The investigation into a prominent lobbying firm's fake letters to Congress points up the dangers to K Street in so-called grassroots and grass-tops lobbying, both of which are increasingly popular -- and controversial. It also underscores the absence of disclosure, let alone regulation, in a booming segment of Washington's influence industry.

The probe has led to PR headaches and new internal rules at Bonner & Associates, which sent out the letters, as well as at a consulting shop and a coal industry coalition caught up in the scandal.

Bonner & Associates got a temporary reprieve last week after Rep. Edward Markey, D-Mass., who chairs the Select Committee on Energy Independence and Global Warming, abruptly canceled a scheduled hearing on the faked letters following a rules dispute. But the hearing has been rescheduled for Oct. 29.

Markey is investigating why three members of Congress received more than a dozen letters opposing climate change legislation that forged the identities of seniors advocates and civil rights leaders, and why the lawmakers weren't notified until weeks after lobbyists discovered the fraud. The Sierra Club has also asked the Justice Department to investigate.

Reform-minded lawmakers have sought twice to require disclosure of grassroots lobbying activities, without success.

In the witness chair will be Bonner & Associates founder and CEO Jack Bonner, who has blamed the deception on "a rogue temporary employee" who has since been fired, and Steve Miller, president and CEO of the American Coalition for Clean Coal Electricity. The ACCCE had retained its longtime consulting firm, the Hawthorn Group, to lobby against climate change legislation that the House went on to approve in June. The Hawthorn Group in turn subcontracted letter-writing work to Bonner & Associates.

"ACCCE has taken the matter very seriously," said Benjamin Civiletti, a senior partner with Venable, who is representing the coal coalition. Along with apologizing to the lawmakers and to the organizations whose names were misrepresented, including local chapters of the NAACP and the American Association of University Women, the coalition has punished certain executives and revamped its internal controls.

"We've imposed some serious administrative penalties on our executives," said Civiletti, who declined to elaborate. He added that the firm will be competitively rebidding its contract with the Hawthorn Group under new terms and conditions and has imposed new rules to verify the authenticity of letters through affidavits. "The right to petition Congress... should be encouraged. And something like this incident puts a pall over constituent communications," he said.

Both Bonner & Associates and the Hawthorn Group announced similar steps. The Hawthorn Group is reviewing its policies and procedures, including its vetting process, said spokesman Harvey Valentine. Bonner & Associates has launched a five-point Quality Standards Program that mandates advance verification for all letters to elected officials and ethics training for all new employees, among other steps.

"It's important to note that Bonner & Associates first discovered this fraud and brought it to light ourselves," said Jack Bonner in a statement posted on the group's Web site.

But reform advocates warn that the incident is all too representative of the deceptive tactics that tend to accompany what they call AstroTurf lobbying campaigns. These tend to involve grassroots letters, e-mails and robo-calls from citizens, and what's known as grass-tops communications from opinion leaders, a Bonner & Associates specialty.

Such campaigns are "waging full force" this Congress, said Craig Holman, legislative representative for Public Citizen. "We're hearing about it with the health care debate. We're going to see it with the climate warming debate. We're going to see it with the financial services reform debate. The problem is, we don't know what's going on because there is no mandatory disclosure."

Reform-minded lawmakers have sought twice to require disclosure of grassroots lobbying activities, without success -- in 1995 with the Lobbying Disclosure Act, and in 2007 with the Honest Leadership and Open Government Act.

During the lobbying bill debate in 2007, Public Citizen identified a dozen organizations that called themselves grassroots but spent millions promoting corporate interests. These included the ironically-named Save Our Species Alliance, which lobbied to weaken the Endangered Species Act, and a Microsoft-backed group called Americans for Technology Leadership that weighed in on antitrust litigation. The latter orchestrated a letter-writing campaign to state attorneys general that included at least two letters from dead people.

More recently, the New York Times revealed that August protests in Houston to oppose climate change legislation featured not average citizens, but oil company employees who were bused in from their workplaces. The supposed grassroots group Energy Citizens is backed by the American Petroleum Institute, the Times reported.

"I think what we've seen, especially this summer with the energy and health care debates, is that AstroTurf has become much more widespread than I think we've ever seen it before," said Eben Burnham-Snyder, Markey's spokesman at the Select Committee. The upshot is that some environmental and civil rights groups are starting to argue that grassroots lobbying should be disclosed -- something Burnham-Snyder said Markey may look at down the road. For the moment, however, Markey's focus is on the forged lobbying letters.

"The American public is honestly confused about what is real and what is not," said Burnham-Snyder. "And that's what we're trying to uncover here."