DOJ changes position on state’s donor disclosure law

The Biden administration has shifted the U.S. Department of Justice's position on whether a California law requiring nonprofits to disclose the names of large donors is unconstitutional.

The U.S. Supreme Court, which is reviewing a 9th U.S. Circuit Court of Appeals decision upholding the statute, asked the solicitor general's office for its opinion.

In November, the Trump administration, siding with two conservative nonprofits that filed lawsuits against the state donor disclosure law, argued it was not narrowly tailored to a compelling government interest.

The change in administrations has prompted a change in the U.S. Department of Justice's view of the California law, which requires tax exempt organizations to disclose to Attorney General Xavier Becerra their Schedule B 990 IRS forms.

Those forms include the names and addresses of anyone who donated more than $5,000 or more than 2% of the group's total contributions each year.

Attorneys for the nonprofits -- Americans for Prosperity, founded by David H. and Charles Koch, and the Thomas More Society -- argue disclosure of donors' identities violates their freedom of association under the First Amendment.

Acting Solicitor General Elizabeth B. Prelogar, in a Monday filing, wrote that the "proper resolution of petitioners' as-applied challenges to the disclosure requirement" is a close call.

"Many of this court's cases involve the risk of threats, harassment, or reprisals by private parties following the disclosure of information to the public," she wrote. ,em>Americans for Prosperity Foundation v. Becerra, 19-251 (S. Ct, filed Aug. 26, 2019; Thomas More Law Center v. Becerra, 19-255 (S. Ct, filed Aug. 26, 2019).

"But when, as here, a law involves only nonpublic disclosure -- that is, disclosure of information to governmental officials, who are required to keep the information confidential -- such harms will presumably not occur" unless the plaintiffs prove the officials will release the information despite confidentiality requirements.

"Here, petitioners did not show a reasonable probability that nonpublic disclosure of their Schedule B information to [the state attorney general] will lead to threats, harassment, or reprisals from governmental officials themselves," Prelogar added.

Prelogar faulted the 9th Circuit majority doing an "incomplete" analysis, and said the Supreme Court should remand the case to allow the court to "reassess the burden that California's disclosure requirement places on the associational rights petitioners assert."

A host of nonprofits running the ideological gamut filed amicus briefs by Monday's deadline arguing against the constitutionality of the California law, with several voicing concern that the state is unable to protect the confidentiality of contributors.

"California cannot force nonprofit organizations and their supporters to bear the risk of the state's demonstrated inability to maintain the confidentiality of sensitive associational information," wrote Brian M. Hauss, counsel for the American Civil Liberties Union.

Becerra has argued there is no problem because the state law requires nonprofits to provide the same information to the state that it already must provide to the federal government.