This article was originally published in Venable's Political Law Briefing Blog.
Long before Citizens United allowed corporations to fund independent expenditures to support candidates, the Supreme Court allowed corporations to contribute to ballot measure committees. Until recently, disclosure was a fairly straightforward matter: give to the official committees supporting or opposing the measure and the contribution would be disclosed; give to other entities (like a nonprofit) that give to the official committees, and the corporation’s contribution would not be disclosed. After Citizens United, however, states' fear of corporate involvement in candidate races led many states to require disclosure of "upstream" contributions. Those changes often applied not only to contributions for candidate independent expenditures, but also to contributions for ballot measures.
We have written about California before. Recently, Washington State has focused on the intermediary issue of when a nonprofit must disclose its donors. A trial court in Washington State ruled that a trade association should have registered itself as a ballot measure committee based on a special project it undertook to challenge state initiatives about food labeling. The result of this decision is that member companies had to disclose their contributions to the association for the special project.
On the flip side, the complexity of ballot measure rules has swept even small efforts to support or oppose into complicated registration and reporting rules. There have been several challenges to these rules, and the courts are coming out in different places:
The Tenth Circuit struck down registration and reporting requirements in Colorado as they applied to a small issue group that raised only about $3,500 to advocate against a state-wide ballot measure in 2014. The court did not say the statute was unconstitutional in all applications, just that the Secretary of State could not enforce the rules against such a small group because the disclosure regulations were so burdensome.
The Fifth Circuit took a different approach and upheld a similar law that required registration and reporting for groups that raise just $200. The court there said that getting together with friends and neighbors with the intention of placing an ad in a local paper and handing out flyers opposing a ballot initiative was subject to registration and reporting. The plaintiffs have asked the U.S. Supreme Court to consider their challenge.
The bottom line: if you plan to contribute to a ballot measure committee, be prepared to have your name disclosed. Even if you are contributing through a trade association or other nonprofit, many states will require disclosure. Although disclosure thresholds vary and the courts have not taken a uniform approach to ballot committee contributions, these decisions are limited and not likely to apply to large ballot measure committees that are well funded and capable of handling disclosure obligations.