New Non-Profit Donor Disclosure Rules Will Not be Enforced While NYCLU and ACLU Lawsuit Proceeds

Attorney General Eric Schneiderman has agreed to hold off on enforcing certain provisions of a recently enacted state ethics law that the New York Civil Liberties Union and American Civil Liberties Union argue violates the First Amendment. Following a lawsuit filed in federal court by the NYCLU and ACLU, the Attorney General agreed last week not to enforce parts of the law until the court considers the statute’s enactment and reaches a preliminary judgement on whether it violates the Constitution. The NYCLU and ACLU’s suit asserts the right of non-profit organizations to discuss public policy issues free from excessive regulatory restraints.

The NYCLU and ACLU filed the suit in district court in December challenging the 2016 Ethics Reform Law. The law establishes a sweeping, complex and vague regulatory scheme for organizations that conduct a wide range of speech on the policy issues of the day that have nothing to do with electoral politics. Courts have upheld regulatory measures directed at electoral advocacy and lobbying, including provisions that require the disclosure of significant contributors. But, in the interest of encouraging robust debate about public issues, the Supreme Court has not approved disclosure requirements in connection with speech that involves neither electoral advocacy nor lobbying. The suit argues that the statute violates the First Amendment by requiring the disclosure of contributors that support issue-oriented speech even when the expression does not advocate an electoral outcome and is not lobbying.

“All non-profits should be able to speak out on the urgent issues of the day without a fear of being subject to disclosure rules that go beyond the bounds of what the Constitution allows,” said ACLU General Counsel Terence Dougherty.

The lawsuit also asserts that controversial organizations like the NYCLU and ACLU have a particular interest, under the First Amendment, in protecting their members and donors from harassment and threats that they might experience if their identities were disclosed. While the statute acknowledges this and calls upon the Attorney General to develop regulations that will allow controversial groups to seek and receive exemptions from the disclosure requirements, the Attorney General has not yet developed those regulations.

“The right of controversial organizations to protect the privacy of their membership lists is well established, and the dangers of failing to do so are well recognized,” said NYCLU Legal Director Arthur Eisenberg. “The dangers are especially troubling in a politically charged climate like the present. We are pleased that the Attorney General has agreed to refrain from enforcing the deeply flawed new disclosure provisions of this law until our lawsuit has its day in court.”