NY to seek nonprofit political spending reports

ALBANY, N.Y. (AP) -- The New York attorney general's office has proposed regulations to require that nonprofits annually disclose their political spending on state and local races starting next year.

The proposal, subject to hearings and public comment through March 6, would require most tax-exempt groups registered in New York, including so-called "social welfare organizations," to report the percentage of expenditures on "electioneering activities."

Those include advertisements or communications calling for the election or defeat of a candidate, ballot question or party, or those that depict or clearly identify them within 180 days of an election.

Nonprofits that spend $10,000 or more a year that way would have to list all political expenditures. They would have to report each contribution received of $100 or more, including the contributor's name, address and employer. Most information would be posted publicly on the attorney general's website.

"More money is being spent on our elections, with less disclosure of where that money is coming from, than ever before," Attorney General Eric Schneiderman said. "Requiring nonprofits to disclose the extent and nature of their electioneering activities will protect prospective donors form misleading solicitations, and give voters more information about who is behind man of the ads they are seeing."

According to the attorney general's office, 501(c)(4) social welfare organizations, exempt from federal and state taxes, have become major vehicles for political activity, including funding sham issue ads that attack candidates. They are "attractive conduits" because they can raise and spend unlimited money while concealing who supplies the money, the office said.

Since at least this summer, Schneiderman's office has been investigating several nonprofits to see whether they were crossing permissible boundaries from educating the public into influencing national politics. Under state law and regulations, any organization that gets $25,000 in annual donations from New York sources is required to register with the attorney general's charities bureau.

The proposed regulations, submitted Tuesday for publication Dec. 26 in the state register, noted they don't require approval from the governor's office. A spokesman for Gov. Andrew Cuomo, asked whether the administration was briefed or supports the proposed disclosures, did not immediately respond Wednesday.

Susan Lerner, executive director of the nonprofit Common Cause-NY, called the draft regulations "a bold step toward lifting the veil on political spending" that now lets anonymous donors influence the political process. Although the group lobbies on issues including campaign finance reform, spokeswoman Alexis Grenell said none of its current efforts are electioneering that would be covered by the regulations.

The regulations address spending on election or issue advocacy by nonprofits, including financial or service transfers to other groups, political committees, unions, individuals or other entities for those purposes. Communications include broadcast, periodical, billboard and Internet ads, mailings or printed materials or at least 5,000 and paid telephoning to more than 1,000 households.

Nonprofits that keep segregated bank accounts for political spending would have to disclose donors only to those accounts.

Groups can seek waivers from publicly revealing donations if they can show "by clear and convincing evidence that such disclosure will cause undue harm, threats, harassment or reprisals to any person or organization." Exemption applications would be exempt.

The regulations would also exclude donations before their effective date and information otherwise exempt under state or federal law.

The attorney general's office said it expects to adopt the rules early next year, after the comment period has closed, subject to any warranted changes, and they will be effective immediately. Its attorneys could sue organizations that don't comply or revoke their registrations to operate as a charity in New York.