Issue-Advocacy Groups Face Tough Battle to Keep Their Donors Secret

BOSTON (CN) — An appeals panel of federal judges had tough questions Wednesday as to why concerns about "cancel culture" would allow two advocacy groups for conservative issues to keep their top donors secret.

“I’m not understanding,” U.S. Circuit Judge David Barron said at oral arguments this morning, trying to differentiate the case at hand from precedent such as the Supreme Court’s Citizens United ruling that approved state disclosure requirements.

U.S. Circuit Judge Bruce Selya, an 87-year-old Reagan appointee, voiced similar puzzlement. “It’s hard for me to square Citizens United with the idea that, if you’re a 501c3 group, no one is entitled to know where your money is coming from," he said. "I think that’s antithetic to Citizens United.”

Rhode Island invited the challenge here after passing a 2012 law that says issue-advocacy groups must list all donors of $1,000 or more on a government website and include the person’s name, home address, employer, job title and donation amount. Should the groups publish any communications within 60 days of a general election, or 30 days of a primary, Rhode Island also requires that the communication name their top-five donors.

The League of Women Voters of Rhode Island and other groups have supported the law as a means of ensuring transparency. But other organizations say it’s a way to suppress unpopular viewpoints by publicly shaming donors and inviting retaliation.

Two conservative groups, the Gaspee Project and the Illinois Opportunity Project, are seeking a First Circuit reversal now after a federal judge dismissed their suit last August. Attorneys for the pair have cited a poll that says 62% of Americans are afraid to share their political opinions for fear of negative repercussions.

A third told pollsters they fear getting fired. The poll also showed that 50% of strong liberals support firing Trump donors and 36% of strong conservatives support firing Biden donors. The plaintiffs say that requiring donors to be identified in such an environment unreasonably chills freedom of speech.

There is some law on their side. The Supreme Court in 1958 struck down an Alabama law designed to force the NAACP to reveal its donors, and in 1995 it struck down an Ohio law prohibiting anonymous campaign literature.

In New York and New Jersey, meanwhile, courts have suggested that laws similar to the one in Rhode Island might be unconstitutional.

But in other cases such as Citizens United, the Supreme Court has approved disclosure requirements.

The public has a strong interest in electoral integrity and in knowing who supports whom, which can be very helpful particularly with obscure ballot referenda, said Gregory Magarian, a law professor at Washington University in St. Louis who specializes in political and First Amendment issues.

Although we live in an overheated political environment, he said, the First Amendment is concerned only with government retaliation and not private retaliation such as firing someone. Magarian noted that, in the NAACP case, the group’s concern was that the Alabama government itself would go after its donors.

Similarly, the Ohio case involved a woman who handed out handbills anonymously, not an issue-advocacy group trying to shield its big-money supporters.

But attorney Daniel Suhr of the Liberty Justice Center in Chicago said the Citizens United ruling never considered the Ohio handbill case. Suhr represents the two organizations opposed to the law and said the judges could apply that. He also noted that Citizens United broadly found that corporations have the same free-speech rights as individuals.  

Rhode Island Assistant Attorney General Katherine Sadeck differentiated the Ohio case meanwhile by noting that it involved a ban on anonymous communications, not a donor-disclosure requirement.

Magarian said the Supreme Court has carved out some situations where an exception to disclosure requirements can be made based on a clear danger of significant retaliation. But “you have to make a record,” he said. “You can’t just wave around an opinion poll. You can’t just say ‘I’m afraid.’”

Rhode Island did run into a problem, however, in regard to how an organization can know if it’s covered by the law.

“One thing puzzles me,” said Barron, an Obama appointee. “If the Providence Journal writes an article, that’s not covered by the law.”

“Right,” said Sadeck. “There’s an exception” for the news media.

“How is that not a problem, that different speakers are treated differently?” Barron asked.

Sadeck said the difference is that the Journal isn’t spending money to influence an election.

“But how does someone figure out upfront which box they fall into?” Barron asked. “If I just started a newsletter, I might think I’m like the Journal, but the state might think I’m like a PAC. What do I do to find out who I am and if I’m committing a crime?”

That question “is not before the court,” Sadeck answered curtly.

The circuit might get some additional guidance in the next month when the Supreme Court is expected to decide whether California can require charities to give a donor list to the state government. The government is supposed to keep the donors secret, but there has been a history of leaks and the charities fear their donors could face retaliation.

The ACLU and the NAACP oppose the law, and the high court appeared skeptical of it at oral argument in April.

Rick Hasen, an expert on campaign finance law the University of California at Irvine, says conservative judges are more concerned about disclosure requirements in the age of doxxing than they have been in the past.

“It’s clear that such laws will get more scrutiny by conservative judges than they did even a few years ago, when Justices Scalia and Kennedy expressed strong support” for them, he said.

U.S. District Judge Pedro Delgado Hernández of the District of Puerto Rico, an Obama appointee sitting by designation, rounded out the Boston-based First Circuit panel.

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