Law & the Courts

Four Takeaways from the Supreme Court’s Nonprofit-Donor Disclosure Case

Then-California attorney general Kamala Harris in 2011. (Mario Anzuoni / Reuters)
A win for the First Amendment over the creepy authoritarianism of Kamala Harris and Xavier Becerra

The U.S. Supreme Court this morning, in Americans for Prosperity Foundation v. Bonta, held that the First Amendment bars California’s attorney general from demanding that every nonprofit that raises money in the state disclose its donors to the AG or face being banned from soliciting California donors. Chief Justice John Roberts wrote the Court’s opinion, from which the three liberals dissented.

Here are four big takeaways from the decision:

One: A big loss for the creepy authoritarianism of Vice President Kamala Harris and Secretary of Health and Human Services Xavier Becerra. Harris, and her successor Becerra, ran the California AG’s office for most of the years at issue in AFPF v. Bonta. The two conservative groups that brought the case were targeted by Harris in 2012-13, right around the time the IRS was going hammer and tongs after Tea Party groups. This case got this far in large part because of the actions of Harris and Becerra in trampling on the First Amendment rights of nonprofits and their blithe disregard for the privacy and safety of donors. The impact of their ineptitude was so egregious that it shocked the trial judge and attracted the criticism of maybe the broadest pan-ideological coalition of interest groups ever to take the same side in a Supreme Court case.

Under Harris and Becerra, the California attorney general’s office was callous with the security of sensitive donor information. The trial disclosed extensive evidence that the California AG’s office “systematically failed to maintain the confidentiality” of donor lists (filed on a form called Schedule B):

  • 1,778 Schedule Bs had been posted online; in some cases, the AG had known for years of the public disclosures and did not notify the nonprofits. Not all of these were conservative organizations, either; one victim was Planned Parenthood.
  • Evidence showed that the registry of some 350,000 Schedule Bs was “an open door for hackers.”
  • The AG’s office interpreted its rules to allow disclosures to public-record and academic-research requests.
  • There was no supervision of third-party vendors who regularly accessed the registry.

The trial judge found “ample evidence” that contributors suffered harassment and reprisals and that the entire project of collecting this sensitive information “demonstrably played no role in advancing the attorney general’s law enforcement goals for the past ten years.” They just wanted it.

As I detailed back in March, even the brief filed by the Biden administration threw Harris and Becerra under the bus for failing to protect donor information (the AG’s office’s “history of not maintaining Schedule B [donor] information as securely as it should have raises a serious concern”) and for being unduly coercive in their disclosure demands without a legitimate purpose for doing so. The briefs by an array of left-wing groups were even blunter in slamming the two California Democrats.

As Jim Geraghty details, Roberts’s opinion is lacerating on how the California AG’s office under Harris and Becerra could not be trusted to safeguard donor privacy. I cited this sort of behavior during the 2020 campaign as one example of why Harris is a dangerous authoritarian who has no concern for core constitutional liberties. Those who sneered at that argument at the time might do well to reconsider.

Two: The Court knows what century this is. The First Amendment right to privacy in supporting nonprofit groups traces to the 1958 case of NAACP v. Alabama ex rel. Patterson. At the time, the Court was concerned with Alabama’s campaign to force the NAACP to disclose its member lists because the state was hostile to civil rights and willing and eager to engage in personal harassment to drive the NAACP out of the state. Times and tactics have changed since then, but there are still many advocacy groups that are as unpopular with a state’s governing majority as the NAACP was in Alabama in 1958. As Roberts noted, citing trial testimony:

For example, the CEO of the [Americans for Prosperity] Foundation testified that a technology contractor working at the Foundation’s headquarters had posted online that he was “inside the belly of the beast” and “could easily walk into [the CEO’s] office and slit his throat.” . . . And the [Thomas More] Law Center introduced evidence that it had received “threats, harassing calls, intimidating and obscene emails, and even pornographic letters.”

The organizations supporting the lawsuit included Chinese dissident groups that have very grave and reasonable fears of what happens if the Chinese government discovers the names of its donors. The Chinese Communist Party is highly aggressive in hacking systems much more secure than the California AG’s “open door.” Moreover, Roberts (quoting an opinion by Justice Samuel Alito in another case) noted that fears of reprisals against donors “are heightened in the 21st century and seem to grow with each passing year, as anyone with access to a computer can compile a wealth of information about anyone else, including such sensitive details as a person’s home address or the school attended by his children.” The confirmation process undoubtedly makes Republican-appointed Supreme Court justices especially aware of this.

Somehow, Justice Sonia Sotomayor did not get the memo, claiming that the Harris/Becerra approach imposed only “trivial burdens” and blandly dismissing the trial court’s findings and the record testimony: “If California’s reporting requirement imposes any burden at all, it is at most a very slight one.” Spoken like a person who has life tenure and need never fear consequences.

Three: “Exacting scrutiny” is still a thing, for now. The Court has previously used the term “exacting scrutiny” in campaign-finance cases to suggest a level of First Amendment scrutiny that is less strict than strict scrutiny, but more exacting than intermediate scrutiny. In practice, the government in an exacting-scrutiny case needs to show that its demands are narrowly tailored to its purposes but does not need to show that they are the least restrictive possible means.

AFPF v. Bonta is not a campaign-finance case; it involves 501(c)(4) groups that may engage in issue advocacy but not in candidate campaigns. In light of that, the Thomas More Law Center tried to persuade the Court to apply strict scrutiny here rather than the standard from campaign-finance cases. Roberts rejected that effort and concluded that exacting scrutiny applies to all forms of compelled disclosures, but it is the one point on which his opinion could not command a majority. Among the justices who joined the rest of the majority opinion, Justice Clarence Thomas argued that strict scrutiny should apply to all such cases, while Alito, joined by Justice Neil Gorsuch, argued that different standards might apply in different contexts and that the Court should leave for another day which standard to apply. Only Justices Brett Kavanaugh and Amy Coney Barrett joined Roberts on this point. The dissenters wanted their own bespoke scrutiny test: Skip the narrow tailoring without an additional “requirement that plaintiffs adduce evidence of tangible burdens, such as increased vulnerability to harassment or reprisals.” But that test is a rigged game if, like the dissenters, you just ignore both the evidence in the record and the political climate of the century you live in.

Four: The IRS is safe, for now, but H.R. 1 (the “For the People Act”) has problems. The challengers in AFPF v. Bonta had to step carefully around concerns that a ruling in their favor would threaten the IRS’s ability to collect the same information — and the IRS has (at least until very recently) had an admirable record of protecting taxpayer confidentiality.

That is a question for another day, but Roberts noted two distinctions. One, the IRS collects information only once, but state requirements are not just a second burden, but potentially 50 of them. Also, IRS disclosure rules apply only to organizations that claim an affirmative tax exemption; California’s apply to anyone who solicits donations. “Revenue collection efforts and conferral of tax-exempt status may raise issues not presented by California’s disclosure requirement, which can prevent charities from operating in the State altogether.”

The “DISCLOSE Act,” currently embedded not only in H.R. 1 but also in Joe Manchin’s proposed alternative, would force 501(c)(4)s to publicly disclose their donors’ names, on the theory of being “dark money.” Even if the Court is inclined to protect the power of the IRS to require confidential disclosures, it is hard to see the DISCLOSE Act surviving a First Amendment challenge after AFPF v. Bonta.

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