California Legislates Donor Disclosure by Political Nonprofits

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May 14, 2014; Fresno Bee

Slowly but surely, state by state, political nonprofits are losing the battle to keep the identities of their donors secret. The latest state to open the curtains to see who’s pulling the strings and levers is California, recently a victim of out-of-state nonprofits that poured $15 million into California in campaigns around two ballot propositions.

The state’s political watchdog went after the Arizona nonprofits for violating campaign finance laws, but the new legislation—SB27, sponsored by state senator Lou Correa—addresses what state campaign finance laws couldn’t, requiring political nonprofits to disclose the donors behind their expenditures.

The new statute, just signed by Governor Jerry Brown, requires political nonprofits—501(c)(4)s and 501(c)(6)s—that spend more than $50,000 in a year or $100,000 over four years to disclose the names of donors who give them $1,000 or more for political activity in California. Open government advocates applauded the law as an important state accomplishment, one that they hope will have “a ripple effect nationwide.”

“[SB27] starts to shed light on dark money in California and serves as an example for the entire nation,” Trent Lange, President of the California Clean Money Campaign, said in a written statement. “We must strengthen disclosure laws even further, because voters deserve to know who’s trying to influence their votes.”

The issue of disclosure may not be as partisan as some might think. While Tea Party-types may be resistant to disclosure, fearing government restrictions on what they see as free speech, others both Democrat and Republican are increasingly concerned about who is buying elections through dark money nonprofits. For example, the Texas House of Representatives recently took up the issue of dark money disclosure, with both parties expressing concern about the pernicious effects of secrecy.

Texas lawmakers invited Utah Republican State Rep. Jim Dunnigan to describe his state’s examination of political nonprofit secrecy. Dunnigan explained, “I really think the chilling effect is when the public does not know who is financing campaigns, when very unfair attack ads are being run and no one knows who’s behind them, and…let me ask you this; if there’s nothing wrong with this hidden money, then why was there such an effort to keep it secret?”

“There are lots of groups that probably are waiting to see what happens and, unfortunately, if we don’t get clarity, we’ll see more that choose to participate in anonymous political expenditures,” added Texas Republican state representative Byron Cook, chairman of the House State Affairs Committee and a supporter of donor disclosure.

Despite being necessary, disclosure has a tough road ahead. The opposition of legislators affiliated with the Tea Party in some states, and certainly in the U.S. Congress, may mobilize to somehow undermine disclosure. In others, such as Minnesota, special interests that have thrived on secrecy, such as the National Rifle Association and right-to-life groups, will flex the muscle of their still-secret donors to kill disclosure legislation. But the movement for disclosure is growing and increasingly bipartisan. Despite the Supreme Court’s Citizens United decision, the court has ruled that disclosure does not violate the Constitution’s free speech guarantees. It’s now up to state and national legislative bodies to make it happen—and it’s going to happen.—Rick Cohen