Disclosure as a Political Weapon
June 16 | Posted by mrossol | American ThoughtDon’t be afraid. Everything is going to be OK.
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The IRS scandal has shown the danger of targeting tax-exempt groups for their political views, but what happens if a tax-exempt group is tagged with political participation that never happened? That’s the story in Washington state, where the Institute for Justice is suing Thursday to prevent the state from categorizing pro bono legal advice as an “in-kind” political contribution.
The story started in 2010, when Puyallup resident Robin Farris began a campaign to recall former Pierce County treasurer Dale Washam over his treatment of employees, alleged abuse of government resources and other controversies. Ms. Farris soon ran up against a Washington state law that caps the amount voters can donate to a recall campaign at $800.
Enter the Institute for Justice (IJ), a civil-libertarian legal outfit that helped Ms. Farris challenge the law on a pro bono basis. IJ argued successfully in federal court that it is unconstitutional for the state government to restrict political contributions that are independent of a candidate.
Having lost in court, the state’s Public Disclosure Commission retaliated by threatening to fine Ms. Farris more than $500,000 for failing to report IJ’s pro bono work as an in-kind contribution to her recall campaign. The regulator said the “contribution” should have been listed in the campaign’s public disclosures. The Commission had retaliated with similar threats against a pro-life group called Family Pac after losing a court case over contributions to referenda campaigns in 2010.
Such a finding is a potential killer for a tax-exempt 501(c)(3) like IJ. If free legal services can be categorized as an in-kind political contribution, IJ could lose its federal tax exemption because 501(c)(3) nonprofits are expressly prohibited from any direct engagement with political campaigns.
The same logic would apply to many tax-exempt groups that offer free help for civil-rights plaintiffs. This includes such left-learning groups as the American Civil Liberties Union, the Brennan Center for Justice and the Campaign Legal Center. IJ says it has identified more than 100 cases in which a nonprofit has represented someone on a campaign-finance case. Without those services, few non-wealthy Americans would have the resources to challenge campaign-finance laws that restrict speech.
The suit also reveals the overbroad nature of campaign-finance limits by attributing a political interest when none existed. The Institute for Justice had no stake or interest in the recall of Dale Washam. It offered to help Ms. Farris because part of its mission is to defend people whose First Amendment rights are violated.
Democrats and their media allies have made a crusade of more disclosure as a way to discourage political spending by businesses. But as the Institute for Justice’s tax-exempt jeopardy shows, disclosure is a weapon that can be used to silence many groups, including those that fight for civil rights and legal due process. It’s another example of liberals trampling on liberal principles.
A version of this article appeared June 13, 2013, on page A16 in the U.S. edition of The Wall Street Journal, with the headline: Disclosure as a Political Weapon.
Review & Outlook: Disclosure as a Political Weapon – WSJ.com.
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