Ban on Campaign Contributions by Fed Contractors Upheld

By Casey C. Sullivan, Esq. on July 17, 2015 | Last updated on March 21, 2019

A law prohibiting political contributions by federal contractors was upheld by a unanimous, en banc D.C. Circuit last week. The eleven judge panel ruled that the law does not violate the First Amendment or equal protection rights of government contractors, the court ruled.

The law was first adopted in 1940, over concerns that businesses would use campaign contributions to influence the government contract process. Those concerns are still valid today, the Court ruled, justifying the narrowly drawn restrictions of the law.

No Donations From Contractors

The law prohibits any government contractor from making any direct or indirect contribution to a party, committee, politician, or candidate, between the beginning of negotiations and the completion of the contract. The reason for the ban is fairly straight forward: it's meant to prevent contractors from influencing government business through political contributions.

Of course, not every government contractor is a giant defense firm looking to grease hands. The plaintiffs in this case were three retired federal employees who were hired back as contractors during retirement. Under the law, they couldn't give a $20 contribution to Bernie Sanders or Donald Trump while still working for the government.

Damming the Flow of Suspect Money

The plaintiffs challenged the ban only as it applied to individual contractors, arguing that it violated their rights to free speech and association. The D.C. Circuit, sitting en banc, rejected their claims. Laws that limit campaign contributions limit speech, therefore implicating the First Amendment. Those laws must withstand "rigorous review" -- something less than strict scrutiny, but more than rational basis.

Such laws must be closely drawn and this one is, the D.C. Circuit ruled. The en banc panel was unanimous in its decision, written by Chief Judge Garland, highlighting the negative consequences of removing political spending limits. According to the court, "if the dam barring contributions were broken, more money in exchange for contracts would flow" through a system that's already widely abused.

The decision comes as fundraising for the 2016 elections has already begun in earnest. During the trial the Federal Election Commission put forth "an impressive, if dismaying," list of pay-to-play contract scandals, highlighting the way money is currently used to influence government pork. 

Outside of government contracts, the "money game" continues to influence politicians -- at least in forcing them to spend much of their time fundraising. Jeb Bush's campaign has already raised over $114 million for presidential run, $100 million from outside groups. As candidates continue to grasp for donations, one thing's clear -- they won't be getting them directly from federal contractors.

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