No leeway on contractor campaign gifts

The <i>Citizen United</i> decision came down in January 2010. The <i>Citizen United</i> decision came down in January 2010. J. Scott Applewhite/AP

A district judge’s rejection of a request by three federal contract employees to temporarily relax a long-standing ban on contractor campaign contributions likely prolongs the uncertainty on the issue during the first full election cycle since the Supreme Court’s landmark 2010 Citizens United v. Federal Election Commission ruling on corporations and politics.

On April 16, U.S. District Judge James Boasberg denied a request for a preliminary injunction filed by three corporate employees -- two under contract with the U.S. Agency for International Development and one who supports the Administrative Conference of the United States, an independent agency that uses research and private sector expertise to improve the government’s rule-making.

As reported by the Associated Press, the three are suing to prevent the Federal Election Commission from enforcing a 70-year-old ban on direct corporate giving to candidates, which they say is a violation of free speech.

A ban specifically aimed at contractors was enacted to prevent the use of donations to enhance chances of winning future contract awards. The Obama administration for more than a year has been mulling an executive order -- a draft of which was leaked -- that would require greater disclosure of campaign gifts by corporations involved in federal contracting.

The judge’s denial of an injunction was “disappointing, but not surprising,” said Alan Chvotkin, executive vice president and counsel of the Professional Services Council. “It’s an adverse ruling and not a minor one,” but its effect is that the case now continues on the merits, he added. PSC sides with the three contractors because of ambiguity on what the ban on campaign gifts means, even though they represent “a narrow segment” of the contractor community, Chvotkin said.

Trey Hodgkins, senior vice president for national security and procurement policy at TechAmerica, said the ruling “muddies the water” on political activity and the prospects for a possible Obama order on contractor disclosure. “They seem to be in conflict,” he said. “If contractors can’t give campaign donations, why require them to disclose?”

The judge’s decision was welcomed by Scott Amey, general counsel of the nonprofit Project on Government Oversight. “Mixing politics and contracting is bad for taxpayers and a recipe for corruption,” he said in an email. “Not only was the court sound in denying the request to lift the ban on contractor campaign giving, but I would love to see the prohibition expanded to include contractor political action committees and the listing of employers' names for individual donors, which are alternative ways for contractors to gain access and favor in Congress.”

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