Require Federal Contractors to Disclose Political Spending

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Since Citizens United and related Supreme Court decisions, it has become increasingly difficult to know who precisely is funding elections and influencing our nation’s policy direction. Since these rulings in 2010, groups have spent well over $600 million in “dark money” on federal elections, the majority of which was concentrated on key races. One way the government could combat this issue and provide transparency would be for the Obama administration to issue an executive order requiring government contractors to disclose all of their campaign contributions.

While not a cure-all to the complications caused by big money in politics, it would cast a light on a uniquely problematic set of donations, those coming from federal contractors and their employees. The federal government spends hundreds of billions of dollars on these contracts annually. Since 2000, the top 10 federal contractors have received a total of $1.5 trillion from the US government in contracts. In just FY2013 the federal government spent an estimated $460 billion on contracts with the private sector.

With such large sums of money involved, it is easy to see how these groups and their leadership could use back channel contributions to PACs and other campaign groups to influence the process. As of 2011, federal contractors made up 33 of the 41 largest disclosed corporate campaign contributors in the trailing two decades. In last year’s election, the top 25 federal contractors made disclosed contributions through their PACs, for a combined total of 30 million dollars, a figure that has more than doubled since 2004. There is nothing to stop these companies, through their leadership and employees, from also donating unlimited amounts to so called “dark money groups” – who are not required to disclose most of their donors.

Current federal law only prohibits the contracting entity itself from contributing to candidates and political parties, but not its directors, officers, shareholders, corporate PACs and other affiliated individuals. However, both contractors and their affiliated entites are allowed to donate unlimited amounts to dark money groups, with essentially no disclosure requirements.

If history is any indication, we know this is an ongoing and serious problem. In 2010, the House Ethics Committee noted there was a “widespread perception” among recipients of earmarks that political donations increased their favor with lawmakers and the likelihood they would receive these funds. Rep. Harold Rogers (R-KY), a member of the House Appropriations Committee, put forth an earmark to purchase $17,000 worth of Black Hawk helicopter drip pans for the Army. Not only was that price tag seven times what this item should have cost, the contract benefited a company that was owned by his campaign contributors. In another instance, Rep. Peter Visclosky (D-IN) was alleged to have solicited contributions from executives at a software firm that had previously received a $2.4 million earmark. In a later email from one of the executives to his colleague, the executive noted that the opportunity to lobby the congressman and his staff “would not have been possible without your generous contributions.”

Just how rampant of a problem undisclosed donations from federal contractors and their affiliates is, we don’t know. That, however, is precisely why we need this executive order. As spending from outside dark money groups balloons with each election, the American people deserve to know who these individuals and groups with vested interests are donating to and if it is influencing the contracting process.

President Obama is well within his authority to issue this order. When a draft of the administration’s proposal to issue an executive order much like the one we are calling for leaked in 2011, certain members of Congress worked to pass legislation to prevent this possibility. What ultimately passed was a rider to the 2012 appropriations bill, one that was also included in the recent 2015 Consolidated Appropriations Act which as approved in December 2014, that required that no funds could be used “to recommend or require any entity submitting an offer for a Federal contract to disclose political spending as a condition of submitting the offer.” A permanent prohibition was also added to the “Defense Authorization Act” in 2011 that states military agencies may not require a contractor to submit “political information as part of a solicitation…or any other form of communication designed to solicit offers in connection with the award of a contract” or “during the course of contract performance as part of the process associated with modifying a contact or excising a contract option.”

While this limits the executive order from requiring contractors to disclose contributions as either a part of the bid process or as a condition for modifying a contract, the President still retains the power to require disclosure from contractors AFTER they have been awarded the contract. Requiring disclosure after the contract has been awarded would provide transparency and accountability to the public, while avoiding accusations of politicizing the contract process.

The time for the President to act is now. With the 2016 presidential election beginning to kick off in earnest, he needs to issue this order soon so it could be implemented in time to have an impact on this race or even be implemented at all before the end of his second term. This simple order would shine a light on the shadowy process of backdoor donations from federal contractors and hold them accountable for their political contributions to the general public.

For further information we recommend reading a recent Brennan Center for Justice report on federal contractors and their political spending here.

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