State Campaign Financial Disclosure Act Applied to Churches Who Publicly Opposed a “Liquor-by-the-Drink” Referendum

The Supreme Court of Tennessee ruled that a state "Campaign Financial Disclosure Act," which regulated

The Supreme Court of Tennessee ruled that a state "Campaign Financial Disclosure Act," which regulated the activities of "political campaign committees" within the state, applied to a group of 13 churches that publicly opposed the adoption of a "liquor-by-the-drink" referendum.

The churches purchased radio, television, and newspaper advertisements opposing the liquor referendum, and offering to provide transportation to the polls on election day; some of the churches, as part of the broadcast of their religious services, broadcast sermons expressing opposition to the referendum; and most of the churches published newsletters for their members which included expressions of opposition to the referendum. The churches spent $5,150 in their efforts.

Following an anonymous complaint, the state attorney general investigated the churches' activities and concluded that they were subject to the state's Campaign Financial Disclosure Act. The churches thereafter sought a "declaratory judgment" from a local state court. The local court concluded that the Act did apply to the churches' activities, and the churches appealed the question to a state appeals court, which ruled in their favor.

The appeals court ruling was then appealed to the state supreme court, which concluded that the Act did apply to the churches. The court observed that the Act regulated all "political campaign committees," which were defined as any combination of two or more persons or organizations making expenditures to support or oppose any measure in an aggregate amount exceeding $250 during any calendar quarter.

Since the churches "made expenditures … to influence the outcome of the vote in the local liquor referendum … [they] constitute political campaign committees." The Act requires political campaign committees to file disclosure statements with the county election commission.

The court rejected the churches' claim that public questions such as a liquor referendum are primarily moral rather than political issues. It also rejected the churches' contention that the Act violated their constitutional right to free speech, since whatever burden the Act imposed on the churches' free speech rights was "justified by a compelling state interest."

In particular, the court noted that "the public has a right to know at a minimum how campaigns on public issues are financed and by whom. Large undisclosed contributions can distort public sensibilities and allow confidence in the electoral system to wane as the perception waxes that elections can be unduly influenced by wealthy special interests and well-financed factions.

The legislature has determined that disclosure is a sufficient remedy for the effects of the concentration of wealth on elections …. Any group that wishes to participate in the process through the financing of election … advocacy should reveal the extent of this financial involvement to the public. This is all that the people of Tennessee have asked of groups directly participating in an election campaign …."

The court also concluded that (1) "the Act does not apply to financing of generalized discussion of public issues and is triggered only when a group is financing … specific advocacy in a particular campaign"; (2) the churches' "regular and continuing programs of broadcasting their religious services on radio and television or of publishing and distributing church newsletters are not and cannot be considered campaign contributions or expenditures, regardless of whether they advocate a particular election result or not in the course of such activities, as these activities are protected by the First Amendment and are expressly excluded from the operation of the Act"; (3) "if [the churches] published advertisements or other forms of general expression that warned of the potential and actual effects of alcohol consumption or other perceived social evils, outside the context of an election campaign or even during a campaign but without financing election-specific advocacy, then such activities would not fall within the Act, absent any indication these activities were timed and intended to circumvent the requirements of the Act."

The churches appealed the Tennessee Supreme Court's ruling directly to the United States Supreme Court. However, the Court denied the appeal (and a motion for rehearing), leaving the state court's ruling intact. Bemis Pentecostal Church v. State, 731 S.W.2d 897 (Tenn. 1987)

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