Appeals Court Rules That Disclosure required for 501(c)4 Contributions

The DC Circuit has refused a stay from a circuit court decision requiring that 501(c)4s disclose donors if they make political ads:

Big news from the D.C. Circuit in this order and opinion. The opinion for two of the three judges explaining the reasons for denying the stay lean heavily on how the challengers to the district court ruling are unlikely to succeed in their legal arguments on appeal. The court also stresses the values of disclosure, reaffirmed on an 8-1 vote by the Supreme Court in Citizens United. [UPDATE Bloomberg BNA reports: "Attorneys for two groups sponsoring political ads, which intervened in the case to try to preserve FEC rules allowing them to keep their donors confidential, had no immediate comment about a possible appeal of the stay ruling by the D.C. Circuit panel."]

But this open a host of unanswered questions about how 501c4 groups and other groups which run issue ads will deal with these new disclosure requirements.(I’m talking here not about political committees such as Crossroads GPS, which masquerade as social welfare groups, but real 501c4s that occassionally get involved with issue adss.) I expect this stay request to now end up before the Supreme Court, where the outcome may be different.

If further stay attempts fail, and if there are no emergency FEC rules put in place (and the FEC’s frequent 3-3 deadlocks mean new rules are unlikely), we could well see 501c4 groups [UPDATE: and importantly 501c3 groups] creating new separate funds to run these ads, so that the groups need disclose the names of only those donors funding these ads (rather than all of their donors).

You need to remember that before Karl Rove's super PAC used the 501(c)4 fig leaf to hide its donors, they raised a pitiful amount of money (IIRC, less than 100 Grand).

For real non-profits, if they want to participate in electioneering, it's just a matter of separating the funds and donations. For something like Rove's Crossroads operations, which serve primarily as a way to launder money, it really complicates things.