Bill to heighten secrecy of 'dark money' political donors sent to Snyder

LANSING — A Republican bill to put a further cloak of secrecy over the names of donors who pay for political attack ads was approved by the Legislature on Tuesday after proponents compared their plight to that of NAACP supporters during the civil rights movement.

Senate Bill 1176 passed the House in a 58-51 vote after it passed the Senate 25-12 on Nov. 19. It's now headed to Gov. Rick Snyder, who has not said whether he will sign it.

The bill is one of a raft of controversial bills on a fast track for passage in Michigan's lame-duck Legislature.

The bill would generally bar not just the public but state agencies such as the Attorney General's Office or the Secretary of State's Office from learning the identities of donors to any nonprofit group, including the "social welfare" organizations set up under Section 501(c)(4) of the Internal Revenue Code that increasingly pay for political "issue ads" that attack candidates for office.

The identities of such donors are already kept secret from the public. The bill sponsored by incoming Senate President Mike Shirkey, R-Clarklake, is seen as a preemptive strike to keep incoming Democratic Secretary of State Jocelyn Benson or incoming Attorney General Dana Nessel, another Democrat, from requiring such disclosure to officials in their agencies.

One reason the secrecy is a concern is that political officeholders including Snyder and state lawmakers in many cases set up nonprofit groups and the public has no way of knowing who might be influencing the decisions of such officials through their donations.

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David Guenthner, senior strategist for state affairs with the conservative Mackinac Center for Public Policy, drew an outraged reaction from Democrats when he testified in support of the bill in the House Committee on Competitiveness on Tuesday and invoked the 1958 U.S. Supreme Court decision in NAACP v. Alabama, in which the court unanimously upheld the civil rights group's right to keep its supporters secret at a time of racial oppression in the deep south.

Rep. Abdullah Hammoud, D-Dearborn, told Guenthner he found the comparison between "millionaires and billionaires" who pay for political issue advertising and the activists who helped to desegregate public services in the 1950s and 1960s "ludicrous," and "extremely offensive."

Rep. Tenisha Yancey, D-Harper Woods, asked Guenthner whether he knew of any recent cases in which "people contributing to political campaigns have been hanged."

Guenthner said he knew of people who had lost their jobs or been subjected to harassment. He said people on both sides of certain issues, such as abortion and LGBTQ rights, are currently subjected to "the same sort of threats"  as NAACP supporters faced in the 1950s, and "they are entitled to the same kind of protections."

"As far as being hung, I don't know if we do that in these times," Guenthner told the committee.

In the Alabama case, U.S. Supreme Court Justice John Marshall Harlan II wrote that disclosure of NAACP membership lists would expose those members to "economic reprisal, loss of employment, threat of physical coercion, and other manifestations of physical hostility." 

Many proponents of so-called "dark money" laws besides Guenthner have cited the case as justification for keeping secret the identities of those who pay for political issue ads.

Guenthner said the need for secrecy is especially compelling today, when social media can whip up "digital mobs" to attack those who support certain controversial causes.

When government agencies hold such information — even when it is not in the public domain — "there is the window of opportunity where that information can be abused and used for the purpose of official harassment," Guenthner said.

Rep. Erika Geiss, D-Taylor, said she's more concerned today about such laws being used to conceal the identities of those who support hate groups.

Guenthner said he's not aware of any hate groups who have been able to register as nonprofit groups with the IRS.

Four Republican representatives -- Gary Howell of North Branch, Martin Howrylak of Troy, David Maturen of Brady Township, and Jeff Yaroch of Richmond -- joined Democrats in voting no.

"Which one of your constituents asked for this?" Rep. Jeremy Moss, D-Southfield, asked rhetorically during the debate in the House.

"Why are we voting against their will?"

Shirkey, the bill's sponsor, told the committee the legislation "protects all of our rights to associate and freedom of speech."

Disclosure can still be required when justified in cases such as a court-ordered warrant or through discovery in a civil lawsuit, Shirkey said.

Craig Mauger, executive director of the Michigan Campaign Finance Network, told the committee Tuesday he knows of no other state with such a broad law barring disclosure of donors to nonprofit organizations.

"I believe that sunlight is the best protection we have against political corruption," Mauger said.

Mauger cited a more recent U.S. Supreme Court decision, Doe v. Reed, from 2010, and quoted the words of a conservative icon, the late U.S. Supreme Court Justice Antonin Scalia.

“Requiring people to stand up in public for their political acts fosters civic courage, without which democracy is doomed," Scalia wrote.

"For my part, I do not look forward to a society which, thanks to the Supreme Court," campaigns are "hidden from public scrutiny and protected from the accountability of criticism," he wrote.

"This does not resemble the home of the brave.”

Contact Paul Egan: 517-372-8660 or pegan@freepress.com. Follow him on Twitter @paulegan4.