Court upholds ban on contractor political contributions

AP News
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Posted: Jul 07, 2015 6:13 PM

WASHINGTON (AP) — A federal appeals court on Tuesday upheld a ban on government contractors donating money to federal candidates or political parties, a prohibition that has been on the books for 70 years.

The U.S. Court of Appeals for the District of Columbia Circuit ruled that the ban is justified because it addresses the government's interest in preventing corruption.

Writing for a unanimous 11-judge panel, Judge Merrick Garland said recent corruption scandals involving members of Congress point to the continuing danger of "quid pro quo" corruption — a direct exchange of money for political favors. He agreed with the Federal Election Commission that the law protects the integrity of merit-based government contracting.

Congress outlawed political contributions by federal contractors largely in response to a New Deal-era scandal involving Democratic Party operatives and contractors.

The ban applies only to individual contractors and not to the political action committees of corporate contractors, or to a corporation's officers and shareholders. Violators can face a five-year prison term.

The appeals court ruled against a university law professor who holds a $12,000 federal contract and two retirees working for the U.S. Agency for International Development as contractors. They argued the ban is unconstitutional because it interferes with their free-speech rights and treats them differently from similarly situated groups.

Garland cited the scandal involving former California Congressman Randy "Duke" Cunningham, who plead guilty in 2005 to fraud and other charges for taking bribes from defense contractors in return for funneling contracts to certain companies.

"The record offers every reason to believe that, if the dam barring contributions were broken, more money in exchange for contracts would flow through the same channels already on display," Garland said.

FEC Commissioner Ellen Weintraub called the ruling a "victory for democracy."

"We can all agree that federal contractors should not be able to buy favors through political contributions," she said.

Alan Morrison, a George Washington University law professor who represented the contractors, said he was disappointed "in the failure of the court to appreciate the unnecessarily broad reach of the total ban" on contributions.

The court rejected arguments that the ban is unnecessary because career government bureaucrats decide who gets government contracts, not elected officials.

Garland said the ban was reasonable because it not only reduces the possibility of corruption, it eliminates its appearance.

"A contribution made while negotiating or performing a contract looks like a quid pro quo, whether or not it truly is," he said.

The challengers also complained that the law allows the president of a corporation with a multibillion-dollar defense contract to make contributions, directly or through his company's PAC, but bans an individual with a $12,000 federal contract from doing the same. They say the different treatment violates the equal protection clause of the Constitution.

But Garland said the ban is not invalid simply because it is "underinclusive."

"Congress could reasonably have concluded that banning contributions by all those associated with corporate contractors would go too far at too great a First Amendment cost," Garland said.

Fred Wertheimer, president of the campaign finance reform group Democracy 21, called the ruling "a victory for efforts at both the state and federal levels to fight pay-to-play corruption." Had the court overturned the law, he said it could have undermined the justification for the ban on corporate contributions to federal candidates.

The ruling did not address whether federal contractors can be prohibited from making contributions to super PACs, outside groups that can accept unlimited contributions and spend independently to sway voters.

Federal contractors include people such as translators or interpreters, those hired by executive branch agencies to give advice, retired FBI agents who do background investigations and people who are hired as expert witnesses for the government in court cases.