Warning of donor harassment, Trump administration backs foes of Calif. disclosure rule

California flag Credit Joseph Sohm Shutterstock CNA The flag of California. / Joseph Sohm/Shutterstock.

The Trump administration has asked the Supreme Court to review a challenge to a California requirement that charitable organizations disclose their major donors to the state attorney general, siding with groups like the Thomas More Law Center that say the requirement will make their donors vulnerable to retaliation, harassment, and violence.

The move from the U.S. Solicitor General's Office drew praise from John Bursch, senior counsel and vice president of appellate advocacy at the Alliance Defending Freedom legal group.

"Charitable entities shouldn't be required to disclose confidential donor information to state officials who do not need it and who fail to adequately protect donor identities from disclosure to the public," Bursch said Nov. 24. "We are pleased that the United States agrees that this case presents critically important issues that the Supreme Court should decide immediately. Forced donor disclosure is a threat to everyone and discourages both charitable giving and participation in the marketplace of ideas."

Alliance Defending Freedom is backing the Michigan-based Thomas More Law Center's complaint in the case. The center promotes issues related to religious freedom, moral and family values, and the sanctity of human life, Alliance Defending Freedom said in August 2019. Another challenger to the California rules is the Americans for Prosperity Foundation, which tends to take conservative or libertarian positions on questions of economics and other issues, including opposition to labor unions.

Acting Solicitor General Jeffrey B. Wall filed a brief asking the Supreme Court to grant a hearing on the case, which was victorious in federal district court but suffered a defeat in the Ninth Circuit Court of Appeals

"As this court's precedents make clear, compelled disclosures that carry a reasonable probability of harassment, reprisals, and similar harms are subject to exacting scrutiny, which requires a form of narrow tailoring," said the brief to the Supreme Court. The solicitor general's office said the appeals court ruling "compromises important associational interests protected by the First Amendment."

"Petitioners alleged that their contributors had in the past suffered harassment, reprisals, and similar harms because of their association with petitioners," the brief said. Disclosure would likely "expose their substantial contributors to those harms, and thereby deter those contributors and others from making future contributions."

At issue is a matter of non-profit tax forms and the crucial information they contain.

Qualified tax-exempt organizations already must submit to the IRS a Form 990 federal information form, including the names of "all substantial contributors" in a section called Schedule B. Substantial donors are defined as those who give $5,000 or more to the organization in a year or 2% of total annual contributions. However, the information about these donors must be kept confidential on pain of civil and criminal law.

Non-profits that ask for donations in California must file their tax returns with California's Registry of Charitable Trusts, administered by the state attorney general, currently Xavier Becerra.

Beginning in 2010, the California attorney general said that disclosures must include this Schedule B. The incoming U.S. vice-president Sen. Kamala Harris, D-Calif., was California attorney general from 2011 to 2017, and the rule change began under her predecessor Jerry Brown.

Both the Thomas More Law Center and the Americans for Prosperity Foundation have alleged that there is a high risk their information will be made public and disrupt their freedom of association.

Alliance Defending Freedom alleged that in March 2012, the California Attorney General's Office began to "harass the law center and demand the names and addresses of its major donors even though the center's donors, clients, and employees have faced intimidation, death threats, hate mail, boycotts, and even assassination attempts from ideological opponents."

The legal group said that for those associated with charities like the Thomas More Law Center that "speak on contentious matters," the disclosure of donor information "poses an imminent danger of hate mail, violence, ostracization, and boycotts."

"Only the most stalwart supporters will give money under such a toxic cloud. Most will reasonably conclude that the risk of association is too great, with the result that groups who make the most threats will effectively shut down those with whom they disagree," said the legal group's request for Supreme Court review.

"Charities will continue to find as-applied exemptions impossible to achieve, and support for groups advocating contentious ideas will dry up," the legal group said. "This Court should intervene now while there are still dissenting voices left to save."

The request said California law has "deprived charities of resources, chilled their speech for nine years, and blocked dissemination of their ideas in our Nation's most populous state."    

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Alliance Defending Freedom has cited the Supreme Court's 1958 ruling in the case NAACP v. Alabama, which ruled against the Alabama Attorney General's demands that the civil rights group produce its membership list or cease operations. The restrictions on the group crippled the organization in Alabama at a key time when black Americans sought to secure civil rights.

The NAACP Legal Defense and Education Fund filed a friend-of-the-court brief on behalf of the Americans for Prosperity Foundation.

The district court found that California's required disclosures were not "substantially related" to its interest in regulating charities, as auditors and attorneys seldom use the Schedule B section when they audit or investigate charities. Even when the information was relevant, it could be obtained from other sources. The disclosure requirement was not narrowly tailored.

The district court said petitioners presented "ample evidence" that their contributors had previously suffered "harassment, reprisals, and similar harms" when their involvement became known. The California attorney general's office had "systematically failed to maintain the confidentiality of Schedule B forms." This failure included making hundreds of the forms available on its registry website.

The court of appeals, however, overturned the district court. It said confidentiality measures had been tightened and said California had a compelling interest in policing fraud in charitable organizations, and disclosing major donors advances this interest, Reuters reported.
It compared the rule to political disclosure cases such as Doe v. Reed, where the Supreme Court said that the disclosure of the names of people who signed a petition referendum was relevant to state interests in protecting the electoral process.

Alliance Defending Freedom's summary of the case said, "the California Attorney General's office has a history of posting supporter's information online and offers no protection against employees, contractors, or summer interns downloading, e-mailing, or printing supporters' names and addresses and then disclosing them publicly."

"We've already seen how publicly revealing political donors with the intent of doing harm (or 'doxing') can ruin careers and corrode civil discourse," the legal group said. "Givers would have good reason to fear being doxed-especially in today's toxic cultural climate."

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The Thomas More Law Center's president and chief counsel is Richard Thompson, who came to prominence for opposing prominent assisted suicide advocate Jack Kevorkian. Thompson co-founded the law center in in 1998 with Thomas Monaghan, the founder of Domino's Pizza who continues to be a prominent Catholic philanthropist. Alliance Defending Freedom said about 5% of donors to the law center are California residents.

Besides issues related to religious freedom and family values, the law center's website also provides resources for critics of the Common Core curriculum. It names other key issues as "confronting the threat of radical Islam" and "defending national security."

The similarly-named Thomas More Society, based in Illinois, is not connected to the law center.

For its part, Americans for Prosperity was founded in 2004. It has had strong financial support from two wealthy brothers, David and Charles Koch, whose combined net worth is in the billions of dollars.