New York State is headed toward requiring 501(c)(4) groups that lobby to disclose their donors, a significant new requirement that may be a first for any state.  As more and more money is being spent to influence state governments, the New York State Joint Commission on Public Ethics approved draft regulations and guidelines to increase lobbying disclosure and reporting requirements.

Advocacy groups that lobby, such as 501(c)(4) organizations that have not had to disclose their donors, will have to disclose certain contributions under the new regulations, which still must go through New York’s formal rule promulgating process.  Once a person or entity that retains a lobbyist or lobbies on its own behalf spends over $50,000 and meets other spending and timing thresholds, it must disclose certain contributions – generally, contributions over $5,000 in the aggregate from a “single source.”  The “single source” rule requires aggregating contributions from donors who live in the same household, are a parent and subsidiary, or are subsidiaries with the same corporate parent.

There are a few important caveats.  Charitable 501(c)(3) organizations are statutorily exempt from the disclosure requirements and 501(c)(4) organizations can seek exemptions if they fear that disclosing donors may cause harm.  Any donor can also seek an exemption if he can show there is a substantial likelihood that disclosing the contribution would cause harm.

The Commission also approved guidelines that require lobbyists and clients to disclose certain business relationships with New York State legislators and statewide elected officials, as well as legislative and state employees.