California Attorney General Kamala Harris lost a high-profile lawsuit over her attempt to obtain donor records from an organization in the orbit of the Koch brothers.

Judging First Amendment protections to exceed what Harris had characterized as the confines of state law, U.S. District Judge Manuel Real ruled that “a nonprofit backed by conservative billionaires David and Charles Koch does not have to reveal its donors,” as the Los Angeles Times noted. Real “found that the Americans For Prosperity Foundation, a 501(c)(3) charity organization, can ignore Harris’s demand to turn over the names and addresses of those who have donated more than $5,000.”

“In court, state lawyers argued that the donor documents allow investigators to track improper loans and unfair business practices by nonprofits. But attorneys for the Americans For Prosperity Foundation countered that donors feared for their safety if their identities were somehow revealed. Judge Real agreed.”

Political motives

In a 12-page decision, Judge Real decided Harris’s argument was farfetched: “While Attorney General Harris argued that she needed donor disclosure to identify lawbreaking like ‘self-dealing’ or ‘improper loans,’ that was a stretch,” the Wall Street Journal recalled in an approving editorial. Real concluded that, “over the course of trial, the Attorney General was hard pressed to find a single witness who could corroborate the necessity of Schedule B forms in conjunction with their office’s investigations.”

Harris, as Bloomberg noted, has continued a policy of maintaining confidentiality with regard to names on donor lists. On the other hand, she has also established a track record of trying to expand state authority in what appears to be a partisan manner. “An ally of the plaintiff’s bar and unions as well as a candidate for U.S. Senate, Harris recently surfaced as a key player in the alliance of state attorneys general intent on using criminal investigatory powers to probe so-called climate denial at non-profit research and advocacy groups as well as at energy companies like ExxonMobil,” as Walter Olson noted for the Cato Institute. “That makes at least two episodes in which Harris personally has signaled interest in novel, aggressive steps to pry open the internal workings of private advocacy organizations that take positions opposed to hers.”

A federal fight

But the federal policy that lent Harris’s approach an imprimatur of reasonableness has become a target of reform in the wake of Judge Real’s decision. “Like other nonprofit groups in the state, the foundation was asked by Harris’s office to turn over a tax form listing its biggest donors that it already provides to the Internal Revenue Service,” according to the site. Now, the role of the IRS in donor databases has landed the agency in the crosshairs of congressional Republicans. “The House’s powerful tax-writing committee approved a bill Thursday that would ban the IRS from collecting the names of donors to tax-exempt groups, enraging campaign-finance watchdogs who say the move could open the door to secret, foreign money in U.S. elections,” as KGW reported. 

The Ways and Means Committee approved the bill, the Preventing IRS Abuse and Protecting Free Speech Act, by a 23-15 vote along party lines, with Rep. Peter Roskam, R-Ill., arguing that groups exempt from taxation “should not be forced to expend precious resources on unnecessary documentation and tax administration rather than focusing on their charitable missions,” KGW added. 

Critics bracing for the bill’s passage unsuccessfully scrambled to stop its progress. “Campaign finance reform and transparency proponents issued a letter calling on members of the Ways and Means Committee to oppose Roskam’s bill,” the Huffington Post noted. “Those backing the letter include Brennan Center for Justice, Campaign Legal Center, Common Cause, CREW, Democracy 21, Public Citizen, Sunlight Foundation and Rootstrikers.”

But even strong advocates for campaign finance reform and donor transparency have acknowledged that the IRS itself played a potent role in mobilizing Republican support for protecting tax-emempt organizations from excessive federal scrutiny. “Attempts to push disclosure legislation have repeatedly run aground on Capitol Hill amid forceful GOP opposition. Republicans in Congress also attached a rider to a spending bill last year that, for the moment, blocks the IRS from even writing new regulations to draw clear parameters around political activity,” according to the American Prospect. “Republicans are still livid that the agency targeted Tea Party groups and other conservative organizations seeking tax exemptions in 2013.”

“The measure, formally called the ‘Name All Sponsors California Accountability Reform (or NASCAR. Get it?) Initiative,’ would require all state legislators to wear the emblems or names of their 10 top donors every time they attend an official function,” the Los Angeles Daily News explained. “The measure’s sponsor, Rancho Santa Fe businessman John Cox, takes delight in the idea and has already done some touring around California with 120 life-size photographic cutouts of politicians dressed up as they might have to under his plan.”

Populists wanted

Cox’s group announced it has already gathered 40,000 signatures out of the 365,880 valid ones necessary to make November’s ballot, telling the Huffington Post they “are confident they can muster enough support.” In an interview with U.S. News, Cox spoke expansively — noting the historically low threshold for signatures based on last election cycle’s low turnout, and banking on a high-energy California electorate in a year when political insurgents have shaken up national politics and captivated Golden State voters:

“Cox says he’s seeking the endorsements of GOP presidential front-runner Donald Trump and Democratic candidate Sen. Bernie Sanders, both of whom have rallied passionate supporters in part by denouncing their rivals as indentured servants to corporations and other wealthy donors.”

Cox’s grand vision may resonate especially with Sanders, whose fundraising has been driven almost entirely by small donations, and whose digital strategist is a 24-year-old Eagle Scout from California named Kenneth Pennington. (“Pennington began as a press aide to the senator, where he grew accustomed to typing out the Facebook posts that his boss would think of in the shower and dictate once he arrived in the office,” according to the Associated Press.)

Although a somewhat related measure, Prop. 89, previously went down to defeat because voters didn’t want to foot the bill for its public financing regime — which “would also have required every privately financed political ad, whether on television or in newspapers or mailed fliers, to list its three biggest financiers in type as large as the biggest print anywhere else in the ad,” as the Daily News noted, adding that Cox, once a Chicago Republican, has pledged to foot $1 million of the bill for NASCAR.

Dem dollars

In that same 2014 election cycle with historically low turnout, analysts noted that Democrats made out better than Republicans in California, overturning the conventional wisdom that big business interests tip the scales in favor of the GOP. “The biggest donors to statewide races in California for the 2014 election cycle were Kaiser Permanente and Anthem Blue Cross of California, pulling $23 million and $19 million, respectively,” as Al Jazeera America reported. “For the state races, Democrats actually received almost three times as much ($145 million) as Republicans ($52 million). Much of the health care lobbying was around Proposition 45, which would have required insurance companies to provide public notice when raising rates.”

Despite contempt among some for those perceived to be buying influence, few have raised objections to a twist on the formula. Some high-profile California candidates have begun raffling off perks gained through privileged access in exchange for small donations. Although presidential hopefuls have indulged in the strategy for years, Lt. Gov. Gavin Newsom has gained notice for taking the idea to new heights. Last month, the San Francisco Chronicle reported, he dangled special seats at the Super Bowl before constituents willing to send at least $5 to the gun-control package he has been touting as part of his early-bird run for the governorship.

“This isn’t Newsom’s first venture into online raffles. In May, for example, the former San Francisco mayor offered the chance to win a pair of tickets to a Giants-Dodgers game to people donating to his 2018 campaign for governor. And in October, that $5 contribution could have turned into seats at a private concert by the band Train and the chance to hang out backstage with Newsom, his family and the band.”