Donor Disclosure and Democratic Distrust of International Civil Society Organizations
People generally love nonprofit organizations. But people’s governments don’t. Paradoxically, government tolerates and even encourages nonprofits — with subsidies and other valuable benefits. But government doesn’t trust nonprofits any farther than it can throw them. And that seems to be a universal rule around the world, common to authoritative and non-authoritative governments alike.
The EU — in defense of democracy, allegedly, is the latest evidence. In Belgium there’s an organization called Fight Impunity; 4000 miles away there is an oil rich country called Qatar. Well, Qatar funneled a pittance of its oil money, but a lot of money nevertheless, through Fight Impunity, to bribe EU members and officials so that the EU would adopt only favorable laws and say only favorable things about Qatar. The whole thing broke wide open and there are corruption trials and investigations going on in Belgium. In Brussels, observers are demanding actions at home and in defense of EU democracy. That’s the short version. Politico reports a lot about it, and produced this video almost as slick as a Grisham or Tom Cruise Mission Impossible movie.
That scandal has spawned consequences and repercussions. The European Union, joining a whole buncha other countries around the world for a long time including the US, is on the verge of adopting its own version of a law requiring nonprofits to disclose the identities of foreign donors. It must be human nature that people love the local volunteer fire station or little league, but their governments get real nervous when it starts looking as though the new fire truck and baseball uniforms were donated by an LLC owned by a Delaware Corporation whose shareholders hail from faraway places. Government views foreign altruism as threat, no matter what. Afghanistan is probably the starkest example right now. Government there would rather the people starve than accept foreign altruism.
Here is what the EU said in its request for comments on proposed legislation expressing its own deep suspicion for foreign altruism.
Recent years have seen a marked increase in cases of covert interference in our democratic sphere by countries outside the EU, with the risks further accentuated by the Russian war of aggression against Ukraine. The measures put forward by the Commission in the 2020 European Democracy Action Plan are under way and have helped to strengthen democratic resilience across the three pillars of the action plan (election integrity, media pluralism, fight against disinformation). However, methods of threatening EU democracies – whether from outside, or using organisations established in the EU which act as proxies for foreign entities – are constantly evolving, requiring a strengthened response to build resilience to foreign interference.
And from Politico, this:
The European Union is working on a law that would force nongovernmental groups, consultancies and academic institutions to disclose any non-EU funding as part of a crackdown on foreign influence in the bloc, three sources confirmed to POLITICO.
The planned legislation, which is in very early stages, echoes similar laws in Australia and the United States. In the U.S., the Foreign Agents Registration Act has required lobbyists working on behalf of foreign governments to register with the federal government since 1938.
The EU’s version is unlikely to target individuals, but would make both commercial and nonprofit organizations around the bloc reveal non-EU funding pertaining to transactions such as paying for academic study, according to one European Commission official who asked not to be named in order to discuss preliminary thinking around the law, which is due to be finalized in late May.
And this from a different Politico article: “Some NGOs voiced concern that if Europe goes ahead with its own version of the U.S. Foreign Agents Registration Act, it could be weaponized by strongmen like Hungarian Prime Minister Viktor Orbán to clamp down on pro-democracy forces in their country.”
Actually, it is probably more accurate to say that it is incumbents don’t much care for nonprofits none. Animus, for example, is what motivated Alabama to demand disclosure years ago in NAACP v. Alabama Ex Rel. Patterson. And of course, the NAACP members feared reprisals based solely on their free association and speech. Incumbents maintained a violent defensive resentment against an exempt organization’s challenge to the manner in which incumbents governed. And since that time, the U.S. has championed, in its domestic laws at least, the rights of donors to remain anonymous at least in the face of proven or imminent repression. Check out Phil’s testimony for a great overview.
We should be concerned, moreover, that the pejorative phrase “dark money” may unjustifiably drive inefficient disclosure rules for the entire sector, including on the international stage. I am not even sure that dark money is as big an issue as we seem to think, particularly in a time of information technology. Dark money is not the problem. Its our own slovenly sound bite habits. We would rather unquestionably consume CNN, MSNBC, and Fox than read and pay attention to all the information available at our fingerprints. Ultimately, we get the governments we deserve.
I have noted before that democracy is at a strategic disadvantage in geopolitical competition and that democracies risks adopting anti-democratic rules when they seeks to ameliorate that disadvantage. Adopting the opposition’s rules is merely another way the opposition wins in geopolitical competition because instead of championing and exporting democratic values, democracies are forced to import and perpetuate anti-democratic strategies, ostensibly in “defense” of democracy. Maybe democracy, like capitalism in its purest form, cannot exist perfectly.
darryll jones