N.C. legislators rush bill to limit nonprofit donor disclosure

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North Carolina House Republicans rushed to pass a “donor privacy” bill Thursday shortly after a Judiciary Committee hearing. The bill (SB 636) would limit the disclosure required for a range of 501(c) nonprofit organizations. It is now up to Gov. Roy Cooper to decide whether to sign it into law.

The bill would prohibit nonprofits from disclosing the list of donors without the donors’ permission, unless otherwise required by law, such as investigations by state agencies including the State Board of Elections.

Rep. Hugh Blackwell, a Burke County Republican, said the bill seeks to protect donors’ First Amendment rights. He said, “This is designed to say that if you are a donor to a charitable organization, unless you give your permission, you don’t have to worry that someone is going to disclose your name broadly to other folks who may have other purposes in mind than just being well informed.”

He said legislators proposed this bill in keeping with a recent U.S. Supreme Court decision that blocked the California Attorney General’s office from collecting the nonprofit Americans for Prosperity’s tax forms containing donor information. Justice Sonia Sotomayor dissented in the case, saying the court erroneously eliminated the burden of proof to show First Amendment violations and instead invalidated the disclosure law entirely.

Rep. Marcia Morey, D-Durham, opposed today’s House action. “We talked about free speech; We talked about free assembly. That’s not what we’re talking about here,” she said. ”We’re talking about money… money that has power to influence and oftentimes money that has power to corrupt.”

This bill would prevent the public from identifying big donors to nonprofit organizations and perpetuate secrecy in campaign finance, opponents of the bill argued.

Although the bill would not affect disclosure requirements for nonprofits to the SBOE, campaign finance watchdog groups said that the measure would expand a loophole already in the state statutes. Currently, dark money groups can funnel their money through layers of shell organizations. Since secondary disclosure of donors is not required, it is sometimes impossible to trace back the source donors.

Melissa Price Kromm

A preemptive strike

Melissa Price Kromm, executive director of N.C. Voters for Clean Elections, said the bill is nothing but a “preemptive strike” to prevent disclosure of donors if state laws close the loophole to allow for “peeling the onion” to identify sources of dark money.

“You don’t have the public clamoring for this, you have special interest clamoring for this,” Kromm said. She said the sudden passage of the bill without public notice is telling of lobbying groups’ influence. North Carolina Republican legislators recently returned from the annual conference of the American Legislative Exchange Council (ALEC). The conservative group famous for pre-written “model legislation” has pushed for similar bills in other states for years.

Rep. Blackwell was a member of ALEC’s Civil Justice Task Force, according to a memo.

The bill would apply to different kinds of nonprofits, including 501(c)(3) charitable, religious, and education organizations and 501 (c)(6) trade associations. However, Kromm said the bill would close the door to transparency for 501(c)(4) organizations, social welfare groups that often play an active role in campaign activities.

In an earlier op-ed to Policy Watch, she highlighted notable 501(c)(4) groups have abused the funneling loophole, including the National Rifle Association, the Club for Growth and Heritage Action, and Democratic-afiliated groups Future Forward, as well as the 1630 Fund.

On the House floor, Rep. Pricey Harrison, D-Guilford, proposed an amendment to limit the donor protection to 501(c)(3) charitable, religious and education organizations only. The amendment failed to gain Republican support.

The Campaign Legal Center, a Washington-based nonpartisan nonprofit organization, sent a  letter to Gov. Cooper urging him to veto the bill. The letter warned, “The bill mandates secrecy for 29 different types of nonprofit organizations.”

“While not barring current statutorily required disclosures, S.B. 636 stymies further disclosure of donor information from groups that hide their political spending in dark money shell games to avoid the reach of such statutorily required disclosures,” the letter read.

The group noted that the bill would also make it easier for North Carolina officials to hide conflicts of interest. For example, the bill could keep it in the dark when legislators solicit money from individuals associated with nonprofits who wish to buy government action in secret, the letter stated.

The group noted that former Michigan Republican Governor Rick Snyder vetoed a similar version of the bill and called it “a solution in search of a problem.”

Care about the integrity of the vote? Make time to read this op-ed.

This week’s must read editorial comes from Professor Rick Hasen of the University of California, Irvine School of Law, in Friday’s New York Times.

Hasen, the author of several books about elections and democracy, warns about ‘a new and more dangerous front in the voting wars.’ Here’s an excerpt from his column:

Professor Richard Hasen

We already know the contours of the battle over voter suppression. The public has been inundated with stories about Georgia’s new voting law, from Major League Baseball’s decision to pull the All-Star Game from Atlanta to criticism of new restrictions that prevent giving water to people waiting in long lines to vote. With lawsuits already filed against restrictive aspects of that law and with American companies and elite law firms lined up against Republican state efforts to make it harder to register and vote, there’s at least a fighting chance that the worst of these measures will be defeated or weakened.

The new threat of election subversion is even more concerning. These efforts target both personnel and policy; it is not clear if they are coordinated. They nonetheless represent a huge threat to American democracy itself.

Some of these efforts involve removing from power those who stood up to President Donald Trump’s attempts to overturn the results of the 2020 election. The Georgia law removes the secretary of state from decision-making power on the state election board. This seems aimed clearly at Georgia’s current Republican secretary of state, Brad Raffensperger, punishing him for rejecting Mr. Trump’s entreaties to “find” 11,780 votes to flip Joe Biden’s lead in the state.

But the changes will apply to Mr. Raffensperger’s successor, too, giving the legislature a greater hand in who counts votes and how they are counted. Michigan’s Republican Party refused to renominate Aaron Van Langevelde to the state’s canvassing board. Mr. Van Langevelde voted with Democrats to accept Michigan’s Electoral College vote for Mr. Biden as legitimate. He was replaced by Tony Daunt, the executive director of a conservative Michigan foundation that is financially backed by the DeVos family.

Even those who have not been stripped of power have been censured by Republican Party organizations, including not just Mr. Raffensperger and Georgia’s Republican governor, Brian Kemp, but also Barbara Cegavske, the Republican secretary of state of Nevada who ran a fair election and rejected spurious arguments that the election was stolen. The message that these actions send to politicians is that if you want a future in state Republican politics, you had better be willing to manipulate election results or lie about election fraud.

Republican state legislatures have also passed or are considering laws aimed at stripping Democratic counties of the power to run fair elections. The new Georgia law gives the legislature the power to handpick an election official who could vote on the state election board for a temporary takeover of up to four county election boards during the crucial period of administering an election and counting votes. That provision appears to be aimed at Democratic counties like Fulton County that have increased voter access. A new Iowa law threatens criminal penalties against local election officials who enact emergency election rules and bars them from sending voters unsolicited absentee ballot applications.

So what can be done? To begin with, every jurisdiction in the United States should be voting with systems that produce a paper ballot that can be recounted in the event of a disputed election. Having physical, tangible evidence of voters’ choices, rather than just records on electronic voting machines, is essential to both guard against actual manipulation and protect voter confidence in a fair vote count. Such a provision is already contained in H.R. 1, the mammoth Democrat-sponsored voting bill.

Next, businesses and civic leaders must speak out not just against voter suppression but also at efforts at election subversion. The message needs to be that fair elections require not just voter access to the polls but also procedures to ensure that the means of conducting the election are fair, auditable and verifiable by representatives of both political parties and nongovernmental organizations.

Congress must also fix the rules for counting Electoral College votes, so that spurious objections to the vote counts like the ones we saw on Jan. 6 from senators and representatives, including Senators Josh Hawley and Ted Cruz, are harder to make. It should take much more than a pairing of a single senator and a single representative to raise an objection, and there must be quick means to reject frivolous objections to votes fairly cast and counted in the states.

Congress can also require states to impose basic safeguards in the counting of votes in federal elections. This is not part of the H.R. 1 election reform bill, but it should be, and Article I, Section 4 of the Constitution gives Congress wide berth to override state laws in this area.

Finally, we need a national effort to support those who will count votes fairly. Already we are seeing a flood of competent election administrators retiring from their often-thankless jobs, some after facing threats of violence during the 2020 vote count. Local election administrators need political cover and the equivalent of combat pay, along with adequate budget resources to run fair elections. It took hundreds of millions of dollars in private philanthropy to hold a successful election in 2020; that need for charity should not be repeated.

If someone running for secretary of state endorses the false claim that the 2020 election was stolen, they should be uniformly condemned. Support should go to those who promote election integrity, regardless of party, and who put in place fair and transparent procedures. Ultimately, we need to move toward a more nonpartisan administration of elections and create incentives for loyalty to the integrity of the democratic process, not to a political party.

We may not know until January 2025, when Congress has counted the Electoral College votes of the states, whether those who support election integrity and the rule of law succeeded in preventing election subversion. That may seem far away, but the time to act to prevent a democratic crisis is now. It may begin with lawsuits against new voter-suppression laws and nascent efforts to enshrine the right to vote in the Constitution. But it is also going to require a cross-partisan alliance of those committed to the rule of law — in and out of government — to ensure that our elections continue to reflect the will of the people.

Read the full op-ed here in The New York Times.

Professor Richard Hasen is also the author of “Election Meltdown: Dirty Tricks, Distrust and the Threat to American Democracy.”

The Week’s Top Stories on Policy Watch

1. DEQ orders Duke Energy to excavate remaining coal ash impoundments

Duke Energy must excavate its final nine coal ash impoundments at six plants, state environmental regulators announced today, overruling the utility’s concerns that the method would be too expensive and environmentally risky.

“DEQ rigorously reviewed the proposals, and the science points us clearly to excavation as the only way to protect public health and the environment,” said DEQ Secretary Michael Regan in a prepared statement.

“Today’s action sends another clear message that protecting public health and natural resources is a top priority of the Cooper administration.”

Duke had proposed to either cap the material in place — in leaking, unlined landfills — or to develop a “hybrid” of excavation and cap-in-place. At public meetings across the state, residents demanded that DEQ force the utility to fully excavate all of the material and place it in a lined landfill.[Read more…]

Bonus read: The big Duke coal ash clean-up: Where things stand and what to expect next

2. A $400 win for teachers could cost North Carolina school districts $40 million

Superintendent Mark Johnson can’t seem to win for losing.

Johnson was part of big press conference Wednesday at the state Legislative Building during which he and State Sen. Andy Wells, (R-Catawba) partnered to announce their proposal of a new program to give the state’s 94,000 licensed teachers $400 a year each to buy classrooms supplies.

The announcement could have been a celebratory occasion.

But there was one missing element: Lisa Godwin.

Godwin, the 2017 North Carolina Teacher of the Year, was listed as a press conference participant but decided not to attend because of concern about how the program would be funded.[Read more…]

Bonus read: Superintendent Mark Johnson takes issue with critics who say SB 580 robs ‘Peter to pay Paul’

3. Four initial takeaways from the Robin Hayes corruption case

This has been another remarkable week in North Carolina. Once again, a dark cloud of corruption has descended upon and enveloped the state’s politics as federal prosecutors unsealed an extraordinary grand jury indictment of one of the state’s best known politicians and a trio of well-heeled businessmen.

Among other things, the indictment accuses Robin Hayes – a scion of the Cannon textile dynasty, as well as a former congressman, state representative, Republican gubernatorial nominee and, until this week, chairman of the North Carolina Republican Party* – of participating in a brazen scheme to bribe the state’s Republican Insurance Commissioner with illegal campaign contributions. Also indicted were the state’s largest individual political donor – Durham businessman Greg Lindberg – and two of his employees, John Palermo and John Gray.

What’s more, there could be more indictments on the way. Insurance Commissioner Mike Causey, who cooperated with federal officials and apparently wore a wire that captured some of the most incriminating statements described in the indictment, told the Charlotte Observer yesterday that “There could be more indictments to come. We don’t know what may happen. And with a case this complex and complicated, it may take months and months and months or years to get everything sorted out.” [Read more…]

4. After sweeping order, an end to coal ash in NC? All bets are off.

North Carolina’s coal ash problem didn’t begin in February 2014, when a corrugated pipe at a Rockingham County Duke Energy facility vomited 39,000 tons of coal ash and about 27 million gallons of contaminated water into the Dan River.

The documented dangers of the coal byproduct predated even a one billion gallon spill in Kingston, Tennessee, six years prior, a spill large enough to fill thousands of Olympic swimming pools.

And North Carolina’s coal ash problem didn’t end hours later, when the billion-dollar, energy juggernaut assured North Carolina officials, incorrectly, that the river – about 70 miles of which was coated in a blue-gray, toxic plume – was no drinking water supply.[Read more…]

5. NC lawmakers push Medicaid work requirements as patients, advocates and courts push back

Emily Henderson was kicked off of Medicaid last year when she went from making $8 per hour at her job to $10 per hour. The raise put her over the income limit. Her son, who is diabetic, remains covered, but she has to choose more often than not between paying to take care of her own health without insurance coverage and paying her bills.

Her story of losing coverage is one that could become a reality for many more people if Republican lawmakers in the North Carolina General Assembly pass a bill to implement work reporting requirements for “able-bodied” adults who receive Medicaid health benefits.

The current income limits are “already making it difficult,” Henderson said. “They’re handcuffing people to poverty to maintain healthcare,” she continued.[Read more…]

6. House Speaker needs to take action regarding lawmaker accused of domestic violence

By many of the usual political metrics, State Rep. Cody Henson ought to be an up and comer.

Henson, a young (he was graduated from high school in 2010) Republican from western North Carolina is an ex-Marine with a winning smile. His biography on the website VoteSmart.org reports that he was an infantry machine gun team leader in the Marine Corps Reserve who then found work as a call center supervisor with a global marketing company. He is described as a member of Midway Baptist Church whose favorite quote (“I know in my heart that man is good, that what is right will always eventually triumph, and there is purpose and worth to each and every life.”) is attributed to Ronald Reagan.

Meanwhile, the list of contributors to his campaigns reads like a “who’s who” of the modern North Carolina political establishment:[Read more…]

7. Facing ACLU deadline, N.C. officials balk on transferring transgender inmate from men’s prison


Kanautica Zayre-Brown, a transgender woman seeking transfer out of a men’s prison in Lillington, spent much of last month in solitary confinement.

But last week, as the deadline to avoid a lawsuit from the ACLU approached, the North Carolina Department of Public Safety transferred Zayre-Brown from the Harnett County Correctional Institution. Not to a women’s prison, as she and the ACLU had requested, but to the smaller Warren Correctional Institution for men in Warren County, near the Virginia border.

“At Warren, Zayre-Brown is housed in a single cell as opposed to an open dormitory, which has been deemed the most appropriate placement at this time,” said DPS spokesman John Bull in a statement Monday. “Prisons has been and will continue diligently conducting research on legal precedent and best practices across the country with an eventual goal of moving Zayre-Brown to a female facility.”[Read more…]

8. Weekly Editorial Cartoon:

 

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