Supreme Court Strikes Down California Reporting Rule Meant To Prevent Charitable Fraud and Self-Dealing

Today, wealthy special interests scored a win, albeit a narrow one. We at Campaign Legal Center are disappointed that the majority chose to sidestep established precedent recognizing the important public interests in nonprofit reporting and relatively minimal burdens such reporting imposes. While the standard of review applied by the Court here was unduly skeptical, it is one transparency laws in the electoral context easily meet, limiting the reach of this case. The decision does not call into question the longstanding laws and regulations requiring public disclosure of campaign spending.

The California Attorney General's office used the confidential donor information in question to enforce the state's non-profit regulations and prevent charitable fraud and self-dealing. This limited, non-public information served a key role in helping the state maintain oversight over organizations soliciting donations.

This case addresses non-public tax reporting by charities, not public disclosure by those spending money to influence elections. Still, this ruling needlessly brushes aside precedent in favor of wealthy special interests--expanding an exemption originally reserved for marginalized groups to seven-figure donors hoping to insulate themselves from public criticism.

American voters have repeatedly supported transparency measures that fight fraudulent activities by an overwhelming margin, understanding them to be essential to governmental integrity. While this decision does nothing to undercut the Court's long recognition that transparency in the electoral context serves the vital interests of an informed electorate, it does significantly impact the state of California's ability to detect fraud and self-dealing by organizations soliciting donations.