Like it or not, campaign regs changed for the better
Revisions protect non-profits’ rights to participate in democracy
LAST JANUARY, the Massachusetts Office of Campaign and Political Finance (OCPF) proposed revisions to many of their existing campaign finance regulations. While most of the proposed changes were minor and technical in nature, several had potentially substantial and serious repercussions for non-profit organizations of all types across the state.
Of particular note were the changes proposed to a little-known but extremely significant regulation that governs when the names and addresses of donors to 501(c)(4) and other tax-exempt organizations must be made public. While none of the proposed changes would have had an impact on our work at the Massachusetts Fiscal Alliance (or our sister 501(c)3 non-profit organization, the Fiscal Alliance Foundation), we felt it was necessary to speak up for other non-profit organizations.
The United States Supreme Court has consistently upheld the rights of members of non-profit organizations to remain private. Many of these decisions stem from the 1950s and 1960s, where the importance of ensuring that pro-civil rights non-profits could maintain the confidentiality of their membership rolls was readily apparent. This right to association stems from the fact that non-profits do not advocate for the election or defeat of candidates for office, but rather advocate for issues. While this distinction can sometimes create confusion for non-experts of campaign finance law, they are legally distinct and different.
Our main concern was ensuring that that OCPF’s regulations are objective, not subjective. For example, while the previous regulations provided certain “safe harbor” provisions for donors, giving them the opportunity to establish that certain donations to non-profits were not intended to be used for political purposes (and thus that their identity need not be publicly disclosed), the proposed revised regulations would have done away with this provision. Had the proposed regulations been approved as drafted, they would have provided OCPF with broad powers to make unilateral determinations regarding donor intent, and to mandate disclosure of donors — without even giving donors a chance to defend themselves by presenting evidence that their contributions were not intended to support activities that require donor disclosure.
A similar regulatory change was made at OCPF in 1988, when the agency made regulatory changes — without an act of the Legislature — that resulted in the union loophole. The union loophole is the country’s most unfair state campaign finance law regulation, allowing unions — including out-of-state unions — to donate up to $15,000 to state candidates. In contrast, individuals can only donate up to $1,000 and employers are prohibited from donating anything at all.
However, when OCPF held their required public hearing on their proposed regulatory changes this past February, Massachusetts Fiscal Alliance and the Fiscal Alliance Foundation were there to fight back. Our organizations provided testimony regarding the flaws in the proposed regulations, and the unintended consequences that could potentially result from their adoption. We also proposed several revisions designed to make the new regulations clearer and more objective, while simultaneously protecting the important free speech and association rights of those donating and becoming members to non-profit entities. To OCPF’s credit, they received our commentary with an open mind and ultimately incorporated many of our proposed changes into their revised regulations. The end result was a better, clearer framework that ultimately removed much of the ambiguity that is sometimes inherent in this area of campaign finance law.Had the Massachusetts Fiscal Alliance and the Fiscal Alliance Foundation not been there to attend that hearing, however, the end result could have been quite different. Despite public notice and a public hearing, changes like these can often fly under the radar. Indeed, notwithstanding the importance of the topic, only two groups even showed up at the hearing to testify. The technical nature and jargon-laden language of topics like this sometimes prevents citizens from understanding the true scope of regulatory changes until after the horse has left the barn and the changes have already been implemented. This makes the work of organizations like the Fiscal Alliance Foundation and Massachusetts Fiscal Alliance — fighting to keep our government accountable, objective, and transparent — all the more important.
Paul F. Gangi is the program director of Massachusetts Fiscal Alliance. He is a lifelong resident of Massachusetts and a former legislative staffer in the Massachusetts House of Representatives.