Obama Looks Set To Abandon Order Mandating Federal Contractors To Disclose Political Donations

The Obama administration has all but abandoned its push to require federal contractors to disclose their political donations, after composing a draft executive order last year that would have forced companies pursuing federal contracts to release their campaign contributions as a condition for submitting bids.

Although the White House composed the draft executive order last April, the administration has neglected to issue a final order, indicating it may drop the matter entirely until after November's presidential election. The U.S. Chamber of Commerce, a loobying group supporting businesses, condemned the proposed order last year, arguing it was a backdoor attempt by the White House to silence its private sector opponents by denying them contracts based on political discrimination.

The sentiment was echoed by congressional Republicans, who warned that the net effect of the rule would be stifled political speech, a nod to the Supreme Court's 2010 Citizen's United decision that ruled the First Amendment prohibited the government from restricting political expenditures by corporations.

While the proposed order was introduced as part of the commitment to government transparency announced by President Obama when he took office, The Hill reports the rule -- which would have required potential contractors for federal projects and their affiliates to disclose contributions to candidates, parties or third-party political groups exceeding $5,000 in the two years prior to submitting the bid -- has almost certainly been placed on the back burner as President Obama enters reelection mode.

The fact that Obama neglected to mention the order in his latest State of the Union address, in a year where campaign finance reform has become a major political issue, is a clear sign the administration is holding off, according to Craig Holman, a lobbyist for the government watchdog group Public Citizen.

Obama neglected to even mention it. I consider it not to be even on the agenda, Holman told The Hill.

Congressional Democrats have not backed down from campaign finance reform. In an attempt to place some limits on the unlimited and often anonymous political spending by corporations, allowed by the Citizens United ruling, Chris Van Hollen, a congressman from Maryland, has reintroduced the Disclose Act, which was killed after it failed to pass Congress in 2010 by a single Senate vote.

The latest version of the legislation, which was introduced in the upper chamber by Sen. Sheldon Whitehouse of Rhode Island, aims to increase government transparency by requiring all corporations, unions and outside spending groups to report any political expenditures surpassing $10,000 to the Federal Election Commission and take public credit for the political advertisements they sponsor. That would be in addition to mandating all federally registered lobbyists to disclose their political expenditures.

While both bill's are expected to be shot down by Republicans, Democrats hope the publicity will place an uncomfortable spotlight on their colleagues across the aisle, many of whom tout the importance of government and political transparency while simultaneously upholding the constitutionality of unlimited political spending as determined by the Citizens United case.

Still, support for the Disclose Act and Obama's proposed draft order do not necessarily go hand-in-hand. House Minority Whip Steny Hoyer acknowledged the executive order could lead to a process where political donations, rather than the merit of a contractor's application and bid, become the primary determinant of whether a certain company is awarded a government contract.

There are some serious questions as to what implications there are if somehow we consider political contributions in the context of awarding contracts, Hoyer told The Hill last May. I'm not in agreement with the administration on that issue.

It has technically been illegal for federal government contractors to contribute to federal campaigns or parties since 1940, a regulation that can still be found under section 441C of the U.S. Code. Although the ban was watered down in the 1970s to allow contractors to form political action committees, those companies were still forbidden from using their own money toward political donations.

Now, that ban is on shaky legal ground. The Citizens United decision, which paved the way toward unlimited political spending under the guise of so-called super PACs, did not address the contractor ban, which the Federal Election Commission insists remains in effect. However, that has not stopped the pro-Mitt Romney super PAC Restore Our Future from accepting almost $900,000 from at least five companies with government contracts, according to a recent analysis from the Los Angeles Times. The largest contribution came from Oxbow Carbon, which has a contract to sell coal to the Tennessee Valley authority.

However, most third-party groups have assumed the ban is still in place. Super PACs supporting President Obama, Rick Santorum, Newt Gingrich and Ron Paul have all required donors to specify the money given to them does not come from the treasury of an entity or person who is federal contractor.