The New Mexico Legislature adjourned on March 22 with Senate Majority Floor Leader Peter Wirth’s (D) surreptitious attack on nonprofit donor privacy and issue advocacy left to die in committee. The Senate unanimously passed Wirth’s bill, S.B. 85, in mid-February, but after facing significant nonprofit opposition during a recent House committee hearing, the Majority Leader was forced to declare: “The bill is dead.”

According to New Mexico In Depth, “Wirth was blindsided by the organized effort to oppose his bill,” particularly because, as he claimed, “These are groups I champion.” That organized nonprofit coalition included the following:

“Folks in opposition are ACLU, Café ACCION, Center for Civic Policy, El Centro, Equality NM, NM Native Vote, NM Working Families, Olé, Organized Power in Numbers, Progress Now New Mexico, Semilla Action and Sierra Club, Rio Grande chapter,” [NM Native Vote Executive Director Ahzta] Chavez said.

The group is a mix of 501c3 and 501c4 nonprofit organizations who variously run nonpartisan get-out-the-vote campaigns, and in the case of 501c4 groups, endorse Democratic candidates.

After scolding the coalition of progressive nonprofits for not approaching him directly, Wirth assured them that their concerns about S.B. 85 expanding campaign finance disclosure requirements beyond the financing of political campaigns were unfounded because all the bill would do is codify the status quo. Never mind that the New Mexico State Ethics Commission’s bill analysis plainly states, “One of SB 85’s central objectives is to require more disclosure of the funding sources of independent expenditures.” Crucially, the “independent expenditure” definition in New Mexico law explicitly covers issue advocacy by nonprofits that refer to elected officials and candidates in their work. The term is very misleading in light of its common understanding.

S.B. 85 sought to remove the phrase “for a political purpose” from the definition of “expenditure” because, in 2019, another bill sponsored by Wirth (S.B. 3) expanded the definition of “independent expenditure” to include speech that is not “for a political purpose,” creating an incongruence in the law. The 2019 bill that became law codified an expanded definition enacted via rulemaking by Secretary of State Maggie Toulouse Oliver (D) in 2017 after then-Governor Susana Martinez (R) vetoed the same expansion via legislation due to concerns that “[t]he requirements in this bill would likely discourage charities and other groups that are primarily non-political from advocating for their cause and could also discourage individuals from giving to charities.”

In other words, Wirth’s misleading codifying-the-status-quo tagline is part of a longstanding strategy whereby government officials allied with Wirth stretch the law beyond the statute, through rulemakings and enforcement action, allowing Wirth to tell lawmakers and impacted speakers that his bill is nothing more than a technical, inconsequential cleanup on Aisle 5. If speakers push back against enforcement action that does not align with existing statute, enforcement officials and Wirth sound alarm bells that the speaker has exposed a “loophole” in current law that must be closed with legislation.

Importantly, the statutory language that Wirth and his speech police allies call “loopholes” is taken from U.S. Supreme Court precedent on the constitutionality of campaign finance reporting and disclosure requirements – especially when they touch issue advocacy by nonprofits. For example, the Supreme Court has warned that laws with the:

“potential for encompassing both issue discussion and advocacy of a political result . . . [may] impose[] independent reporting requirements on individuals and groups that are not candidates or political committees only in the following circumstances: (1) when they make contributions earmarked for political purposes or authorized or requested by a candidate or his agent, to some person other than a candidate or political committee, and (2) when they make expenditures for communications that expressly advocate the election or defeat of a clearly identified candidate.”

By eliminating references to “a political purpose” within the disclosure requirements for independent groups, S.B. 85 would have removed any semblance of New Mexico’s law staying within the confines of First Amendment precedent.

As it is, the Rio Grande Foundation (RGF) is currently challenging the 2019 law that extended the “independent expenditure” (IE) definition – and therefore the reach of disclosure requirements – to include speech well beyond “communications that expressly advocate the election or defeat of a clearly identified candidate.”

As RGF explained in February:

“S.B. 85 doubles down on existing New Mexico law by replacing the word ‘contribution’ in the statute with the word ‘donation.’ Current law defines a ‘contribution’ as funds given or received ‘for a political purpose.’ Therefore, an argument could be made that an organization making IEs is only required to report donors who give ‘for a political purpose,’ even though the context in which the existing law uses this term argues for a broader and general requirement to report all donors. S.B. 85 makes it explicit that donors who give for any purpose – not just ‘a political purpose’ – are required to be reported if an organization makes IEs.”

Despite assurances from the Attorney General’s office that S.B. 85 would “not regulate the spending associated with nonprofit entities,” the donor disclosure “loopholes” cited by Wirth and the New Mexico State Ethics Commission deal exclusively with nonprofit donor disclosure. And the changes to the IE donor disclosure requirements are clearly aimed at nonprofits, not political committees and obviously not candidates.

The anti-privacy fanatics at the Ethics Commission have claimed that expanding the reach of the law to more explicitly apply to issue speech and inarguably require nonprofits to disclose non-political donors is necessary because sophisticated nonprofits with “smart lawyers” have been able to fight back against the state’s overzealous enforcement. First, just because a nonprofit’s legal counsel correctly points out that the Commission’s demands are incongruous with the statute does not mean there’s a “loophole.” Second, in what world does increasing barriers to entry through compliance burdens, legal risks, and privacy concerns not advantage entrenched, well-funded entitles? Perhaps there’s a reason small, local nonprofits showed up to the recent hearing and not the organizations cited as the supposed targets of the bill’s expanded reporting mandates.

As RGF President Paul Gessing and People United for Privacy Foundation (PUFPF) Vice President Matt Nese warned in a recent Santa Fe New Mexican op-ed:

“The chilling effect of the law will be felt strongly by groups working on issues ranging from immigration to education and every cause in between.

That means entrenched political interests will gain influence and dissenting voices will be silenced. Promoted under the guise of increasing transparency, SB 85 moves us closer to a world where only politicians, lobbyists and major media outlets get to speak about what happens in Santa Fe.”

Paul Gessing also joined PUFPF in a recent webinar discussing PUFPF’s report on threats to nonprofit donor privacy in the states. Like the nonprofits that testified at the House committee hearing, RGF was “caught unaware on this particular proposal,” until being alerted by PUFPF. Also like those nonprofits, Gessing suggests that Senators “were probably told by the Majority Leader that this was cleanup language, that this was innocuous, and they didn’t realize exactly what they were voting for.”

Instead of blaming nonprofits for not engaging on his preferred timeline, perhaps Wirth should consider they too were “blindsided” by legislation that he inaccurately described as doing two things: amending portions of the law that regulate super PACs and making changes to candidates’ reporting requirements.

Too often, nonprofits are told by proponents of campaign finance legislation that the proposed changes are nothing more than minor updates to laws regulating campaigns and PACs, only to find out too late that they are also caught in the dragnet and faced with the harsh reality of either staying silent or exposing the names and home addresses of their members and supporters. Frustratingly for Wirth, especially considering his same bill also died in the House in 2023, New Mexico nonprofits didn’t fall for his sneaky tactics this time around.