Group Backs Donor Disclosure Regs for Benefit of Others

December 9, 2019

U.S. Department of the Treasury
CC:PA:LPD:PR (REG-102508-16)
Room 5203, Internal Revenue Service
P.O. Box 7604, Ben Franklin Station
Washington, D.C. 20044

Re: Guidance Under Section 6033 Regarding the Reporting Requirements of Exempt Organizations, 84 Fed. Reg. 47,447 (Sept. 10, 2019) (RIN 1545-BN28)

To Whom It May Concern:

I write on behalf of the Goldwater Institute (the “Institute”), a 501(c)(3) non-profit organization, in support of the IRS proposed rulemaking for updated regulations under Section 6033 of the Internal Revenue Code. Specifically, we urge the IRS to adopt a proposal to eliminate the requirement that certain tax-exempt organizations disclose the names and addresses of contributors on Schedule B of Forms 990 and 990-EZ.

While the Institute, as a 501(c)(3) organization, would not be affected by this change, we regularly perform public interest policy work and public interest litigation in the area of donor privacy. We therefore believe we can contribute a unique and helpful perspective on this issue.

The IRS should adopt the proposed exemptions for reporting donor information because this will decrease the likelihood that donors to those groups will be exposed to ideological harassment and intimidation due to intentional or unintentional disclosure of that information to third parties. And because the proposed rule would only exempt groups that receive gifts that cannot be deducted as charitable contributions, there is no conceivable countervailing public interest in the reporting of donor information. (The rule would still require groups to maintain the information in the event it was needed for an audit or investigation.) Thus, collection of the information serves no legitimate public purpose, while potentially exposing individuals to significant harm when they exercise their constitutional rights to free speech and free association.

The risk of harassment is real. Indeed, ideological harassment was a central factual question in a trial that we recently litigated in Denver, Colorado. In that case, we represented two non-profit groups that are challenging the constitutionality of a Denver ordinance that requires them to disclose certain donors, to the government, any time those groups engage in issue advocacy related to a municipal ballot measure. Colo. Union Taxpayers Found. v. City of Denver, Colo., No. 2017CV34617, Dist. Ct., Denver, Colo. (filed Dec. 13, 2017).

During the trial, witnesses for the plaintiffs provided compelling testimony that ideological harassment is a common and recurring problem. Specifically, these witnesses testified to the following types of harassment that they had endured from people who opposed their organizations' missions.

DEATH THREATS AND THREATS OF VIOLENCE

Mr. Dave Trabert testified at trial that he has received vile emails and death threats during his tenure as president of the Kansas Policy Institute (“KPI”). KPI is a free-market public policy center that focuses on fiscal responsibility and constitutional limits on government. Mr. Trabert has served as its president since 2009.

Between 2013 and 2014, Mr. Trabert received vulgar and threatening emails as a result of the policy positions taken by KPI. On November 18, 2013, he received an email that said “Hey a**hole, we know who signs your checks for the propaganda you spew. We know where you live and we're watching you. Go crawl back into the hole from which you came!” Mr. Trabert interpreted this email to be a threat of physical violence. As a result, he contacted the police and filed reports in Wichita, Kansas, and Leawood, Kansas. The police informed him that they would try to determine the identity of the sender and contact him or her to follow up. On February 11, 2014, he received another email, from a different individual, which said, “The only way you will prove you are not owned by Charles Koch, is to come by and suck my d*** when you are in Wichita to suck Koch's d***!!! Hell I will even spin you around and f*** you in the a** if you want!!!” Mr. Trabert also interpreted this email to constitute a threat of violence, and he also turned it over to the police.

Mr. Trabert has also received threatening tweets as a result of the work he does. One such tweet reads: “@MikeLoBurgio @davetrabert KOCH! (just say the word). . . . makes 1 wish some crazy could get them a bullet between the eyes!” Mr. Trabert interpreted this as a threat of physical violence and death. The second one reads: “So, am I the only one who wonders if the Kansas Policy Institute is a subsidiary of the National Policy Institute? I have concerns.” Mr. Trabert interpreted this as an attempt to link KPI with the National Policy Institute–which was harmful to KPI because, despite the similarities in their names, the two groups have nothing in common. KPI is a respected, mainstream free-market policy organization. The National Policy Institute promotes white supremacy. By attempting to link the two, the author of the tweet was, in Mr. Trabert's estimation, attempting to encourage people to take violent action against KPI.

VANDALISM AND HARASSMENT OF CHILDREN

Ms. Lynn Harsh, CEO of the Freedom Foundation, a Washington, D.C. based free-market non-profit, was subjected to repeated acts of intimidation and vandalism based on her work. Ms. Harsh testified, through a deposition, that she experienced ideological harassment as part of her work. She experienced property damage and verbal harassment from those who disagreed with her and the Freedom Foundation's position. She found plastic cutlery with Post-it notes under forks, spoons, and knives, in the front lawn of her home. These Post-it notes were specifically aimed toward the Davenport case in which the Freedom Foundation's attorneys were representing plaintiffs in court, and toward Ms. Harsh. These Post-it notes contained foul language and swear words.

On another occasion, the downstairs windows of her home were spray painted. The spray-painted sign was the letters EFF (standing for Evergreen Freedom Foundation) with a big X through it. Ms. Harsh interpreted this as harassment directed at her for her work at the Freedom Foundation, and the litigation positions the Foundation's clients had taken in several lawsuits.

Ms. Harsh's office trash cans were also rifled through. Several times, she got to work to find, placed on the office porch, her office documents scrounged up from the trash can. There were notes placed on such documents. At her home, she twice found dead mice with sticks through them in her garbage can that was tipped over. Ms. Harsh attributed these office and home trash can situations to the litigation positions taken in lawsuits.

Ms. Harsh and another colleague had the tires of their cars slashed in the back of their office parking lot. Ms. Harsh informed the local police about both the trash can and the slashed tires situations. Ms. Harsh attributes that to one of the lawsuits against unions that the Freedom Foundation was litigating at the time.

Ms. Harsh's son was retaliated against in school by a school teacher who was a union representative because Ms. Harsh's employer represented clients against the union. Harsh testified that these harassment experiences were stressful, and some of her colleagues, and some of the Freedom Foundation's clients and board members could not take that kind of pressure, and that she does not want anybody else to have to go through what she went through.

ASSAULT AND THREATS TO FAMILIES

Mr. Vincent Vernuccio testified at trial that he endured significant harassment and intimidation as an employee of Michigan's Mackinac Center. The Center is a free-market policy center that focuses on labor, education, and fiscal policy. From 2012 to 2017, Mr. Vernuccio served as the Center's director of labor policy.

In September 2013, Mr. Vernuccio was the keynote speaker at an event in Vancouver, Washington. He was asked to speak at an educational event about so-called “right-to-work” laws. He arrived at the event, in a car, with his wife. As they were approaching the parking lot, they encountered protestors outside the event venue. Mr. Vernuccio believed the protestors were there to “intimidate” speakers and attendees. He understood them to be pro-union protestors who were upset about his promotion of right-to-work laws. As they were driving in, Mr. Vernuccio rolled down his window to speak with one of the protestors. After a brief conversation, the protestor spit on Mr. Vernuccio.

This battery was not the end of the harassment. Once he was inside the venue, Mr. Vernuccio observed protestors in the room, seeking to disrupt the speakers. He understood them to be attempting to “intimidate the event organizers and the people at the event to not be talking about worker freedom or holding an event that was on right to work or giving workers the ability to choose whether or not to pay the union.” They were “trying to stand close and be very loud.” Eventually, organizers had to call the police, who removed the protestors.

Mr. Vernuccio also testified about receiving death threats from his ideological opponents. In December 2012, he appeared on a national program on National Public Radio to discuss Michigan becoming a right-to-work state. During the caller portion of the interview, an individual called the program and said, as Mr. Vernuccio paraphrased, “[I]s your guest prepared for what he's going to find when he comes home . . . tonight[?]” Mr. Vernuccio perceived this to be a threat of violence. Because he was traveling at the time and his then-fiancée was home alone, he asked the Center to send someone to check on his residence, which they did.

* * * * *

As this sworn testimony shows, ideological harassment is a real and persistent threat. Some people choose to accept that risk as part of their professional work, or by agreeing to be the public face of a movement or cause. But many more people choose to privately support causes they believe in by providing financial assistance. The threat of ideological harassment and intimidation is what motivated the Supreme Court to hold, in NAACP v. Alabama, that supporters of non-profit advocacy groups have a Fourteenth Amendment right to confidentiality. 357 U.S. 449, 466 (1958). There is a “vital relationship,” the Court unanimously recognized, “between freedom to associate and privacy in one's associations.” Id. at 462. The proposed rule will help Americans to better exercise that freedom, now and in the future.

For the foregoing reasons, the Institute strongly supports adoption of the proposed rule.

Sincerely,

Matt Miller
Senior Attorney, Free Speech Litigation Lead
Scharf-Norton Center for Constitutional Litigation at the Goldwater Institute
Phoenix, AZ