Campaign Financing Disclosure and Shutting People Up: In China and the United States

The Obama administration has rightly complained about a new law that China has passed with respect to foreign NGOs (non-government organizations).  According to the Associated Press, the new law subjects NGOs, inter alia,

“to closer financial scrutiny, requiring that they submit annual reports detailing their sources of financing, spending activities and changes in personnel.”

While the law was passed at the end of April, Secretaries John Kerry and Jacob Lew mentioned the law again in their recent visit to China.

The purpose of the law is pretty obvious: To subject foreign NGOs to more government scrutiny and to make it harder for them to do things the government doesn’t like.  In particular, if financing sources have to be identified, some of those sources may stop contributing to NGOs.  They may decide it’s not worth jeopardizing their business or other interests in China to do so.  If NGOs have less money, they can do less to help people in China – and they cause less trouble for a Chinese government that is becoming more hostile to dissent and disagreement.

What is interesting is that, in the United States, many of the people who object to China’s new rules, including those on disclosing sources of financing and spending, support disclosure requirements here.

For example, in California, it took a federal district court order to stop California Attorney General Kamala Harris from demanding that Americans for Prosperity, a non-profit funded in part by Charles and David Koch, disclose a list of its donors as part of its registration as a non-profit in California, information that the California Attorney General is particularly bad at keeping confidential, even though it is required by law to do so.

The attorney general of the U.S. Virgin Islands has subpoenaed the Competitive Enterprise Institute (“CEI”), a group that denies humans’ role in climate change, for ten years of emails, communications, etc., including donor information.  In addition to harassing the CEI, it seems likely that one of the purposes of the subpoena was to discourage people from contributing to CEI.

To show that it is not just liberals/progressives who are doing this, The Wall Street Journal reported that in Missouri, a Republican state senator, who is running for Attorney General against an opponent who needs private donations to be competitive, is supporting legislation that

“would require all 501(c)(3) and 501(c)(4) groups to disclose contributions and expenditures if anyone who makes spending decisions for that group is a candidate, a candidate’s spouse or ‘has a contract or is employed by a candidate.’

This means if Sally Smith runs for office and her political consultant does work for the Sierra Club or National Rifle Association, that group would have to disclose its donors.  That would be true whether or not the group is active in the state, has run any advertising, or is even interested in Sally’s candidacy.”

Finally, there is the infamous Internal Revenue Service targeting scheme aimed, according to the Treasury Department’s own Inspector General, at Tea Party and other conservative groups.  After three years, and a very strong opinion from the Sixth Circuit Court of Appeals, the IRS finally produced a list of 426 groups that were singled out for special review.  It is interesting that the list the IRS turned over included over 100 more groups than the Treasury Department’s Inspector General listed back in 2013, and it included more liberal groups than the Inspector General identified.  Which means either the Inspector General missed the liberal groups during his investigation or the IRS added them to the list make it look less egregious than it really was.

While proponents of disclosure claim it is about transparency, disclosure requirements also allow supporters of one side to harass and intimidate of people supporting to the other side, as well as making people less likely to contribute.  I talked about this in more detail here, asking whether people can be trusted with this kind of information.  The judge in the California case referred to above decided they couldn’t.  Similarly, The New York Times reported in May about how Bernie Sanders supporters were harassing and threatening delegates supporting Hillary Clinton.

In addition, the effect, even if it wasn’t the intent, of what the IRS was doing with respect to Tea Party groups in 2011 and 2012 was to shut those groups up during a presidential race.

Obviously, none of this is on the same scale as in China, but it’s still the same idea.  And it raises the question why what we object to in China is okay in the United States.