A GUSHER OF SECRET money is flowing into the political system — more and more with every campaign, propelled by an acquiescent Supreme Court, feckless regulators and a gridlocked Congress.
This money, funneled to third-party groups that have positioned themselves outside the normal campaign finance reporting channels despite their clear interest in influencing elections, represents a threat to a democratic system. Much more light would have been shed on this secret spending had Congress last year passed the Disclose Act, which would have tightened the tax code to require nonprofit groups and trade associations that intervene in elections to report that spending and the funding for it. The measure passed the House but fell just short of the 60-vote Senate hurdle. Its prospects in the current legislative environment are dim.
Which gets to the pending question: what to make of a draft executive order that would require disclosure of some of this spending, specifically that of entities seeking government contracts. We believe in disclosure as a general rule, but we find ourselves uneasy about this approach.
The order, leaked by opponents while it is still in draft form, would require anyone seeking government contracts to report contributions (by the company, its subsidiaries and its directors or officers) to or spending on behalf of federal candidates, parties and political committees. This information is already publicly available, although not collected in a single place or reported in connection with the contracting bid. More controversial, the order would require reporting of “any contributions made to third party entities with the intention or reasonable expectation that parties would use those contributions to make independent expenditures or electioneering communications.” These are the checks that currently escape disclosure. The stated justification is to “ensure the integrity of the federal contracting system” and make certain that contracts are awarded “free from undue influence” of extraneous factors, such as “political favoritism.”
Some of the concerns about the proposal seem to us overstated or capable of being fixed. In a letter to President Obama, the U.S. Chamber of Commerce and other business groups argued that the order would “politicize the procurement process” rather than improve it, by encouraging those who had to report contributions to refrain from favoring certain candidates or to change their donation strategy in order to maximize their chance for getting contracts. This impact could be lessened by requiring reporting after a contract is awarded.
Another argument is that the order does not cover government employee unions or recipients of federal grants, but those could easily be included.
But the order has the feel of an end run around an end run. The Disclose Act was a way for Congress to get around a misguided but constitutionally based Supreme Court ruling; that having failed, the executive branch is trying to achieve its own, more limited, response. And it suffers from a disconnect between ends and means. The stated goal is to preserve integrity in contracting from political influence, but there has been no procurement scandal or other evidence of a problem; rather, the real impetus is to secure by executive fiat at least a slice of the disclosure that could not be obtained from Congress.
Other jurisdictions that have had a concern about political influence seeping into the contracting process have tended to respond by prohibiting contributions from those doing business with the government, not by mandating disclosure. The proposed executive order is a well-intentioned but flawed answer to a real problem.