States Can Require Financial Disclosure by Presidential Candidates to Safeguard Electoral Transparency (Take Care)


This piece was originally published on Take Care

Throughout the 2016 Election cycle, and since, there have been calls for all presidential candidates to disclose their tax returns. President Trump, despite these calls, has yet to do it.

The public should feel increasingly concerned given the president’s long list of potential conflicts of interest between the presidency and his business interests.  For example, we recently learned that Trump made unreported changes to a trust document, allowing him to draw income from any of his more than 400 businesses at any time. This change only makes his ineffective separation from his businesses starker. Since the federal financial disclosure form won’t require disclosure of these disbursed profits, the “surest way” to see what profits he is taking is the release of President Trump’s tax returns.

Tax returns would also be the surest way for the American people to gain a clear picture of President Trump’s personal wealth, debts, foreign business ties, and potential conflicts of interest.

Now recognizing how important it is for the public to have this information detailing potential conflicts of those in public office, at least 23 states have introduced bills that would require federal presidential candidates to release their tax returns, or comparable information, in order to be listed on the ballot as a candidate for President in future elections. Such requirements – which would codify a tradition of presidential candidates going back almost 50 years – serve the public by providing full transparency and disclosure in elections for our nation’s highest office.

The Supreme Court has repeatedly affirmed that transparency is fundamental to our political process. But as Richard Painter and Norman Eisen, our two prior Presidents’ ethics advisors, have explained, the current anemic federal disclosure form is inadequate to provide the public with critical information about Trump’s conflicts and foreign ties. State ballot access requirements could fill this critical gap in the next election.

If states do pass these requirements, they will undoubtedly be challenged. But states will have a strong argument that properly tailored disclosure requirements are constitutional.

The primary argument a challenger would make to these laws would likely be that they unconstitutionally add a “qualification” for the presidency to those specified in Article II of the Constitution. In a 1995 ruling in U.S. Term Limits v. Thornton, the Supreme Court held that states cannot add “qualifications” for congressional candidates to those in Article I of the Constitution. Therefore, the Court struck down an Arkansas law that would have denied ballot access to congressional candidates who had served more than a specified number of terms.

Rick Hasen has argued that U.S. Term Limits may not apply to presidential elections because states have carte blanche to choose their electors for the Electoral College and therefore can impose additional qualifications. However, as he recognizes, going this route opens an undemocratic can of worms suggesting unlimited state power to defy the voters in directing presidential electors’ votes.

But this extreme argument isn’t necessary. Even as the Supreme Court struck down the term limits restriction, it made a distinction between unlawful “substantive qualifications” and proper state-level “procedural” mechanisms for ballot access. This is the distinction that should matter.

So, the question is whether a financial disclosure requirement—such as a tax return or other form requiring disclosure of similar information—is procedural or substantive. While financial disclosure has not traditionally been a common ballot access measure like filing deadlines or signature requirements, it should fall on the procedural line of this constitutional test.

Although the Supreme Court has issued few decisions in this area, it appears that the critical line is between laws that exclude individuals based on personal characteristics (i.e., things that cannot be changed, at least not at the point of election, such as age, residency, education, land-ownership, and, in U.S. Term Limits, past congressional service) and laws that merely ask candidates to do something—something any candidate could do—in order to gain ballot access (such as paying filing fees, gathering signatures, resigning another public office, etc.).

This line-drawing makes intuitive sense because it hones in on state laws that would limit, ahead of time, the pool of eligible candidates for a federal position. In other words, the Court’s concern in U.S. Term Limits was about a state’s exclusion of an entire “class of candidates,” not with procedural requirements imposed equally on all candidates for an office. A tax return or other personal financial disclosure requirement does not, ahead of time, exclude any individual or class of individuals from running for president or vice-president.

To further strengthen a law against constitutional attack, a state law could include civil penalties in addition to the ballot access restriction. In that case, if a Court were to find that the ballot access restriction is akin to a “qualification” or is otherwise unconstitutional, a fallback enforcement mechanism would remain in place. There is a longstanding federal financial disclosure requirement that no court has ever held to be an unconstitutional “qualification.”

Assuming that the state laws clear the “qualification” hurdle, the next constitutional question is fuzzier but, once again, a well-crafted law will have the upper hand. When it comes to procedural ballot access requirements, the Supreme Court has imposed a balancing test of state interests against the burdens of the law. Since every restriction on candidates is also a restriction to some extent on voters’ choice, ballot access restrictions must be subjected to some scrutiny. But, at the same time, states have latitude to impose restrictions on candidates so long as they are not severe or discriminatory.

These laws clearly serve important state interests fundamental to the integrity of our electoral system. The Court has long acknowledged that “sunlight is the best disinfectant” and never has the importance of transparency to healthy democracy been more apparent.

Moreover, it is doubtful that judges would see a law that merely codifies a nearly 50-year-old tradition of candidates as a severe burden. Indeed, nearly 40 years ago, the U.S. Court of Appeals for the Fifth Circuit upheld a state financial disclosure requirement and explained that the state interests in educating the voters outweighed any burden on a candidate’s privacy. That Florida law – which requires the disclosure of tax returns or a detailed financial disclosure – is still on the books and could provide a good model for a law applying to presidential elections. By allowing candidates the choice of disclosure through tax returns or an alternative form, the states could bypass any legal concerns regarding the normal confidentiality of federal returns. The current bill pending in Oregon does just that.

In the NY Times Op-ed pages, Derek Muller takes aim at these ballot access laws, reducing them to discriminatory and partisan attacks on President Trump. That intent, he argues, would doom these laws because the Court has been wary of states’ use of the ballot to further political agendas. He also argues that a blanket statutory requirement is a poor mechanism to settle such a political score.

But he misses the point. These proposals are and must be about more than President Trump. They would codify what had become, until now, an honored tradition among presidential candidates.

While it is obvious that President Trump’s refusal to release his tax returns was the impetus for these laws, the laws themselves will apply evenly to all candidates in 2020 and beyond. Many of them apply to both the president and vice president, as they should, and could even be extended to all federal candidates.

President Trump’s outlier behavior exposed a gap in our electoral system that allows individuals to ascend to our highest public office without providing citizens with the necessary information to assess their candidacy –  as well as their ability to govern without conflict of interests. The states are within their rights to make sure that candidates wishing to appear on their ballots provide this information to their voters.