Florida GOP bill would further shield names of dark money donors

Some political groups have come under increased scrutiny recently as a result of a Miami-Dade County “ghost” candidate investigation.
Sen. Joe Gruters, R-Sarasota.
Sen. Joe Gruters, R-Sarasota. [ The Florida Channel ]
Published Jan. 20, 2022|Updated Jan. 22, 2022

TALLAHASSEE — Florida Republicans are pushing legislation that would enact broad new layers of secrecy around nonprofit organizations’ corporate and individual donors, a move that would allow some political groups to shield sources of funding from local and state government scrutiny.

There are two versions of the so-called “Personal Privacy Protection Act” in the Florida Legislature, and records and interviews show the bill language was provided by a lobbyist who says he was working on behalf of two nonprofit organizations whose tax-exempt status allows them to engage in a restricted level of political activity and does not require them to disclose their donors.

Such groups, which often serve as vehicles for dark money spending because their sources are hidden, have come under increased scrutiny in the last year as a result of a Miami-Dade County “ghost” candidate investigation marked by dark money spending.

The proposed legislation in the House would further limit public knowledge of their funding sources by prohibiting government entities from requiring corporations, associations, and nonprofit organizations to provide information about their direct or indirect support to any entity. The public entities would also be barred from publicly releasing the information if they have it.

Related: Dark-money group asks judge to block bank records that would reveal donors

“Many of the donors want to stay anonymous, or they do (give) a tremendous amount of money and they don’t need to let everybody know how much money they’re giving to certain organizations,” said state Rep. Toby Overdorf, a Palm City Republican who is sponsoring the bill.

The Senate version is narrower, protecting information that would identify a person, member, or donor to a charitable organization. However, Sen. Joe Gruters, R-Sarasota, said he would be open to considering broadening the scope of the bill.

“I am always open to any suggestions. It is part of the process,” Gruters told the Miami Herald on Wednesday. “It is interesting, I thought this was going to be a simple, easy bill, and all of a sudden it is a firestorm.”

In particular, Gruters said he would be open to amending the bill to include nonprofits that register as 501(c)(4), a tax-exempt status that allows organizations to engage in a restricted level of political activity without the need to disclose donors.

Jorge Chamizo, a lobbyist who has a long list of clients, provided the bill language to Gruters’ staff and told the Herald the goal is to get support for the House version of the bill.

When asked who he was lobbying on behalf of, Chamizo mentioned two nonprofit organizations: People United for Privacy and Opportunity Solutions Project. But he would not provide information about who was behind the groups.

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“There are lots of organizations that are supporting it,” said Chamizo, who emphasized the interest comes from both conservative and liberal groups.

Echoes in arguments

Gruters, Overdorf and Chamizo all said the proposed legislation is in response to a U.S. Supreme Court ruling last summer that struck down a California law that required charities to disclose top donors to the state attorney general.

California’s disclosure requirement was challenged by the Americans for Prosperity Foundation, the charitable arm of Americans for Prosperity, a conservative political organization affiliated with the Koch family.

The decision divided the court along ideological lines and found the state’s requirements violated the First Amendment’s protection of the freedom of association. The court’s three liberal members dissented and said the decision could have implications for political donation disclosures.

“Today’s analysis marks reporting and disclosure requirements with a bull’s eye,” Justice Sonia Sotomayor wrote. “Regulated entities who wish to avoid their obligations can do so by vaguely waiving toward First Amendment ‘privacy concerns.’”

That Supreme Court ruling was recently cited by Tallahassee strategist Ryan Tyson’s lawyers when asking a Miami circuit court judge to block the release of bank records that would disclose donors to his political nonprofit organization, Let’s Preserve the American Dream. His lawyers argue that the release of such information would violate donors’ privacy rights.

The information is part of pretrial discovery in the case of former Republican state Sen. Frank Artiles, who is facing several charges related to recruiting and paying a no-party candidate who ran in Senate District 37.

Newly released court records show Tyson’s group wired more than half a million dollars to a dark money group that later funded misleading mailers promoting no-party candidates in three key state Senate races in 2020, including the one under investigation.

His group has not been accused of wrongdoing, but prosecutors have zeroed in on him as part of an investigation into the source of the mailers and an attempt to sway a 2020 Miami-Dade election.

In the motion, Tyson’s lawyers cited the Supreme Court ruling in their motion to shield the donor names, arguing the organization’s bank records “implicate the heart of the First Amendment’s right to the freedom to associate” and their disclosure “could chill speech across the political spectrum” by halting future donations to the organization for fear of being outed to the public.

Gruters told the Herald that it is a “coincidence” that the Supreme Court ruling is cited as the impetus for both Tyson’s motion and his bill. He said the intent of the bill is to “protect donors and nonprofits.”

“The way it was presented to me, it makes sense. So we’ll see where it goes,” he said.

Overdorf said his bill is a “preemptive way of … being in compliance with the Supreme Court case.”

On Thursday, the Orlando Sentinel reported that the Florida Department of Agriculture and Consumer Services, which regulates charities, opened an investigation into Tyson’s group.

In a statement to the Herald, Agriculture Commissioner Nikki Fried, a Democrat running for governor, confirmed the investigation.

“As always, our department will enforce the law to the fullest extent to protect consumers. Our Consumer Services team is currently investigating whether this entity was previously operating in violation of Chapter 496, Florida Statutes, and we are unable to comment further at this time.”

In a statement to the Herald, Tyson’s lawyer Erika Alba said Let’s Preserve the American Dream “has not been contacted or notified by the commissioner of agriculture of any investigation, and the first we have heard of this possibility is from the media inquiries we are receiving.”

“We are very concerned that a state agency such as the Department of Agriculture would disclose the existence of an investigation to the press before it notified the entity in question,” she said. “LPTAD makes every effort to follow all laws in the state of Florida.”

In the 2020 election cycle, Fried accepted donations from political committees funded by dark money nonprofit Grow United. The Sentinel reported that the largest known contributor to Grow United was Let’s Preserve the American Dream, which contributed more than $1 million last year.

Concerns are raised

The bills, as currently drafted, would allow for donor information to be released during litigation if there is a “compelling need” or if the agency requesting the information protects any person who isn’t named in a lawsuit.

Under the bill language, a person alleging a violation of the law would be able to sue for injunctive relief and damages of at least $2,500 per violation. Those who knowingly violate the proposed law would be charged with a misdemeanor, which could come with a $1,000 fine or 90 days in prison.

Overdorf said his bill, if approved, should not impact criminal investigations.

“I have every confidence that if there was a criminal intent or a criminal investigation, that a good prosecuting attorney would be able to gain access to the donors associated with it. This does not stop that in any way,” he said.

Some experts, however, say it would protect donors to the nonprofit, which funded misleading mail in three key Senate races.

“This bill, if it were on the books today, would have precluded the media and the public from learning many of the details about the ghost candidate scheme,” said Michael Barfield, the director of public access at the Florida Center for Government Accountability.

Virginia Hamrick, an attorney with the First Amendment Foundation, said the bill acts like a public records exemption but is not drafted as one.

The bill, however, is not technically a public records exemption, and would not require a two-thirds vote to pass. It would require a simple majority vote — which Republicans handily have.

“It doesn’t look like a public records exemption bill and it doesn’t follow the state’s requirement for enacting a public records exemption, but it acts as one,” she said. “It prevents the release of information that an agency has, and would have to give up under the public records law.”

Sen. Gary Farmer, who sits on the Governmental Oversight and Accountability Committee, called the bill “the worst type of legislation that eats at the core of our democratic process.”

“If it looks like a duck and quacks like a duck, it’s a duck,” said Farmer, D-Lighthouse Point. “Clearly, this is a public records exemption even though they are painstakingly not referring to Chapter 119 in doing so.”

A national trend

Hamrick said similar bills have been filed in the states of Virginia and Tennessee.

“It’s a movement across the country,” she said.

A bill filed during Virginia’s 2022 legislative session includes nearly identical language to Florida, stripping public agencies of the ability to require a nonprofit entity to provide the agency with personal information.

In North Carolina, legislation was passed that prohibited nonprofits from disclosing the list of donors without the donors’ permission, unless otherwise required by law. The bill was eventually vetoed by Gov. Roy Cooper.

Anna Massoglia, who researches dark money and politically active nonprofits for OpenSecrets, said the bill has “cookie cutter” language other states are using to obscure donor information and was part of a wave that began after the Supreme Court ruled last summer.

Groups like the American Legislative Exchange Council hand out language to states, Massoglia said, and “the language in this bill is similar to the language we are seeing in other areas … the timing here is extremely interesting.”

Jenna Grande, of watchdog group Citizens for Responsibility and Ethics in Washington, echoed the sentiment, noting that the bill is a “continuation of a trend of certain states looking to grant special rights to large donors to nonprofits that are unavailable to the average citizen.”

“By making this legislation over-inclusive, the Legislature would deny the public legitimate investigations into fraud and corruption,” she wrote in an email. “When it comes to understanding how organizations with public influence operate, it’s imperative their financial records are accessible and transparent.”

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