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SANTA FE — State lawmakers and New Mexico’s nonprofit community are in a tense standoff at the Roundhouse. At stake, depending on who you speak to, is either nonprofits’ free speech or an orderly election. What is not in dispute is that lawmakers are looking to define what the nonprofits can and can’t do during an election year.
The confrontation is the latest front, albeit a behind-the-scenes one, in an ongoing war that began last summer and peaked in December, when several nonprofits sued the state of New Mexico in federal court over an order that required them to register as political committees and list their donors.
The nonprofits contended the order was unconstitutional and superseded federal law. Federal law doesn’t require nonprofits to list donors. Lawmakers said they wanted to stop nonprofits from influencing elections.
Legislation now has been proposed that would seek to achieve the same result as last year’s order through different means.
The bill, (HB 891), would require nonprofits to list donors who give more than $5,000 if they name a political candidate in a piece of literature or a broadcast ad that targets the candidate’s constituency during most of an election year.
At the heart of the proposal is the notion that a nonprofit, as a recipient of tax-exempt status, ostensibly gets a public subsidy, said Assistant Attorney General Phil Baca, who drafted the legislation for the bill’s two sponsors, Senate Majority Leader Michael Sanchez, D-Belen, and House Majority Leader Ken Martinez, D-Grants.
That assumption allows the state to set conditions on nonprofits, Baca said.
“We’re basically looking to see: Are New Mexico’s nonprofits being used a conduits for large money to influence elections?” he said.
Nonprofits, for their part, say the definition of “electioneering” in the proposed legislation is overly broad and would hamper nonprofits’ ability to educate voters and their members on issues.
“We have to be able to communicate with members through … news bulletins,” said Brian Shields of Amigos Bravos, a nonprofit dedicated to protecting the state’s rivers. “Under this bill, our ability to be able to educate the public within this body would be limited to every other year. This is putting a huge hamper on the democratic process.”
Nonprofit leaders also wonder why their groups are targeted, while businesses and corporations are not circumscribed in their activities. If the law passes, a business could dump loads of money into a campaign, with ads targeting political candidates and elected officials, but not face the same scrutiny, representatives of nonprofits said.
“We are outspent 20 to 1 by corporations,” said Carter Bundy of American Federation of State, County, Municipal Employees.
Nonprofits further worry that the requirements set out in the legislation could cost them donors. Some donors wish to remain anonymous, because the organizations sometimes tackle controversial issues, and donors also don’t want to be hit up by other nonprofits seeking donations, said Douglas Meiklejohn, executive director of New Mexico Environmental Law Center.
Additionally at stake would be nonprofits’ right to free speech if they were required to list donors, said Matt Brix of the Center for Civic Policy.
Baca admitted that the U.S. Supreme Court has struck down several states’ attempts to place conditions on nonprofits. But he said this legislation is more experimental in that it makes disclosure of certain donors a condition of receiving a tax subsidy if the threshold is triggered by electioneering.
Baca acknowledged, however, that the legislation would likely go to court if it were to become law.
“It’ll always end up in the courts,” Baca said. “It’s a very litigious area. No one has been able to figure this out.”
Proposal stems from contested flyers
When citing the need for HB 891, lawmakers make reference last year, when several legislators lost their re-election bids after several nonprofits paid for and distributed flyers critical of them.
Three of the ousted lawmakers unsuccessfully sued the organizations. But those legislators and others – as well as state Attorney General Gary King – characterized the flyers as political campaigning.
The nonprofits that authored the flyers, including the Center for Civic Policy and SouthWest Organizing Project, said they strictly adhered to federal Internal Revenue Service rules for 501c(3) organizations and thus did not cross the line between issue advocacy and political campaigning. The flyers did not endorse a candidate, were sent out months before either the primary or general election and were meant to educate, the nonprofits said.
The line between issue advocacy and electioneering is made all the more hazy by New Mexico’s Campaign Reporting Act (pdf), which is vague about what constitutes political activity.
Sanchez raised the flyers as a cautionary example during a recent debate on whether to allow webcasting on the Senate floor. Citing concerns about third parties lifting images from the video broadcast, he said, “Let’s just hope that our political consultants, Republicans and Democrats, and the Center for Civic Justice and Common Cause, doesn’t use it to really go after people and distort what people’s records are.”
Sanchez was referring to the Center for Civic Policy. Steven Robert Allen of Common Cause, meanwhile, said his organization was not involved in the printing up and distributing the flyers.
The battle over the issue also carries a political overtone, as sitting elected officials draw a bead on nonprofits that they said could target them next.
“We all know what those ads are and how people use them,” Sanchez said during last week’s webcasting debate.
Struggle touches on ethics reform debate
The struggle between lawmakers and nonprofits has boiled to the surface occasionally in this year’s legislative session, particularly in the context of ethics reform.
Many nonprofits support bills this year that would cap campaign contributions, set up a state ethics commission and create more accountability in the state’s political process. New Mexico is one of a handful of states that do not limit how much a contributor can give to a political candidate.
But some lawmakers find it to be hypocritical that the nonprofits don’t want to make their donor lists public.
“When it applies to them being transparent, it doesn’t seem to fit,” Rep. Debbie Rodella, D-Española, said, noting that many of the nonprofits crying foul support ethics reform for the Legislature.
“What is good for the goose is good for the gander. The more transparency we could apply, the better,” said Rodella.
It is unclear if Rodella supports many of the ethics reforms measures before the Legislature this year.
Representatives of nonprofits said those who compare nonprofits giving over their donor lists to elected officials and political candidates having to divulge their contributors are missing an important point.
The elected officials and political candidates oversee taxpayer money, they said.
“Unlike elected officials, nonprofits don’t make laws,” said Robby Rodriguez, the executive director of SouthWest Organizing Project.
“[Lawmakers'] self-serving attempts to silence the nonprofits who often act as the only watchdogs of what is really a very non-transparent political system do a great disservice to the public.”
