Attorney Jim Bopp has posted another Free Speech victory — this time in a challenge to the manner in which California election disclosure regulations are applied to 501(c)(4) organizations. The case is California Pro-Life Council v. Randolph, about which I commented below. Here is Jim’s take on the decision:
James Madison Center for Free Speech
1 South 6th Street
Terre Haute, IN 47807
November 15, 2007
Contact: James Bopp, Jr.
Phone: 812-232-2434; Fax 812-235-3685
Ninth Circuit Strikes Down PAC-Style Burdens on Groups Making Independent Expenditures Advocating for or Against Ballot Measures
Yesterday, the U.S. Court of Appeals for the Ninth Circuit dismantled a large portion of California’s disclosure scheme with regard to ballot measure advocacy. The case was brought by California Prolife Council (“CPLC”), a state prolife group that occasionally supports or opposes ballot measures. For example, CPLC sometimes adds a small item asking readers to vote for or against a ballot measure to its newsletters or voter guides.
However, California imposes complex requirements on groups doing ballot measure advocacy. A group whose major purpose is not ballot measure advocacy can still find itself treated like a political committee (“PAC”). If forced into such PAC status, the group can be required to have a treasurer, do extensive recordkeeping, and make multiple and ongoing reports, even if they aren’t making expenditures for ballot measure advocacy. The only way to escape PAC status is to dissolve as a group and dispose of all the group’s assets in state-approved ways.
Moreover, California law requires groups like CPLC to report people who make a “contribution” to the group, on the theory that they are supporting the ballot measure advocacy. Although the law says that a gift is properly a “contribution” only if the donor has the “purpose” of influencing a ballot measure, California presumes that donors have such a “purpose” if they give to a group that has in the last 4-5 years made two expenditures for ballot measure advocacy. So after the group’s second expenditure, a donor who gave just to support the group in general is reported as giving to support a ballot measure, which may not be true at all. For a variety of reasons, many donors do not wish to have their donations to a group publicly disclosed, especially when the group takes strong positions on matters of public controversy.
CPLC challenged the law because it wanted to do ballot measure advocacy on occasion but did not want to assume the endless burdens of PAC status. And it did not want to have to report its donors as persons who support a ballot measure when they did not give to CPLC for that purpose.
The Ninth Circuit struck down the PAC burden requirement, holding that such burdens could not be imposed on groups just doing ballot measure advocacy. Rather, California could only require simple one-time reports when expenditures for ballot measure advocacy were done. And the Ninth Circuit limited the way in which donors would have to be reported as having made a “contribution” in support of a group’s ballot measure advocacy. If donors really did not have the “purpose” of supporting ballot measure advocacy, they would not have to be disclosed.
This means that multi-purpose groups like CPLC that do occasional ballot measure advocacy only have to file a report when they actually do ballot measure advocacy. And they don’t have to report donors if the donor did not intend to support ballot measure advocacy.