The Supreme Court recently ruled in favor of two conservative groups who had challenged a California mandate that tax-exempt charities reveal the names of their top financial supporters to the state. The decision could imperil some political donor disclosure laws and buttress “dark money” by making it harder for the state to fight fraud and prevent the misuse of charitable contributions.
In a 6–3 ruling, the justices on Thursday, July 1, agreed with two nonprofit organizations, the Americans for Prosperity Foundation and the Thomas More Law Center, that the California attorney general’s policy, which has been in place for a decade, violates the Constitution’s First Amendment guarantees of freedom of speech and association.
The six conservative members of the court were in the majority, with three liberal members dissenting.
California requires charities to produce a copy of the tax form they file with the Internal Revenue Service, including a list of significant contributors. In addition, more prominent groups must disclose donors who give $200,000 or more in a given year.
Donor information is not available on the internet, and the state promises that it is kept confidential, but Reuters reported some had been revealed in the past.
“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.
“We do not doubt that California has an important interest in preventing wrongdoing by charitable organizations,” Chief Justice John Roberts also wrote. “There is a dramatic mismatch, however, between the interest that the Attorney General seeks to promote and the disclosure regime that he has implemented in service of that end.” He added that “assurances of confidentiality may reduce the burden of disclosure to the State, [but] they do not eliminate it.”
In a dissenting opinion, liberal Justice Sonia Sotomayor stated that the court had reversed its former stance.
“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 stated that the court had overturned the requirement. However, there was no proof that the donors would experience any negative repercussions if their identities were made public, such as threats or reprisals, as the groups had claimed.
An array of charitable organizations from across the ideological spectrum backed the two groups that challenged California’s law. Liberal groups, including the American Civil Liberties Union, had pushed for a narrower ruling in favor of the challengers.
The Supreme Court heard arguments in March after the 9th Circuit Court of Appeals in San Francisco reversed a federal judge’s decision regarding the groups in 2018.
Supreme Court recently has made it simpler for states to pass election integrity legislation, supporting two Republican-backed bills in Arizona in another ruling.