Koch brothers win legal duel with California

This is an apt topic for Independence Day — whether the U.S. Supreme Court struck a blow for privacy and free speech last week or undermined California’s justifiable effort to require a controversial (and conservative) political organization to reveal its donors.

After numerous battles in lower courts, the Supreme Court, by a 6-3 margin that reflected its ideological division, sided with Americans for Prosperity, a non-profit organization founded by industrialists David and Charles Koch, and other non-profit organizations.

Federal law requires such organizations to file income tax returns and list their major donors, but California law requires only that they provide copies of their tax returns to the state Department of Justice, which oversees charitable groups.

However, beginning a decade ago, the California Department of Justice began demanding that organizations also disclose their donors. Americans for Prosperity sued former Attorney General (and now Vice President) Kamala Harris, alleging that the demanded filings violated their donors’ constitutional rights and, if disclosed publicly, would subject them to harassment.

Advocates of the disclosure requirement countered that the information was needed to combat fraud and the flow of so-called “dark money” into political campaigns, particularly after the Supreme Court’s Citizens United decision. The state insisted that the information would remain confidential, but there has been in fact, a couple of incidents in which it was disclosed.

Americans for Prosperity tended to win in lower federal courts but lose in the 9th District Court of Appeal, which has a reputation for liberal leanings. Finally, the case reached the Supreme Court, where conservatives hold sway by a 6-3 margin, and that’s how the court divided on the case in last Thursday’s decision.

The majority opinion, written by Chief Justice John Roberts, declared that California’s regulation violated donors’ First Amendment rights and did not serve a narrowly tailored government interest.

“The upshot,” Roberts wrote, “is that California casts a dragnet for sensitive donor information from tens of thousands of charities each year, even though that information will become relevant in only a small number of cases involving filed complaints.”

The court’s three liberal justices saw otherwise, with Justice Sonia Sotomayor writing their dissent and alleging that the decision would allow more anonymously donated money to influence campaigns and poses a “significant risk that it will topple disclosure regimes that should be constitutional.”

It’s the latest skirmish in an old debate over whether regulating political activity with campaign contribution and spending limits, bans on certain kinds of political spending, disclosure laws and other rules is needed to prevent corruption or whether it violates constitutional rights of free speech.

The regulations at all levels of government are written and imposed by politicians, who have vested interests in how they affect political campaigns. In the Americans for Prosperity case, three Democratic attorneys general — Harris, Xavier Becerra and now Rob Bonta — sought the information other Democrats clearly and publicly hoped would curb the influence of the libertarian Koch brothers.

Through Americans for Prosperity and their other organizations, the Kochs have been fairly successful, especially at the state level (although not in California) in electing Republican legislators and thereby influencing the decennial redrawing of congressional districts to help the GOP gain and retain seats.

Democratic politicians and their allies, especially labor unions, obviously dislike that the Kochs have been successful. However, in pursuing the names of major donors to non-profit organizations, California’s attorneys general also have imposed burdens on purely charitable groups that could damage their ability to attract donors, and there’s virtually no evidence that the requirement has actually played a material role in rooting out fraud.

 

Dan Walters has been a journalist for nearly 60 years, spending all but a few of those years working for California newspapers. He has written more than 9,000 columns about California and its politics and his column has appeared in many other California newspapers. He currently writes for CalMatters.org a non-profit, non-partisan media venture explaining California policies and politics.

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