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Court upholds ban on contractor pay-to-play donations

Posted Jul. 10, 2015 / Posted by: Jonathan Fox

Earlier this week, the D.C. Circuit Court of Appeals unanimously rejected a challenge to the 1974 ban on campaign contributions by federal contractors. Ruling on Wagner v. FEC, the 11-member court collectively upheld the Nixon-era rule designed to prevent quid pro quo corruption via “pay-to-play” political donations by individual contractors. The D.C. courts decision came days after Friends of the Earth’s recent call-in campaign pressing President Obama to issue an executive order requiring federal contractors fully disclose their political spending.

This is good news for all Americans. First, the federal prohibition not only reduces the possibility of corruption, it addresses the appearance corruption. Judge Merrick Garland explicitly spoke to this, noting, "A contribution made while negotiating or performing a contract looks like a quid pro quo, whether or not it truly is" in the court’s ruling upholding the ban.

Second, the D.C. Court of Appeals upheld the prohibition on individuals, corporations, and firms negotiating or implementing federal contracts from giving money to federal candidates or political parties. The court recognized that this long-standing ban on contractor political spending curbs corruption of public contracting. The Court noted the real need to protect the public's faith in contracting practices, citing several instances pay-to-play scandals at federal and state levels. The court’s concern is especially poignant given the Brennan Center for Justice’s findings that the top 24 federal contractors gave over $30 million in contributions to political action committees (commonly known as PACs).

Third, the D.C. Court of Appeals’ decision encourages efforts demanding an executive order to close remaining loopholes regarding contractor political donations via PACs. Specifically, Friends of the Earth and others have called on President Obama to expand the scope of existing rules to shine a powerful spotlight on a form of “legal corruption” that thrives in the shadows of our political system. An executive order would tighten disclosure requirements that the D.C. Appeals Court did not address, namely political spending by federal contractors through PACs and other indirect political groups.

Proving whether or not the $1.1 million Chevron gave to political candidates in 2012 directly led to the almost $679 million in government contracts it received in 2013 is extremely hard. But the task of finding the smoking gun of corruption is almost irrelevant when political donations by federal contractors smell of impropriety. A presidential executive order demanding full disclosure of political spending will help break the cycle of “who gives, gets” and end to the corrosive influences enabled by the U.S. Supreme Court’s Citizens United ruling. An executive order addressing undisclosed political spending by federal contractors -- combined with the legal backing of this D.C. Court of Appeals decision -- would protect the integrity and public trust in merit-based public contracts. And all it takes is a stroke of President Obama’s pen.


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