Montana governor sues IRS over political donor disclosure

Steve Bullock, Governor of Montana, speaks during the Milken Institute Global Conference in Beverly Hills, California, U.S., May 1, 2017. REUTERS/Mike Blake

(Reuters) - Montana’s governor on Tuesday sued the Internal Revenue Service and U.S. Treasury to stop them from removing requirements that politically active nonprofits, such as the NRA and Planned Parenthood, disclose donor identities to U.S. authorities.

In the lawsuit filed in U.S. District Court in Great Falls, Montana, Governor Steve Bullock, a Democrat, said the Trump administration failed to give proper notice of or seek public comment on changes to the decades-old rule requiring such disclosure. He is asking a U.S. judge to find the rollback, which was announced last week, illegal and set it aside.

Pointing to the significance of the coming midterm election, Bullock said in a statement: “The IRS and the administration are sending absolutely the wrong message at the wrong time: Spend money to get corporate interests elected and we’ll work to cover your tracks. Well, I say not on my watch.”

IRS and Treasury officials did not immediately respond to requests for comment on what Bullock’s staffers said was the first such lawsuit of its kind.

The Treasury Department said last week that the IRS would no longer require a range of nonprofit organizations to identify any contributors giving more than $5,000.

Conservatives have complained that the disclosures to the IRS, though not public, were susceptible to media leaks. The issue exploded into headlines several years ago when the IRS was found to have targeted tax-exempt political groups aligned with the conservative Tea Party movement for greater scrutiny.

In his suit, Bullock argued that Montana would have to change its laws and spend “substantial resources” to develop new procedures for making large nonprofit political donations more transparent.

It is the latest of Bullock’s salvos against the Trump administration and what the two-term governor and former attorney general of Montana says is secrecy in political spending that undermines American democracy and the integrity of U.S. elections.

Bullock last month signed an executive order requiring state government contractors that have spent money in elections to reveal donors’ identities.

Reporting by Laura Zuckerman in Pinedale, Wyoming; editing by Bill Tarrant and Cynthia Osterman