Tuesday, Nov. 5, 2002 | 9:08 a.m.
The U.S. Supreme Court, in an encouraging move, has agreed to consider a case that could decide whether states can regulate telemarketing done on behalf of charities. The case is from Illinois, where a telemarketing company raised money for Vietnam veterans. Illinois Attorney General James Ryan noted that just 15 percent of the money raised actually went to the charity -- something not disclosed by the solicitors. Further, according to Ryan, the phone solicitors said the donations would be used for food and shelter for homeless veterans, but just 3 percent went for those purposes.
This would seem to be a pretty clear case of telemarketers -- and the charity hiring them -- taking advantage of unwitting donors. But the U.S. Supreme Court, based on First Amendment concerns, has historically ruled that the government can't apply strict regulations to telemarketers. The Illinois Supreme Court has applied the same logic, preventing the attorney general from proceeding against the telemarketer. In his filing with the U.S. Supreme Court, Ryan said the Illinois high court "transformed the First Amendment into a license for unscrupulous fund-raisers to defraud the public in the name of raising money for a charity."
In light of how the U.S. Supreme Court has strengthened First Amendment protections for commercial speech, the trend wouldn't seem to favor consumers in the Illinois case, which was joined by 18 other states, including Nevada. But this is an instance where the courts shouldn't permit the First Amendment to be used as a shield against fraud.
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