The Case for Requiring Federal Contractors to Disclose Their Secret Political Contributions

May 26, 2022 | by
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For more than 80 years, those negotiating or performing federal contracts have been prohibited from contributing to federal candidates or parties and from giving to other entities for political purposes.

The Supreme Court's 2010 decision inĀ Citizens United v. Federal Election Commission made the contractor contribution ban relevant again. The decision permitted corporations to spend money to influence elections -- in unlimited sums -- as long they did not coordinate with federal candidates or parties.

Although many expected that the decision would spawn political expenditures directly by corporations, most of the new political spending resulting from it has been by third-party entities, such as super PACs and 501(c) nonprofit groups.

Contributions to super PACs must be publicly disclosed. But 501(c) groups are not required to disclose their donors. This gap in disclosure requirements has resulted in hundreds of millions of dollars in "dark money" political spending.

The Federal Election Commission (FEC) has generally interpreted the contractor contribution ban as applying to gifts to super PACs, and it has taken several enforcement actions against contractors for giving to super PACs. But the FEC has not deemed the contribution ban to apply to gifts to politically active 501(c) groups. This is arguably inconsistent because some 501(c) groups spend money to influence elections in the same manner as super PACs. Further, some 501(c) groups even transfer their money directly to super PACs that they work in concert with.

The public has a particularly profound interest in learning of cases in which businesses seeking taxpayer funds are spending money to influence their votes. A requirement that federal contractors disclose their electioneering efforts would help shine a light on these companies' payments to shape the playing field on which they play and, in the process, might flush out bad actors seeking refuge in the shadows.