Judge Rejects Major Rules on Charity Soliciting

A federal judge has struck down major portions of the Los Angeles city and county ordinances regulating charitable solicitations, issuing a far-reaching decision that could affect thousands of organizations ranging from small religious groups to the United Way.

U.S. District Judge Kim M. Wardlaw in Los Angeles ruled that the city and county had a substantial interest in preventing fraud and harassment in the solicitation of funds, but concluded that the procedures used by those governments were overly broad and much too intrusive.

The judge said the city and county could prevent fraud by using existing criminal laws and by providing information that would help the public make good choices about its charitable donations--such as disclosing how much money goes to salaries at a particular organization.

Shirley Flucus, who heads the unit of the Los Angeles Police Commission that regulates 30,000 charitable organizations in the city, said Wardlaw’s ruling would have a dramatic effect on her agency’s operations. “We’re holding our breath,” she said.

Flucus said the agency would immediately comply with Wardlaw’s decision, while the city attorney’s office contemplates an appeal.

Consequently, she said the agency will no longer collect licensing fees--about $3,000 annually--or bonds from professional fund-raisers, or require charitable organizations to provide a roster of their officers or a detailed financial statement.

Flucus said these changes will impinge on the agency’s ability to prevent fraud. She said the agency had not filed criminal charges against anyone in the past five years, but typically rejects about 40 solicitation applications a year.

County officials did not return calls seeking comment.

Wardlaw’s decision came in a case filed by Gospel Missions of America, a “small religious and missionary organization” that operates three modest homeless shelters in Rowland Heights, according to its leader, the Rev. Erich Wagner II.

Gospel Missions came under the scrutiny of investigators after some supermarket owners complained that shopping center solicitors--sometimes street people dressed in cleric’s collars--were helping themselves more than the homeless for whom they claimed to be raising money.

In 1992, the Sheriff’s Department obtained a warrant to search five residences owned or leased by Gospel Missions in Rowland Heights. An affidavit filed by a sheriff’s investigator said there was probable cause to believe the searches would yield information showing “illicit charitable operations.”

According to papers filed later by members of Gospel Missions, the searches were conducted at gunpoint and “had a devastatingly chilling effect upon all of them,” resulting in damage to the group’s reputation and a reduction in outreach activities. Ultimately, no criminal charges were filed against Gospel Missions or any of its officials.

In January 1994, Gospel Missions and 21 individuals sued the city and county for damages--a case that is still pending--and lodged a constitutional challenge to the solicitation ordinances. Though none of the group’s facilities were in Los Angeles, Gospel Missions solicited in the city and Flucus had helped spark the probe. The suit led to Wardlaw’s ruling, which was dated Jan. 10 but released Wednesday.

In a long and scholarly decision, Wardlaw found the local ordinances “constitutionally infirm,” on the basis of a number of Supreme Court decisions. Wardlaw devoted more detail in the opinion to the city ordinance, and then said that the county ordinance had many of the same defects.

She cited one high court ruling that said, “Prior authorities . . . clearly establish that charitable appeals for funds, on the street or door to door, involved a variety of speech interests--communication of information, the dissemination and propagation of views and ideas, and the advocacy of causes--that are within the protection of the 1st Amendment.”

The judge said portions of the city ordinance “are so vague that persons ‘of common intelligence must necessarily guess at [their] meaning and differ as to [their] application.’ ”

For example, she cited a section of the city ordinance that said that before soliciting charitable contributions, every person must file a “notice of intention” with a city agency. The notice of intention must include, “but not be limited to,” certain specified information. However, Wardlaw said the city failed to specify what the additional information could include. Consequently, she said the section is void because of vagueness and because it “impermissibly vests unbridled discretion in the licensing authority.”

Wardlaw upheld the city’s right to require charities to obtain an “information card,” of the type used by solicitors in the mail, going door to door or working at supermarkets. The card typically contains the name, address and phone number of the organization, the nature of the solicitation--for example, helping the homeless--estimated expenses of the solicitation and information on how much money it raised previously.

The judge also said the city could investigate statements on the notice of intention to solicit and to have access to books and records relating to any charitable solicitation. Further, Wardlaw said the city and county may legitimately require people to register, identify their solicitors and make disclosures concerning their solicitation of public funds.

But she said other provisions of the ordinance were unduly burdensome, among them the requirement that an organization provide a detailed financial statement for the most recent year and a list of its officers’ and board members’ names, addresses and phone numbers. “Such disclosures directly expose the applicant’s internal operations to public scrutiny and are unrelated to any legitimate governmental interest, “ the judge wrote.

Wardlaw also said that a bevy of other provisions of the city ordinance and the county law did not pass constitutional muster. In particular, she said provisions of both ordinances that permit government officials to place on the information card their own views of the worthiness of the organization’s solicitation is “an impermissible regulation of speech content.” If the city’s opinion is unfavorable, the judge noted, that clearly would hamper the solicitors’ legitimate efforts.

The ruling has one particularly ironic outcome, said Deputy City Atty. Miguel Dager and Gospel Missions attorney James H. Fosbinder. Both ordinances contain an exemption for solicitations made “solely for evangelical, missionary or religious purposes.” At the time the case began, Gospel Missions said that as an evangelical group it was exempt from the ordinances, while city officials said it did not have such purposes and should not be exempt.

Wardlaw ruled that the exemption was a violation of the Constitution’s bar on government aid to religion. She said the exemption had no secular purpose, advanced religious interests and fostered excessive government entanglement by requiring a city agency to examine and monitor religious solicitations to determine their true purpose.

As a result of this section of Wardlaw’s decision, religious organizations will be required to file papers to get solicitation permits, Flucus and Dager said. Several religious groups already register with the city voluntarily, but many others do not, Flucus said.

A spokesman for one large charity, asked to comment on the federal court ruling, said his group had not found the local ordinances particularly burdensome. Todd Rosin of the United Way of Los Angeles called the regulations an effort “to ensure that local nonprofit organizations are being run ethically with accountability and cost efficiency.”

However, Rosin added, “whenever a practice is found improper by the courts, we would support that decision.”