WASHINGTON - In a 6-3 decision yesterday, the U.S. Supreme Court struck down a California reporting rule designed to prevent charitable fraud and self-dealing. In doing so, the Court sidestepped established precedent recognizing the important public interests in nonprofit reporting and relatively minimal burdens such reporting imposes. This limited, nonpublic information served a key role in helping the state maintain oversight over organizations soliciting donations.
However, this decision does not call into question the longstanding laws and regulations requiring public disclosure of campaign spending. The standard of review applied by the Court is one transparency laws in the electoral context easily meet, limiting the reach of this case.
Americans for Prosperity Foundation v. Bonta addressed nonpublic tax reporting by charities, not public disclosure by those spending money to influence elections. Still, this ruling needlessly brushes aside precedent in favor of wealthy special interests—toughening the standard of scrutiny applied to California’s law beyond what the Court’s earlier disclosure decisions would have required. The League of Women Voters of California filed an amicus brief in this case.
“The Supreme Court’s decision to reject California’s disclosure requirement is disappointing and, although narrow, could open the door for further exploitation by wealthy special interests,” said Stephanie Doute, executive director of the League of Women Voters of California. "The League will continue to advocate for transparent campaign finance rules that let voters know who is seeking political influence.”
“Some could worry that this case might have an impact on other states and their efforts to prevent charitable fraud and self-dealing,” said Tara Malloy, senior director for appellate litigation and strategy, Campaign Legal Center. “But, the Supreme Court has repeatedly upheld that public interests tied to electoral transparency justify laws governing disclosure. There is really no reason to believe this ruling will have a broad impact on electoral transparency measures.”
"We’re disappointed with today’s decision, which departs from precedence to protect super wealthy donors from accountability. Still, it is clear that election related disclosure easily meets the Court’s standard: only fulsome disclosure of the financial backers to a candidate can protect our democracy," said Stuart McPhail, Citizens for Responsibility and Ethics in Washington senior litigation counsel.
“It is disappointing that the Court missed an opportunity to reaffirm the freedom of states to monitor fundraising by nonprofit organizations for compliance with state laws, including “dark money” groups that raise and spend unlimited money in politics,” said Common Cause President Karen Hobert Flynn. “But it’s important to emphasize that this was not a campaign finance disclosure case, and campaign finance laws remain constitutional and vitally important despite the Court’s decision today.”
As American voters continue to overwhelmingly support transparency measures that seek to fight fraudulent activities—understanding them to be essential to governmental integrity—the desire of wealthy special interests to make anonymous political contributions cannot be permitted to overrule well-established precedents.
Read the Supreme Court's decision here.
CONTACT: Elizabeth Leslie, [email protected]