California Court: Citizens United Ruling Doesn’t Bar Compelled Disclosure Of Donors Under Campaign Finance Laws

Citizens United Doesn't Bar Compelled Disclosure Of Donors under Campaign Finance LawsA Superior Court judge in Sacramento, California entered a preliminary injunction, holding that an Arizona nonprofit organization that contributed money to a political action committee in the Golden State must submit its donor records for review by a state watchdog agency. See Fair Political Practices Commission v. Americans for Responsible Leadership, No.  34-2012-00131550 (Cal. Super. Ct. Oct. 31, 2012). See also Calif. judge expected to OK look at Ariz. donation, U-T San Diego (Oct. 31, 2012); California Judge Leaves Door Open For Outing Of Dark Money Donors, TPMMuckraker, Oct. 31, 2012); Judge agrees to audit of $11M Arizona donation, (Oct. 30, 2012).

Earlier this year, Phoenix-based Americans for Responsible Leadership (ARL), a 501(c)(4) organization, gave $11 million to the Small Business Action Committee PAC, a California organization that is opposing Proposition 30, a pending tax initiative proposed by Governor Jerry Brown, and supports Proposition 32, which would restrict the ability of labor unions to raise money for political purposes.

Citizens United Doesn't Bar Compelled Disclosure Of Donors Under Campaign Finance LawsThe Fair Political Practices Commission (FPPC), a California state agency that regulates governmental officials’ conflicts of interests and campaign finance matters, sued ARL in the Sacramento County Superior Court. In the lawsuit, FPPC seeks information about ARL’s campaign spending in California so that it may determine whether the organization violated state campaign finance disclosure laws. The FPP contends that it needs to know whether ARL’s donors intended their donations to fund political campaigns in California. According to the agency, such an intention would subject the campaign spending to California’s disclosure requirements.

Yesterday, Superior Court Judge Shelleyanne Chang issued a tentative ruling that the FPPC has the general authority to audit ARL prior the November 6, 2012 General Election to determine (1) whether the ARL is a committee pursuant to Gov’t Code §82013(a) or a “major donor” pursuant to Cal. Gov’t Code §82013(c); (2) whether, if ARL is a committee pursuant to Cal. Gov’t Code §82013(a), it violated the pre-election reporting requirements; and (3) whether any donations were earmarked for specific purposes. In a written order entered this morning, Judge Chang confirmed her earlier ruling and granted the FPPC’s motion for a preliminary injunction.

Among other things, in today’s ruling the court rejected ARL’s contention that compelled public disclosure of its donors would violate the free speech and association principles announced by the U.S. Supreme Court in Citizens United v. Federal Elections Commission, 130 S.Ct. 876, 90 (2010). According to the court, Citizens United is inapposite because that case–

… did not address the issue of whether donors should be publicly disclosed. By this preliminary injunction … the FPPC is not seeking to restrict, and the Court is not, limiting expenditures by ARL. The Court is simply concluding that the FPPC, under its statutory authority can conduct an audit to determine whether it has complied with applicable California law and regulations and whether, under applicable California regulations, the FPPC can determine whether the donors’ identities must be disclosed. Nothing in Citizens United prohibits this state-mandated disclosure.

 by Shawn N. Sullivan


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