the FEC and IRS shut us down. They may be forcing our hand, but I assure you, as silly as all this might seem, the changes we make in response will make us stronger and more effective. Please help us turn the tables on the State.

Please rush us your best donation today.

For Liberty,

Jim Babka
President
RealCampaignReform.org, Inc.

P.S. You saw how the liberal MoveOn.org put Howard Dean on the map. They've also helped pass McCain-Feingold.

What MoveOn.org did to expand big government, DownsizeDC can do to dramatically shrink government. But only if you join us now.

Imagine, Congress proposes some new Medicare Prescription Drug-style "time bomb." Ron Paul once again organizes the opposition. He's got the ground-forces on the Hill. Congress may have suppressed political dissent, but they've helped us discover how we can make a big impact.

Once we have the tools in place, our allies, the new Downsize DC Foundation, can educate the public on the issues. Our transformed organization DownsizeDC.org (formerly RealCampaignReform.org) provides Congressman Ron Paul and other politicians who are doing the right thing with an air force -- ads on the air in targeted Congressional districts and targeted emails from constituents to Congressional offices.

As we explained in the letter, I believe we can FINALLY win many of these future battles.

But it will require the right legal structure. Downsize DC, the combination of two organizations, is more powerful than RealCampaignReform.org all by itself.

Your rapid response lets us rapidly respond to big government.