Should companies bidding for government contracts be required to disclose their political donations? An executive order under consideration by President Obama says, “Yes.” But Republicans [and some Democrats, too] say, “No.”
In an effort to reduce the likelihood that government contracts are payoffs for campaign contributions and other political expenditures, President Obama has drafted an executive order that would require companies bidding for government contracts to disclose their campaign spending. That sounds like a good idea, right? Openness and transparency are values that cross political lines. Who would publicly come out such an idea? Unfortunately, the answer to that question is: lots of politicians whose re-election campaigns depend on the huge, secret corporate donations legitimized by the Supreme Court’s Citizens United decision. In fact, some politicians are so worried that President Obama might actually wield his executive power, that they have introduced an anti-transparency bill that would pre-empt the President’s executive order.
What it says, and what it’s about
The initial wording of the proposed executive order says: “Every contracting department and agency shall require all entities submitting offers for federal contracts to disclose certain political contributions that may have been made within the two years prior to submission of their offer.”
The order includes all contributions to political parties or federal candidates or expenditures on their behalf and would require disclosure of contributions that exceed $5,000 in a given year.
It’s clear that the executive order is designed as a creative answer to Citizens United. In a May 4, 2011 press release, Public Citizen gave this rationale:
The need for such action is directly traceable to the U.S. Supreme Court’s decision in Citizens United v. Federal Election Commission, which lifted restrictions on political spending by corporations. The decision paved the way for companies to make massive expenditures from their general treasuries to influence election outcomes, including by funneling money through front groups that do not coordinate with candidates.
Public Citizen added that the new Citizens United rules invite an increase in “pay-to-play” abuses…
“…where contractors make campaign-related expenditures to obtain contracts, or at least favorable consideration of bids. There is no question that Citizens United will facilitate more and more severe contracting corruption, in the form of “pay to play” abuses, both federally and in the states. The pay-to-play system encourages fraud and abuses of power, prevents contracts from being awarded to businesses based on merit, wastes taxpayer dollars, and facilitates privatization and contracting out of services that otherwise could or should be provided by government agencies.”
Of course, the wording of the proposed executive order is merely draft language, and until it’s signed, it’s subject to change. But those sentences have ruffled a lot of political feathers. The controversy started earlier this year, when someone leaked the draft to a former Bush-administration official with an axe to grind: his appointment to the Federal Election Commission was blocked by Democrats. He published the draft on a conservative website, and that’s when the games began.
Who’s for it, and why
Early in May 2011, 22 government-watchdog and openness organizations sent a letter to President Obama, urging him to sign the transparency-in- government-contracting executive order. The letter pointed out:
… the widespread public perception that companies and their executives who provide the most generous campaign financial support to winning candidates are rewarded with the most lucrative contracts. On far too many occasions, that perception has been validated by scandal and the disgrace, resignation or even conviction of some governmental officials.”
The proposed executive order attacks the perception and the reality of such “pay-to-play” arrangements by shining a light on political spending by contractors. It simply requires that a business entity, as a condition of bidding on a government contract, disclose the campaign contributions and expenditures of the company, its senior management and affiliated political action committees for all to see, so the public may judge whether contracts are being awarded based on merit rather than campaign money.
The letter also notes that the requirement of transparency is not a new concept in government contracting: more than a dozen states already require campaign-finance disclosure from government contractors.
“The flip side of transparency is secrecy,” the letter continues, “and the specter of hundreds of millions of dollars in secret campaign cash coming from companies that derive much of their wealth from government contracts.”
Also lining up behind the proposed order are many Democrats, including Sen. Nancy Pelosi, who recently said: “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.”
Reps. Henry Cuellar [D-TX] and Robert Andrews [D-NJ, have also voiced their support for Obama’s draft “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.”
Who’s against it, and what they’re saying
It didn’t take long for politicians beholden to corporate donors to line up against the proposed executive order. Naturally, their arguments against transparency in government contracting don’t mention their obvious allegiances to the government contractors [details here] who keep them comfortably ensconced in Washington. Instead, they rail against—no surprise—government intrusion and purported politicization of government contracting. Examples:
- Senate Minority Leader Mitch McConnell [R-KY]: “It amounts to an effort to silence or intimidate political adversaries’ speech through the government contracting system.” McConnell says it’s an “abuse of executive branch authority.” McConnell received $77,050 from the employees and PAC of AT&T. The company received $161 million in government contracts in 2009. He also received $71,750 from General Electric donors, which received $1.1 billion in government contracts in 2009.
- Senator Susan Collins [R-ME]: “No White House should be able to review your political party affiliation or the causes you support before deciding if you are worthy of a government contract. And no Americans should have to worry about whether their political activities or support will affect their ability to get or keep a federal contract or their job.” Collins has received $99,550 from the employees and PAC of General Dynamics throughout her career. The company received $5.8 billion in government contracts in 2009. She also received $34,801 from Raytheon-connected donors. The company received $7 billion in government contracts in 2009.
To underscore the hypocrisy of Congressional representatives who oppose the transparency order, Huffington Post recently reported that the Public Campaign Action Fund sent letters to a handful of House Committee Chairs alleging that their opposition to the executive order was being done as a gift to big-time donors:
The group noted that major federal contractors had contributed large sums of money to several key lawmakers, including Rep. Buck McKeon (R-Calif.) — who has received $122,150 from the defense contractor Lockheed Martin during his career — and House Science Committee Chairman Ralph Hall (R-Texas), who has received $45,531 from the national security contractor Raytheon’s PAC and employees during his time in Congress.
The congressman the group highlighted above the others, however, was committee chairman Darrel Issa, who has received $66,950 alone from the scientific, engineering and technology applications company SAIC’s PAC and employees.
The proposed executive order’s natural enemies, of course, are the companies who both compete for government contracts and make contributions to politicians with contracting clout. Their arguments against the proposed plan offer no surprises:
- In testimony before a Congressional committee chaired by Rep. Darrel Issa [R-CA], Marion C. Blakey, president and chief executive of the Aerospace Industries Association, said that the requirement “would strain companies and might even encourage some potential or current competitors to leave the federal marketplace.”
- The U.S. Chamber of Commerce called the proposal a “backdoor attempt” to silence White House critics and vowing to “fight it through all available means.”
Transparency advocates worry that opponents of the draft order are winning the messaging battle, partly because Republicans seized on the leaked draft early and framed the issue as one of “politicization,” and partly because Democrats—perhaps because of their own corporate allegiances—have remained mostly silent or are siding with Republicans in opposing it. Prominent among these Democrats are Sen. Claire McCaskill [D-MO], and Senate Democratic Whip Steny Hoyer [MD], plus Sen. Joe Lieberman [I-CT], who caucuses with the Democrats.
Irony and hypocrisy abound in the debate over transparency in government contracting. For those who say that demanding disclosure is tantamount to politicization, proponents point out that government contracting is already highly politicized and corrupt. A comment from Firedoglake:
First of all, let’s nobody pretend that politics ALREADY doesn’t play a role in contracting. And there are literally hundreds of examples of that (I’ll choose one at random). Second of all, you could design this in such a way that the disclosure couldn’t possibly be a factor in choosing a contractor, simply by staggering the disclosure. There are all kinds of ways to base contracting on performance and efficiency. The reason to add disclosure at all is to remedy a great wrong carried out by the Supreme Court that is eating away at the heart of democracy.
And if you’re looking for irony, look no further than the Congressional Committee on Oversight and Government Reform. Rep. Elijah E. Cummings (D-MD.), ranking member of the committee, backed the draft order as a way to bring additional transparency to the contracting process, but found no support from committee chair Darrel Issa. Cummings says, “I never thought I would see the day that our committee would view transparency as the enemy.”