You’re a Contractor? Political Contributions Not Allowed

By DAVID B. RIVKIN JR. and ELIZABETH PRICE FOLEY

Law professor Wendy Wagner’s scholarship at the University of Texas captured the attention of the U.S. government, which contracted with her to analyze how federal agencies can better use science in decision making. Unfortunately for Ms. Wagner, her federal contract means that she cannot contribute to any political party, committee or candidate for federal office. So in 2011 she went to court, asserting that the 74-year-old ban on contractor contributions is unconstitutional.

On Sept. 30, the full U.S. Court of Appeals for the D.C. Circuit heard arguments in Wagner v. FEC. The case provides a much-needed opportunity for the courts to demand strong justification for laws curtailing political speech.

The question in Ms. Wagner’s case is whether the ban on contractor contributions furthers the government’s interest in preventing quid-pro-quo corruption—meaning an exchange of dollars for political favors. This is the only interest considered sufficient to justify limits on political contributions, consistent with the First Amendment, under the Supreme Court’s 2010 decision in Citizens United v. FEC, and the D.C. Circuit’s own precedent that year in SpeechNow.org v. FEC.

The government contends that banning contractor contributions prevents quid-pro-quo corruption because if contractors could make donations, candidates might return the favor by helping secure a federal contract. The ban’s genesis lies in the Works Progress Administration scandal of the late 1930s, wherein WPA employees and contractors were strong-armed into making contributions to Democrats as a condition of keeping their jobs or contracts. The WPA’s blatant solicitation shocked the nation, leading to the 1939 Hatch Act, which included broad limits on political activity by federal employees. These included a ban on employee contributions to candidates and a ban on contributions by contractors.

In 1993 the Hatch Act was significantly amended, permitting federal employees to work on political campaigns while off-duty and contribute to candidates. Recipients of federal largess, such as grants, scholarships and benefits like Social Security or disability, also can make political contributions—even though, arguably, their contributions may be made with the goal of securing those benefits. Federal contractors like Wendy Wagner, by contrast, remain unable to make any contributions.

The outcome in Wagner will likely hinge on how closely the D.C. Circuit scrutinizes the connection between the law’s stated goal—preventing quid-pro-quo corruption—and its means of achieving that goal—banning contractor contributions. The fit between the law’s means and ends is loose at best.

For example, the law is oddly narrow. It prohibits contributions by a contracting entity, e.g., a corporation, but it allows the corporation’s employees and officers to make contributions—while sole proprietors like Ms. Wagner cannot. If Ms. Wagner wants to contribute, she can form a corporation, call herself the president, and sign her contract as president of Wagner Inc. If there truly is a risk of corruption, why permit such formalistic evasion of the law and give corporations an unfair advantage over sole proprietors?

Similarly, the law doesn’t ban contractors from fundraising or bundling—activities far more beneficial to political candidates—and it doesn’t ban contributions made before securing a federal contract. Any corruption risk is surely highest at the stage before awards are made, when those vying for contracts may hope that large contributions will win them a contract award.

The law also is oddly broad. It bans contributions to any political party, PAC or federal candidate, even though it is agency bureaucrats—not politicians, parties or PACs—who award contracts. Similarly, the law bans contributions to independent-expenditure groups—so-called Super PACs—such as Planned Parenthood Votes, or the Tea Party Patriots Citizens Fund. Yet none of these Super PACs can influence the awarding of federal contracts. A law that bans contractor contributions to individuals and entities that have no rational connection to the award decision is incapable, by definition, of reducing quid-pro-quo corruption—since the quid (contribution) cannot produce the quo (contract award).

If the D.C. Circuit concludes that the federal contractor ban violates the First Amendment, it will be because the courts now understand that prior restraints on political speech cannot rest on the government’s mere claim that such bans are needed to prevent corruption. When laws restrict citizens’ most fundamental constitutional rights, such as the right to political speech, courts have a duty to put the government to the test—to ensure not only that the laws advance important interests like preventing corruption, but that they are tightly calibrated to further those interests.

In Wagner, the D.C. Circuit will have an opportunity to show that judges take their duty to protect political speech very seriously.

Mr. Rivkin, a partner at the firm Baker Hostetler, served in the Justice Department and the White House Counsel’s Office in the Reagan and George H.W. Bush administrations. Ms. Foley is a constitutional law professor at Florida International University College of Law and the author of “Defending Citizens United,” forthcoming from Prager in 2015.

Source: http://online.wsj.com/articles/david-rivkin-and-elizabeth-price-foley-youre-a-contractor-political-contributions-not-allowed-1413932117

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