[EL] NM donor disclosure bill

[bzall at aol.com]

Um, yes, though it might be more accurate to say that c3s can support or oppose ballot initiatives to the extent they can lobby under either the IRC 501h/4911 "mechanical " test or the older "substantial part" test. Initiative lobbying is direct, as opposed to grassroots, lobbying.

Barnaby Zall
_________________________

> On Mar 28, 2017, at 11:32 AM, Mark Scarberry <mark.scarberry at pepperdine.edu> wrote:
> 
> 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 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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