WASHINGTON — Open government advocates are re-energizing their push for President Barack Obama to issue an executive order that would require federal contractors to reveal political contributions.
The issue is gaining traction at the White House after a false start last spring, according to public interest lawyers who attended a discussion on campaign finance issues with the president’s counsel’s office earlier this month.
“This is the one thing that Obama can do on his own,” said Craig Holman, government affairs lobbyist for Public Citizen and one of those present at the White House counsel’s office meeting. “It’s something we can actually get done because Congress can’t do anything.”
In April, a draft of the executive order was leaked to the conservative-leaning Heritage Foundation, touching off a wave of criticism that it would enable the Obama administration to pick and choose federal contracts based on political preferences.
In 2010, the federal government awarded more than $540 billion in contracts, or 15 percent of that year’s federal budget, according to the Federal Procurement Data System.
The leaked executive order, time stamped 4 p.m. April 13 and scanned lopsided into a PDF document, would have required all applicants for federal contracts to disclose their contributions in the past two years to federal candidates, parties or party committees. It would have also compelled aspiring contractors to reveal all spending in the past two years directed toward “third party entities with the intention or reasonable expectation” that those parties would turn around and invest that money in electoral activities.
The second condition was widely viewed as Obama’s rebuttal of the Citizens United decision, the controversial Supreme Court ruling he railed against during his Jan. 27, 2010, State of the Union address. In a rare swipe at the country’s highest court, Obama said the Citizens United outcome would “open the floodgates for special interests — including foreign companies — to spend without limit in our elections.”
In that landmark case, the Supreme Court held the First Amendment bars the federal government from restricting independent political spending by corporations and unions.
As Republican voters went to the polls in South Carolina on Saturday, campaign finance reform advocates marked the second anniversary of the Citizens United decision.
Even if the Obama administration backs off the draft executive order, some transparency proponents, including the Sunlight Foundation’s John Wonderlich, are not abandoning hope for a legislative solution.
Despite an election-year Congress poised for partisan gridlock, Wonderlich, the foundation’s policy director, said public awareness will only grow for how big money can sway elections in a post-Citizens United world.
“People are just now starting to understand what it means to have huge, undisclosed sums of money from groups that aren’t really controlled by the campaigns,” Wonderlich said. “It really threatens integrity and accountability in the way political campaigns work, and it’s going to cause enormous doubt in the way our elected leaders represent us.”
‘A green light’
In April, with the backing of an alarmed business lobby, Republican lawmakers began crafting amendments to preempt any bill that would require applicants for federal contracts to disclose campaign gifts.
But Holman and other proponents now cite two pieces of legislation recently signed by Obama — the defense authorization and omnibus spending bills — that leave a “wide open window” for the president to pursue the long sought-after directive.
Both bills prohibit the administration from asking applicants for federal contracts to reveal their political donations during the bidding process.
Although the bills effectively ruled out what the leaked executive order was pursuing, transparency advocates have not given up. They agree an ideal executive order would now mandate that contract winners unveil their campaign gifts after the application process — not in the course of it or before it begins.
Fred Wertheimer, president of Democracy 21, reiterated the benefit of this legislative opening last week, saying the two year-end bills, taken together, “basically give a green light to the disclosure as long as the disclosures are not made part of the bidding process.”
Wertheimer, whose nonprofit, nonpartisan organization pushes for greater government accountability, confirmed that he accompanied Holman to the meeting at the White House counsel’s office. But he declined to go into details of the session.
The White House did not respond to requests for comment about whether the Obama administration is still considering the executive order.
The White House get-together in early January came after months of congressional gridlock in 2011 preventing revisions to existing disclosure laws.
Leading the charge for greater transparency in the federal contract-bidding process is Rep. Anna Eshoo, D-Calif., who urged Obama to “finally issue his long-awaited executive order” in a press release following the $900 billion omnibus spending bill’s passage in mid-December.
In February and June, Eshoo introduced two separate amendments to spending bills, proposing that any company doing business with the federal government should make known its political contributions. House Republicans blocked the amendments.
During a floor speech touting her disclosure amendment in June, Eshoo called the political activities of federal contractors “a dark corner of our system that is not being addressed.”
A little over a month later, she sent a letter signed by 62 other lawmakers to Obama, imploring him to go ahead and issue the executive order on disclosure.
“Disclosure will not politicize the procurement process — it will improve it,” she said in the letter. “Political expenditures are already well-known to those that make them and to the officials who benefit. With disclosure, the public will have access to this information as well, allowing them to judge whether contracts were awarded based on merit.”
Critics of the executive order are just as ardent, as evidenced by a 27-signature letter that landed on Obama’s desk less than two weeks after Obama’s draft leaked to the conservative think tank – and several months before Eshoo’s legislative allies began coalescing.
The message to the president, spearheaded by Sen. Susan Collins, R-Maine, and Senate Minority Leader Mitch McConnell, offered a bullet-pointed list as to why the disclosure order would endanger a supposedly neutral system of bidding for federal contracts.
“Political activity would obviously be chilled if prospective contractors have to fear that their livelihood could be threatened if the causes they support are disfavored by the Administration,” the GOP letter reads.
In an email earlier this month, Collins spokeswoman Elizabeth “E.R.” Anderson wrote the congresswoman will continue to “aggressively oppose” all White House efforts to require federal contractors to disclose their political gifts.
Getting off the sidelines
Some of the executive order’s critics are even more forward with what they view as a purely political maneuver by the White House.
“The idea that this [contractors’ campaign contributions] is some big secret is complete bull,” said Hans von Spakovsky, the senior legal fellow at the Heritage Foundation who first reported on the executive order leak.
He said corporations still have to report campaign gifts to the Federal Election Commission, and contract officers can review that spending information at their own discretion during the bidding process.
Holman disagreed, saying in a telephone interview that corporations often funnel political money through third-party groups and those contributions go “entirely undisclosed” under the Citizens United decision.
Sure enough, no corporation is currently required to disclose its political contributions using “soft money” — limitless funds that cannot directly support a candidate but often indirectly do provide backing through political action committees.
Some of the country’s top recipients of federal contracts already voluntarily publicize their campaign donations. However, those disclosures are often made using the company’s own governance policy and not a uniform system, such as that in place by the Federal Election Commission.
Spakovsky pointed to the Solyndra scandal as “prime evidence of how politics really drives the decision-making coming out of the White House.”
In 2009, the Obama Administration approved a $535 million loan to the green technology company, promising the investment would create thousands of new jobs as part of an alternative energy initiative. The solar power company filed for Chapter 11 bankruptcy in September and laid off almost all of its workers.
An investigation by the House Energy and Commerce Committee later revealed some of the Obama campaign’s top donors had been running the failed company and actively lobbying for it in the White House.
It was a political fiasco Spakovsky does not want to see play out again.
“It makes problems for them either way,” Spakovsky said. “If somebody doesn’t thereafter get a contract with the federal government, they may be able to claim that they didn’t get it because they made certain political contributions. Or if they get it, the other people who are making bids will claim the reason they got it is because they made political contributions.”
For the Sunlight Foundation’s John Wonderlich and other open-government supporters, the executive order is not just about federal contracts — it’s about reviving the the spirit of the president that they saw animated by the Citizens United ruling two years ago.
That Obama, Wonderlich said, “gave a speech once a week about the dangers of secret money in our elections.” And it’s that Obama that can bypass an onerous Congress to bring greater transparency to the federal contract bidding process, Wonderlich added.
“The president needs to get active again,” Wonderlich said. “It’s not OK for him to sit on the sidelines.”