The Independent View: NY Tax-Exempt Groups Disclosure Laws and Exemptions

Two years ago, New York Governor Andrew M. Cuomo, championed a bill that required, tax-exempt groups that lobby the New York State government, reveal where they got their money.

In addition to the requirement for nonprofit groups to disclose donors to lobbying efforts, the state Attorney General Eric T. Schneiderman, began requiring them to also reveal donations they use to pay for election spending. And last year, the New York City Campaign Finance Board, adopted similar rules for independent expenditures in city races.

The new lobbying regulations in New York are notable because they apply to groups organized under Section 501(c)(4) of the federal tax code, groups that have not been required to disclose their donors. Such groups are intended to promote “social welfare,” but they have become a political force.

New York’s definition of lobbying goes beyond back-room arm-twisting at the Capitol. It also includes spending on television advertisements that have become a common means for outside groups to rally public support or opposition against legislation. The new measure requires groups that devote substantial resources to lobbying to disclose all of their donors who contribute more than $5,000.

As national political spending by nonprofit groups has increased in the wake of the Supreme Court’s Citizens United decision on campaign finance: on the federal level, spending of more than $256 million in the 2012 election cycle, according to the Center for Responsive Politics in Washington, which tracks political spending. In New York, they have been big players, too. One group, the Committee to Save New York, spent more than $13 million on advertising supporting Mr. Cuomo’s agenda in 2011 and 2012; the group went dormant as soon as the state started requiring disclosure of donors.

So far, about 80 groups, many of them trade associations, have disclosed their sources of financing.

Mr. Cuomo’s office included in the legislation an exception for lobbying groups whose donors might face “harm, threats, harassment, or reprisals,” like civil rights groups.

Two years after the law passed, a growing number of nonprofit organizations, spanning the ideological spectrum, are seeking exemptions, arguing that their donors could be endangered if their names were released to the public.

In Albany, where even transparency is discussed in secret, the state ethics commission voted behind closed doors to grant an exemption to Naral Pro-Choice New York, a prominent abortion rights group. That lone exemption has prompted Republicans to accuse ethics regulators of favoring liberal organizations.

The application by Naral was followed by requests from at least four other groups, two more supporting abortion rights, a group opposing abortion and same-sex marriage, and the New York Civil Liberties Union.

Some government watchdogs are hoping that the ethics commission takes a tough stance by limiting exemptions. But the groups seeking exemptions say the potential cost of disclosure is too high.

Andrea Miller, the president of Naral Pro-Choice New York, said, “Even here in New York, where there’s such extraordinary public support for a woman’s right to choose, our organization has been targeted.” Ms. Miller said the group regularly received disturbing handwritten letters, and once had a menacing video posted on its Facebook page by a man who was later convicted of assisting in what he thought was a plot to bomb an abortion clinic.

Other groups around the nation have also sought to shield their donors from public scrutiny. In recent years, the National Organization for Marriage, which opposes same-sex marriage, has sued in several states to challenge laws requiring the disclosure of donors.

And this spring, the Federal Election Commission agreed to continue exempting the Socialist Workers Party, citing the “long history of threats, violence and harassment” against it.

“It’s a period of tremendous evolution right now in these laws about disclosure,” said Kelly Williams, the corporate general counsel for the Brennan Center for Justice, a research and advocacy group at the New York University School of Law. Ms. Williams said organizations should be exempted from disclosure when there was credible evidence their donors could face threats or harassment, but not when they feared the prospect of economic harm to their donors, from a boycott, for example.

Since then, the exemption has attracted notice because Naral has been so politically active: waging a campaign last year to help Democrats take control of the State Senate; spending $425,000 on lobbying this year; pushing an abortion rights measure put forth by Mr. Cuomo; and vowing to go after incumbent Republican senators next year.

David A. Renzi, a Republican appointee to the ethics commission from Watertown, said at the panel’s last meeting that he was concerned about the process by which the commission was considering exclusions. After Mr. Renzi’s complaint, the commission decided to table other exemption applications while it considered whether the process should be less opaque.

The State Senate Republican leader, Dean G. Skelos of Long Island, has asked the commission to withdraw Naral’s exemption, saying the panel “acted rashly.”

The ethics commission would not name groups seeking exemptions, but several have identified themselves publicly, among them Family Planning Advocates of New York State, which cited the 1998 murder in suburban Buffalo of an obstetrician who performed abortions, and New Yorkers for Constitutional Freedoms, which cited attacks against supporters of Proposition 8, the California ballot measure that banned same-sex marriage.

“We have no intention of releasing those donors,” said the Rev. Jason J. McGuire, the executive director of New Yorkers for Constitutional Freedoms.

The New York Civil Liberties Union, which said that Supreme Court precedent required the state to provide an exemption for groups whose work is deeply controversial, is also worried about ramifications for donors.

How would you define and vote on an exemption request?