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Donor privacy bill clears Senate over 'dark money' concerns from Democrats

"Our society hangs in the balance," one lawmaker says.

Posted Updated
N.C. Legislative Building
By
Travis Fain
, WRAL statehouse reporter
RALEIGH, N.C. — In a party-line vote Tuesday, the North Carolina Senate passed legislation meant to guarantee privacy for people who donate to charities and other nonprofits.

Democrats raised questions about whether the bill would shield political contributions. Republicans said the measure was a crucially important defense against so-called "cancel culture" and could keep people from facing blowback should their charitable donations to causes their neighbors don't share become public knowledge.

“Our society hangs in the balance," Sen. Bob Steinburg, R-Chowan, who has advanced a number of conspiracy theories, told his colleagues during floor debate on the bill.

Under Senate Bill 636, nonprofits in the state would be forbidden from revealing donors' names, including to the government, without their permission. Bills like this are moving in a number of statehouses around the country, and much of the issue ties back to an argument over donor lists in California.

That state's Attorney General’s Office sought information from charities as part of the registration process, saying it was needed to police fraud. Several groups have asked the federal courts system to block that requirement, and the matter is pending now before the U.S. Supreme Court.

A group called People United for Privacy has pushed the issue in North Carolina, along with the John Locke Foundation, a right-leaning think tank. The issue unites some of the left and the right: the American Civil Liberties Union of North Carolina also has backed the bill.

Sen. Norman Sanderson, R-Carteret, said the measure may not be needed if the Supreme Court makes the right decision in the California case, "but we all know that sometimes courts don’t make the right decisions." He also acknowledged he doesn't know of any effort by government officials in North Carolina to access donor lists and described the measure as proactive.

Democrats united against the measure. Even Senate Minority Leader Dan Blue, D-Wake, who initially co-sponsored the bill, voted against it.

Sen. Jeff Jackson, D-Mecklenburg, who is running for the U.S. Senate, said he wasn't going to speak against the bill Tuesday until Steinburg raised the stakes to society hanging in the balance.

Some nonprofits exist primarily as "dark money" groups, spending part of what they collect on issue advertising that figures heavily into political races, Jackson noted. Often, these groups give to each other, moving money around until it's difficult to determine what came from where.

They “launder the money … and then spend it on our behalf," Jackson said.

Senate Bill 636, said Jackson and Sen. Natasha Marcus, D-Mecklenburg, makes things even more opaque.

“Are we all exactly sure what the consequences (of the bill will be)?" Jackson asked. “No. We’re talking about tax law. … Safe to say it’s a very dark cloud. We should all be moving in the other direction.”

The bill specifically says it won't apply to disclosures required under state election laws, but Democrats said it strains credulity to believe the measure is meant to protect – to use an example Marcus keyed on – a grandmother giving $100 to the NAACP. Marcus said there the bill won't create new loopholes in campaign finance laws, but it will make existing loopholes ones more problematic.

“It’s about dark money," Marcus said.

Sanderson, the bill's lead sponsor, said Marcus and Jackson don't know the bill's intent because they never asked him. It is solely, he said, to protect nonprofits and their donors. Without it, Sanderson predicted, charities could “see a tremendous decline” in donations.

The measure cleared the Senate 28-21. It heads now to the House for more debate.

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