We know who funded Supreme Court legal fight. But a new law may make money secret

Yahoo

2 days ago

When Judge Jefferson Griffin unsuccessfully attempted to overturn his loss in the 2024 North Carolina Supreme Court election, the number that stuck out was 65,000 — the number of ballots he sought to disqualify, potentially flipping his 734-vote loss to Democratic incumbent Allison Riggs.
However, another less-reported number is key to understanding the chaotic and unprecedented six-month legal battle: $2 million.
That's the amount of money Griffin and Riggs brought in from donors across the country to support their efforts in court. These donations came from California megadonors, local attorneys, concerned citizens and, in one case, a sitting Republican judge on the North Carolina Court of Appeals who could have ruled on the case.
But under a new law enacted last month by the Republican-controlled legislature, all of that money could become secret — leaving voters in the dark about where the money comes from to litigate high-profile contested elections or fend off ethical and criminal allegations.
Senate Bill 416, the Personal Privacy Protection Act, prohibits state agencies from disclosing donors to nonprofit organizations.
Critics say this includes legal expense funds, like the ones Griffin and Riggs set up to fund their courtroom battle, and warn it could open the door to 'dark money in our politics,' according to Democratic Gov. Josh Stein, who vetoed the bill last month.
Republicans, joined by three Democrats in the House, overrode Stein's veto, with Sen. Warren Daniel, the bill's sponsor, saying it was necessary to protect donor privacy.
'Ultimately, the bill impacts both sides of the aisle equally,' said Daniel, a Morganton Republican, noting that Alabama, Colorado and Alaska have each passed similar bills. 'It prevents the elected officials in red states from targeting left-wing groups and, vice versa, blue states targeting conservative organizations.'
The bill does not mention legal expense funds by name, but Aaron McKean, a lawyer with the nonpartisan Campaign Legal Center, said its broad application to nonprofits creates a loophole that could shield disclosure.
'There's a chance that some enterprising person might create a 501(c)4 as their legal expense fund vehicle, and then be able to claim that they don't have to disclose any of their donors under this law,' he said.
He also noted that when Republicans unsuccessfully tried to pass a similar bill in 2021, they specifically included an exemption for legal expense funds 'that ensured they would remain fully transparent.' That exemption does not appear in SB 416.
Asked whether the bill applies to legal expense funds, a spokesperson for the State Board of Elections said that agency staff are 'still evaluating' SB 416 'including whether it affects reporting and disclosure provisions for legal expense funds.'
Sen. Daniel and the two other sponsors of SB 416 did not respond to questions from The News & Observer about the intended scope of their bill.
McKean said the possibility of further reducing donor transparency is 'particularly egregious' given all of the chaos surrounding the 2024 Supreme Court election.
'People in North Carolina, people across the U.S., want more information about who is spending money to influence their government or their elected officials,' he said. 'And bills like this go the wrong direction.'
Where do these disclosure rules come from?
Disclosure rules for legal expense funds emerged in the mid-2000s following a string of scandals, including former Democratic House Speaker Jim Black pleading guilty to a federal corruption charge.
Black fought his charges using an unregulated legal fund that did not disclose its donors.
Republican Senate leader Phil Berger, who at the time served in the minority in the state legislature, said the funds should be transparent.
'The public is entitled to know who is paying the bill for public officials when they get in trouble,' he wrote in a 2006 news release.
Last month, Berger voted in favor of SB 416.
Republicans have pursued consequential changes to other financing rules in recent years.
Earlier this week, The Assembly reported that Duke Energy donated $100,000 to the NC GOP's building fund, which was the account used to pay Griffin's legal fees.
Previously, these building funds were largely restricted to spending on expenses related to a party's headquarters. But a law enacted last year by the Republican supermajority allows those accounts — which draw donations from corporations, business entities and labor unions — to be used for legal actions.
A party spokesperson told The Assembly that Duke's contribution was 'was not connected to the North Carolina Supreme Court election, nor any specific candidate.'
What do Griffin and Riggs' finance reports show?
While SB 416 could affect future litigation, the finance reports for Griffin and Riggs are still available and shed valuable insight into the contested election that upended North Carolina politics.
The largest donor to each candidate, by far, was their respective political parties. The North Carolina Republican Party gave Griffin over $340,000 worth of legal services, and Democrats gave Riggs $325,000.
But, past those contributions there was a striking disparity in donations between the two candidates. Riggs reported raising over $1.6 million, whereas Griffin reported raising about $362,000.
And where Riggs reported receiving over 12,000 individual donations to her legal fund, Griffin reported only 13 — three of which were from the NC GOP.
Judge Tom Murry made a $5,000 contribution to Griffin's legal fund — a donation critics called a 'textbook conflict of interest' given that, as a sitting judge on the Court of Appeals, Murry could have been asked to rule on Griffin's challenge to the election results.
'It is law school lesson number 101, and let it sink in: one judge donated to help another judge change the outcome of an election in cases that he could conceivably sit on in judgment,' Rep. Deb Butler, a New Hanover County Democrat, said during the veto override vote. '… If Senate Bill 416, had been the law, then we would never have known that.'
Murry did not formally recuse himself from the case, but nevertheless he did not end up sitting on the panel that heard it.
As for Riggs, her finance reports show a wide variety of donations from donors large and small.
Unlike regular campaign finance committees, legal expense funds don't have the same limits on individual contributions. That led to some eye-popping contributions from across the country, including $250,000 from Elizabeth Simons, a California-based megadonor, and $20,000 from the chair of Capitol Broadcasting, which owns WRAL, the Raleigh-based TV station.
However, nearly 95% of Riggs' individual donations came from small-dollar donors who gave $100 or less. When totaled up, those small donations accounted for about 22% of her total haul.
Large donations over $5,000 accounted for about 53% of Riggs' overall contributions.
One final data point in the two candidates' disclosures presents further questions.
Riggs reported spending over $1 million of her donations on legal fees to Womble Bond Dickinson, the law firm that represented her throughout the case.
However, Griffin's records only show the $340,000 for in-kind legal fees from the NC GOP and another $14,000 to Dowling PLLC, a law firm that represented him.
The North Carolina Republican Party, which joined Griffin as a co-plaintiff at some points in the case, also reported a roughly $48,500 expenditure to Dowling in February, but did not specify if it was for his challenge.
Asked how Griffin and the party could have spent roughly a third of what Riggs did on lawyers for a complicated case that ping-ponged between state and federal courts, a spokesperson for the Republican Party did not respond, nor did the treasurer of Griffin's legal expense fund.