[EL] NM donor disclosure bill

[Mark Scarberry]

Perhaps I'm missing something. Five thousand dollars is not in many cases a
"very significant amount." Lots of people give more than that to a specific
charity, including to churches.

The Church of Latter Day Saints almost certainly spent more than $1,000
supporting Prop. 8 in California (regarding same-sex marriage). For the
church's involvement, see, for example,
http://www.mormonnewsroom.org/article/same-sex-marriage-and-proposition-8
and http://www.mormonnewsroom.org/article/california-and-same-sex-marriage.
If the NM law applied to ballot propositions outside of NM (doubtful) or if
a similar law were adopted in California, would the church then have to
list every donor who gave more than $5,000 to the church, even for
unrelated purposes? Given the strong commitment of the LDS community to
giving 10% of income to the church, my sense is that the disclosure would
sweep up at least hundreds of thousands of church members across the nation
and would in effect constitute a public list of church members who make a
reasonable income. (My church, on the other hand, is a bit like Will
Rogers' description of the Democratic Party; I believe he said that he did
not belong to an organized political party -- he was a Democrat.)

Mark

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

On Tue, Mar 28, 2017 at 1:58 PM, Trevor Potter <tpotter at capdale.com> wrote:

> Anyone who reads what I wrote will readily recognized that my op ed did
> not say what Sean claims—I did not say that a disclosure law could not
> constitutionally reach a 501 c3’s candidate-related activity.
>
>
>
> To the contrary,  Sean and I are in agreement on that point: “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.”  CLC agrees that the Supreme Court has never
> suggested that the constitutionality of a campaign finance disclosure law
> turns on the tax status of the groups subject to the law. As a policy
> matter, the public has an informational interest in learning who is
> financing a group’s electioneering communications regardless of whether
> that group is a 501(c)(3) or a 501(c)(4). These were likely among the
> factors animating the New Mexico legislature’s decision not to exempt
> 501c3s from SB 96’s coverage by virtue of their tax status.
>
>
>
> Because the bill could apply to 501(c)(3)s, however, does not mean that
> there is a substantial likelihood that it in fact will adversely affect
> activities by 501(c)(3)s in New Mexico. In order to trigger coverage, a
> 501(c)(3) which mentions a candidate would have to spend over $1,000 for an
> “advertisement” that either contains express advocacy for such candidate,
> or its functional equivalent, or (a) refers to the candidate, (b) targets
> the candidate’s electorate, and (c) is publicly distributed during the
> 60/30 pre-election windows. A candidate-centric ad purposefully circulated
> in the immediate days before an election is almost always outside the
> organizational purview of charities, and the bill’s coverage is not aimed
> at such groups.  Notably, nonpartisan voter guides by 501c3 are exempted
> from the law.
>
>
>
> Opponents’ attempts to argue that  SB 96 would require disclosure of
> speech about candidates by  501(c)(3)s causes them to conjure highly
> unusual factual circumstances. For example, to trigger disclosure under SB
> 96 in Sean’s hypothetical, livestreaming or republishing that portion of
> the pastor’s statement in a church bulletin would, as an initial matter,
> have to cost the church over $1,000. Even if it satisfied this element, the
> statement might  still be exempt from the definition of “advertisement” as
> a communication by a membership organization to its members.
>
>
>
> The benefits of disclosure are not hypothetical. Disclosure requirements,
> like those in SB 96, give voters information about the real sources of
> funding behind advertisements designed to impact choices at the ballot.
> Like similar laws around the country, SB 96 is meant to foster informed
> choices about the policies and elected leaders that will impact New
> Mexicans on a daily basis. These publicly policy benefits of disclosure of
> the sources of funding of candidate –centric advertising were robustly
> lauded by the United States Supreme Court in the 8-1 portion of Citizens
> United.
>
>
>
> As a postscript, Mark Scarberry also raises the question of whether SB 96
> applies to ballot measure advocacy (which may be engaged in by 501 c 3s, as
> Barnaby Zall has noted in this discussion) .  It does.  The bill also
> requires disclosure from those who spend over $1,000 on advertisements
> expressly advocating for ballot measures, or that refer to specific ballot
> measure during the 60/30 pre-election windows.  Donor disclosure, however,
> is limited to those who earmark their donations for ballot measure advocacy
> or who give very significant amounts (over $5,000). As most will recall,
> the Supreme Court has also spoken approvingly of transparency in the
> financing of ballot measure advocacy, and CLC certainly agrees that
> “[i]dentification of the source of advertising may be required as a means
> of disclosure, so that the people will be able to evaluate the arguments to
> which they are being subjected.” First National Bank of Boston v. Bellotti,
> 435 U.S. 792 n.32 (1978); Citizens Against Rent Control v. City of
> Berkeley, 454 U.S. 290, 298 (1981).  It is unclear why this informational
> interest would be any less compelling in connection to advocacy by a 501c3
> as opposed by a 501c4.
>
>
>
> Trevor Potter
>
> Campaign Legal Center
>
>
>
> *From:* law-election-bounces at department-lists.uci.edu [mailto:
> law-election-bounces at department-lists.uci.edu] *On Behalf Of *Sean Parnell
> *Sent:* Tuesday, March 28, 2017 12:03 PM
> *To:* Election Law Listserv
> *Subject:* [EL] NM donor disclosure bill
>
>
>
> 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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