November 02, 2015

President Should Act to Curb Political Abuses by Federal Contractors

By Noah Bookbinder

General Dynamics, the Virginia–based aerospace and defense giant, received more than $13 billion in 2013 for work done for the United States government.  Later, it voluntarily disclosed that it had spent more than a quarter million dollars on direct corporate political donations in that year, including $100,000 to a so-called “dark money” group that doesn’t disclose its donors.  And then, without explanation, the company changed its account – which was vague to begin with – of exactly how much it had given and to what kinds of organizations.   

So how much did the company really give that year?  To whom? Did any of the contributions affect its billions in government contracts or the defense policy that is so crucial to General Dynamics’ profits?  We have no way of knowing.  And that’s a problem. 

Citizens for Responsibility and Ethics in Washington found last year that corporations have not been voluntarily disclosing their political contributions in ways that are complete, accurate, or helpful in determining how they are attempting to build and use influence.  General Dynamics decided in April 2014, just as CREW’s report on the problems with voluntary disclosure came out, to stop its contributions to certain types of political organizations (although it had already given more than a half million dollars that year to dark money groups).  But it is a very strong bet that many other contractors are still giving generously and secretly in an attempt to influence politics and our government.   

The Supreme Court’s disastrous 2010 Citizens United decision – which allowed corporations to greatly increase their influence on politics and policy by spending as much as they want on so-called independent election expenditures – relied in part on the assumption that corporations would voluntarily disclose their political contributions and be held accountable by shareholders and the public.  Like so much else in that decision, that assumption has been proven wrong. 

Congress has shown no inclination to fix the situation, but this is one area where President Obama, acting on his own, can make a real difference.  The president can issue an executive order requiring federal contractors like General Dynamics to disclose all of their political giving, including contributions to dark money groups.  He is apparently considering this step, but time is running out, and the need is severe. 

Federal contractors include huge and influential companies from defense giants Lockheed Martin and Boeing to Chevron, AT&T, Pfizer and, by many accounts, Koch Industries.  And without full information about these companies’ political giving, there’s no way to know whether the contracts they receive and the policies they benefit from are also benefitting the public – or just the companies’ profits – and whether these companies are playing fair in getting them. 

We have seen examples of federal contractors improperly trying to influence awards of contracts.  Recently, top federal contractor Lockheed Martin paid the Justice Department $4.7 million to settle charges that it had illegally used taxpayer money to pay lobbyist and former Rep. Heather Wilson (R-N.M.) to help it get a $2.4 billion no-bid contract. 

The Supreme Court was wrong in arguing in Citizens United that contributions to organizations, rather than candidates – the kinds of contributions that would be impacted by the possible executive order – are not corrupting.  The recent indictment of Sen. Bob Menendez (D-N.JK.) alleges that favors for a donor were tied to contributions to a political organization; if proven, that would show a corrupting influence from exactly the type of contribution the Supreme Court said we shouldn’t worry about.  An executive order by the president can help address these kinds of problems by bringing these contributions into the light.   

We know Americans are concerned about money in politics, and an executive order would only be a start to the solution.  It would apply only to companies that receive government contracts, and it would not restrict their political giving – it would just allow us to know what they are giving. But it would be a good start.

CREW has always believed that government can do better and that our government includes many good people trying to do good work for the American public.  The pervasive influence of money makes it much harder for them to do that good work.  With a stroke of his pen, the president can help.

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