February 9, 2021

Senators Call on Solicitor General to Reverse Position in SCOTUS Case Threatening Constitutional Protection for Dark Money

Democrats: Biden Solicitor General must abandon Trump position in AFPF v. Becerra or risk entrenching anonymous election and disinformation spending; Case could allow dark money groups – like the ones behind 1/6 pre-riot rally – to “plead the First” in maintaining special interest power

Washington, DC – Senators Sheldon Whitehouse (D-RI), a senior member of the Senate Judiciary Committee, and Dick Durbin (D-IL), Chair of the Senate Judiciary Committee, led Judiciary Democrats in calling on the Biden administration to reverse the Department of Justice’s position in Americans for Prosperity Foundation (AFPF) v. Becerra, a First Amendment challenge before the Supreme Court. The senators warn the Biden Justice Department that the case could lead Trump-appointed right-wing justices to grant constitutional protection to anonymous “dark money” spending in elections and on disinformation campaigns – like the campaign that fomented the January 6 attack on the U.S. Capitol.

The Trump administration backed plaintiff AFPF—a part of the Koch network of influence front groups—in its case to overturn a California rule requiring limited, confidential disclosure by nonprofit organizations of high-dollar donors to aid in the state’s tax administration. The question before the Court is whether this requirement violates the First Amendment’s freedom of association. The Ninth Circuit ruled it did not and upheld the law.

The senators point to a range of flaws in the First Amendment argument adopted by the Trump administration, and to the likelihood that, should the Supreme Court accept the argument, anonymous dark money spending in our democracy could become constitutionally protected. The result would be the permanent entrenchment of powerful special interest influence over American democracy, the senators write.

“This case marks a continuation of a long effort to entrench corporate America’s stranglehold on American government, to the detriment of its people,” the senators write. “The furtive architects of this campaign use the Supreme Court to obtain constitutional rulings that reliably elevate private over public interests, and to allow unlimited, and now anonymous, spending. The United States has a vital interest in reversing this dangerous course, which has brought our democracy to the brink of destruction.”

Joining Whitehouse and Durbin are Senators Patrick Leahy (D-VT), Dianne Feinstein (D-CA), Amy Klobuchar (D-MN), Chris Coons (D-DE), Richard Blumenthal (D-CT), Mazie Hirono (D-HI), Cory Booker (D-NJ), Alex Padilla (D-CA), and Jon Ossoff (D-GA).

The Supreme Court took Becerra on January 8 and will be accepting briefs in the coming weeks. President Biden’s Solicitor General will submit a brief in the case and must decide soon whether to reverse the Trump position.

AFPF and a raft of over 60 anonymously funded amicus curiae – many linked to the Koch network and other major right-wing dark-money funders – argue that the California rule threatens protections afforded by the Supreme Court’s seminal Civil Rights Era decision in NAACP v. Alabama. In that case, the Court deemed anonymity protections for civil rights activists in 1958 Alabama to be a matter of life or death. The senators point to the obvious differences between limited, confidential disclosure of donors for tax administration purposes and the potential for violent retaliation in the Jim Crow South.

“[G]ranting such sweeping anonymity protections to all organizations, including industry-funded ‘charitable’ front groups like plaintiff Americans for Prosperity Foundation, whose corporate funders have demonstrated no comparable threat of reprisal for the expression of their views, simply does not follow,” the senators write.

Since the Supreme Court’s Citizens United decision, dark money spending in our elections has now topped $1 billion, and the pace of spending by outside forces (i.e., not the candidates themselves) is accelerating. According to the Center for Responsive Politics, outside spenders—super PACs, dark money groups, and political parties—spent $2.6 billion in federal elections during the 2020 election cycle, which is roughly twice what was spent in the last presidential cycle in 2016.

Alongside dark money spending in politics has come a troubling uptick in dark money misinformation campaigns. In the lead-up to the January 6 attack, groups backed by anonymous donors stoked the lie of a stolen election and organized the rally then-President Trump used to spur the riot. In a robocall issued at the behest of an anonymous donor, one such group encouraged “patriots” to “march to the Capitol building and call on Congress to stop the steal.” Several of the groups are active spenders in federal elections and right-wing political causes.

Full text of the senators’ letter is below. A PDF is available here.

February 8, 2021

Hon. Elizabeth Prelogar
Acting Solicitor General
Office of the Solicitor General
United States Department of Justice
950 Pennsylvania Avenue, N.W.
Washington, DC 20530

Dear Acting Solicitor General Prelogar,

We write to urge the Department of Justice to reverse the United States’ position in Americans for Prosperity Foundation (AFPF) v. Becerra, Nos. 19-251 and 19-255, currently pending before the Supreme Court of the United States. On November 24, 2020, in response to the Court’s call for the views of the Solicitor General, the Trump Administration filed an amicus brief recommending that the Court grant certiorari, and endorsing petitioners’ effort to dramatically expand constitutional protections for anonymous spending and activity. The Court granted certiorari on January 8. The Trump Administration’s position in this case was wrong on the merits, imperils the United States’ interests, and, if adopted by the Court, would result in a further flood of anonymous money—or “dark money”—into our political system, causing great harm to our democracy.

Notwithstanding the flippancy with which the Trump DOJ abandoned prior litigating positions, we understand that the Department does not take lightly the decision to reverse its past positions. We appreciate the important institutional reasons for such caution. At the same time, we agree with former Deputy Solicitor General Michael Dreeben, who has argued that while it should engage in a rigorous and thoughtful process of internal debate, the Office of the Solicitor General should operate with a “presumption in favor of providing the court with its current view of the law.”[1] We trust that a close review of this matter will make clear that a change of course is warranted in this highly important case. To the extent it would be helpful to discuss Congress’s equities in this case, we would welcome the opportunity to meet with you.

1) The Trump Administration’s position was wrong on the merits, and the judgment of the court of appeals should be affirmed.

California requires charitable organizations that fundraise in the State to confidentially disclose to the State Attorney General’s office the identities of their substantial contributors. This case presents the question whether this requirement violates the First Amendment’s freedom of association. The Ninth Circuit held that it does not. Ams. for Prosperity Found. v. Becerra, 903 F.3d 1000, 1020 (9th Cir. 2018). In arguing for a grant of certiorari and reversal, the Trump

Administration stretches the Court’s First Amendment compelled disclosure precedents well past their breaking point.

The Trump Administration argued that the court of appeals misapplied the “exacting scrutiny” standard by failing to require “narrow tailoring,” which requires a “reasonable” fit between the government interest and the means used to achieve its objective. Br. for United States as Amicus Curiae 16. But the Trump Administration failed to articulate any difference between its requested standard and the one used by the court of appeals. The court of appeals observed as much, noting that the “narrow tailoring” sought by the plaintiffs was indistinguishable from the ordinary “substantial relation” standard consistently employed by the Supreme Court in disclosure cases. Pet. App. 16. It proceeded to apply exacting scrutiny, recognizing that the “strength of the governmental interest must reflect the seriousness of the actual burden on First Amendment rights,” and considering whether the disclosure regulation swept too broadly. Id. In other words, it applied the exact “reasonable fit” analysis the plaintiffs requested. The Trump Administration was simply wrong when it told the Court the court of appeals had “erred in dispensing with that requirement altogether.” U.S. Br. 16.

The court of appeals also properly determined that California’s Schedule B requirement passes exacting scrutiny. As the Trump Administration acknowledged, California has a compelling interest in regulating charities operating within its borders. That interest is all the more compelling given the proliferation of fraud and self-dealing among anonymously funded charities.[2] And the Trump Administration overlooked the extensive record evidence showing how Schedule B information allows the State to determine whether charitable entities are misusing charitable assets or otherwise violating the law. See. Resp. Supp. Br. 3.

Most troubling is the Trump Administration’s attempt to extend the holding of NAACP v. Alabama ex rel. Patterson 357 U.S. 449 (1958) and its progeny to the plaintiffs and facts here. In that seminal case, the Supreme Court refused to allow compelled disclosure of the identities of NAACP members who faced significant threats to their physical safety during the civil rights era. But granting such sweeping anonymity protections to all organizations, including industry-funded “charitable” front groups like plaintiff Americans for Prosperity Foundation, whose corporate funders have demonstrated no comparable threat of reprisal for the expression of their views, simply does not follow. Indeed, “applying NAACP v. Alabama’s holding in a formally symmetrical manner to the relatively powerful . . . without regard to context may undermine rather than affirm the values underlying that decision.”[3] But more to the point, California keeps petitioners’ Schedule B forms entirely confidential, and there is no evidence to suggest that California’s regime could lead to public harassment or other negative consequences. The central factors counseling the NAACP Court to shield NAACP member identities from compelled disclosure are therefore absent here.

2) The Trump Administration’s position imperils the interests of the United States.

It is (or was once) rare that the United States files a brief in the Supreme Court that is so transparently hostile to its own interests, but that is what happened here. For the reasons advanced by the California Attorney General, Resp. Supp. Br. 5-7, the Trump Administration failed in its halfhearted attempt to distinguish its own IRS Schedule B requirement from the California requirement it says violates the Constitution. There is no question that the broad constitutional ruling petitioners seek would jeopardize the IRS’s ability to collect Schedule B information from nonprofit organizations.

Flanked by an unprecedented volume of certiorari-stage amici, including over 60 dark-money organizations with ties to petitioner AFPF’s known industry funders,[4] the United States urges a result that directly undercuts its ability to protect citizens against fraud and abuse in the nonprofit sector. Again, the Trump Administration acknowledged a government’s compelling interest in regulating charities operating within its borders. U.S. Br. 20. And as California explained, “by identifying the donor, the amount of the contribution, and the type of donation received (cash or in-kind), [Schedule B] provides information that can indicate misappropriation or misuse of charitable funds and can help . . . investigators determine whether the organization and its donors are engaging in self-dealing.” Resp. Supp. Br. 3. But the Trump Administration’s urged outcome here would shackle the United States’ ability to do just that, rendering the Internal Revenue Service’s confidential collection of Schedule B information presumptively unconstitutional.

Meanwhile, here in Congress, many of the dark money groups that have flocked to the Court in this case have already begun to resist congressional oversight by pleading a First Amendment right to anonymous spending and association. Take for example the U.S. Chamber of Commerce, the anonymously funded trade organization and corporate lobbying behemoth that enjoys, by far, the highest winning percentage in cases before the U.S. Supreme Court.[5] In response to questions for the record in the Senate’s Environment and Public Works Committee last Congress, the Chamber altogether refused to answer questions, claiming seventeen times that a “question seeks information clearly protected by the fundamental right of freedom of association guaranteed to the Chamber and its members . . . by the First Amendment to the Constitution,” and that “[t]herefore, on behalf of itself and its members, the Chamber respectfully declines to provide information in response to this question.”[6] The Chamber doubles down on this extreme constitutional theory in its amicus brief to the Court in Becerra, arguing that NAACP v. Alabama should apply “whenever associational privacy rights are threatened.”[7]

3) A broad constitutional ruling would lead to a further flood of corrupting financial influence on our democracy.

The United States must view this case in the context of an elemental tension we live with in politics and government between two classes of citizens. One is an insider influencer class, which occupies itself with rent-seeking from government, and desires rules of political engagement that make government more and more amenable to its power and influence. The second class is the general population, which has an abiding institutional interest in a government with the capacity to resist that special-interest influence. This is a centuries-old tension.[8]

This case marks a continuation of a long effort to entrench corporate America’s stranglehold on American government, to the detriment of its people. The furtive architects of this campaign use the Supreme Court to obtain constitutional rulings that reliably elevate private over public interests, and to allow unlimited, and now anonymous, spending.[9] The United States has a vital interest in reversing this dangerous course, which has brought our democracy to the brink of destruction.

The Supreme Court’s 2010 decision in Citizens United, 558 U.S. 310 (2010), unleashed a torrent of political spending. That decision was a boon to those with money to spend and incentive to spend it, and it added to the already extant imbalance in our political system. While on paper Citizens United upheld disclosure requirements, in practice the proliferation of shell corporations and the lack of judicial insistence on proper disclosure has meant there is no accountability for lies, smears, and disinformation. The “tsunami of slime” unleashed by Citizens United has fundamentally eroded trust in our political system.[10] A 2020 Gallup poll found that trust in the federal government to solve domestic problems was down ten points since 2009, from 51% to 41%.[11]

As we recently warned Secretary Yellen, America’s influencer class—empowered to spend unlimitedly by Citizens United, and enabled by their sophisticated lawyers and advisors— have effectively identified and exploited the IRS’s weak and outdated regulations. They began funneling money into organizations created under sections 501(c)(3) and c(4) of the Internal Revenue Code precisely because these organizations did not have to publicly disclose their contributors. After Citizens United, political spending by 501(c)(4) groups exploded. Since 2010, 501(c)(4) organizations have spent over $800 million on political expenditures, compared to $103 million in the previous decade.[12] In one representative case, the American Action Network, a 501(c)(4), raised $41.9 million in one year, $24.6 million of which came from a single anonymous donor.[13] According to an analysis of the 2020 election, only 30% of outside spending came from groups that fully disclose their donors. And 501(c)(3) “charitable” groups, such as the Federalist Society, routinely engage behind the scenes in partisan political activity that at the very least skirts the line of prohibited lobbying and political activity.[14]

It is currently within the capacity of the United States government to police this mess, but a broad constitutional ruling for petitioners in AFPF v. Becerra would destroy that ability, permanently entrenching the power of this influence network. In light of these stakes, we urge you to address this matter with the utmost urgency.

As Justice Scalia wrote: “Requiring people to stand up in public for their political acts fosters civic courage, without which democracy is doomed. For my part, I do not look forward to a society which, thanks to the Supreme Court, campaigns anonymously . . . and even exercises the direct democracy of initiative and referendum hidden from public scrutiny and protected from the accountability of criticism. This does not resemble the Home of the Brave.” Doe v. Reed, 561 U.S. 186 (2010) (Scalia, J., concurring). We could not agree more.

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