IRS scandal notwithstanding, on Tuesday, the (Republican-dominated) Texas legislature passed S.B. 346, a bill to force non-profit organizations and trade associations to disclose the names of the people who support them financially. The law exempts unions, but covers groups that spend more than $25,000 or more in independent expenditures about political candidates. This applies even if those expenditures are a tiny fraction of the group’s overall spending.
If Texas legislators had first consulted the Constitution, they would have rejected forced disclosure as a violation of the First Amendment. The Constitution protects organizations from forced disclosure of their members (NAACP v. Alabama, 1958), and does not distinguish between an organization’s members, as with NAACP, and its contributors, as here (Buckley v. Valeo, 1976). Although Buckley upheld the forced disclosure for “organizations that are under the control of a candidate or the major purpose of which is the nomination or election of a candidate,” it first excluded disclosure for “groups engaged purely in issue discussion,” saying the law would have otherwise been “impermissibly broad.” This unconstitutional legislation directly targets those issue-based groups — a 501(c)(4)’s primary purpose is explicitly non-political — and I would expect the First Amendment–friendly Roberts court to agree.
This law would also have a chilling effect on issue-based donors, whose opponents could drag them through the mud for their contributions. Even the current disclosure system is costly for donors. As Brad Smith explains, compelled disclosure of political donations was especially damaging to financial backers of Proposition 8, California’s traditional-marriage ballot initiative. Some donors lost their jobs while others suffered boycotts of their businesses for defending traditional marriage. Elsewhere, in August of 2008, “a liberal group called Accountable America used compulsory disclosure data to send letters to nearly 10,000 prominent conservative donors, threatening publication of their names and, in the words of the New York Times, ‘digging through their lives’ if they continued their financial support.”
Rumor has it that Governor Perry’s advisers want him to sign the law, but he has not yet announced what he plans to do. During his presidential campaign, he thought that campaign contribution limits were unconstitutional, so one would think this would be an easy question for him. But one would also think that the Republican-led legislature might have thought twice before embracing such a left-wing policy proposal. Stay tuned.