[EL] NM donor disclosure bill

[Mark Scarberry]

And, if I remember correctly,  501(c)(3) organizations may take actions,
without threatening their tax exempt status,  to support or oppose ballot
propositions so long as the amount they spend is not a substantial
(material?) part of their overall expenditures.

Mark

Prof. Mark S. Scarberry
Pepperdine Univ. School of Law

On Tue, Mar 28, 2017 at 9:03 AM, Sean Parnell <
sparnell at philanthropyroundtable.org> wrote:

> I ran across an op-ed from Trevor Potter today, concerning a donor
> disclosure bill in New Mexico that is apparently awaiting the governor’s
> signature or veto. http://www.santafenewmexican.
> com/opinion/my_view/looking-in-governor-should-sign-dark-
> money-bill/article_4164c35e-8267-577c-94a9-1287ecee677a.html
>
>
>
> One section jumped out at me, concerning disclosure of donors to charities:
>
> Contrary to assertions by dark money proponents, SB 96 does not threaten
> to regulate true charities. In fact, the federal tax code already prohibits
> charities from spending money to influence elections—and strictly limits
> the amount of lobbying they can conduct as well.
>
> Concerns that SB 96 could impact such groups are entirely hypothetical. SB
> 96 will apply only to political communications and simply provides basic
> information to New Mexico’s voters about the real sources of money funding
> advertisements that support or oppose ballot measures or candidates
>
> The first sentence is simply false. *Independence Institute v. FEC*
> upheld the determination that campaign finance laws can be applied to a
> 501(c)3 entity even though it is legally prohibited from campaign
> intervention. The Campaign Legal Center even filed 3 briefs in this case
> supporting the application of campaign finance laws to charities. Here is
> (in part) what it wrote concerning disclosure and 501(c)3 entities (p. 26
> of brief
> <http://www.campaignlegalcenter.org/sites/default/files/CLC_D21_PC%20Amici%20Br.FINAL_.pdf>
> urging affirmance of district court ruling):
>
>
>
> The Institute also argues that 501(c)(3) organizations should be exempted
> from disclosure because they are “barred, by federal law, from carrying out
> any candidate-centered electioneering.” Appellant Br. 43-44. To be sure,
> 501(c)(3) groups are prohibited from “intervening” in a “political
> campaign” under 26 U.S.C. §501(c)(3). But the IRS’s definition of campaign
> intervention, see, e.g., Rev. Rul. 2007-41, 2007-1 C.B. 1421, is used to
> determine whether a group meets the criteria for a tax status under Section
> 501(c)(3), not whether the group should be subject to disclosure under
> federal election law. The IRS’ definition is not—and was not intended to
> be—coterminous with the activity regulated under FECA. See, e.g., Shays,
> 337 F. Supp. 2d at 124-28 (criticizing FEC for deferring to the IRS
> standard because “the IRS in the past has not viewed Section 501(c)(3)’s
> ban on political activities to encompass activities that are... considered
> [to be political activities]” under federal campaign finance law).
> Moreover, that the Tax Code itself imposes more stringent limits on
> political activity by 501(c)(3) groups than by 501(c)(4) groups suggests,
> if anything, that section 501(c)(3) groups are entitled to less
> constitutional protection for their political activities.
>
>
>
> As concerning “hypothetical” concerns, I daresay the supposed benefits of
> the law are hypothetical as well, in that it has yet to be enacted (and may
> not be, of course), and of course the application of campaign finance
> disclosure requirements to charities was hypothetical as well until it
> happened in *Independence Institute v. FEC*. And it’s difficult to accept
> the assertion about the law applying only to “political communications”
> that “support or oppose ballot measures or candidates” given the fact that
> the law is written in such a broad way as to encompass, for example, a
> church service where the pastor names specific elected officials and asks
> the congregants to pray for them (this was a weekly feature of my church in
> Des Moines), if that service is livestreamed or republished in a church
> bulletin or carried on the radio or converted to a podcast.
>
>
>
> Best,
>
>
>
> Sean Parnell
>
> Vice President for Public Policy, The Philanthropy Roundtable
>
> 1120 20th Street NW, Suite 550 South
>
> Washington, DC  20036
>
> (202) 600-7883 (direct)
>
> (571) 289-1374 (mobile)
>
> sparnell at philanthropyroundtable.org
>
>
>
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