Appeals court says tax-exempt groups can keep donors secret

WASHINGTON (Reuters) - A U.S. appeals court ruled on Tuesday that tax-exempt organizations do not need to release the names of those who pay for political advertisements leading up to the November 6 elections in the United States, turning aside an attempt by a Democratic congressman to force disclosure.

The unanimous decision reverses a ruling by a lower court in March that had sent tax-exempt groups scrambling for ways to keep donors' names secret.

Many of these groups exist for the sole purpose of running election ads, often masking the involvement of wealthy individuals or major corporations, disclosure advocates said.

Chris Van Hollen, a Maryland Democrat, sued the Federal Election Commission (FEC) in 2011 to try to force the agency to require disclosure.

However, a U.S. Court of Appeals in Washington ruled that the FEC was entitled to flexibility in how it interprets the relevant law,

"The statute is anything but clear, especially when viewed in the light of the Supreme Court's decisions," its decision said.

The relatively brief five-page decision came four days after a three-judge panel heard oral arguments in the matter, a fast pace for a court that sometimes takes months to issue decisions.

Two conservative organizations, the Center for Individual Freedom and the Hispanic Leadership Fund, asked the appeals court to find in favor of the FEC after U.S. District Judge Amy Berman Jackson found in favor of Van Hollen in March.

The decision applies to organizations known under the U.S. tax code as 501(c) groups - groups that are exempt from paying tax, typically because they have a charitable status - and to so-called issue ads that such groups pay to run in the weeks before an election.

(Reporting by David Ingram; Editing by David Brunnstrom)

Source: http://news.yahoo.com/appeals-court-says-tax-exempt-groups-keep-political-143740680.html

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