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L. Paige Whitaker Legislative Attorney - page 9 / 31

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Legislative Options After Citizens United v. FEC: Constitutional and Legal Issues

Some have raised the possibility that there might be constitutional limitations on the ability of Congress to require disclosure of donors who have not necessarily donated specifically for campaign-related activity, perhaps particularly if there is no mechanism by which such disclosure may be limited (e.g., through the use of a separate account for political activities). In other words, some might argue that the differences between the proposals and existing law might be constitutionally significant. It is not clear how a court would analyze this argument since it does not appear any court has examined a similar provision.41 It seems such a requirement would be subject to “exacting scrutiny, which requires a substantial relation between the disclosure requirement and a sufficiently important governmental interest.” 42

Here, it might be argued that the relationship between (1) the compelled disclosure of donors who gave money for reasons not necessarily related to campaign activity and (2) the government’s interest to provide information to the electorate or avoid corruption or the appearance of corruption is insufficient to withstand judicial scrutiny. Proponents of such an argument might point to the fact that § 501(c) organizations engage in a panoply of activities outside the election context and campaign activity cannot, by law, be their primary activity.43 Thus, donors who make non-earmarked contributions are supporting the entirety of the organization’s activities, and it might be questioned whether the government can require the public disclosure of their identities simply because the organization happens to engage in limited amounts of campaign activity. Such an argument might be extended to the disclaimer requirements as well. On the other hand, it is arguably unclear whether this argument has constitutional merit. The Court has generally looked favorably on disclosure and disclaimer requirements, and there may be other factors that support the constitutionality of the proposals at issue here. For example, while the § 501(c) organizations we are concerned with here are limited in the amount of campaign activity they may participate in, they are permitted to engage in an unlimited amount of lobbying. Thus, a court could perhaps look at the full spectrum of the organization’s activities when determining whether a donor disclosure requirement is sufficiently related to the government’s informational interest. A court might also consider the extent to which the requirement would lead donors to be 44

41 It does not appear there is a directly analogous provision in federal law. Federal lobbying law requires registered lobbyists to report the name and other information of non-client organizations that contribute at least $5,000 to the lobbyist or his/her client in the quarterly period to fund the lobbying activities and “actively participates in the planning, supervision, or control” of those activities. 2 U.S.C. § 1603(b)(3). The constitutionality of this provision was upheld by the U.S. Court of Appeals for the D.C. Circuit in National Association of Manufacturers v. Taylor, 582 F.3d 1 (D.C. Cir. 2009). Under the Internal Revenue Code, § 501(c) organizations that file an annual information return (Form 990) are generally required to disclose significant donors (typically those who give at least $5000 during the year) to the Internal Revenue Service (IRS). 26 C.F.R. § 1.6033-2(a)(2)(ii)(f). No identifying information of donors to § 501(c) organizations is subject to public disclosure under the tax laws except in the case of private foundations (which are a type of § 501(c)(3) organization). IRC § 6104(b), (d). The private foundation provision, which does not appear to have been challenged on constitutional grounds, might be supported as an anti-abuse provision since these entities generally have a small number of donors who often have significant control of the foundation.

42

Citizens United, slip op. at 51 (internal quotations omitted).

43 See Rev. Rul. 81-95, 1981-1 C.B. 332 (ruling that lawful participation in campaign activity would not affect the § 501(c)(4) status of an organization whose primary activity was promoting social welfare); Rev. Rul. 67-368; 1967-2 C.B. 194 (ruling that an organization whose primary activity was rating candidates using non-partisan criteria did not qualify for § 501(c)(4) status); Gen. Couns. Mem. 34233 (Dec. 30, 1969) (applying similar reasoning to § 501(c)(5) and § 501(c)(6) organizations).

44 In general, the proposals do not appear to permit the organization to establish a separate account solely to fund the political activities, and then limit disclosure to only those donors who contribute to that account. Thus, it might be that even if the donor requested his or her donation not be used for campaign activity, and the organization agreed, the donor’s identity could possibly be subject to public disclosure.

Congressional Research Service

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