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University of Notre Dame

SCOTUS donor privacy case could have ramifications for dark money in elections, Notre Dame expert says

19-Apr-2021 4:30 PM EDT, by University of Notre Dame

On April 26 (Monday), the Supreme Court of the United States will address the constitutional standard for disclosure of donor information for the first time since Justices Amy Coney Barrett, Neil Gorsuch, Elena Kagan and Brett Kavanaugh joined the court.

In Americans for Prosperity Foundation v. Rodriquez, two nonprofits are challenging California’s authority to require charities to provide the names and other identifying information for their major donors to the attorney general, arguing that the policy violates the First Amendment and would deter people from giving. The state cannot disclose the names publicly, but officials say the information will help determine if a group is doing charitable work and not involved in illegal business activity.

While Congress currently requires tax-exempt charities to provide this information to the IRS, only a few states require charities to also provide this information to state officials who regulate charities, according to University of Notre Dame Law School Professor Lloyd Hitoshi Mayer, who notes that dark money in elections could also be impacted.

“Even though the case does not involve campaign finance disclosure laws, it could have significant ramifications for dark money in elections because the petitioners have asked the court to tighten the constitutional standard for requiring disclosure of donor information,” said Mayer, an expert on campaign finance, nonprofits and disclosure. “The current exacting scrutiny standard limits governments to requiring disclosure when doing so has a substantial relation with a sufficiently important governmental interest.”

One petitioner, the Americans for Prosperity Foundation, is asking the Supreme Court to require donor disclosure requirements to instead be narrowly tailored to further an important governmental interest. The other petitioner, the Thomas More Law Center, is asking the court to go even further by requiring any disclosure requirement to further a compelling governmental interest as well as being narrowly tailored for doing so — what is commonly known as strict scrutiny.

“Either change would make it more difficult for governments to require organizations to disclose information about their donors,” Mayer said. “Both petitioners only ask for these changes to apply outside of the elections context. But if a majority of the court adopts a stricter constitutional standard in this case, it is likely that majority would also eventually apply it to campaign finance donor disclosure laws. That in turn would limit the ability of both states and the federal government to require public disclosure of donor information for politically active nonprofits, PACs and possibly even political parties and candidates.”

Mayer’s work was cited in amicus curiae briefs on both sides of the case — the National Taxpayers Union Foundation and Public Policy Legal Institute brief supporting the petitioners and the California Association of Nonprofits brief supporting the California attorney general.

Mayer’s articles include “Disclosures About Disclosure,” discussing the Supreme Court Justices’ competing factual narratives about donor disclosure in the Citizens United v. FEC decision; “Nonprofits, Politics, and Privacy”; and “Nonprofits, Speech, and Unconstitutional Conditions.”

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