Lawsuit Challenges New York’s New Nonprofit Disclosure Requirements

Citizens Union, a “nonpartisan good government group” based in New York City, has filed a lawsuit in federal court challenging the state’s ‘nonprofit disclosure’ rules that were approved by the Legislature in June and signed into law by the Governor in August.

The group is challenging two new provisions of the Executive Law § 172-e and § 172-f (Chapter 286, Parts F and G), arguing that they are unconstitutionally overbroad and infringe on the group’s First Amendment rights to free speech.

In a statement, Citizens Union said “This law intends to silence nonprofits that criticize elected officials by affecting their ability to raise funds and should not be allowed to stand.”

New Executive Law § 172-e requires a 501(c)(3) organization to report their sources of funding to the Attorney General when the group makes an in kind contribution or donation in excess of $2,500 to a 501(c)(4).  Such reports must be done two each year, and the reports are to be provided to JCOPE to be posted on their web site.  (The first reports, covering the period July – December 2016, will be due by January 30, 2017.)

New Executive Law § 172-f requires 501(c)(4) organizations that engage in “issue advocacy” to make certain disclosures regarding their advocacy to the Attorney General.  501(c)(4) organizations that spend more than $10,000 in a calendar year on “covered communications” (communications to at least 500 people) are required to file semi-annual reports with the Attorney General, and disclose the name and address of contributors of over $2,500.

In response to the lawsuit, a spokesperson for Gov. Cuomo said “Everyone’s all for disclosure until it applies to them….It’s hypocritical, to say the least.”

Read news coverage from the Daily News, Capitol Confidential, Politico NY, State of Politics and the Journal News.