Republican leadership in the Tennessee legislature are shepherding a bill to protect their grip on power through erasing the possibility of anonymous donor contributions for non-profits.
Last week, the Tennessee Senate passed the upper-chamber version of a measure supported by party leaders in both chambers that would compel 501(c)(4) groups to register as political action committees (PACs) if such non-profit enterprises even mention candidates or visually depict their “likeness” in any way.
Tax-exempt groups under 501(c)(4) status allow individuals to make donations anonymously to protect their own reputation from the public blowback that comes with contributions to causes found politically polarizing. Anonymity is a key protection for free speech, protecting individuals and their livelihoods from the public harassment that often comes with financial activism on hot-button issues. In February, for example, leftist media launched a “harassment campaign” against donors supporting the trucker protest in Canada after their private information was leaked.
Under Tennessee HB1201, groups offering individuals an avenue to private activism would effectively strip their access to anonymity unless 501(c)(4) non-profits remained politically silent four months out of the year — two months before a primary, and two months before a general election. The bill seems clearly unconstitutional for contradicting the First Amendment.
The bill, sponsored by House Speaker Cameron Sexton and championed by Senate Majority Leader Jack Johnson, began to pick up committee momentum last month after prominent state activist and Executive Director of Tennessee Stands Gary Humble launched a primary bid to unseat Johnson.
“Voters and citizens in general depend upon organizations like Tennessee Stands to teach them about the issues,” Humble told The Federalist. His conservative 501(c)(4) government transparency group educates voters on how state lawmakers debate certain issues. “If I were to cut a video and clip a committee hearing and just repurpose that and show that in a video with Tennessee Stands, I would be violating this law… We call this the ‘Incumbent Protection Act.'”
Sexton sought to throw cold water on the idea that the bill would compell 501(c)(4) groups to disclose the private information of donors in the House Local Government Committee earlier this month by soliciting testimony last week that the bill only requires expenditures be made public, not contributions.
“We only want them to report expenditures in excess of $5,000 that were made within 60 days of an election,” said Matt Mundy, an attorney for the committee. “Other than that, they can spend as much money as they want during a campaign and they can say what they want during a campaign.”
Sexton went on to clarify further with a question to State Rep. Ryan Williams, a co-sponsor of the bill.
“There’s also misinformation put out that they would have to be treated like a PAC, but what this bill does is require them through the registry to list their expenditures only, and not their contributions on any of those forms after they spend $5,000 within a 60-day window of a campaign,” Sexton said. “Is that accurate?”
“Yes,” Williams said.
Except an amendment passed at the 11th hour requires compliance with the Tennessee code stipulating how contributions must be disclosed. Tax-exempt groups under 501(c)(4) status of the IRS, the amendment reads, are “required to report expenditures in accordance with § 2-10-105(c)(1) and (h)” requiring groups submit the personal information of its donors.
Sexton said last week the bill was meant to undermine “dark” money by bringing financial records “into the light,” four days after comparing Humble to the leftist dark money giant George Soros.
“I see this for [Humble] merely as a mechanism to continue to try and to get non-disclosed contributions to his 501(c)(4),” Sexton said on a Memphis radio show in response to Humble’s criticism. “Which, in turn, theoretically, he could turn around and use for himself and his own campaign and not disclose that he got money from other individuals. This is the same thing that George Soros is doing in campaigns.”
“Tennessee is on the brink of catastrophically curtailing free speech by intentionally targeting conservatives or anyone who would publicly disagree with any elected official,” Wade Miller, the executive director of Citizens for Renewing America, told The Federalist. “Meanwhile, corporate America and other special interest groups are still free to voice their opinion on public policy issues. We’ve seen this silencing happening with Big Tech, but now it’s come to our backyards in middle America. Statehouse members and Governor Lee must stop this attempt to shut down conservative grassroots entities to prevent them from holding elected officials accountable.”