Advocacy Groups Challenge Ethics Laws

Two advocacy organizations for nonprofits have challenged provisions of an ethics law approved last year in New York State that they contend is unconstitutional and harmful to nonprofits.

Lawyers Alliance for New York and the Nonprofit Coordinating Committee of New York (NPCC) filed a complaint against the New York Attorney General’s Office. The 15-page filing alleges that New York Executive Law §172-e violates the 1st and 14th amendments as a result of a requirement that nonprofits report donor information because they provided a certain level of assistance to 501(c)(4) social welfare organizations – even when that support was not connected to lobbying or political speech.

The case is expected to be joined by ongoing litigation brought by the New York Civil Liberties Union, the American Civil Liberties Union and Citizens Union before Judge Richard M. Berman of the U.S. District Court for the Southern District of New York.

A spokesman for the Attorney General’s Office said they are reviewing the lawsuit but had no comment beyond that at the moment.

Executive law §172-e requires nonprofits that donate staff, staff time, personnel, offices, office supplies, financial support of any kind or any other resources totaling $2,500 or more in a six-month period to a 501c4 social welfare organization that engages in lobbying to file a report with the attorney general. The report must include the identity of any donor to the nonprofit of $2,500 or more and would be posted online within 30 days.

The measure was adopted by the state Senate (S-8160) and Assembly (A-10742) on June 18, and signed into law by Gov. Andrew Cuomo on Aug. 24.

“While other sections of the statute are intended to increase transparency in the electoral process, the provisions we challenge today are unrelated to those goals,” said Sean Delany, executive director of the Lawyers Alliance for New York. “Nonprofits that provide technical support, make grants, or otherwise support advocacy organizations – with no intention of supporting lobbying activity – should not be required to disclose their donors without any connection to that activity. This is the first statute in the country to mandate such disclosure, and it is an ill-considered way to create such a legislative precedent,” he said.

Transparency and accountability are fundamental to nonprofits, especially those engaging in lobbying, NPCC President Sharon Stapel said, but the law catches nonprofits up in a net of reporting for every day activities that have no connection to lobbying.”