Wednesday, March 11, 2009

New Mexico Bill Seeks to Require Nonprofit Disclosures of Political Campaign Donors

Last weekend we posted a report on nonprofit soft money spending in the last presidential election.  Campaign finance and nonprofits is an annual issue of course.  Yesterday, the New Mexico Hosue Voters and Elections Committee unanimously approved HB808 yesterday.  The bill requires that any federally tax exempt organization that engages in an "electioneering communication" during a primary or general election disclose the following information:

A. if the electioneering communication occurs during the primary election, the entity shall file a report of activity listing:

(1) all expenditures related to the electioneering communication, the purpose of the expenditure and the name and address of the person or entity to whom an expenditure was made;

(2) each donation, grant or allocation received by the entity in excess of two hundred fifty dollars ($250) and not previously reported, regardless of whether it is related to the electioneering communication;

(3) the name and address of the person or entity from whom the donation, grant or allocation was received; and

(4) the date the expenditure was made;

The bill contains similar requirements for "electioneering communications" made during a general election.  Here is the official legislative summary of the bill:

Synopsis of Bill

HB 808 enacts and amends statutory sections in the Campaign Reporting Act, Section 1-19-25 et. seq. NMSA 1978, to require a tax-exempt organization that engages in an electioneering communication regarding a candidate for state office during a primary or general election to file a disclosure report for that election with the secretary of state disclosing contributions and expenditures as specified. The bill provides monetary penalties to be paid to the SOS for false or incomplete information, late filing, and failure to file.  HB 808 defines “electioneering communication” to mean any radio, TV, cable or satellite broadcast, and any print advertisement that: refers to a clearly identified candidate for state office; is made during a primary or general election for the office sought by the candidate; and is targeted to the relevant electorate. The term does not include communications appearing in a news story, commentary or editorial distributed through print or broadcast, unless such print media or broadcasting facilities are owned or controlled by any political party, political committee or candidate.

The bill seems to have broad support, according to an article in yesterday's New Mexico Indpendent despite staunch nonprofit sector opposition, acknowledged constitutional issues and Supreme Court case law against similar efforts in other states:

Nonprofits have vocally opposed the bill for several reasons, including a concern that such a measure would abridge their right to free speech if they were required to list donors.  Some representatives of the nonprofits also have said the requirements set out in the legislation could cost them donors seeking privacy.  At the heart of the proposal is the notion that a nonprofit, as a recipient of tax-exempt status, ostensibly gets a public subsidy, Assistant Attorney General Phil Baca told the Independent last week. That assumption allows the state to set conditions on nonprofits, said Baca, who had drafted the Martinez-Sanchez legislation.  Baca said much the same thing before the House Voters and Elections Committee on Tuesday morning.  “We’re sovereign so we can craft our tax code any way we want to,” he told lawmakers. Baca admitted last week that the U.S. Supreme Court has struck down several states’ attempts to place conditions on nonprofits and that the proposed legislation would likely go to court if it were to become law.

I am no expert on the intersection of election and tax law -- I know what 501(c)(3) and related tax provisions say but I have never really dived into the whole Federal Elections Commission laws and regulations on the topic.  So my views might be described as those of a better informed layperson at best.  But I'll spout them anyway.  First, I think many of these laws are motivated by incumbents' efforts to protect their own jobs and not necessarily by any theoretical position that donors ought to know who is funding a "swift boat" campaign.  The New Mexico Independent article suggests that the bill "is part of a larger standoff between state lawmakers [who presumably want to shut up any opposition voices] and the nonprofit community."  I do think the lies and  half truths of the swift boat campaign -- whether told against John Kerry or John McCain -- were deplorable, but I'm not so sure that forcing disclosure does anything to address the substantive lies, if lies they be.  Remember, too, that Lyndon Johnson's insertion of a prohibition against campaign intervention was entirely motivated by his desire to shut his opponents up.  Ultimately, allowing incumbents to protect or enforce their views by shutting opponents up has to be the most un-American concept of all.

Ultimately, our system of governance is built on the rights of all to hear information from whatever source.  To bad we cannot pass a law that mandates that listeners take responsibility to personally determine the truth of the information (like the truth of the definition in the picture above).  That many of us fail in that responsibility, though, is not sufficient justification, in my view, to allow the government to protect us from our own ignorance by forcing some speakers to shut up.  I am aware, and do not necessarily disagree with the argument that conditioning tax exemption qua subsidy on refraining from certain speech is not an infringement of free speech.  It is legitimate to think that government [i.e., the people] ought not be forced to subsidize any speech at all.  My observations above are not meant to address that argument but the broader point that we should all join the "thinking" party rather than the Republican or Democratic party.

dkj

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