Political Contribution Disclosure
Subscribe to our Newsletter

 

FOLLOW US

 

By Topic  |   By Industry  |   By Author  |   By Date  |   Useful Links
Political Contribution Disclosure 
government contractor and technology; business advisory  business advisory 

 

By: Chris Whitehead
Abstract:

Does the world of politics have the right to interfere with our capitalistic business ideals?  President Obama has introduced a measure in the public forum that would greatly affect how federal government contracts are awarded to participants. The idea centers around a topic that is often debated:  political campaign fundraising. He has drafted a potential executive order that would require all business entities who do service under a contract with the federal government to disclose all their political contributions over $5,000. The President strongly believes that our nation’s election system should not be financed and backed by some of the country’s most powerful business conglomerates, as well as those situated abroad who often hide behind the curtain with their financial transactions. This includes the major companies on Wall Street, the high roller insurance companies, and chief foreign organizations. Last year, the United States Supreme Court in Citizens United vs. Federal Election Commission ultimately ruled federal statutes barring corporations and unions from directly participating in the political process were unconstitutional and in violation of the First Amendment. This potential piece of legislation, entitled “Disclosure of Political Spending by Government Contractors,” will – at least in Obama’s eyes – provide full and utmost disclosure to the American people and support our country’s democratic ideals. He wants to project accountability into our daily business affairs.  Section 2 of the bill states, "…every contracting department and agency shall require all entities submitting offers for federal contracts to disclose certain political contributions and expenditures they have made within two years prior to the submission of their offer." Furthermore, it would be any contributions or expenditures  -- by the company, its officers and directors, and subsidiaries under its control -- to or on behalf of federal candidates, parties, or party committees or to third party entities with the expectation that the contributions would be used for campaign purposes. However, none of these provisions would apply to unions.


 

 

Current federal government contracting standards already require the disclosure of donations to political nominees, but the added wrinkle in all of this is that all this information would now be provided to independent groups, such as the National Rifle Association and United States Chamber of Commerce, that often provide significant political support to federal agencies who award government contracts. How does this affect government contractors? Government contracts have typically been awarded legally based on price factors, as well as to those who are able to demonstrate superior technical competence and ability in their business processes. This new provision threatens to break the objectivity and politicize the entire granting process, as federal contracts would be granted to those who support the federal agency’s particular political cause.  This concern was brought up in a letter sent to the President by twenty-seven Republican senators led by Minority Leader Mitch McConnell. They voiced their belief that people would be afraid to donate to the cause of their choice out of fear of that cause being disbanded by the federal government. Several individuals’ livelihoods rely on the income they generate from federal contracting, and it is not fair for that to be a judgment call. It is a debate that is stirring up a lot of dust. What do you think?

 

This new provision threatens to break the objectivity and politicize the entire granting process, as federal contracts would be granted to those who support the federal agency’s particular political cause.