The U.S. tax code allows Americans for Prosperity, a Koch brothers-linked, tax-exempt 501(c)4 group, to shield the names of its donors — but California will now be able to force it to share donor names with the state after winning a federal appeal Tuesday.
A federal district court ruled in 2016 that the group, backed by Charles and David Koch, did not have to reveal its donors. The group had been targeted by then-Attorney General Kamala Harris, who targeted the group in her campaign for U.S. Senate.
At that time, Mark Holden, general counsel for Koch Industries, said: “It reaffirms what I’ve always believed, that there is a right to anonymous free speech and free association and that officials like Attorney General Harris don’t have the right to demand this information absent a compelling interest.”
On Tuesday, however, a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit ruled that the state does have a compelling interest in preventing charitable fraud.
Under the new ruling, Americans for Prosperity and another group, the Thomas More Law Center, must disclose donors to the state.
Though the state is required by law to keep the names confidential, skeptics argue that there is little chance donors’ names would be kept confidential after there were no criminal penalties in the IRS scandal of 2013. There, Internal Revenue Service employees created obstacles for conservative groups seeking to register as non-profits, and one group’s confidential donor list was leaked.
But the appeals court disagreed: “We held that the plaintiffs had shown neither an actual chilling effect on association nor a reasonable probability of harassment at the hands of the state from the Attorney General’s demand for nonpublic disclosure of Schedule B forms,” the judges argued.
Americans for Prosperity played a key role in mobilizing Tea Party activists during the 2010 midterm elections.
The Los Angeles Times reported that it was not yet clear if Americans for Prosperity would appeal the ruling.
Joel B. Pollak is Senior Editor-at-Large at Breitbart News. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. He is also the co-author of How Trump Won: The Inside Story of a Revolution, which is available from Regnery. Follow him on Twitter at @joelpollak.