WASHINGTON, April 26 (Reuters) - Conservative U.S. Supreme Court justices on Monday appeared sympathetic to a challenge by two conservative groups to a California requirement that tax-exempt charities disclose to the state the identity of their top financial donors.
The nonprofit groups - the Americans for Prosperity Foundation and the Thomas More Law Center - argued that California's policy, in place for the past decade, violates the U.S. Constitution's First Amendment guarantees of freedom of speech and association. They have said that if the information becomes public, which some has in the past, it could lead to harassment or threats to donors.
Democratic-governed California, the most populous U.S. state, has said the donor information is required as part of the state attorney general's duty to prevent charitable fraud.
Conservative justices, who make up a 6-3 majority, signaled support during Monday's arguments for the groups' view that the measure should be struck down in full.
There appeared little appetite for a middle-ground proposal backed by President Joe Biden's administration to uphold the state policy but send the case back to lower courts to explore whether the groups could pursue a challenge based on how California applied the rules to them.
Conservative Justice Clarence Thomas voiced concern that donor identities becoming publicly known could deter people from giving money to groups with contentious views.
"In this era there seems to be quite a bit of loose accusations about organizations. For example, an organization that has certain views might be accused of being a white supremacist organization or racist or homophobic, something like that, and as a result become quite controversial," said Thomas, whose wife, Virginia Thomas, is a conservative activist.
The Thomas More Law Center is a conservative Catholic legal group. The Americans for Prosperity Foundation, which funds education and training on conservative issues, is the sister organization of Americans for Prosperity, a conservative political advocacy group - both founded by conservative billionaire businessman Charles Koch and his late brother David.
Conservative Chief Justice John Roberts appeared skeptical that California could assuage the concerns of someone who wants to donate to a controversial group but is worried about the donation being made public.
"If that person came to you and says, 'I want to give a donation but I want to be sure that California will not disclose this, that it will not get out. Can you give me 100 percent assurance that would not happen?' What would you tell that person?" Roberts asked California's lawyer, Aimee Feinberg.
Conservative Justice Amy Coney Barrett noted that 250 nonprofit groups from across the ideological spectrum had backed the challenge, suggesting broad opposition that would justify striking down the policy.
California requires that charities provide a copy of the tax form they file with the U.S. Internal Revenue Service that lists donors who contribute large amounts. Larger groups must disclose donors who contribute $200,000 or more in any year. That information is not posted online and is kept confidential but some has been disclosed in the past.
The case could have broad ramifications if the justices set a new standard making it easier for groups to withhold donor identities. The court in the past has been hostile to political campaign finance restrictions - it ruled in 2010 that corporations and other outside groups could spend unlimited funds in elections - but has upheld disclosure requirements.
Liberal Justice Stephen Breyer expressed concern that the case could be a "stalking horse" setting up future challenges to campaign finance restrictions, noting that in the political context "the interest is even stronger in people being able to give anonymously."
The San Francisco-based 9th U.S. Circuit Court of Appeals in 2018 reversed a federal judge's ruling in favor of the groups.
A ruling is expected by the end of June.
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