Government Contractor Contributions and What To Do About Them

Last month, the Obama administration drafted <a href="http://www.scribd.com/doc/53440033/Executive-Order-Disclosure-of-Politi…; target="”_blank”">an
executive order</a> that would require those seeking federal government
contracts to disclose their political contributions, and those of their
directors, officers, affiliates, and subsidiaries, made in the two
years before they bid for a contract. This draft executive order has
been the subject of a great and unusual controversy.<br>
<br>
Some state and local governments already have laws that require the
disclosure of, or even prohibit, political contributions from
government contractors. Why do such laws exist? All one need do is look
at the list of contributions to candidates, parties, and many PACs to
see that those from government contractors, current and prospective, constitute a
sizeable portion of the funds that are contributed.<br>
<br>

This is not because government contractors have the strongest feelings
about the principal issues in every election, or believe more strongly
than others that political parties and PACs are important parts of our
democratic system.<br>
<br>
It is because government contractors want elected officials to feel
obliged to them and because government contractors feel they are
expected to make sizeable contributions in order to get contracts and
to keep them. In other words, they seek to influence and they feel forced to pay to play.<br>
<br>
<b>Ways to Handle Government Contractor Contributions</b><br>
There are two best ways to prevent this sort of influence and pay to play, which costs citizens a great deal in both money and trust.
One is to prohibit the contributions altogether. The other is to
institute public campaign financing that allows participating
candidates to have the funds necessary to compete with
non-participating candidates and independent expenditures that are
funded largely by those doing and seeking business with the government.<br>
<br>
Requiring disclosure is a distant third choice, and one that Congress
recently refused to pass (the DISCLOSE Act) due to strong Republican
opposition.<br>
<br>
<b>The Republican Attack on Disclosure</b><br>
The same people are attacking the executive order, and they have done what they can
to undermine public campaign financing. And they strongly oppose any
prohibition of political contributions.<br>
<br>
In <a href="http://online.wsj.com/article/SB100014240527487039927045763054141378066…; target="”_blank”">her
Wall Street <i>Journal</i> column last week</a>, Kimberley Strassel made a
representative attack on the executive order. She argued that the
executive order means that companies "can bid and lose out for the sin
of donating to Republicans. Or they can protect their livelihoods by
halting donations to the GOP altogether—which is the White House's real
aim. Think of it as 'not-pay to play.'"<br>
<br>
In other words, what Strassel is arguing is that, unlike all other
contractors, whose contributions either go to both parties in
relatively equal proportions, just to make sure, or if the incumbent is
strong go primarily to the incumbent, federal contractors give
primarily to Republicans, whether they are in power or not, and whether
they are likely to win or not. If true, this means that federal
contractors are different from state and local contractors and,
therefore, the arguments against disclosure by federal contractors do
not apply to disclosure by or restrictions on state and local
contractors.<br>
<br>
That is, this debate does not directly apply to local government ethics.<br>
<br>
<b>Recognizing How Corrupt the Procurement System Is</b><br>
But there are very intriguing ideas that arise from what Strassel and
others are saying. For example, the Senate minority leader, Mitch
McConnell, is quoted as saying, "This is almost gangster politics, to
shut down people who oppose them." What they say implies that the
procurement system is seriously corrupt, that elected officials use
political contributions to favor and disfavor contractors.<br>
<br>
It also implies that knowing their contributions would be public,
government contractors would do what they had to do to get contracts,
even if it meant not giving money to candidates they truly favor, that
is, Republicans. Since free speech is the most precious commodity any
person owns, short of his family's lives, this means that the procurement system is deeply
corrupting.<br>
<br>
Finally, what they are arguing implies that elected officials use government contractors
to win elections, in this case through a not-pay-to-play approach that
effectively prevents contractors from giving to the opposition party.
Something has to be done, of course, to prevent elected officials from
abusing the procurement system in this way. Preventing one executive
order could not possibly be enough if things are as bad as the
Republicans are saying they are.<br>
<br>
<b>Back to Solving the Problem</b><br>
What does all this mean for government ethics? It means that
Republicans, if one takes them at their word, should be strong good
government advocates. They oppose the use of underhanded tactics to
change elections. They oppose the abuse of the procurement process for
political purposes. And they oppose pay to pay.<br>
<br>
And yet they not only fully support political contributions by
government contractors, even though they are central to pay to play, but they also support having this process occur secretly,
despite the greater opportunity this gives for abuse.<br>
<br>
Therefore, since they oppose the abuse of the procurement system for
political purposes, the only choice open to them is to opt for public
campaign financing, so that not only are government contractors limited
in the contributions they can give, but everyone is, including unions
and environmental organizations (they also argue that the executive
order discriminates in favor of these, when they are not government
contractors).<br>
<br>
If their attack on the draft executive order is not simply an
underhanded campaign tactic itself, then these same people will come
out for strong, fair, and workable public campign financing programs. I
won't be holding my breath.<br>
<br>
Robert Wechsler<br>
Director of Research-Retired, City Ethics<br>
<br>
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