WASHINGTON (Reuters) -The U.S. Supreme Court on Thursday backed two conservative nonprofit groups that challenged California’s requirement that tax-exempt charities provide the state the identities of top financial donors – a decision that could imperil some political donor disclosure laws and buttress “dark money” donations.
The justices, in a 6-3 ruling, sided with the Americans for Prosperity Foundation and the Thomas More Law Center in finding that the California attorney general’s policy, in place for the past decade, violates the U.S. Constitution’s First Amendment guarantees of freedom of speech and association.
The court’s conservatives were in the majority, with its liberal members dissenting, just as they were in the other decision on their final day of rulings for their current nine-month term. In the other case, the court upheld Republican-backed ballot curbs in Arizona in a ruling that makes it earlier for states to enact voting restrictions.
Democratic-governed California, the most populous U.S. state, had said the donor information is required as part of the state attorney general’s duty to prevent charitable fraud.
“We are left to conclude that the Attorney General’s disclosure requirement imposes a widespread burden on donors’ associational rights,” Chief Justice John Roberts wrote in the ruling.
The state’s interest in “amassing sensitive information for its own convenience is weak,” Roberts added.
The Thomas More Law Center is a conservative Catholic legal group. The Americans for Prosperity Foundation, which funds education and training on conservative issues, is the sister organization of Americans for Prosperity, a conservative political advocacy group – both founded by conservative billionaire businessman Charles Koch and his late brother David.
“Stripping our office of confidential access to donor information – the same information about major donors that charities already provide to the federal government – will make it harder for the state to fight fraud and prevent the misuse of charitable contributions,” California’s Democratic Attorney General Rob Bonta said.
Americans for Prosperity Foundation CEO Emily Seidel said the ruling “protects Americans from being forced to choose between staying safe or speaking up,” alluding to her group’s concerns that donors could face threats if their identities become public.
‘A BULL’S-EYE’
The decision could make it easier for groups to withhold donor identities in other contexts, allowing for the entrenchment of untraceable “dark money” political donations that shield the identity of the donor.
The Supreme Court in the past has been hostile to political campaign finance restrictions – it ruled in 2010 that corporations and other outside groups could spend unlimited funds in elections – but had upheld disclosure requirements.
Liberal Justice Sonia Sotomayor wrote in a dissenting opinion that the court has reversed this previous approach.
“Today’s analysis marks reporting and disclosure requirements with a bull’s-eye. Regulated entities who wish to avoid their obligations can do so by vaguely waving toward First Amendment ‘privacy concerns,'” Sotomayor wrote.
Sotomayor said the court struck down the requirement without any evidence that donors would face negative consequences if their identities become public.
University of California, Irvine School of Law election law expert Rick Hasen wrote on his blog that the ruling will make it “much harder to sustain campaign finance disclosure laws going forward.”
Democratic congressional leaders fumed. Senate Majority Leader Chuck Schumer called the decision “jaw-dropping” and said it will make it “much harder to expose the evils of dark money in our political system.”
California required charities to provide a copy of the tax form they file with the U.S. Internal Revenue Service listing donors who contribute big amounts of money. Larger groups had to disclose donors who contributed $200,000 or more in any year. That information was not posted online and was kept confidential but some had become public.
The San Francisco-based 9th U.S. Circuit Court of Appeals in 2018 reversed a judge’s ruling in favor of the groups, prompting the appeal to the Supreme Court, which heard arguments https://www.reuters.com/world/us/us-supreme-court-weighs-conservative-groups-bid-conceal-donors-2021-04-26 in March.
Some congressional Democrats had urged conservative Justice Amy Coney Barrett, who was part of the majority in the ruling, not to participate in the case because Americans for Prosperity spent money last year to support her Senate confirmation to the court.
The two groups that challenged California’s mandate were backed by nonprofit organizations spanning the ideological spectrum. Liberal groups, including the American Civil Liberties Union, had urged a narrower ruling against California.
(Reporting by Lawrence Hurley; Editing by Will Dunham)
