After Koch-backed Americans for Prosperity Foundation and the Thomas More Law Center sued to hide their large donors from California state authorities, likening themselves to the NAACP in the Jim Crow South, Citizens for Responsibility and Ethics in Washington, Campaign Legal Center, Common Cause and League of Women Voters of California filed an amicus brief to the U.S. Supreme Court in Americans for Prosperity Foundation v. Becerra to explain that the First Amendment supports transparency, not subterfuge and fraud.
The brief urges the Court to uphold California’s law requiring charitable groups active in the state to file nonpublic tax reports and list their largest donors with the state Attorney General in order for the state to effectively enforce its tax and nonprofit laws and prevent charitable fraud. These filings, which the groups already disclose to the IRS, are kept confidential and only used for governmental oversight purposes.
AFPF and the Thomas More Law Center refused to submit their donor reports to the Attorney General’s office and brought its suit against the California Attorney General, claiming that by submitting donor information — many of whom are large corporations or powerful and politically-connected public figures who contribute millions of dollars annually– will expose the donors to harassment and threats. However, despite their claim, California’s law requires confidential reporting, preventing any major donors from being exposed to public hostility.
“Shielding the rich donors who give enormous sums to organizations like Americans for Prosperity Foundation and Thomas More Law Center removes any semblance of accountability,” said CREW Senior Litigation Counsel Stuart McPhail. “When it comes to understanding how organizations like these operate, especially those groups with tremendous public influence, it’s imperative their financial records are accessible and transparent. The First Amendment not only permits such transparency but is advanced when transparency leads to speech used to hold the powerful to account.”
“This case has nothing to do with elections or any claimed interests in public transparency,” said Campaign Legal Center Vice President Paul Smith. “A case about the constitutionality of California’s confidential tax reporting law should not be permitted to dilute the Court’s well-established precedents endorsing voters’ right to know who is spending money to influence our elections and our government. This case should not be used as a vehicle to expand exemptions from transparency in election spending to any deep-pocketed, politically active group that attracts public criticism for messages to evade disclosure.”
“This suit is truly a solution in search of a problem that does not in fact exist,” said Common Cause Money in Politics and Ethics Program Director Beth A. Rotman. “The disclosure requirement being challenged is disclosure solely to the state of California, and their filings are exempted from FOIA requests, so the public will never see their lists of donors.”
“The League joined this case to stand against the spreading influence of dark money in politics,” said League of Women Voters of California Executive Director Stephanie Doute. “Financial disclosure rules are essential to ensure accountability for political influence, and this case could have dangerous implications for campaign finance transparency. The wealthiest political donors should not be able to influence our politics in secret. This case is just another example of wealthy special interests trying to chip away at transparency in politics.”
California’s state requirement is functionally identical to nonpublic reporting obligations under federal tax laws, to which AFPF and Thomas More Law Center don’t object. Nevertheless, AFPF and Thomas More Law Center are asking the Court to redefine the standard of review applied in disclosure cases. A broad ruling accepting that theory could make it harder to defend all disclosure laws in court, permitting powerful groups’ financial misdealings to go undetected, and censoring any criticism based on their conflicts of interest.
AFPF’s and Thomas More Law Center’s attempt to ground their novel First Amendment claim by likening themselves to the NAACP in the Jim Crow South, and cases that found states could not disclose NAACP members to aid the KKK’s attacks on civil rights workers and the civil rights cause. Not only is that comparison insulting to the civil right activists who risked their lives, but it’s legally baseless. California’s program is a routine program designed to combat fraud and misbehavior in organizations that enjoy the benefit of the state’s tax support. The petitioners’ desire to avoid scrutiny of their books, and criticism of their actions, are not protected by the First Amendment.