Business & Lobbying

Obama urged to impose rules on campaign spending disclosure

More than 50 organizations are pressing President Obama to issue an executive order requiring increased campaign spending disclosure for companies that contract with the federal government.

The coalition, which includes an assortment of public interest groups, unions, investors and corporations, contends that Obama must act unilaterally in the wake of recent court decisions that have relaxed federal campaign finance regulations.

“Congress has been unable to act in this space, so this is a chance for the president to put his money where his mouth is and act,” Lisa Gilbert, the director of Public Citizen’s Congress Watch division, told The Hill on Monday.

The advocacy group is joined in the effort by the Project On Government Oversight (POGO), the Sunlight Foundation, Ben & Jerry’s and the International Brotherhood of Teamsters, among others.

In a letter to Obama, the groups point in particular to Supreme Court rulings that that have injected vast new sums of corporate money in federal politics.

“We’re now living in a Wild West campaign spending world,” the letter reads. “There is no single solution to the problem of Big Money dominance. In fact, there are many desperately needed solutions. Today, we urge you to act on one option immediately— tackling the issue of corruption in government contracting.”

Federal contractors, like all corporations, are not allowed to give money from their treasuries directly to candidates or party committees. However, they are able to create and contribute through political action committees, though that spending must be disclosed. A contracting company’s board, officers and employees are also free to give to directly to campaigns.

The Supreme Court decision in the Citizens United case, however, provided a pathway for corporations to give directly to independent expenditure organizations — including super-PACs and some nonprofits — some of which do not fully disclose their donor rolls. While campaign finance law contains some grey areas, federal contractors are largely allowed to contribute to these groups.

Organizations are asking Obama to require companies that receive federal contracts to then disclose any corporate donations it makes to those so-called “dark money” groups.

In the letter, they ask Obama to create additional transparency framework for “requiring full disclosure of political spending by business entities receiving federal government contracts.”

The White House neither confirmed nor denied whether it would consider taking action on contractor contribution disclosure.

“This is an issue that we have talked about at some length, as you know,” White House press secretary Josh Earnest told reporters Monday, before adding, “I don’t have any news to make on this particular issue.”

In 2011, President Obama drafted an order that put some limits on political donations by federal contractors — such as during the negotiation process of a contract or while a contractor is actively working on one — and proposed to increase the transparency of giving by companies attempting to secure federal deals.

The measure faced congressional opposition, with Republicans saying it would curb free speech and hurt small businesses. The House Oversight and Government Reform Committee held a hearing questioning the “politicization of procurement.”

Then, in 2014, Congress approved a provision in a spending bill that effectively killed the intent behind the draft executive order. The language, which sets forth that campaign contribution disclosure could not be required for companies bidding for federal contracts, has been reauthorized in every appropriations bill since.

Several versions of the ban floated around Capitol Hill at the time and only pre-grant disclosure got the axe, Gilbert said.

The most recent request for action by Obama would not violate that statute, because it would only make those companies that win federal contracts liable for disclosing corporate donations, she said.

“Congressional intent is clear,” Gilbert said. “They’ve narrowed it and left this avenue open.”

The groups are mounting a case for why the extra transparency is necessary.

“Pay-to-play is for real,” wrote POGO’s General Counsel Scott Amey, in a blog post on Monday.

He points to a report released last year by the Sunlight Foundation detailing how 200 corporations spent a total of $5.8 billion on lobbying and campaign contributions from 2007 to 2012. 

During the same period, the same companies received $4.4 trillion in federal business and support, the report found.

“In other words, for every $1 the companies spent on political influence and access, they got $760 from the federal government,” Amey said.

“Without election spending disclosure, contractors are left unfettered to influence the 2016 elections in the hope of receiving payback,” he continued. “Federal contracting, which should be based on a level playing field, is riddled with cozy relationships, backroom deals, and pay-to-play arrangements. Congress, which depends on the same spigot of campaign cash, is unfortunately part of the problem.”


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