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Judge Invalidates FEC Anonymous Donor Rule

The decision blocks anonymous donations to nonprofit groups that seek to influence elections

On Aug. 3, a U.S. District Court judge issued a ruling that invalidates a Federal Election Commission (FEC) regulation that allows donors to anonymously contribute to nonprofit groups that seek to influence elections.

U.S. District Court Judge Beryl Howell ruled that the FEC’s treatment of such groups, including 501(c)(4) political groups, “fails to uphold the standard Congress intended when it required the disclosure of politically related spending.”

The IRS allows 501(c)(4) social welfare groups to spend money to influence elections if it’s not their “primary purpose.” Spending by 501(c)(4) political groups has proliferated since the 2010 Citizens United ruling that reshaped campaign finance law in the U.S. FEC regulations stipulate that donors to nonprofit political groups only need to be disclosed if their contribution is earmarked for a specific political ad.

“The challenged regulation facilitates such financial ‘routing,’ blatantly undercuts the congressional goal of fully disclosing the sources of money flowing into federal political campaigns, and thereby suppresses the benefits intended to accrue from disclosure,” Howell said.

Barring an appeal, the ruling gives the FEC 45 days to issue temporary regulations that would require political nonprofits to reveal more about donors who give $200 or more toward impacting federal elections.

This article was provided to OSAE by the Power of A and ASAE's Inroads.

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