Opposition to contractors disclosure rule grows among Dems

Democratic opposition is growing to a draft proposal under consideration by President Obama that would force prospective government contractors to reveal political contributions.

Top Democrats in both chambers have come forward in recent days with concerns that such a mandate would politicize the bidding process at the expense of its integrity. They’ve joined Republican leaders and the business lobby in urging administration officials to scrap their plans to adopt the rule.

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The latest resistance came Thursday from Senate Homeland Security and Government Affairs Committee Chairman Joe Lieberman (Conn.), an Independent who caucuses with Democrats, and Sen. Claire McCaskill (D-Mo.), head of the Homeland Security’s Government Contracting subcommittee, who sent a letter to President Obama expressing their dissent.

“[R]equiring businesses to disclose their political activity when making an offer risks injecting politics into the contracting process,” the lawmakers wrote. “Federal contracting law already precludes the consideration of political activity in evaluating contract offers.”

The concerns echo those from House Democratic Whip Steny Hoyer (Md.), who told reporters Tuesday that political contributions should be immaterial to the bidding process.

“The issue of contracting ought to be on the merits of the contractor’s application and bid and capabilities,” Hoyer said. “There are some serious questions as to what implications there are if somehow we consider political contributions in the context of awarding contracts.”

Unveiled last month, the draft executive order would require companies bidding for federal contracts to disclose contributions made by directors and officers to federal candidates and parties. It would also require the disclosure of corporate donations to third-party advocacy groups that support or oppose federal candidates with campaign ads.

Under federal contracting rules, contracts must be awarded based on a consideration of quality, price, technical merit and compliance with solicitation requirements.

“The requirement that businesses disclose political expenditures as part of the offer process creates the appearance that this type of information could become a factor in the award of federal contracts,” the senators wrote.

Sens. Susan Collins (Maine), senior Republican on the Homeland Security and Governmental Affairs Committee; and Rob Portman (R-Ohio), ranking member of Contracting Oversight subcommittee, also signed the letter.

Some Republican critics have charged President Obama with trying to snoop on the political activities of companies in order to punish those that oppose his administration.

Senate Republican Leader Mitch McConnell (Ky.) called the proposal a “blatant attempt to intimidate people” into “not contributing to causes the administration opposes.”

White House press secretary Jay Carney told reporters last month that the president wants to inform taxpayers of contractors who spend money to influence elections — an argument echoed by campaign finance watchdog groups. Carney denied a political motive.

A number of House Democratic leaders — including Minority Leader Nancy Pelosi (D-Calif.) — are lining up in support of the proposal.

“What we are aiming at in this is to [target] those who have this endless, undisclosed money going into campaigns — again, in a way that I think undermines our democracy,” Pelosi said Thursday at a press conference in the Capitol. “I salute the president for what he did.”

Reps. Henry Cuellar (Texas) and Robert Andrews (N.J.), both members of the Democratic leadership, also voiced their support for Obama’s draft Thursday.

“One of the questions is whether he has the authority to do this thing by executive order,” Andrews told The Hill. “I think he does ... and I’d encourage him to use it.

“The more sunshine in government, the better,” Andrews added.

The draft order came 15 months after the Supreme Court’s Citizens United decision allowed corporations and unions to spend unlimited funds on political activities. That case opened a flood of campaign advertising in the last election from outside groups, many of which did not have to disclose their donors.

To counter that ruling, the White House and Democrats tried to move legislation called the Disclose Act  that would have required outside groups to reveal their donors, but that effort stalled in the Senate.

On Thursday, the House Homeland Security and Small Business committees gathered jointly to examine the draft disclosure rule.

The hearing was mired in controversy even days before it began, when Jack Lew, head of the White House Office of Management and Budget (OMB), declined the initial invitation from the GOP chairmen to testify on the draft order. That response didn’t sit well with Reps. Darrell Issa (R-Calif.), head of the Oversight Committee, and Sam Graves (R-Mo.), chairman of the Small Business panel, who threatened a subpoena if the administration refused to send a representative.

In the end, the sides reached a kind of truce, with OMB agreeing to send a witness but stipulating that he wouldn’t address the draft disclosure order specifically.

That wasn’t the only controversy. Just hours before the hearing began, the Democrats on the Oversight panel accused GOP leaders of refusing to allow testimony from one of their invited witnesses, Fred Wertheimer, president of campaign finance watchdog Democracy 21.

It didn’t prevent Wertheimer from submitting a written statement cheering the draft order as “an appropriate way” for the White House to protect taxpayers from “pay-to-play efforts by persons seeking to influence executive-branch contracting decisions or seeking to obtain earmarks by members of Congress for government contracts.”

At the joint hearing itself, Republicans pressed a senior OMB official on the draft order.
Issa said the draft order was “Chicago hardball politics” that could have “a chilling effect” on contractors who want to participate in the political process.

“This executive order is outside of the procurement process,” Issa said.

Daniel Gordon, the administrator for the Office of Federal Procurement Policy at OMB, avoided discussion of the order, saying it would be “inappropriate” for him to comment on what is only a draft and not official administration policy. But he defended the principle of transparency in general before lawmakers.

“Transparency is one of the best ways of fighting corruption,” Gordon said, calling it “Vitamin T.”
That did not win over opponents.

Graves said small businesses would be “ill-prepared” to handle the draft order’s disclosure requirements, as well as its potential criminal liability. He added that asking for political contribution information from a company during a contract’s bidding process disturbed him.

“The simple idea that you want this information ahead of time disturbs me in a big way,” Graves said.

While being careful not to discuss the draft order, Gordon said a contractor’s politics would never come into consideration for a contracting officer when awarding a contract.

“They won’t take that into account. The only factor that you take into account is the [contract solicitation],” Gordon said.

Republicans were not the only ones to question the draft order. Rep. Gerry Connolly (D-Va.) said while he favors transparency, people could draw “a false assumption” from data detailing government contractors’ political contributions.

Other Democrats at the hearing spoke forcefully in favor of the draft order.

OMB did not respond Thursday concerning the timeline for release of the final rule.

Kevin Bogardus contributed to this report.