Many Nonprofits Seeking Exemption From New York State Donor Disclosure Law

Some New York nonprofits that lobby New York State government are seeking exemptions from a state ethics law that requires them to reveal the identities of their donors, the New York Times reports.

Championed by Governor Andrew M. Cuomo, the law in question requires 501(c)(4) groups that devote substantial resources to lobbying, including spending on television advertisements, to disclose the names of all donors who contribute more than $5,000. Included in the legislation is an exception for groups whose donors might face "harm, threats, harassment, or reprisals," including civil rights groups. One such group, NARAL Pro-Choice New York, reported that a menacing video was posted on its Facebook page by a man later convicted of assisting in what he thought was a plot to bomb an abortion clinic. After the state ethics commission granted NARAL an exemption in June, at least four other groups filed applications for exemptions from the law, including two groups that support abortion rights, a group opposing abortion and same-sex marriage, and the New York Civil Liberties Union. To date, about eighty organizations, mostly trade associations, have disclosed their donors.

NARAL's exemption has attracted notice because of its heavy lobbying activities, which include a campaign last year aimed at securing Democratic control of the State Senate, spending $425,000 on lobbying this year, and vowing to unseat incumbent Republican senators next year. Indeed, the NARAL ruling prompted many state Republicans to accuse ethics commission members of having a liberal bias. Following a complaint from one Republican board member, the commission decided to table exemption applications while it considered whether the process should be more transparent. "For far too long, the world of tax-exempt groups, operating unregulated as lobbying entities, has been in need of sunshine and reform," Melissa DeRosa, a spokesperson for the governor, told the Times. "Under Gov. Cuomo's leadership, New York is the most progressive state in the nation in that pursuit, while abiding by federal case law considering safety exemptions."

The debate over which groups should be excluded from the disclosure law echoes similar disputes in California, Maine, Minnesota, and other states. But in the wake of the U.S. Supreme Court's Citizens United campaign finance decision, the New York law is notable because it applies to groups organized under Section 501(c)(4) of the Internal Revenue Code, which have not been required to disclose the names of their donors. While (c)(4)s are granted tax-exempt status to promote "social welfare," many are heavily engaged in political lobbying ativites and wield significant political influence. According to the D.C.-based Center for Responsive Politics, (c)(4)s in the U.S. reported spending more than $256 million in the 2012 election cycle,. In New York State, the Committee to Save New York spent more than $13 million on advertising supporting Gov. Cuomo's agenda in 2011 and 2012; the group became inactive as soon as the state started requiring disclosure of donors.

As the debate intensifies, the New York Civil Liberties Union remains concerned about the law's implications. "People say nasty things about us or call us up all the time, and we can take that," said NYCLU legal director Arthur Eisenberg. "It's the individual donors who shouldn't need to take that, and the price of their association with us, and their participation in the First Amendment activity of lobbying, should not be at the cost of their feeling secure and free from threats and retaliation."

Thomas Kaplan. "Nonprofits Are Balking at Law on Disclosing Political Donors." New York Times 08/20/2013.