A proposed executive order requiring vendors submitting offers for federal contracts to disclose political contributions and expenditures has sparked a legislative response.

An amendment was added to HR1540, a fiscal national defense authorization bill, which passed last week, precluding an executive agency from requiring a vendor to disclose political contributions as a condition of contract participation.

Additionally, two companion bills opposing the proposed executive order were also introduced into the house and senate. SB1100 and HR2008, titled “Keeping Politics Out of Federal Contracting Act of 2011”, explicitly prohibit an executive agency from requiring submission of political information, and prohibit an agency from using political information as a factor in consideration of whether to award a contract. The bills’ definition of political information means information relating to political spending, including contributions, independent expenditures and electioneering communications.

Previously, a congressional hearing was also held concerning the proposed executive order.

Photo of the United States Capitol with the flag by Florian Hirzinger on Wikipedia.

As part of Governor Deval Patrick’s reforms for small businesses operating in the state, starting July 1 the Operational Services Division will no longer charge the annual $275 fee for businesses participating in the Commonwealth’s Procurement Access and Solicitation System (Comm-PASS). The state is also eliminating the fee it charges businesses to shop for health care under the independent state agency Commonwealth Choice. Another announced reform increases the upper threshold of Massachusetts’s preferential small procurement competitive bidding range from $50,000 to $150,000.

Secretary of Administration and Finance Jay Gonzalez said the reforms are focused on “creating opportunities for small businesses, creating jobs for our residents, and containing health care costs so businesses can survive and thrive.”

Photo of Governor Devol Patrick by Scott LaPierre on Wikipedia.

A federal judge has ruled a section of the Federal Election Campaign Act of 1971 [FECA] prohibiting direct corporate contributions to federal candidates is unconstitutional. In United States v. Danielczyk, a criminal case being heard in the US District Court for the Eastern District of Virginia, Judge James C. Cacheris found corporations have an equal right to make political contributions under federal law as do human beings.

In the decision dismissing one of the counts against the defendants, the judge writes, “But for better or worse, Citizens United held that there is no distinction between an individual and a corporation with respect to political speech. Thus, if an individual can make direct contributions within FECA’s limits, a corporation cannot be banned from doing the same thing. So because individuals can directly contribute to federal election campaigns within FECA’s limits, and because [2 U.S.C.]§ 441b(a) does not allow corporations to do the same, § 441b(a) is unconstitutional and Count Four must be dismissed.”

Currently, during an election cycle, individuals may contribute $2,500 for a federal candidate’s primary election and an additional $2,500 for the general election.

Mayor Corey A. Booker has signed a new pay-to-play ordinance into law, specifically aimed at city redevelopers. The new ordinance bars redevelopers from contracting with the city if a contribution, or pledge of a contribution, over $300 has been made one year prior to the contract.

Redeveloper is defined to mean any person or entity entering into a contract with the city, or with another redeveloper, for the rehabilitation of any area in the city. The definition includes those with a 10-percent or greater ownership in the entity, partners, officers, subsidiaries, and spouses and adult children living at home.

Any group of individuals from the contracting entity cannot contribute in the aggregate in excess of $3,000. Contribution and disclosure requirements will also be required from lobbyists, professionals, and consultants working for a redeveloper if his or her work relates to the subject contract. A redeveloper who violates the ordinance is barred from future redevelopment agreements for four calendar years.

The ordinance takes effect June 2nd.

Photo of Newark at night by Jamaalcobbs at en.wikipedia.

The House Majority PAC and the Majority PAC, two independent expenditure entities, formally requested an advisory opinion from the Federal Election Commission asking whether federal officeholders and candidates may solicit unlimited contributions on behalf of PACs. The request was sparked by the newly created Republican Super PAC, founded by James Bopp, and its plan to ask candidates to solicit and direct unlimited contributions on its behalf.

These solicited funds would be earmarked for independent expenditures supporting or opposing specifically designated candidates. Additionally the request asks if candidates may participate in fundraisers for PACs even if they cannot solicit contributions.

Governor Martin O’Malley signed into law a bill which requires corporations to disclose to shareholders the dates and amounts of political independent expenditures and the candidate or ballot issue to which the expenses related, or post a link to this information from its homepage.

All entities making an aggregate independent expenditure of $10,000 or more in an election cycle will be required to file reports detailing information such as the identities of those making, or those exercising direction or control over those making, the independent expenditures. Included in the report must be the identity of each person who made cumulative donations in excess of $51 to the entity making the independent expenditure. Entities include corporations, partnerships, committees, associations, and labor organizations.

The law redefines independent expenditure to mean expressly advocating the success or defeat of a clearly identified candidate or ballot issue. Separate and distinct from the definition of independent expenditure, the law also defines electioneering communications to cover expenditures for broadcasts made within 60 days of an election. Based on the amount of money spent and the size of the audience of the broadcast, separate and additional disclosure reports may be required for electioneering communications.

The new law takes effect December 1.

Reaction to the leaked draft presidential executive order requiring vendor disclosure of political contributions has been increasing. A hearing was held in the House last week to examine the proposed executive order, with testimony being presented from various witnesses.

The U.S. Chamber of Commerce, writing on behalf of a coalition of more than 80 business groups and trade associations, has strongly protested the proposed executive order, stating, “American businesspeople should not be forced to limit the exercise of their constitutional rights under a new and oppressive regulatory scheme.”

More than 30 public-interest groups have signed a letter in support of the draft executive order, writing, “In order to keep in check actual or perceived corruption in government contracting, it is imperative that there be full disclosure of campaign contributions and expenditures by federal government contractors.”

If the draft presidential executive order were to be signed, it would be effective immediately, requiring every entity submitting offers for federal contracts to disclose certain political contributions and expenditures made within the two years prior to submission of their offer.

Photo of the U.S. Chamber of Commerce courtesy of APK on Wikipedia.

Governor Lincoln Chafee has sent letters to the directors of Rhode Island’s 17 quasi-public agencies requesting, among other things, they terminate non-critical contracts with lobbyists. He is also requesting any procurement activities by these agencies be open and transparent, instructing the agencies to post all procurement rules and regulations applicable to each agency’s contract practices on a public website.

Governor Chafee indicates the purpose of the letters is to help find cost reductions that are available through increased efficiency and productivity, stating, “Under my appointment authority I take very seriously the responsibility of placing highly qualified individuals who strive to ensure value in the services provided by our quasi-public agencies.”

Some of the quasi-public agencies include the Rhode Island Industrial-Recreational Building Authority, the Rhode Island Airport Corporation, and the Rhode Island Health and Educational Building Corporation.

RHODE ISLAND: The Providence Lobbying Disclosure Ordinance, which was to take effect May 16, will now take effect July 1. The City Council’s Committee on Finance amended the March 11 ordinance extending the time to begin the implementation of the regulations. The new ordinance requires lobbyist registration, reporting, ID badges, and penalties.

This report refers to the March 23 Lobby Comply post “Providence Creates Lobbying Registration Law” by George Ticoras.

Photo of the Providence, R.I. skyline by boliyou on Wikipedia.

Today at 1:30pm EDT, the hearing examining the proposed pay-to-play presidential executive order will be held by the House Committee on Oversight and Government Reform and the House Small Business Committee.

Here is a link to the live coverage on the Committee on Oversight & Government Reform website.

The SunFoundation will be liveblogging the hearing at:  http://bit.ly/mxIbFe

You can also follow the conversations on Twitter with the hashtag #opengov.

This post is a follow-up to Tuesday’s post “Hearings Set for Anticipated Executive Order on Pay-to-Play” by George Ticoras.

On Thursday, May 12, the House Committee on Oversight and Government Reform and the House Small Business Committee will hold a joint hearing to examine a proposed presidential executive order requiring disclosure of political contributions by governmental contractors.

The draft proposed executive order, which was leaked to the press, would require every entity submitting offers for federal contracts to disclose certain political contributions and expenditures made within the two years prior to submission of their offer. The disclosure requirement includes contributions made to federal candidates, parties, and committees, by the bidding entity, its officers, and any affiliates or subsidiaries within its control. Contributions made to parties for independent expenditures and electioneering communications would also have to be reported. These disclosures would be required whenever the aggregate amount of the contributions and expenditures by the bidding entity exceeds $5,000.

The hearing is scheduled to examine the proposed executive order, evaluate its impact and consequences on the federal acquisition system, and determine whether it introduces politics into the procurement process.

A report released by the Government Accountability Office reveals disclosure reporting terminology and reporting requirements are a challenge for some lobbyists. The 2010 Lobbying Disclosure Observations on Lobbyists’ Compliance with Disclosure Requirements also found some lobbyists lacked clarity in determining what constitutes a lobbying activity versus a non-lobbying activity. Generally, however, the findings in the report, which were substantially the same as prior reports, show lobbyists as a whole complying with disclosure and reporting requirements.

The GAO is required by law to prepare reports determining the efficacy of lobbying compliance and reporting, and identify any challenges to compliance. This is their fourth report.

U.S. Representative Chris Van Hollen has filed both a lawsuit against the FEC and a petition at the FEC seeking to challenge regulations of disclosure requirements of contributions for “electioneering communications” and “independent expenditures”. In Van Hollen v. FEC, he claims the FEC regulation 11 CFR §104.20(c)(9), which requires disclosure only of those making contributions over $1,000 to an entity for the purpose of furthering electioneering communications, contradicts the statute which requires disclosure of all donors making contributions over $1,000.

The separately filed petition with the FEC requests they revise and amend regulations currently allowing independent expenditure groups to not reveal donors giving over $200 except for those contributors who gave for the purpose of furthering the reported independent expenditure. Representative Van Hollen alleges this contradicts the statute, which requires disclosure of all donors who gave over $200 to the entity.

The Alaska Legislature was adjourned on its scheduled date, but not in its usual manner.

Because the House and Senate could not agree on the time of the adjournment, which is on the 90th and last day authorized by law, Governor Parnell himself invoked state constitutional authority and adjourned the 27th session of the legislature on April 17. He then immediately called a special session to begin April 18.

The special session is limited by law to a maximum of 30 days.