The Disclosure Digest: January 26, 2021
 Welcome to Disclosure DigestJanuary 26, 2021Explore the legislation, litigation, and advocacy surrounding nonprofit donor disclosure with The Disclosure Digest, a Ballotpedia newsletter. Under federal law, nonprofits are generally not required to disclose to the public information about their donors. State laws, however, may require such disclosure. Some say expanded donor disclosure provisions minimize the potential for fraud and establish public accountability. Meanwhile, others say that disclosing to the public information about donors violates privacy rights and can inhibit charitable activity. 
Federal appeals court considers challenge to Santa Fe donor disclosure ordinanceOn Jan. 21, the U.S. Court of Appeals for the Tenth Circuit heard oral argument in a challenge to a Santa Fe city ordinance requiring entities spending $250 or more advocating for or against ballot propositions to disclose their donors. The parties to the suit The plaintiff is the Rio Grande Foundation (RGF), an economic policy think tank whose self-described mission is “to increase liberty and prosperity for all of New Mexico by informing citizens of the importance of individual freedom, limited government, and economic opportunity.” The defendants include the city of Santa Fe and the Santa Fe Ethics and Campaign Review Board (ECRB), which enforces the city’s campaign finance ordinances. What is at issue In 2015, the Santa Fe City Council approved an ordinance requiring any person or group spending $250 or more on ballot measure campaigns to disclose their donors. Any entity meeting that threshold must report “all contributions received for the purpose of paying for such expenditures.” Disclosures must include the donor's name, address, and occupation. In 2017, Santa Fe conducted a special municipal election in which residents voted on a tax on sweetened drinks. RGF sponsored a campaign opposing the measure. On April 24, 2017, the ECRB, in response to a citizen complaint, held a hearing to determine whether RGF’s campaign expenditures had exceeded the $250 reporting threshold. The ECRB determined that RGF had done so and ordered it to file the required disclosures. On July 26, 2017, RGF sued the city, alleging the ordinance “chills constitutionally protected speech by non-profit groups and their donors,” in violation of the First Amendment to the U.S. Constitution and Article II of the New Mexico Constitution. How the lower court ruled On Jan. 29, 2020, Judge Judith Herrera, of the U.S. District Court for the District of New Mexico, dismissed RFG's lawsuit and upheld the challenged ordinance. Herrera, a George W. Bush (R) appointee, wrote: RGF’s as-applied challenge fails because there is no evidence of threats, reprisal, harassment, or the like of donors or potential donors to RGF or that would-be donors declined to contribute because of the disclosure requirements. RGF did not rely on any other burdens. Because disclosure requirements serve substantial governmental interests, Defendants met their burden of demonstrating a substantial relation between the governmental informational interest and the information required to be disclosed. Although the Court remains concerned about the potential chilling effect of the ordinance for groups raising and spending small amounts on ballot initiatives, the factual record is insufficient to support the sweeping invalidation of the ordinance that RGF requests[.] What comes next A three-judge panel is considering the case: Judges Carlos Lucero (a Bill Clinton (D) appointee), Carolyn McHugh (a Barack Obama (D) appointee), and Scott Matheson, Jr. (also an Obama appointee). In the course of oral argument on Jan. 21, the panel did not indicate when it would issue a ruling. A recording of the oral argument can be found here. The case name and number are Rio Grande Foundation v. Santa Fe (Tenth Circuit: 0:20-cv-02022; District of New Mexico: 1:17-cv-00768). |
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