Darkness Falls Over New Jersey Dark-Money Bill
January 8, 2020
By: Beth Pindilli
In June of this year, Governor Murphy of New Jersey signed Senate Bill 150 into law, which requires dark-money groups to report who is bankrolling them. Governor Murphy was hesitant to sign this bill but did so after threats for the legislature to override his conditional veto. He asserted that he only agreed to pass this bill under the impression that the legislature would eliminate many of the problematic provisions.
One of which is the possible impacts on nonprofit advocacy groups. S-150 defies Independent Expediter Committees (IEC) “as a 527 or 501(c)(4) organization that raises or expends at least $3,000 annually to influence elections; to influence ‘the passage or defeat of any public question, legislation, or regulation’; or to provide ‘political information’ regarding ‘any candidate or public question, legislation, or regulation.’” These IEC groups will be required to disclose the identities of their donors who contribute $10,000 in quarterly reports.
Legislators supporting the passage of the law contend that it “will lift the veil of secrecy . . .the activities of groups working to influence the political process.” Their concern lies with seemingly innocent groups spending large amounts of money from clandestine sources to influence elections, regulations, and legislation. The law also aimed to shift influence away from special interest groups by increasing the maximum amount of all campaign contributions from $2,600 to $3,000. This increase is intended to encourage people to contribute directly to political parties, which are required to disclose their spending and contributions.
The legality of this bill is already being questioned. Governor Murphy himself was concerned that requiring groups to report their advocacy for issues not proposed on the ballot could violate the free speech and association rights granted by the United States Constitution. On October 2nd, 2019, The U.S. District Court for the District of New Jersey issued a preliminary injunction in the case of Americans for Prosperity v. Grewal. This means New Jersey cannot enforce this law while the case continues. The Governor’s comments on possible unconstitutionality were cited in the Plaintiff’s argument.
A defining argument in this case revolves around First Amendment concerns. The Supreme Court has emphasized time and time again that the government is not allowed to target an organization simply for speaking out on a matter of public concern, which is precisely what this Act appears to be doing. The Plaintiff is a social welfare organization based in Virginia, their Morris County office in New Jersey publishes a New Jersey Taxpayer Scorecard that “track[s] legislators’ voting records on key issues ranging from criminal justice reform to occupational licensing.” They asserted that the Act’s disclosure requirements would chill its free speech by subjecting donors whose identities would have to be disclosed to “threats, harassment, and reprisals,” thus limiting the contributions Plaintiff would receive.
The Plaintiff also claims that the Act’s “astonishingly broad terms ensnare not just electioneering communications, but also pure issue advocacy and even the transmission of mere ‘facts’ related to ‘any candidate or public question, legislation, or regulation.’” Defendants contend that this Act is similar to the election-related disclosure requirements that have been found valid by courts for decades, and, that all of the Plaintiff’s arguments rely on an overbroad reading of the statute. However, the court disagreed, they have initially sided with the Plaintiff, in their grant of a preliminary injunction, concluding that “in contrast to the ‘risk of irreparable injury looming over AFP and its donors, New Jersey faces no appreciable harm from an injunction.’” It will be interesting to see how this case develops.