The conservative nonprofit that successfully fought in the U.S. Supreme Court for unlimited donations to federal campaigns wants to keep its list of donors secret.
But in oral arguments on Monday, a three-judge panel from the U.S. Court of Appeals for the Second Circuit had tough questions for Citizens United’s general counsel on the group’s argument that Attorney General Eric Schneiderman’s requirement that charities turn over donor lists constitutes prior restraint.
Judge Pierre Leval told Michael Boos, Citizens United’s general counsel, that the group’s fight against the attorney general’s requirement, in which charities must submit their Forms 990 as well as their Schedule B forms, which list donors, seems to indicate that the group should be entitled to “secret speech” or “secret advocacy.”
“There’s a kind of oddness about the policy of the First Amendment to promote public, open discourse and your position that somebody should be able to do something that’s called speech but in secret so that no one finds out about it,” Leval said.
Citizens United is appealing a ruling last year by U.S. District Judge Sidney Stein of the Southern District of New York to dismiss its suit, in which it argues that its activities are so controversial that its members could reasonably expect public backlash or physical harm.
Citizens United receives federal tax-exempt status under 26 U.S.C. §501(c)(4)—the classification used for “social welfare” organizations—and its educational materials counterpart, Citizens United Foundation, has tax-exempt status under §501(c)(3).
The disclosure requirement has been on the books for more than a decade.
Barbara Underwood, New York’s solicitor general, said during the presentation of the government’s arguments that Schneiderman stepped up enforcement of the disclosure requirement after taking office in 2010.
In 2012, Schneiderman updated disclosure policies for charities to require 501(c)(4) groups to report how much they spend on federal, state and local electioneering.
But Citizens United argued that the stepped up enforcement amounted to an abandonment of “consistent practice” and an “about face,” though the judges did not seem to be swayed by the argument.
“It was lax enforcement until Mr. Schneiderman took office, now it’s more rigorous enforcement,” Judge Rosemary Pooler said during Boos’ arguments. “What’s wrong with that?”
During presentation of the government’s arguments, the judges pushed Underwood for more details on Schneiderman’s requirement, including the procedure for sending out notices of deficiency to charities that do not comply with the disclosure requirement and for retaining submitted information.
Underwood argued that the disclosure policy is intended to prevent “the use of charities as a way of self-dealing.”
Leval asked Underwood to address Citizens United’s argument that Schneiderman’s policy would “chill” speech, Underwood said the Attorney General’s Office does not disclose donor information.
She also addressed Citizens United’s citation in its appellate brief of the U.S. Supreme Court’s 1958 decision in NAACP v. Alabama, 357 US 449, in which the court found that the National Association for the Advancement of Colored People did not have to turn over its membership lists in response to a state subpoena, saying it could not be “plausibly alleged” that Citizens United is facing the same threats that NAACP members faced in the pre-civil rights South.
“That was about violence, not about criticism,” Underwood said.
Boos noted that 47 other states do not have a requirement like New York’s and said that donors’ names could be revealed in a cyberattack.
“It’s just dragnet policy here,” Boos said. “It’s not based on any level of suspected misconduct. It’s just that the government wants the information and wants to maintain a massive repository of donor information.”
The panel also included Judge Jon Newman.
Assistant Solicitor General Matthew Grieco and assistant attorney general Steven Wu also appeared in the case.
Citizens United’s legal team also includes Jones Day partner Todd Geremia and associate Andrew Bentz.