Eric T. Schneiderman
Eric T. Schneiderman ()

Attorneys for the conservative advocacy group Citizens United pressed their claim Monday that Attorney General Eric Schneiderman is violating the First Amendment by requiring the group to file a list of its confidential donors with the state.

In papers filed in the Southern District, Citizens United is asking Judge Sidney Stein to grant a preliminary injunction blocking Schneiderman from requiring it to file with his Charities Bureau the confidential donor list contained on Internal Revenue Service Schedule B.

Lawyers for the group say that if Citizens United does not comply with Schneiderman’s “unconstitutional” demand for the donor list, it risks prosecution for violating the ban on unregistered solicitation of charitable donations in New York State. Under New York Executive Law §172-b(5), violations can trigger civil penalties of $1,000 per violation and up to $100 per day for noncompliance.

The group is famed for its role in the landmark 2010 U.S. Supreme Court case of Citizens United v. Federal Election Commission, 558 U.S. 310 (2010), where the court held the 2002 McCain-Feingold Act prohibitions on independent expenditures by corporations and unions to support or renounce individual candidates violated the First Amendment. That case involved Citizens United’s production of “Hillary—The Movie” a film assailing then-New York Senator and presidential aspirant Hillary Rodham Clinton.

Now, in Citizens United v. Schneiderman, 14-cv-03703, Jones Day partners Donald McGahn and Todd Geremia, along with Citizens United General Counsel Michael Boos, are seeking an injunction to free the group to solicit funds with three goals in mind.

The first is to promote and raise money for a sequel to “Hillary—The Movie,” the second is to “publicly oppose recent efforts by the Internal Revenue Service to target certain ideological non-profits” and the third is “to publicly criticize the New York Attorney General’s own policies and missteps, including but not limited to the policy challenged” in this lawsuit.

Schneiderman, who was elected in 2010 and is up for reelection this year, has been a vocal critic of the Citizens United decision and an advocate of transparency in campaign finance.

In 2012, he led a group of 22 states filing an amicus brief urging the U.S. Supreme Court to let stand a Montana Supreme Court decision upholding a requirement that corporations contributing to political campaigns register as political action committees. But the Supreme Court, in American Tradition Partnership v. Bullock, 11-1179, struck down the law as a clear violation of its decision in Citizens United.

The Citizens United decision was also decisive in a case argued by Schneiderman’s office in New York, where the U.S. Court of Appeals for the Second Circuit in October 2013, over Schneiderman’s objection, enjoined enforcement of New York’s $150,000 limit on individual donations to independent political action committees (NYLJ, Oct. 24, 2013).

Schneiderman’s office is scheduled to respond to the Citizens United memorandum on the confidential donor list issue in two weeks. A date for oral argument before Stein has not been set.

A nonprofit based in Virginia and Washington D.C., Citizens United describes itself as a group that combines education, advocacy and grassroots programs seeking “to promote the traditional American values of limited government, free enterprise, strong families and national sovereignty and security.”

In their complaint against the disclosure requirement that was filed May 22, the Citizens United legal team emphasized the importance of confidentiality when it uses donor funds “to advocate positions on ‘hot button’ topics such as the place of religion in America and explore the records of prominent individuals” like Clinton.

“These donors reasonably fear public backlash and financial harm should their support of politically contentious and controversial causes become known publicly,” according to the complaint.

In their memorandum Monday, McGahn, Geremia and Boos stated that, for years, and “without incident,” Citizens United filed with the Attorney General’s Charities Bureau the standard CHAR 500 form along with their otherwise-public IRS Form 990.

But under Schneiderman, they said, the Charities Bureau “began demanding that Plaintiffs file both their publicly-available Form 990 and their confidential list of donors found on their IRS Schedule B, despite the fact that the regulation governing disclosure has gone unchanged since 2006.”

They said Schneiderman violated the First Amendment with his “newly minted” policy change and did so “via administrative fiat, without any sort of prior notice or public comment.”

And they said that “by demanding Schedule B directly from the organization, the Attorney General is circumventing federal law that would otherwise protect it from public disclosure.”

Federal law provides a mechanism for New York State to obtain Schedule B information for certain purposes, 26 U.S.C. §6104(c)(3), but, as it provides for confidentiality, they argue the attorney general’s exercise of his “unbridled discretion” to engage in “speech licensing” was preempted.

“Critically, any claim by the Attorney General that donor information will remain confidential rings hollow,” they said. They insist an injunction is needed now because if their clients want their voices heard, “they cannot spend the next several months in limbo while the Bureau ponders the enforcement of its new policy requiring groups to give up their members’ and supporters’ privacy in order to earn the right to speak.”

The attorney general’s office declined comment.