A lawsuit was filed Tuesday that aims to challenge a Utah law concerning donations to nonprofit organizations. House Bill 43 was intended to combat the use of nonprofits to hide the identities of donors to political causes. Critics of the law claim that HB 43 infringes upon the free speech rights of Utahns.
Libertas Institute is one of the groups pursuing legal action to challenge the law. The organization’s president, Connor Boyack, said that Utah already has the tools to prosecute so-called “dark money” and that HB 43 has kept Libertas from engaging in public advocacy.
“What we are concerned about is the free association and free speech of our donors who, under House Bill 43, would be compelled to have their information disclosed if we were to engage on a political issue,” Boyack said. “Specifically, we wanted to be involved in Prop 1 fighting the local option sales tax. We chose not to; we had to sit on the sidelines because some of our donors support our work that has nothing to do with politics and yet, under House Bill 43, we would have had to disclose these people who had no connection to Prop 1.”
Boyack said that HB 43 puts donors in a difficult situation, forced to choose between privacy and the First Amendment.
“If a law like this existed in California in 2008 when the LDS Church spent a substantial amount of money to engage on Proposition 8, a law like this would have required the Church to disclose the name, the addresses, and the donation amounts of every tithe payer worldwide,” he said. “Think if someone supports Planned Parenthood but they don’t want their religious leaders or their parents or their employer to know about it. If that type of information has to be disclosed it harms that individual’s free association rights.”
The IRS allows 501(c)(3) entities to engage in political causes, provided they do not participate in direct electioneering. Boyack said that, in passing HB 43, the Legislature greatly overstepped its bounds.
“What we’re worried about here is that the Legislature overreacted and rather than taking a scalpel and trying to close any potential loopholes tightly, they’ve taken a sledgehammer and they’ve roped in many other organizations and as a result of that, has chilled the free speech not only of the organizations but by extension their donors, their supporters,” he said.
Libertas and the other parties to the lawsuit will be represented by lawyers from the Center for Competitive Politics.
