Court to Hear Case on Telemarketers

The Supreme Court agreed Monday to consider giving state prosecutors more power to crack down on telemarketers who solicit for charities but keep most of the money for themselves.

Officials from Illinois and 18 other states want to prosecute some telemarketers for consumer fraud.

Charitable solicitations generate more than $200 billion per year, yet a relatively small percentage of this money supports a charity.

In the case before the court, a group called Telemarketing Associates solicited on behalf of VietNow, which provides food and shelter for Vietnam War veterans.

But Illinois prosecutors said only 3% of the money solicited by Telemarketing Associates supports Vietnam veterans.

State prosecutors, however, have run into a surprising obstacle: the 1st Amendment and its freedom of speech protections.

In past rulings, the high court has said that states cannot force solicitors to speak a certain message or disclose certain facts, such as what percentage of the money will go to charity. These rulings have knocked down a series of state laws and local ordinances that required fund-raisers to tell the public where the money will go.

But Chief Justice William H. Rehnquist dissented from these decisions of the 1970s and 1980s, and he has made it clear that he would be glad to reverse them.

Last year, the Illinois Supreme Court threw out a consumer fraud charge against Telemarketing Associates and did so based on the high court’s past free speech decisions involving fund-raising. Those rulings “compel us to reach the decision we announce today,” the Illinois court said.

Illinois Atty. Gen. James Ryan appealed. The 1st Amendment has been “transformed into a license for unscrupulous fund-raisers to defraud the public in the name of raising money for charity,” Ryan said.

The high court should “rectify this constitutional error” and give prosecutors more leeway to prosecute solicitors whose fund-raising amounts to a fraud.

The justices said Monday that they will take up the case of Ryan vs. Telemarketing Associates. Arguments will be heard early next year.