A New York state court ruled that the constitutional guaranty of religious freedom did not excuse a church from producing its records in response to a grand jury subpoena.
During a tax investigation, the state attorney general subpoenaed several records and documents from a church (including general ledgers, accounts payable and receivable journals, 941 and W-2 forms, cash receipts and disbursement journals, bank statements, cancelled checks, postal shipment records, employee travel expense records, telephone bills, the corporate charter, minutes of board meetings, and credit card statements). The church challenged the validity of the subpoena on the ground that disclosure of the documents would violate the constitutional rights of the church and its members.
The court noted that the church had to "make at least some showing that production of the information sought would impair their first amendment rights" and that "once such a showing is made, the prosecution has the burden of establishing that the infringement is outweighed by a compelling state interest to which the information sought is substantially related, and that the state's ends may not be achieved by less restrictive means." Church representatives argued that disclosure of the records would reveal the identities of contributors to the church in violation of the church's belief (based on Matthew 6:1-4) that "charity should be given in secrecy."
The court rejected the church's claim that disclosure of many of the requested records would violate the church's right to religious freedom. For example, the court observed that "it is hard to conceive that release of charge or credit account records, or records of employees' travel expense accounts, would have any likelihood whatsoever" of violating any religious beliefs or tenets of the church. The court agreed that the church "sufficiently substantiated" that disclosure of some records would violate contributor's constitutional guaranty of religious freedom. It cited cash receipts records and bank statements. The court further agreed that disclosure of records revealing the charitable recipients of church funds (e.g., cancelled checks and bank statements) also might violate the church's rights.
The court emphasized that "the fact that disclosure of the items would directly violate the denominational belief that church contributions should be kept secret is only the beginning, however, and not the end of the inquiry." The church would be required to disclose the constitutionally protected records if the state could establish that the alleged violation of the church's rights was outweighed by a "compelling state interest to which the information sought is substantially related" and that the "state's ends may not be achieved by less restrictive means." The court concluded that such was the case here, since the church's records were sought in connection with an investigation into tax-related offenses including underreporting of compensation paid to officers and employees and diversion of church funds to nonreligious purposes, and "it is by now well settled that enforcement of a state's revenue laws constitutes a compelling governmental interest."
The court also concluded that there "was no less restrictive means for obtaining the relevant evidence of the violations of law under investigation," and therefore the church's "first amendment objections to the subpoenas are unavailing." The court did acknowledge that the subpoenas "did not seek either general membership lists or general lists of contributors to or charitable donees of the [church]," and that "disclosure of the identities of specific contributors was incidental to the effort to uncover the flow of money and property in and out of the [church], and indispensable part of the grand jury's investigation." In other words, since general membership or contributor lists were not relevant to the grand jury's inquiry, they may have been protected from disclosure had they been specifically sought by the attorney general.
This case is significant because it is one of the few published opinions to discuss the validity of a church's objections to attempts to subpoena its records. Many churches assume that their records enjoy a mantle of secrecy and are immune from the subpoena power. The New York case recognizes that this assumption is flawed, even with respect to records whose disclosure would admittedly violate the church's religious beliefs. Full Gospel Tabernacle, Inc. v. Attorney General, 536 N.Y.S.2d 201 (1988).