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Fundraisers Lobby Congress on Patriot Act

March 12, 2004

By: Scott Hovanyetz
Senior Reporter
scotth AT dmnews.com

Third-party telemarketing fundraisers are seeking assistance from U.S.
lawmakers in their efforts to remove a provision from the Patriot Act that
gives the Federal Trade Commission limited sway over charities.
The American Teleservices Association urged its members this month to lobby
their representatives in Congress on the Patriot Act while the association
was gathered in Washington for the ATA's annual legislative conference.

The ATA has gained some congressional support, said Stuart Discount, a
member of the ATA's board of directors, though he declined to name the
lawmakers favorable to the association's position.

However, third-party fundraisers were dealt a setback in court recently when
a U.S. district judge upheld the FTC's new rules governing charity
telemarketing.

The Patriot Act is an anti-terrorism bill Congress instituted in 2001 after
the Sept. 11 attacks. It contains a provision adding the words "a charitable
contribution, donation, or gift of money or any other thing of value" to the
definition of telemarketing activities covered by the FTC under the
Telemarketing Sales Rule.

The FTC later decided that it would not include charities in the national
no-call list, nor would it regulate charities that do telemarketing
in-house. However, it would require charities that use for-profit
fundraisers to abide by rules that formerly applied to commercial
telemarketers only.

These include company-specific no-call rules, abandoned-call limitations and
caller ID, disclosure and calling time requirements. The new rules took
effect in March 2003.

"It's costing my clients money," said Discount, president of Tele-Response
Center, Philadelphia, a call center firm that serves nonprofits. "We have
less contact per hour and more donors asking to be placed on
company-specific no-call lists."

A few lawmakers are interested in proposing a change to the Patriot Act that
would limit the scope of the FTC's sway over charity telemarketing, Discount
said. In the meantime, two Maryland-based charities, the National Federation
of the Blind and Special Olympics Maryland, are suing the government to
challenge the FTC rules.

That effort suffered a blow this month when the FTC announced that U.S.
District Judge J. Frederick Motz in Baltimore issued an opinion, dated Feb.
24, denying the charities' claims. Motz said that the rules did not violate
the First Amendment and were in line with the government's interest in
preventing fraud.

The charities will appeal the decision to the 4th Circuit Court of Appeals,
said Errol Copilevitz, attorney with Copilevitz & Canter, Kansas City, MO,
who is representing the two nonprofits. He argued that Congress never
intended the Patriot Act to be used against legitimate charities.

Congress passed the act in October 2001 when there were concerns about
fraudulent charity scams related to the Sept. 11 attacks, Copilevitz said.
There were also concerns about charities being fronts for terrorist
organizations.

The FTC took that mandate and used it to target telemarketers, he said.

http://www.dmnews.com/cgi-bin/artprevbot.cgi?article_id=26824