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The Supreme Court’s Looming Dark Money Decision

The ruling could give a boost to untraceable campaign donations.

SCOTUS
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For more than 40 years, argu­ments against “dark money” have lost at the Supreme Court. Now, however, the Court could rein­force the grow­ing influ­ence of this type of secret fund­ing for polit­ical campaigns.

In Amer­ic­ans for Prosper­ity Found­a­tion v. Rodriquez, to be argued on April 26, the justices will consider the right to confid­en­ti­al­ity for dona­tions to nonprofits. It could have signi­fic­ant implic­a­tions given how corpor­a­tions and wealthy indi­vidu­als hide their role in polit­ics by rout­ing their money through opaque nonprofits.

The Amer­ic­ans for Prosper­ity Found­a­tion and another nonprofit argue in the case pending before the Supreme Court that Cali­for­nia has no interest in know­ing who their major donors are — which is consist­ent with a type of argu­ment has been made in other campaign finance cases through­out the years involving donor disclos­ure. And for more than 40 years in the campaign finance context, these argu­ments have lost, as the Supreme Court has repeatedly ruled that the disclos­ure of donors behind polit­ical campaigns and polit­ical ads is consti­tu­tional. The Supreme Court ruled this way in Buckley v. Valeo in 1976, and it came to the same conclu­sion in McCon­nell v. FEC in 2003, in Citizens United v. FEC in 2010, and in McCutcheon v. FEC in 2014.

The Supreme Court has said in these campaign finance cases that disclos­ure in such contexts is justi­fied by three state interests. The first two are the voter inform­a­tional interest in know­ing who is bank­rolling candid­ates and the anti-corrup­tion interest in prevent­ing corrup­tion and the appear­ance of corrup­tion, since crim­in­als are less likely to commit a crime in broad daylight. The third is the anti-circum­ven­tion interest in enfor­cing other aspects of campaign finance, such as hard money limits or the ban on dona­tions from foreign nation­als.

However, Amer­ic­ans for Prosper­ity Found­a­tion is a slightly differ­ent case because it does­n’t arise in the campaign finance context. Instead, in this case, the Cali­for­nia is regu­lat­ing char­it­ies which soli­cit money in Cali­for­nia to ensure that they are not defraud­ing the public. The Amer­ic­ans for Prosper­ity Found­a­tion argues that an old line of cases known as NAACP v. Alabama protects it from having to reveal its donors to the state, even on a confid­en­tial basis. (Under current law, Cali­for­nia does­n’t disclose the iden­tit­ies of donors to the public.)

In the original NAACP case from 1958, the Supreme Court recog­nized that if Alabama had the names of local NAACP members, it could put African Amer­ic­ans at risk of harass­ment. And if anything, that “harass­ment” language under­sold the risks that Black Amer­ic­ans faced in the Deep South in the 1950s for being known as active members of the group. In 1951, for example, Harry T. Moore and his wife were killed in a Christ­mas Day bomb­ing of his home because he was believed to be the secret­ary of the NAACP’s Flor­ida chapter. (Moore had, in fact, already left the organ­iz­a­tion when he was killed.) His murder has never been solved. Even after the 1958 case was decided, murders of NAACP lead­ers contin­ued. In 1963, Medgar Evers, Missis­sippi field secret­ary for the organ­iz­a­tion, was shot in his drive­way. And in 1965, George Metcalfe, another NAACP leader from Missis­sippi, was killed in a car bomb­ing.

In other words, the NAACP, as a nonprofit organ­iz­a­tion, made a valid point in the 1958 case when it argued that naming names presen­ted a palp­able threat of harass­ment. In its ruling, the Supreme Court decided that NAACP members had a First Amend­ment right to asso­ci­ation that protec­ted them from Alabama’s prying.

The Amer­ic­ans for Prosper­ity Found­a­tion is arguing that it, too, will be subject to harass­ment and that it has a First Amend­ment right to keep its donors confid­en­tial from the state of Cali­for­nia. The organ­iz­a­tion won this argu­ment in the district court, while Cali­for­nia won on appeal in the Ninth Circuit.

Accord­ing to Open Secrets, the polit­ical arm of APF, the Amer­ic­ans for Prosper­ity Action PAC, spent $60 million in the 2020 elec­tion cycle. Accord­ing to Issue One, Amer­ic­ans for Prosper­ity is one of the top 15 dark money groups. Because they are opaque it’s not clear what the exact rela­tion­ship is here.

There are plenty of things to distin­guish the context of the NAACP in the 1950s and 1960s and the Amer­ic­ans for Prosper­ity today. Accord­ing to Source Watch, both AFP entit­ies were origin­ally funded by the Koch broth­ers, Charles and David. David Koch died in 2019. The Kochs at the time of David’s death were two of the richest Amer­ic­ans alive — to the tune of as much as $100 billion. By compar­ison, the NAACP during the 1950s and 1960s was a scrappy nonprofit with many poor indi­vidu­als as members. Compar­ing the two is like compar­ing apples and diamond encrus­ted Rolexes.

The prob­lem is that if the Amer­ic­ans for Prosper­ity Found­a­tion wins at the Supreme Court, every nonprofit that laun­ders dark money for corpor­a­tions or the wealthy will rely on this new case to keep the dark money sources under wraps. And that’s bad news for our demo­cracy.

The views expressed are the author’s own and not neces­sar­ily those of the Bren­nan Center.