Ruling from Thursday hearing will spell out terms of donor disclosure
As organizers start to contemplate the fundraising push for next year’s gay marriage constitutional amendment proposal, insiders will be tuned in on Thursday to the Minnesota Campaign Finance and Public Disclosure (CFPD) Board’s meeting as the board weighs a potentially critical rules clarification on political contributions to ballot questions.
While there is no dispute that ballot initiatives can raise unlimited amounts of money, there is an important debate unfolding about the extent to which donors to amendment causes should be subject to public disclosure requirements.
At the heart of the controversy is a 1997 advisory opinion from the CFPD that exempts issue advocacy groups constituted as 501 (c) (3) or 501 (c) (4) nonprofit corporations from disclosure requirements in ballot initiatives.
Gary Goldsmith, CFPD’s executive director, has drafted a memorandum to board members in advance of the Thursday meeting in which he observes his staff cannot figure out why the board left corporations off the hook for disclosing where their funds came from. The issue concerns a complex campaign finance arrangement called “underlying source disclosures.” Essentially, when a big group like the Sierra Club or the National Rifle Association makes a contribution to a Minnesota ballot initiative group, the old advisory opinion says the group does not have to disclose its donors, also known as underlying sources.
The move to revoke the 1997 advisory opinion is supported by government accountability groups like Common Cause Minnesota and the Brennan Center for Justice at the New York University School of Law. They contend that a ballot question campaign like the gay marriage amendment could draw millions of dollars in spending that cannot be tracked to its original source.
Mike Dean, executive director of Common Cause Minnesota, said groups often create funds with non-descriptive titles that mask from voters the identities of individuals who make sizeable contributions.
“The real harm of not moving forward is that millions of dollars of undisclosed money could flow into ballot amendment campaigns,” Dean said. “I think that’s harmful to voters, because they won’t be able to evaluate the information or misinformation that’s spread by these different groups.”
Opponents who are leading the charge to pass the marriage amendment agree that big nonprofit corporations should disclose the contributions they make to ballot initiative groups. But they do not think the nonprofit corporations should be required to disclose their underlying donors.
Josiah Neeley, an attorney for Terre Haute, Ind.-based law firm Bopp, Coleson & Bostrom, which represents the National Association for Marriage, said the requirement runs afoul of a person’s right to privacy in political participation.
“When you’re talking about a sensitive subject like abortion or gay marriage, people might not want to broadcast their view on that issue to co-workers, families and friends, members of the parish or their employers,” Neeley said.
In a sign of the importance of the CFPD’s decision, James Bopp, the firm’s lead partner and a nationally prominent legal contestant on disclosure issues, reportedly plans to testify on Thursday.
The decision could provide clarity about the parameters for fundraising in the 2012 ballot initiative that will ask voters if marriage should be defined as a union between one man and one woman. But the issue may not be laid to rest on Thursday; a legal challenge is likely to result if the CFPD revokes the advisory opinion.
The bulk of Minnesota’s campaign finance laws are found in Chapter 10A, which is known as the Ethics in Government Act. The 10A statutes contain provisions that conflict with the 1997 advisory opinion, known as Advisory Opinion 257, according to Goldsmith’s memorandum.
The CFPD hashed through the issues at its June 14 meeting, at which Neeley, Dean and others testified. Goldsmith followed up with a memorandum on June 23 that provided analysis underscoring the conflict between the advisory opinion and state campaign finance law.
The state has provisions in 10A that require underlying source disclosures for independent expenditures. Those laws were expanded in 2010 to cover independent expenditures made by corporations in the wake of the U.S. Supreme Court’s Citizens United decision, which legalized corporate contributions to influence campaigns. The disclosure laws apply to ballot questions, Goldsmith wrote.
In his memorandum, Goldsmith said the increasing volume of registrations of ballot question funds makes the matter urgent for the six-member CFPD. He doesn’t believe that he can tell groups that the advisory opinion is on strong legal footing.
“Because I could not explain the basis for Advisory Opinion 257, I did not believe that I could assure questioners that it still represented the board’s interpretation of Chapter 10A,” Goldsmith wrote in the memo.
The move to revoke the advisory opinion is strongly opposed by Minnesota Family Council President Tom Prichard. He said the state does not have the same interest in knowing the identities of ballot question contributors that it does in knowing contributors to candidates.
“I think you have an interest in disclosure when you have candidates,” Prichard said, “because money can influence a candidate. It can have a corrupting influence. You want to know where that money is going and who it is coming from when it’s a candidate, because it’s an ongoing relationship and an influence. But when you’ve got issues [related to a ballot question], there is no corruption involved. … It’s very clear cut,” Prichard said.
Prichard’s distinction between candidates and ballot questions has drawn a rebuttal from NYU’s Brennan Center. In a letter to Goldsmith, two lawyers from the center’s Democracy Program said disclosure should be required in both types of elections.
“Disclosure of financial contributions and spending in ballot measure elections is necessary to allow voters to evaluate political arguments — and decide how to vote,” wrote the two Brennan Center lawyers.
Neeley, however, disputes the public’s need to know the names of contributors. He noted that people who give to a nonprofit corporation are not always aware of how the group will spend it.
“There’s really no objective connection between the donations that are being disclosed and the ultimate spending, potentially,” Neeley said.
Prichard said disclosure could have a chilling effect among contributors.
“Do we want to be discouraging people from engaging in the political process? Because where does that shift the power base? From individuals to other groups, entities,” Prichard said.