Shining a light on dark money
Disclosure in the age of Citizens United
“WE CANNOT GUARANTEE the sun will rise tomorrow, but we can guarantee our donors will never be disclosed.” So vowed Paul Craney, spokesperson and board member of the conservative Massachusetts Fiscal Alliance, in a 2018 CommonWealth op-ed that protested efforts by “powerful politicians, bureaucrats, unions, and far-left interest groups” to force the organization to reveal its funders.
As a non-profit organized under IRS Code 501(c)(4), he argued, the Fiscal Alliance is protected by the First Amendment rights of free association and free speech from the disclosure requirements that apply to candidates’ committees, PACs, and other more overtly political groups.
Those disclosure requirements are among the few remaining means available to counter the power of wealth in our politics. The US Supreme Court’s decision in the 2010 Citizens United case, which held that the First Amendment right of free speech necessarily entails the right of monied interests to flood political campaigns with cash, also held that the government’s interest in providing voters with information about the sources of campaign spending justifies laws mandating disclosure.
Congress has the power to require that these donors’ names be made public, but hasn’t done so. And in the decade since Citizens United, “dark money” groups exempt from disclosure laws, including 501(c)(4)’s like the Fiscal Alliance, have become a potent force, pouring $963 million in outside spending into elections, compared to $129 million in the decade before. Some states have responded to this regulatory vacuum by passing laws to shine light on this dark money. Massachusetts did so in 2014.
While the Fiscal Alliance has applauded Citizens United for its affirmation of unconstrained spending, as Craney’s op-ed shows, the endorsement of disclosure laws in that decision irritates the group considerably.
So a month before the November 2018 election, the Fiscal Alliance sued the state Office of Campaign and Political Finance, the Massachusetts attorney general, and the Suffolk County District Attorney in federal court to block enforcement of the law. Its claim: the Alliance wished to purchase radio and TV ads saying that Democratic state Sen. Marc Pacheco had voted in favor of a pay raise and an 80 percent tax increase, but was deterred by the threat of being prosecuted for violating the disclosure law, which it claimed was unconstitutional.
A successful challenge to a campaign finance disclosure law requires a showing of a reasonable probability that revealing donors’ names will subject those donors to threats, harassment, or reprisals from either government officials or private parties. The precedent is a 1958 case, NAACP v. Alabama, where the US Supreme Court ruled that the NAACP had demonstrated a reasonable probability (an “uncontroverted showing,” in fact) that turning over a list of its members to comply with a subpoena issued by the state of Alabama would endanger those members and the organization.
Craney happily likened his group’s campaign against the disclosure law to the NAACP’s resistance to Alabama’s subpoena: “Southern racist politicians used the same arguments for donor disclosure to intimidate and harass members of pro-civil rights organization,” he wrote. “It’s easy to come up with modern day examples where the same abuses would take place.”
But actually it’s not easy. Opponents of campaign finance disclosure have had little success in the cases they’ve filed comparing themselves to opponents of state-supported violence in the Jim Crow South. So the Fiscal Alliance needed to look elsewhere for a legal argument that revealing its donors’ names would violate their constitutionally-guaranteed rights of freedom of association.
It believed it had found such an argument in a 2018 case, Janus v. AFSCME, where the US Supreme Court ruled in favor of a public employee who objected to paying fees to the public sector union that negotiated on his behalf but of which he was not a member and of whose bargaining positions he disapproved. That employee’s “right to eschew association for expressive purposes,” the court said, is protected by the First Amendment.
Pressing the Janus case into service in its campaign finance fight, the Fiscal Alliance maintained that disclosing the names of donors to the ad would violate the donors’ rights to eschew association – association with the ad. The disclosure requirement, the argument went, would imply that the donors “funded the ad, when in reality they may know nothing about the ad – or even disagree with it – and simply support the organization’s overall mission.”
To advance the litigation, the state appropriately offered to be bound by a protective order from the court, keeping the donors’ names from being disclosed outside the confines of the lawsuit. And over the objections of the Fiscal Alliance, the court ordered that the names be produced.
Rather than comply with that order or even pursue an appeal from it, the Fiscal Alliance just walked away, voluntarily dismissing the challenge it had brought. As a result, the state’s disclosure law remains in place, and rather than risk prosecution for failing to comply with the law’s requirements, the Fiscal Alliance will simply not engage in the “electioneering communications” the law covers.Craney’s vow that donors would never be disclosed remains unbroken – but probably not in the way he was hoping.
Margaret Monsell, a former assistant attorney general and former general counsel to the state Senate Committee on Ways and Means, is an attorney practicing in the Boston area.