Court Allows Public Disclosure Of Political Donors

September 20, 2018       Mark Hrywna      

Nonprofits that make political ads explicating telling viewers who to vote for or against must now disclose the identities of all contributors who gave more than $200 in a year. That’s the result after the U.S. Supreme Court on Tuesday lifted a temporary stay by Chief Justice John Roberts.

“The decision was not a surprise yet the impact will be large because for the first time in decades, (c)(4)s will have to be disclosing their contributors,” said Tim Delaney, president and CEO of the National Council on Nonprofits.

People can’t read too much into the court order, said Delaney, a former solicitor general for the State of Arizona. The decision was more procedural than on the merits of the case, he added.

Delaney also emphasized that the underlying case concerns the application of Federal Election Commission (FEC) rules on 501(c)(4) social welfare organizations – contributions to which are not tax deductible – and not 501(c)(3) charitable organizations.

“This decision moves us closer to Independent Sector’s position that nonprofits should disclose donors who fund partisan political activity,” said Allison Grayson, director of policy development and analysis at Independent Sector. “However, we urge the FEC to quickly provide guidance to help nonprofits comply with this rule change. It also is important to note, debates around donor disclosure and the Johnson Amendment are symptoms of a broader problem: confusing and conflicting political activity rules governing nonprofits. We must proactively work to align and clarify political activity rules to protect the public’s trust in the nonprofit sector,” she said in a statement.

The case was brought by Citizens for Responsibility and Ethics (CREW) against Crossroads GPS after the FEC dismissed its 2012 complaint. The decision, effectively immediately, means that contributors for a major category of dark money spending in this fall’s elections will have to be disclosed publicly, according to CREW.

“This is a great day for transparency and democracy,” CREW Executive Director Noah Bookbinder said. “Three courts, including the Supreme Court, have now rejected Crossroads’ arguments for a stay, meaning we’re about to know a lot more about who is funding our elections,” he said in a statement after the decision.

CREW filed suit against the FEC in February 2016, challenging the dismissal of a 2012 complaint filed against Crossroads GPS, a conservative group led by former George W. Bush advisor Karl Rove, for failing to disclose names of donors who funded the group’s campaign ads.

Last month, a U.S. District Court judge ruled in CREW’s favor, giving the FEC 45 days to issue a new regulation to require donor disclosure. The D.C. Circuit Court then declined a request by Crossroads GPS for an emergency stay. Chief Justice Roberts on Saturday stayed the lower court’s ruling but the full Supreme Court vacated that, allowing the District Court ruling to stand.

Other organizations said they were still studying the case and its potential impacts.

“For this election, the way it stands now, all 501(c)(4)s will have to be reporting their who their contributors are,” Delaney said.

  • Citizens for Responsibility and Ethics in Washington
  • Crossroads GPS
  • elections
  • Federal Election Commission
  • Independent Sector
  • National Council of Nonprofits
  • U.S. Supreme Court