Koch-linked charity must disclose top donors to California, appeals court rules

David Koch, shown in 2013. A federal appeals court ruled that the Koch-backed Americans for Prosperity Foundation must turn over a list of its top donors to the California attorney general.
(Phelan M. Ebenhack / Associated Press)

A federal appeals court ruled Tuesday that two conservative charitable groups, including one tied to the billionaire Koch brothers, must turn over a list of their top donors to the California attorney general.

A three-judge panel of the U.S. 9th Circuit Court of Appeals reversed a lower court ruling that the Koch-backed Americans for Prosperity Foundation and the Thomas More Law Center do not need to disclose the information to the state.

The groups were challenging a California law that allows the attorney general to collect the same donor list they are required to provide to the Internal Revenue Service — a form that includes the names and addresses of their largest contributors.


Attorneys for the nonprofits had argued that the rule violates the 1st Amendment because it deters people from donating and could expose contributors to threats, business boycotts or other repercussions should their identities be revealed.

But state officials, who are required to keep the information confidential unless ordered by a court, had argued that they need the names to make sure the organizations are not involved in fraud.

The judicial panel sided with the state, saying that the disclosures are “related to an important state interest in policing charitable fraud,” Judge Raymond C. Fisher wrote in the 41-page opinion. “The panel held that plaintiffs had not shown a significant First Amendment burden on the theory that complying with the attorney general’s Schedule B nonpublic disclosure requirement would chill contributions.”

He wrote that the rule would have “at most a modest impact on contributions” and added that neither nonprofit identified anyone whose willingness to donate hinged on whether the person’s name would be disclosed to the attorney general. And the risk that the disclosures would be made public inadvertently, Fisher wrote, is slight.

Bill Riggs, a spokesman for the foundation, said the group is disappointed by a decision that “imperils people’s 1st Amendment right to freedom of speech and of association” and “intends to continue doing all it can to champion and protect the important constitutional rights at stake.”

The Americans for Prosperity Foundation, co-founded in part by brothers David and Charles Koch, is a sister group of the Koch network’s political arm Americans for Prosperity. The billionaire executives have spent extensively to promote conservative economic causes. The group has described itself as “devoted to the promotion of limited government and free markets” and has held conferences, issued policy papers and run educational programs to promote those views.


A representative of the Michigan-based Thomas More Law Center, which provides free legal services with a mission to “preserve America’s Judeo-Christian heritage,” could not be reached for comment.

It’s unclear whether the groups plan to appeal to the U.S. Supreme Court.

In a statement Tuesday, Atty. Gen. Xavier Becerra said the reason for the disclosure requirement is simple: “Our mission is to protect Californians who donate their hard-earned dollars to charity. Charities operating in California must not engage in fraud or unfair business practices.”

The state had argued that in the past, officials had used the forms to trace charity money used improperly after Hurricane Katrina, identify self-dealing within a charity, track a for-profit corporation’s improper use of a nonprofit organization and to investigate a cancer charity’s in-kind gift fraud.

“In sum, the record demonstrates that the state has a strong interest in the collection of Schedule B information from regulated charities,” Fisher wrote.

Twitter: @AleneTchek