Lawsuit: Regulators Revealed Donor Names of Thousands of Nonprofits

The California attorney general’s office posted donor names online despite privacy assurances

Kamala Harris
Kamala Harris / AP
November 12, 2015

California regulators posted the names of donors to roughly 1,400 nonprofit groups on a government website despite assurances that such information would remain confidential, according to a group suing to prevent such disclosures.

In a court filing last week, the Americans for Prosperity Foundation revealed that officials at California’s Register of Charitable Trusts had allowed that information to become public, even as the state’s attorney general denied in court that such disclosures had ever taken place.

According to AFPF, it was able to find and download more than 1,400 unredacted versions of nonprofits’ donor disclosures to the IRS through the register’s searchable online database.

The state attorney general’s office requires that all nonprofits submit extensive documentation in order to solicit donors in the state. That includes a copy of its Form 990 Schedule B, which nonprofits are required to turn over to the IRS each year, but which the agency redacts in versions it makes publicly available.

The AG’s office has stated that it keeps that information confidential, but a pair of lawsuits filed by AFPF and the Center for Competitive Politics, a nonprofit legal group, have questioned both the security of that information and the state’s purported need to gather it for law enforcement purposes.

"There is no evidence to suggest that any ‘inadvertent disclosure’ [of a Schedule B] has occurred or will occur," said AG Kamala Harris in a court filing.

AFPF produced evidence that that was not the case during a deposition of Kevis Foley, the former head of the register.

"Would you be concerned if it turned out that one such Schedule B was on the web site that was meant to be kept confidential?" AFPF’s attorney asked.

"Would I be surprised? No, I would be disconcerted, but it wouldn’t surprise me," Foley said. "It’s possible there’s one out there that shouldn’t be."

There are actually more than a thousand, according to AFPF’s tally of unredacted Schedule Bs. Those documents have since been removed from register’s website.

A spokeswoman for the AG's office would not comment directly on the register's donor disclosures, only noting that "no schedule B forms for Americans for Prosperity Foundation were posted on our website."

AFPF is engaged in a lawsuit over the California regulations that require it—and all other 501(c)(3) nonprofits—to turn over their donor rolls in order to operate in California. A federal judge recently enjoined California from enforcing the regulation while the lawsuit is in the works.

AFPF says that the disclosure of its donors could harm the organization by subjecting its donors to threats and harassment. Such intimidation tactics have already been levied at individuals involved with the group, which is chaired by libertarian philanthropist David Koch.

Harris has insisted that internal policies in the AG’s office are sufficient to prevent the unauthorized disclosure of donor information even though there is no statutory prohibition on that disclosure.

The Supreme Court last week declined to hear CCP’s challenge to the regulation despite what the group characterizes as a smoking gun in AFPF’s tally of disclosed schedule Bs.

"During the litigation, the attorney general failed to provide any reason for collecting this information other than a claim that at some point in the future it might be valuable for ‘law enforcement,’" CCP said in a statement.

While the AG’s office says that the donor information on schedule Bs is necessary for investigation and enforcement actions, depositions in AFPF’s case revealed that the register has consulted that information only five times in the course of roughly 360 investigations since 2005.

In that time, the register did not once initiate an investigation based on information in a nonprofit group’s schedule B, according to Steven Bauman, the AG office’s lead auditor.