GOP escalates campaign to weaken donor transparency in NC

If Republican lawmakers and deep-pocketed conservative funders get their way, Big Money donors in North Carolina will have more ways to hide their political spending from public view.

N.C. Senate Bill 416 is part of a wave of so-called “donor privacy” bills pushed nationally in recent years by the American Legislative Exchange Council (ALEC), a corporate conservative policy group, and People United for Privacy, a D.C. advocacy outfit backed by some of the country’s biggest right-wing donors.

The anti-transparency bill passed the N.C. General Assembly earlier this year, but Democratic Gov. Josh Stein vetoed it in early July.

Now, a showdown over the public’s access to information about Big Money spending looms as Republicans seek to overturn the veto — with the potential help of a few wavering Democratic lawmakers, who are the target of an aggressive D.C. lobbying campaign.

The rise of the donor secrecy movement

North Carolina’s bill is the latest salvo in a decade-long push by conservative and corporate groups to limit public access to information about Big Money donors in politics.

At the forefront of the donor secrecy movement is the People United for Privacy Foundation and its sister group, People United for Privacy. Originally part of the conservative State Policy Network, the People United groups became independent in 2018. Both were registered by attorney Alan Dye, who also represented the American Legislative Exchange Council (ALEC), which has earned notoriety as a “corporate bill mill” pushing legislation benefiting its business backers. The same year, ALEC developed a toolkit to help legislators pass laws that limit donor disclosure.

The move to shield the spending of political donors from public view was a response to high-profile investigations into the Koch network and other wealthy operatives, generating public backlash.

Today, the People United for Privacy groups operate a multi-million dollar advocacy and lobbying operation, pushing measures to limit disclosure of donors — including “dark money” political spenders — through state bills like North Carolina’s, and ultimately, through federal legislation.

While they claim to be bipartisan, their backers are a who’s who of American right-wing politics.

According to 2023 federal tax records, the latest data available, two-thirds of People United for Privacy Foundation’s $2.4 million budget came from DonorsTrust, a secretive conservative fund that isn’t required to publicize its donors. Since 2020, DonorsTrust has poured more than $4.6 million into the group, and funneled another $475,000 to the State Policy Network for work related to “donor privacy.”

Other backers of the People United for Privacy groups are major funders of right-wing causes including the Adolph Coors Foundation ($150,000 in total grants), the Carroll Patrie Foundation ($200,000), the Sarah Scaife Foundation ($100,000), and the Searle Freedom Trust ($475,000).

Art Pope, the North Carolina GOP megadonor whose political machine has driven state politics sharply to the right, is also a key backer. The John William Pope Foundation, which Art Pope chairs, has granted $75,000 to People United for Privacy Foundation since 2021, according to federal tax filings. Pope also sits on the board of the Lynde and Harry Bradley Foundation, another prominent conservative funder, which has given $200,000 to the group.

The Bradley, Coors, Scaife foundations have come under fire as major supporters of Project 2025, the extreme right-wing agenda embraced by President Donald Trump in his second term.

A big loophole for disclosure

North Carolina’s latest “donor privacy” bill is one of dozens of efforts nationally by the People United for Privacy groups to limit donor disclosure at the state level this year. It also mirrors a similar North Carolina bill vetoed in 2021 by then-Gov. Roy Cooper, who called it an “unnecessary” measure that “may limit transparency with political contributions.”

This year’s bill — sponsored by three legislators with ties to ALEC — prohibits the state from “collecting, disclosing, or releasing” information about “financial and nonfinancial donors” to nonprofits, with certain exceptions.

That includes 501(c)(3) charitable, religious, and educational nonprofits, but it also covers 501(c)(4) “social welfare” organizations, who have become a leading source of “dark money” political spending. It also includes 501(c)(5) unions and 501(c)(6) business associations like the Chamber of Commerce, who also spend money to influence politics.

Unlike Political Action Committees (PACs) and candidate campaigns, 501(c)(4) nonprofits aren’t required to reveal their donors — although states like North Carolina have adopted their own rules requiring disclosure of who is backing their political activities. According to the Brennan Center for Justice, $1.9 billion was spent in 2024 on federal races by dark money groups, a record high.

While the N.C. bill doesn’t change the state’s disclosure requirements for dark money groups, it includes a glaring loophole: It allows candidates to create legal expense funds that can hide the identities of their donors, exempting them from North Carolina’s political spending disclosure laws.

The importance of that disclosure came into sharp focus in 2024, when Republican Judge Jefferson Griffin created a legal defense fund in his ultimately unsuccessful attempt to throw out more than 65,000 votes and overturn the N.C. Supreme Court Election. N.C.’s campaign disclosure laws revealed that a judge on the N.C. Court of Appeals — who could have heard the case on appeal — had donated $5,000 to Judge Griffin’s legal expense fund, a clear conflict of interest.

N.C. Senate Bill 416 “would make it nearly impossible for voters to learn of similar conflicts of interest going forward,” wrote Aaron McKean of the Campaign Legal Center, and “allow wealthy special interests to bankroll a candidate’s or official’s litigation expenses entirely in secret — creating obvious risks for corruption in our political process.”

Peeling off Democatic support?

The N.C. House version of the bill passed 63-46 in late June, with one member not voting, and 10 recording excused absences. Gov. Stein vetoed the measure, arguing that it “reduces transparency and creates more opportunity for dark money in our politics,” especially candidate legal funds. Stein also noted that “it makes it difficult, if not impossible, for the Department of Revenue to identify and crack down on certain types of tax fraud.”

Republicans are now gearing up for a vote, possibly in the next week, to override Stein’s veto — but they’ll need Democrats to succeed. Last November, Republicans held onto their supermajority in the N.C. Senate, but fell one seat short in the N.C. House, meaning it will take at least one Democrat to join the GOP in embracing the anti-transparency cause.

Shepherding the Republican bill through the legislature is an unlikely champion: lobbyist Brian Lewis of New Frame LLC, who represents liberal groups including El Pueblo and Moms Rising. Filings show Lewis has been hired by People United for Privacy to help push the bill through the N.C. General Assembly, presumably to assist in luring Democrats.

Meanwhile, North Carolina’s right-wing political machine has shifted into high gear to support the bill. The John Locke Foundation, a N.C. think tank largely funded by GOP benefactor Art Pope, has published a series of stories on its Carolina Journal website advocating for the measure. Americans for Prosperity, a conservative, pro-business advocacy group also backed by Pope and the Koch political network, is aggressively lobbying for a veto override as well.

“At a time when the public is demanding more transparency for political spending, mandating donor secrecy goes in the wrong direction,” McKean of the Campaign Legal Center recently argued. “Voters have a right to know which wealthy special interests are spending big money to influence our government.”

Disclosure: The author's spouse is executive director of N.C. for the People, a democracy organization that has announced opposition to N.C. Senate Bill 416. Image: Ejov Igor/Pexels