Bloomberg Law
April 26, 2021, 6:00 AM

NAACP-Conservative Alliance Fights Donor Disclosure at Top Court

Greg Stohr
Greg Stohr
Bloomberg News

Seven decades after the U.S. Supreme Court said the NAACP didn’t have to give Alabama its membership list, prominent liberal groups are in the unlikely position of supporting two conservative charities in a challenge to California’s requirement that they disclose their top donors.

In a Supreme Court argument set for Monday, the Americans for Prosperity Foundation and the Thomas More Law Center will contend that California can’t be trusted to keep the information private -- and that it’s opening up the groups’ supporters to threats and harassment, much like Alabama once did to the NAACP.

The First Amendment showdown is drawing outsize interest, in part because of its potential implications for political campaigns. Advocates of campaign-finance regulation say the case could be a step toward a direct attack on election disclosure laws.

The case “seems like it’s a stalking horse for something else,” said Paul Smith, vice president of the Campaign Legal Center, which filed a brief backing California in the case.

Even so, the challengers have drawn an ideological cross-section of backers that say they have strong donor privacy interests of their own. They include the NAACP Legal Defense and Educational Fund, the American Civil Liberties Union, and the Human Rights Campaign, an LGBTQ advocacy group, which were among the groups filing a brief largely agreeing with the charities. The Legal Defense and Educational Fund grew out of the NAACP but has operated independently for decades.

‘Like a Sieve’

California is one of four states -- along with New York, New Jersey and Hawaii -- that require charities to provide a copy of their Schedule B, a form they routinely file with their federal tax returns. That form generally provides the names and addresses of people who contributed more than $5,000. Although California says it keeps the information confidential, the groups say the state has a history of inadvertently disclosing information, including 1,800 Schedule B forms posted online and discovered during litigation.

“Their track record shows that they’ve leaked the information like a sieve,” said John Bursch, who represents the Thomas More Law Center and serves as senior counsel for the advocacy group Alliance Defending Freedom. “California is not a place that you would want holding your confidential information.”

The groups say sloppiness puts donors at risk of intimidation and harassment in a politically fractious and dangerous era. They’re relying on a line of Supreme Court cases that start with the court’s unanimous ruling in the 1958 NAACP case, which said disclosure of the group’s members would undermine their freedom of association.

First Amendment

“This is not the time or the climate to weaken First Amendment rights to anonymity,” the Charles Koch-backed Americans for Prosperity Foundation argued in court papers. “Social and political discord have reached a nationwide fever. Perceived ideological opponents are hunted, vilified, and targeted in ways that were unthinkable before the dawn of the internet.”

The foundation describes itself as focused on “free markets, civil liberties, immigration reform, and constitutionally limited government.” The Thomas More Law Center says it works to protect “religious freedom, free speech, family values, and the sanctity of human life.”

California says it has fixed its accidental disclosure problems. And it says any lingering public-disclosure risk doesn’t outweigh the state’s legitimate need for the information to evaluate complaints against charities and investigate instances of fraud.

Although the challengers say the state can get the information on an as-needed basis -- either by demanding the forms from the charities, or requesting them from the Internal Revenue Service -- the state says those alternatives are time-consuming and inefficient.

Biden Shift

“The state has compelling interests in overseeing charitable entities and preventing the unlawful diversion of charitable assets and the deception of the donating public,” California argued in court papers.

The Trump administration filed a brief opposing the California requirement in November, but the Biden administration shifted the federal government’s position and is urging the court to return the case to a lower court for more scrutiny.

Lurking in the background is the potential impact on dark-money election spending. Americans for Prosperity and Thomas More say they aren’t contesting past Supreme Court rulings that give the government considerable latitude to require disclosure of campaign donors.

Bursch said it’s “laughable” to say the current case will lead to the invalidation of election laws.

“If you think about disclosure for purposes of elections, the government interest there is in disclosing the information to the public, so the public can make informed choices when they vote,” he said. “Here, California has tried to keep donor data private. It’s simply doing a bad job with that.”

Business Agenda

But some of the groups’ supporters are asking the court to say that election disclosure laws should be subject to equally tough scrutiny. The U.S. Chamber of Commerce said in court papers that “the freedoms of speech and association deserve the same rigorous protection in the context of elections as they do in other contexts.”

And Smith, the Campaign Legal Center lawyer, says that if the court imposes the test being sought by the challengers, it will only help those opposing campaign-finance regulations.

“They can probably take that standard of review over to the other side of the house and use that as a way to begin mounting an attack on disclosure” in the election context, Smith said. “It’s not that those cases haven’t already been filed. They just haven’t gotten to the Supreme Court.”

The cases are is Americans for Prosperity v. Bonta, 19-251, and Thomas More Law Center v. Bonta, 19-255. The court is scheduled to rule by late June.

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To contact the editors responsible for this story:
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