A case involving political "dark money" and the founder of an organization tied to President Donald Trump's accusations of voter fraud could lead to a crush of anonymous cash infiltrating elections in the country's second-largest state, a Democratic lawyer warned the Texas Supreme Court on Tuesday.
The nine Republican justices on Texas' highest civil court heard arguments involving the legality of the state's ban on corporate contributions, disclosure requirements for political action committees and the question of when a politically active nonprofit should have to disclose its donors like a traditional PAC. Some believe that the case ultimately could wind up before the U.S. Supreme Court and potentially reshape campaign finance regulations nationwide.
Houston tea party group King Street Patriots, started by Catherine Engelbrecht, has been the focus of a longstanding lawsuit by the Texas Democratic Party accusing the organization of violating state campaign finance laws by engaging in political behavior when it dispatched poll watchers on behalf of the Texas Republican Party during the 2010 election.
But the nonprofit, represented by Indiana attorney James Bopp Jr. -- architect of the landmark Citizens United case that opened the door for corporations and unions to make unlimited independent expenditures in U.S. elections -- has fired back with a counterclaim challenging numerous provisions of Texas campaign finance law.
Twenty-two states currently prohibit corporations from contributing money to campaigns and candidates, according to the National Conference of State Legislatures. Texas has no limit on what individuals or political committees can donate to candidates, requiring all political spending to be disclosed. But corporations statewide are barred from giving money directly to a campaign, though they are allowed to contribute to a political committee set up for a ballot measure or to a state-level Super PAC, which is only allowed to make expenditures independent of candidates.
Two state courts so far have upheld the Texas campaign finance laws at issue in the case. But if the Texas Supreme Court decides to toss those laws, the public will be hard pressed to know who is funding candidates and campaigns, said Chad Dunn, a lawyer for the Texas Democratic Party.
"What's at stake today is opening the floodgates to secret funding of elections," Dunn said.
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The court isn't expected to rule for months and Bopp said he would appeal to the U.S. Supreme Court if he loses.
Engelbrecht's King Street Patriots drew national attention in 2010 for sending hundreds of observers to assist the state Republican party with poll watching efforts. She said the group exists only on paper now and an offshoot started about the same time called True the Vote has taken the lead on looking into voter rolls in numerous states.
Trump has made widely debunked claims that the presidential election was marred by 3 million illegal voters. He has also encouraged the work of True the Vote, which says it is conducting a state-by-state voter roll analysis that Engelbrecht says could substantiate Trump's accusations.
Tuesday's hearing comes amid debate in Texas and elsewhere over so-called "dark money." The term arose from nonprofit advocacy groups that spend on political purposes but are not subject to campaign finance disclosures. Its rise is one of the effects of the U.S. Supreme Court's 2010 Citizens United ruling.
Democrats have alleged in their lawsuit that the King Street Patriots, a nonprofit that is not required to disclose donors under federal and state campaign finance laws, made unlawful political contributions to the Texas GOP. It did this, Democrats allege, by training poll watchers in cooperation with the party, holding candidate forums only for Republicans and by phone banking for former Gov. Rick Perry. Democrats have used the case to press for disclosure of the group's donors, arguing the nonprofit is a "sham corporation" that has acted more like a PAC.
Texas Solicitor General Scott Keller argued Tuesday that the group doesn't qualify as a PAC under state law. Supreme Court Chief Justice Nathan Hecht seemed to agree, saying: "It's hard to see how training poll watchers expressly advocates for the outcome in an election."
Bopp said current Texas campaign finance laws infringe on the Houston group's free speech. He said the state's PAC provisions are vague and overbearing. Asked by Hecht if he thinks the group is a PAC, Bopp said he wasn't sure because the law is so muddy.
"This is critical," he said. "Advocacy groups need to know and understand when it is they are going to bump up against a campaign finance law and in particular when they will be subject to PAC burdens."
