Louisiana’s Public Service Commission has a dangerous proposed rule to demand the full donor list of any entity wishing to speak before it, explicitly aimed at nonprofits. This includes an “ultimate source” requirement, requiring reporting of any pass-throughs via “foundations, nonprofits, or intermediaries.” The demand is inherently dangerous because there is no kindly request for donor information.
This proposed rule has constitutional implications. Under the First Amendment’s freedom to associate, the Supreme Court requires disclosure laws to survive “exacting scrutiny” which requires the government to show such disclosure is in substantial relation to a sufficiently important government interest and be narrowly tailored. The proposed changes to Louisiana’s Public Service Commission’s procedural rules fail this strict test. The justification for such an abysmal demand is to assure “Louisiana Energy Dominance” by demanding “transparency to influences that may be present with respect to position or arguments of intervenors in Commission proceedings.” These conclusory statements are not weighty enough to demand the donor lists of nonprofit organizations. Worse, when the public does care about a nonprofit’s donors, it’s often to threaten or harass the employees or supporters of the organization.
The proposed changes are not properly tailored to the stated interests of the government. By demanding donor disclosures for nonprofits merely filing on something as important as energy policy, they impose burdens more appropriate for political organizations with explicit electoral purposes. Precedents like Buckley v. Valeo and other campaign finance cases establish that disclosure requirements must be tied to direct political activities. Applying similar standards to mere regulatory comments, which focus on legal advocacy, overreaches constitutional bounds. When the government goes after non-political donors, such as in Americans for Prosperity v. Bonta, the disclosures become much more worrisome. In First Choice Women’s Health Center v. Davenport, the Supreme Court expressly “[p]ut aside” the heightened risks “of harassment and reprisals . . . in the 21st century, where almost anyone with a computer can access information once it migrates to the public domain.” Instead, any “official demand for private donor information is enough to discourage reasonable individuals from associating with a group” and that, in turn, is enough to open the courthouse doors for a First Amendment challenge.
It’s important to note that, in previous cases about donor privacy, all involved seemingly mere financial disclosures similar to the Louisiana Public Service Commission’s demand. In NAACP v. Alabama, the state used a foreign corporation registration statute to try to get a civil rights group’s donor list. In Bates v. Little Rock, the city used a business license tax registration. In Shelton v. Tucker, the case involved paperwork to be employed as a schoolteacher. And Americans for Prosperity Foundation v. Bonta, decided just a few years ago, centered on routine charitable registrations with the Attorney General of California. All of these cases applied “exacting scrutiny” to the disclosure requirements.
It’s unclear how knowing if the Sierra Club has foreign donors changes anything about the obvious advocacy of one of the oldest organizations of the environmental movement. Or so too knowing if a foreign oil company contributed to a pro-oil exploration and energy independence nonprofit. That is because the Supreme Court has long recognized since NAACP that “[e]ffective advocacy of both public and private points of view, particularly controversial ones, is undeniably enhanced by group association,” and that there is a “vital relationship between freedom to associate and privacy in one’s associations.” The groups speak for themselves, without delving into who the donors might or might not be.
Relatedly, the proposed rule will likely mislead rather than enlighten the public. “Junk disclosure” is produced when the government demands more than just the names of people who give to influence a specific case but also those who give to nonprofits that perform a variety of functions (as the proposed rule does). Divorcing the disclosure from any actual intent that the money be used to influence a specific court case implies agreement where there may be none. This is compounded when a donation is given far in advance of any decision by a nonprofit to weigh in on a matter before the Commission or when a donor may oppose the nonprofit’s specific speech. For example, a donor may give to the American Civil Liberties Union because of the history of the ACLU in fighting speech restrictions, but that cannot infer that the donor necessarily agrees with all the stances of the organization—on things like national security, reproductive/life issues, and other areas in the ACLU’s large portfolio.
The Louisiana Public Service Commission will often hear from various nonprofit groups: trade associations, environmental groups, and groups with expertise on the matters before the Commission, which regulates everything from the “Do Not Call” registry to interstate trucking to nuclear energy development. Therefore, it should keep in mind that the proposed rule likely fails exacting scrutiny and risks chilling nonprofit participation in legal processes in all sorts of contexts.
The full regulatory docket may be found here.