New Missouri law shields nonprofit donor identities, allows LLCs to give to candidates
A new law signed by Gov. Mike Parson last week will shield nonprofits from being forced to disclose their donors to government agencies and allow for certain limited liability companies to contribute to candidates.
Included in a bill modifying various tax credits is the “Personal Privacy Protection Act,” which would bar public agencies from requiring nonprofits to share the identities of donors, volunteers or supporters.
It also closes any records or lists in the possession of public agencies that contain the identity of supporters under Missouri’s open records law and under court rules. The provision goes into effect Aug. 28.
Violations could be met with lawsuits and a class B misdemeanor. Exceptions would be allowed for the Missouri Ethics Commission to subpoena the info during an investigation, and for it to be produced in litigation if a “compelling need” is demonstrated and the info won’t be disclosed outside of those named in the lawsuit.
The proposal had received support this legislative session from groups like the ACLU of Missouri, Americans for Prosperity, People United for Privacy — all of which have 501(c)(4) arms, an Internal Revenue designation that allows them to participate in political activity without having to disclose their donors.
The Missouri Independent is an affiliate of States Newsroom, a 501(c)3 nonprofit that discloses its donors.
Lawmakers previously told The Independent that the bill was necessary to protect people’s privacy to donate to causes and ensure laws — like one in California that was struck down by the U.S. Supreme Court last year — don’t mandate otherwise.
Lawmakers are “trying to protect an individual’s right or ability to donate to a cause that they believe in,” Rep. Jered Taylor, R-Republic and sponsor of a House version of the bill, previously said.
Versions of the bill have been proposed across the country. In Florida, critics raised concerns it would have shielded information that came to light in a “ghost candidate” scandal that is the subject of a criminal probe and state investigation.
The new provisions may also cause issues for state agencies.
According to a fiscal analysis of the provision, officials from the Department of Revenue warned the agency may be hindered in determining whether organizations owe state tax if they can’t request personal information.
Department of Labor and Industrial Relations officials said that if it’s interpreted that the agency can’t collect wage records under the law, the department may be out of compliance with federal requirements if a nonprofit stops submitting quarterly wage reports.
That could result in certification of Missouri’s unemployment insurance program being put in jeopardy, costing the state approximately $60.1 million annually in federal funds. An additional $989 million may have to be paid by employers for a 6% payroll tax if Missouri’s program is out of compliance, officials noted.
Officials with the Office of Administration said they would need to individually go through over 200,000 public bid and contract documents in its online database to ensure “personal information” of nonprofits is not disclosed.
“The Division of Purchasing would be forced to take down this website to avoid exposing a member’s name,” the fiscal analysis read. “This would also increase the number of Sunshine Law requests for records that are currently available online.”
A separate provision of the bill also stipulates that except when authorized by federal law, state agencies cannot impose additional filing or reporting requirements on charitable organizations than what’s already required in state law. State grants or contracts, labor unions and investigations by the attorney general into charitable organizations would be exempt.
The provision was added to the larger bill by Sen. Eric Burlison, R-Battlefield. It is similar to language he proposed last year, arguing that requiring donor information could create a chilling effect.
Other senators critical of the proposal at the time raised concerns it may stymie efforts to investigate nonprofits, pointing to the allegations against former Gov. Eric Greitens’ that he stole a donor list from a veteran’s charity he founded, which was investigated by a House committee.
Greitens’ campaign for governor also included allegations that “shell companies” were created to shield the identities of donors.
A provision included in the bill added by Sen. Andrew Koenig, R-Manchester, would allow limited liability companies to donate to campaign committees if the company is at least a year old and specifies with the Missouri Ethics Commission that it “is a legitimate business with a legitimate business interest and is not created for the sole purpose of making campaign contributions.”
All information submitted to the commission under the provision will be made public on the Missouri Ethics Commission’s website.
Missouri Independent is part of States Newsroom, a network of news outlets supported by grants and a coalition of donors as a 501c(3) public charity. Missouri Independent maintains editorial independence.