Federal appeals court upholds Arizona law requiring groups to disclose the original sources of campaign money
A divided Ninth Circuit panel on Sept. 30 rejected a First Amendment challenge by Americans for Prosperity and its foundation to Proposition 211, which makes major campaign media spenders name donors of more than $5,000.
San Francisco. A federal appeals court on Sept. 30 upheld Arizona's Voters' Right to Know Act, the voter-approved law that requires groups spending heavily on campaign media to disclose the original sources of the money, even when it passed through other organizations first.
In a 2 to 1 decision, a panel of the U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal of a suit by Americans for Prosperity, a nonprofit corporation based in Virginia with a chapter in Phoenix, and the Americans for Prosperity Foundation. Judge Gabriel P. Sanchez wrote for the majority, joined by Judge Johnnie B. Rawlinson; Judge Patrick J. Bumatay dissented.
What the law requires
Arizona voters approved the law, Proposition 211, on Nov. 8, 2022, with 72 percent of the vote. It applies to a "covered person" whose campaign media spending in a two-year election cycle exceeds $50,000 in statewide races or $25,000 in other races. Individuals spending their own money and organizations spending their own business income are excluded.
A covered person must report to the Arizona Secretary of State every donor who directly or indirectly gave more than $5,000 of original money used for campaign media, and any intermediary that passed such money along. The reports are public. Before using a donor's money for campaign media, the spender must notify the donor in writing and allow 21 days to opt out. Spenders keep records of contributions over $2,500 for five years, and ads must name the top three donors. The Citizens Clean Elections Commission enforces the law.
What the judges decided
Applying the exacting scrutiny standard of Supreme Court cases including Americans for Prosperity Foundation v. Bonta, the majority held that the law is substantially related to Arizona's interest in telling voters who pays for campaign media, imposes only modest burdens and is narrowly tailored. It rejected the groups' claim that the law threatened their donors with harassment as "conclusory and devoid of any specifics."
Judge Bumatay wrote that the law reaches anyone who gives more than $5,000 in two years to any organization, including charitable and religious ones, if the money is later linked to enough political activity in Arizona, whether or not the donor knew of it.
“The First Amendment, as originally understood, does not tolerate suppressing political speech or compelling association in this way.”
Voters' Right to Know, the committee that campaigned for the measure, defended it with lawyers from Campaign Legal Center, which said other legal challenges to the law remain. Two state court cases, in which the Arizona Supreme Court has upheld the disclosure requirements, are still pending over other issues, the Arizona Daily Star reported. Americans for Prosperity did not immediately respond, the paper said.
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