PHOENIX (CN) - A conservative advocacy group told the Ninth Circuit on Thursday that an Arizona law intended to shed light on dark money in campaign finance violates donor privacy.

Voted into law in 2022 by more than 70% of Arizonans, the "Voters Right to Know Act" requires statewide campaigns that spend more than $50,000 in advocacy to disclose the names of donors who gave more than $5,000, even if that donation isn't directly connected to the cause. 

"This law demands disclosure not only of direct donors, but also what it calls indirect donors: all those who gave to any organization anywhere upstream whose funds somehow found their way to what the law dubs campaign media spending," plaintiff attorney Derek Shaffer said in a Phoenix courtroom Thursday morning. 

Shaffer, representing the nonprofit Americans for Prosperity, told the three-judge panel that if one donated more than $5,000 to their church over the course of a year, then the church donated that money to a larger charity that then supported a political candidate or ballot measure, that donor would be "outed" as a supporter of that political cause. Shaffer said this could violate a citizen's right to privacy and First Amendment right to free association by forcing one to associate with a political position they may not agree with. 

Americans for Prosperity sued the Citizens Clean Elections Commission of Arizona, the executive agency that enforces the law, in 2023, asking a federal judge to find the law chills free speech and forces association in violation of the U.S. Constitution. The group filed an appeal in May 2024 after U.S. District Judge Roslyn Silver dismissed its complaint. 

On Thursday, Shaffer, of the D.C. based Quinn Emanuel Urquhart and Sullivan, said requiring campaign contributors to find and disclose the root source of a donation could lead to a privacy invasion of personal finances. 

"If you can do that, there's really no logical stopping point," he said.

The Citizens Clean Elections Commission dismissed the idea that donors would be ignorant as to where their money goes.

"These are the really high thresholds," commission attorney Eric Fraser said. "These people are major donors. They're sophisticated donors. They often know exactly where their money is going." 

Fraser, of the firm Osborn Maledon, said the law doesn't violate the First Amendment because it doesn't force association. He said donors who give more than $5,000 to a group typically have a strong influence over what their money will support, and following the chain of command will benefit voters to know exactly where campaign support originates. 

U.S. Circuit Judge Patrick Bumatay, a Donald Trump appointee, asked how deep the rabbit hole could go, and, for example, if a church upstream from the political donation would have to ask an individual donor where their money came from.

Attorney David Kolker, representing the sponsors of the 2022 ballot initiative Voters Right to Know, said the donor would have to report that information to the church.

"The last donor has to figure that out, and if it can't it can't pass on that money," Kolker told the panel, to which Bumatay said: "The burdens are pretty high on the donors here."

A section of the law that prevents the Legislature from limiting or prohibiting enforcement actions taken by the governing agency is currently enjoined by the state court of appeals, pending review by the state Supreme Court. Legislative leaders in August 2023 challenged that provision along with another section that grants the agency authority to implement disclosure requirements, but the appeals court kept that section in place. 

Because the state Supreme Court could strike the law down completely, Bumatay suggested the panel wait to rule. Because the two cases address non-overlapping legal questions, both parties said they don't think the panel should wait. 

The panel, rounded out by Bill Clinton-appointed U.S. Circuit Judge Johnnie Rawlinson and Joe Biden-appointed U.S. Circuit Judge Gabriel Sanchez, didn't indicate Thursday whether it will wait.

Source: Courthouse News Service