SCOTUS Is Finishing the Job on Financial Disclosure Requirements

The Supreme Court ruled Thursday morning that California can not require charities to disclose information about their major donors. This was the second major case decided by 63 margins in the final day of the term. Chief Justice John Roberts wrote the majority opinion. He found that the California regulation was not constitutional on its face. Although the narrow opinion does not address the bigger questions regarding campaign finance disclosure laws it is sure to open the door to their demise. Justice Sonia Sotomayor, in dissent, noted that today's analysis marks disclosure and reporting requirements with a bullseye.AdvertisementThis case reveals that California charities were required to file an IRS form with the names, addresses, and major donors each year. Some of the information was made public online due to a security breach. The petitioners, Americans for Prosperity Foundation, which is affiliated with Koch, and Thomas More Law Center claimed that they were subject to harassment and reprisals because the state collected the information. (Americans For Prosperity stated to the Hill that it spent seven figures on its campaign for Justice Amy Coney Barrett's seat at the court.AdvertisementAdvertisementSubscribe to the Slatest Newsletter Get a daily email update with the latest stories. Signing you up was not possible due to an error Please try again. To use this form, please enable jаvascript. Email address: I would like to receive updates on Slate special offers. You agree to our Privacy Policy & Terms by signing up. Thank you for signing up! You can cancel your subscription at any time.Roberts compared the dispute to NAACP. Alabama, a civil rights-era case. This case prevented the attorney general from accessing the NAACPs membership lists. The court ruled that compelled disclosure was against the First Amendment. The chief justice determined that California's demand for tax documents was unconstitutional. This shattered California's stated interest to fight charitable fraud and self-dealing. He wrote that the First Amendment protects freedom of association. However, there are also restrictions that a person can put on their ability to work together to achieve shared goals. It is possible for association to be hampered by fear.AdvertisementRoberts noted that some donors in California have been threatened with bombs, protests and other physical violence. He also said that computers make it more difficult for such threats to occur. Sotomayor pointed out in dissent that the reprisals occurred in different contexts, and not because California had collected their information. Roberts pointed out that there were many liberal organizations like the ACLU, the Knight Foundation and Human Rights Campaign that joined the challengers in this instance. This was in order to avoid being worried that wealthy conservative donors might want to keep their anonymity. Neil Gorsuch, Sam Alito and Clarence Thomas concurred in invalidating the rule. They would have applied a stricter standard of scrutiny.AdvertisementSotomayor, along with Justices Elena Kagan, Stephen Breyer, argued that wealthy objectors no longer need to show any objective harms and that disclosure requirements now require some loss of anonymity. Sotomayor also noted that disclosure requirements directly burden associational right, although this was the view of Justice Thomas. But, this is not a win for wealthy donors or dark money, who should be allowed to operate in the shadows as they are America's true victims. This case could spell doom for campaign transparency rules and oversight.AdvertisementAdvertisementIn both major cases today, there is a bizarre two-step. The Supreme Court in Shelby County, 2013 promised that Section 5 of the Voting rights Act's effects would not have any consequential effect because Section 2 would still cover racial voting practices. Today, the court has slashed Section 2. The court also ruled Citizens United in 2010. In the same vein, the majority said that removing campaign finance rules would not have any consequences because strong disclosure rules would prevent corruption. Today, the court ruled that campaign finance disclosure laws would not survive. It doesn't make it any less horrible to do terrible things in two steps spread over many years. Today, the court made it more difficult to regulate actual charitable corruption and easier to regulate fake vote fraud. Both of these outcomes are bad for democracy.