North Carolina Bill Would Be a Detriment To Transparency

Benjamin Franklin's face on the one hundred dollar bill seen peeking out from behind two pieces of torn paper.

An anti-transparency bill, S.B. 636, is working its way through the North Carolina House and Senate. If signed into law, this legislation would reduce accountability in the state’s political system by making it easier for wealthy special interests who pass their funds through multiple groups before it is spent on election influence to hide their identities.  

Several states have advanced or enacted similar legislation over the last few years, and more are on track to do the same in 2021. This type of legislation helps donors conceal their true identities and gives the greenlight to groups who wish to dump unlimited sums of secret spending — otherwise known as dark money – into elections while obscuring the true sources of their funding. 

Consequently, voters are barred from accessing information about which wealthy special interests are spending to influence our political system.  

On Aug. 19, 2021, Campaign Legal Center (CLC) sent a letter to North Carolina’s governor urging him to veto the bill when it reaches his desk. A chief concern of the letter was that S.B. 636 threatens to, “undermine governmental transparency and integrity in North Carolina.”

Current North Carolina law does not require disclosure of the original sources of money spent to influence elections, and S.B. 636 would further entrench this problem. Specifically, the bill would change state law to make the identities of donors to nonprofit organizations confidential and require a nonprofit to conceal the identity of a donor upon the donor’s request.  

Additionally, this legislation would increase criminal penalties for state employees and legislators who divulge confidential donor information and provide a new path for donors to sue if their personal information is revealed without their consent.  

These provisions could hinder the ability to investigate possible wrongdoing involving nonprofits and have a chilling effect on whistleblowers. 

Even though the bill has an exception for campaign finance disclosures, that exception is like a Band-Aid on a broken leg: current law doesn’t address dark money tactics, and the bill’s secrecy requirements make it even easier for dark money groups to evade transparency.  

So far this year, South Dakota, Arkansas, Iowa and Tennessee have enacted comprehensive anti-transparency laws and there have been proposals for similar legislation in Nebraska, Wyoming, West Virginia, New York and Oklahoma.  

In some states, like Wyoming and Nebraska, proposals for similar bills have died and will not be passed in the 2021 legislative session.   

Previous years have also seen successful attempts to implement state-level bills that assist donors seeking to hide their identities. Between 2018 and 2020, five states — Arizona, Mississippi, Utah, West Virginia and Oklahoma — codified laws which stifled election transparency.

While some state lawmakers might want to help enable the rise of dark money groups in our country’s politics by creating and enacting anti-transparency laws, a resounding majority of Americans from across the political spectrum would prefer strong donor disclosure laws that increase transparency in our country’s campaign finance system.  

CLC commissioned a national survey examining public support for disclosure of political contributions. The survey concluded that more than four out of five Americans — including 85% of Democrats, 83% of Independents and 81% of Republicans — supported public disclosure requirements.  

Some states have heeded the public’s call for strong disclosure laws. In 2018, North Dakota voters approved a constitutional amendment that requires comprehensive disclosure of the “ultimate and true source” of money spent to influence state elections and legislation. 

Meanwhile, the For the People Act, a bill that has passed the U.S. House of Representatives and is navigating its way through the U.S. Senate, could provide a model for those who want more robust transparency protections at the state level.

If signed into law, this bill promises to substantially overhaul and strengthen transparency requirements for federal campaigns. 

The For the People Act would close loopholes that nonprofits have exploited to fund independent expenditure ads while avoiding publicly disclosing information about their donors.  

We need to defend state-level donor disclosure laws (and donor disclosure laws at all levels) that protect voters’ right to know who is spending money to influence our vote and our government. Real transparency about who is spending big money on elections will mean more government accountability, less influence for wealthy special interests and less political corruption. 

Georgia is a Communications Assistant at CLC.