The Battle for Political Disclosures from Federal Vendors - State and Federal Communications

March 1, 2012  •  

The Battle for Political Disclosures from Federal Vendors

disclosureIn the spring of 2011, a draft presidential executive order was leaked to the public. The order 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 included 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 be reported. These disclosures would be required whenever the aggregate amount of the contributions and expenditures by the bidding entity exceed $5,000.

Reaction to the order was swift. The U.S. Chamber of Commerce, writing on behalf of a coalition of more than 80 business groups and trade associations, strongly protested the proposed executive order. Meanwhile, a letter in support of the order, signed by more than 30 public interest groups, urged full disclosure of campaign contributions and expenditures by federal government contractors. U.S. Representative Anna G. Eshoo sent a letter to President Obama, signed by more than 60 members of the House, in support of the proposed executive order.

The House Committee on Oversight and Government Reform and the House Small Business Committee held a joint hearing to examine the order, evaluate its impact and consequences on the federal acquisition system, and determine whether it introduced politics into the procurement process. Bills opposing the proposed order were introduced in both the House and the Senate. Finally, a compromise amendment, precluding an executive agency from requiring a vendor bidding on a contract to disclose political contributions, was added to the National Defense Authorization Act for Fiscal 2012. The act passed and was signed by President Obama at the end of 2011.

Passage of the bill did not end calls for disclosures of political contributions from federal contractors, however. Petitions with more than 100,000 signatures were submitted by Public Citizen and to the White House, urging the President to require federal contractors to disclose their political contributions after the bidding process is completed and a federal contract is awarded.

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