What's at issue, how the lower court ruled, and what comes next.
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[Disclosure Digest by Ballotpedia]
** WELCOME TO DISCLOSURE DIGEST
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** JANUARY 26, 2021
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Explore the legislation, litigation, and advocacy surrounding nonprofit donor disclosure with _The Disclosure Digest_, a Ballotpedia newsletter.
Under federal law, nonprofits are generally not required to disclose to the public information about their donors. State laws, however, may require such disclosure. Some say expanded donor disclosure provisions minimize the potential for fraud and establish public accountability. Meanwhile, others say that disclosing to the public information about donors violates privacy rights and can inhibit charitable activity.
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** FEDERAL APPEALS COURT CONSIDERS CHALLENGE TO SANTA FE DONOR DISCLOSURE ORDINANCE
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On Jan. 21, the U.S. Court of Appeals for the Tenth Circuit heard oral argument ([link removed]) in a challenge to a Santa Fe city ordinance requiring entities spending $250 or more advocating for or against ballot propositions to disclose their donors.
THE PARTIES TO THE SUIT
The plaintiff is the Rio Grande Foundation ([link removed]) (RGF), an economic policy think tank whose self-described mission is “to increase liberty and prosperity for all of New Mexico by informing citizens of the importance of individual freedom, limited government, and economic opportunity.” The defendants include the city of Santa Fe and the Santa Fe Ethics and Campaign Review Board (ECRB), which enforces the city’s campaign finance ordinances.
WHAT IS AT ISSUE
In 2015, the Santa Fe City Council approved an ordinance requiring any person or group spending $250 or more on ballot measure campaigns to disclose their donors. Any entity meeting that threshold must report “all contributions received for the purpose of paying for such expenditures.” Disclosures must include the donor's name, address, and occupation.
In 2017, Santa Fe conducted a special municipal election in which residents voted on a tax on sweetened drinks. RGF sponsored a campaign opposing the measure. On April 24, 2017, the ECRB, in response to a citizen complaint, held a hearing to determine whether RGF’s campaign expenditures had exceeded the $250 reporting threshold. The ECRB determined that RGF had done so and ordered it to file the required disclosures. On July 26, 2017, RGF sued ([link removed]) the city, alleging the ordinance “chills constitutionally protected speech by non-profit groups and their donors,” in violation of the First Amendment to the U.S. Constitution and Article II of the New Mexico Constitution.
HOW THE LOWER COURT RULED
On Jan. 29, 2020, Judge Judith Herrera ([link removed]) , of the U.S. District Court for the District of New Mexico, dismissed RFG's lawsuit and upheld the challenged ordinance ([link removed]) . Herrera, a George W. Bush (R) appointee, wrote:
RGF’s as-applied challenge fails because there is no evidence of threats, reprisal, harassment, or the like of donors or potential donors to RGF or that would-be donors declined to contribute because of the disclosure requirements. RGF did not rely on any other burdens. Because disclosure requirements serve substantial governmental interests, Defendants met their burden of demonstrating a substantial relation between the governmental informational interest and the information required to be disclosed. Although the Court remains concerned about the potential chilling effect of the ordinance for groups raising and spending small amounts on ballot initiatives, the factual record is insufficient to support the sweeping invalidation of the ordinance that RGF requests[.]
WHAT COMES NEXT
A three-judge panel is considering the case: Judges Carlos Lucero ([link removed]) (a Bill Clinton (D) appointee), Carolyn McHugh ([link removed]) (a Barack Obama (D) appointee), and Scott Matheson, Jr. ([link removed])) (also an Obama appointee). In the course of oral argument on Jan. 21, the panel did not indicate when it would issue a ruling. A recording of the oral argument can be found here ([link removed]) .
The case name and number are _Rio Grande Foundation v. Santa Fe_ (Tenth Circuit: 0:20-cv-02022; District of New Mexico: 1:17-cv-00768).
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** WHAT WE'RE READING
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* Courthouse News Service, "A Free Speech Chill? Donor Disclosure Rules Debated at 10th Circuit," Jan. 21, 2021 ([link removed])
* The Hill, "Politicians once again prioritize silencing those who disagree with them," Jan. 21, 2021 ([link removed])
* JD Supra, "Political Privacy Update: Supreme Court to Hear Two Donor Privacy Cases From California," Jan. 21, 2021 ([link removed])
* The New York Times, "Please Don’t Follow This Money: A new Supreme Court case will take on 'dark money' in politics," Jan. 19, 2021 ([link removed])
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** THE BIG PICTURE
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_Number of relevant bills by state_: We're currently tracking 17 pieces of legislation dealing with donor disclosure. On the map below, a darker shade of green indicates a greater number of relevant bills. Click here ([link removed]) for a complete list of all the bills we're tracking.
** NUMBER OF RELEVANT BILLS BY CURRENT LEGISLATIVE STATUS:
NUMBER OF RELEVANT BILLS BY PARTISAN STATUS OF SPONSOR(S):
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** RECENT LEGISLATIVE ACTIONS
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For complete information on all of the bills we are tracking, click here ([link removed]) .
* NEW YORK S02637 ([link removed]) : This bill would require that any statement of campaign receipt that includes a contribution from a limited liability corporation disclose the name of that corporation's registered agent (or, absent that, another person).
* Republican sponsorship.
* Introduced and referred to Senate Corporations, Authorities, and Commissions Committee Jan. 22.
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