May 3, 2011
Pay-to-Play Draft Executive Order
Keeping in line with my recent research interests and the kind introduction provided by your regular blogger, Stefan Padfield, my introductory-post focuses on corporate campaign contributions.
Late in April it was reported that President Obama was circulating a draft Executive Order (Download Draft Executive Order) meant to enact a small portion of the DISCLOSE Act, a failed election transparency law targeted at corporate contributions. The DISCLOSE Act, which was just one vote short of a filibuster-proof majority in the Senate last fall, sought among other election transparency measures to prohibit federal contractors from making political donations to federal candidates or parties. The draft Executive Order takes a more scaled-back approach to this issue and would only require federal contractors to disclose contributions exceeding $5,000 made by it, its offers and directors, and any of its subsidiaries to any federal candidate, party, or independent third-party entity with the intention of making independent expenditures or electioneering communications. Disclosures would be searchable by the public, and similar to the type of pay-to-play legislation enacted in several states.
The proposed Executive Order encompasses independent expenditures, which the Supreme Court held in Citizens United pose no risk of quid pro quo corruption, but only requires disclosure (not an out-right ban) of such contributions. Those familiar with Citizens United know that the disclosure requirements involved in that case were upheld. The proposed Executive Order, therefore, tests the constitutional boundaries of the evolving Supreme Court jurisprudence of corporate campaign finance regulation because it targets disclosure requirements of corporate independent expenditures-- an issue not directly addressed by Citizens United. It is also worth noting that by including third party donations within its scope, this proposal would arguably capture donations to 501(c)(4) organizations, which are not currently disclosed to the public. Given that the proposed Executive Order would become effective immediately, and cover donations made within the past 2 years, this Order has potential, if signed, to play a major role in the corporate campaign finance debate that will undoubtedly continue through the 2012 presidential election. For those interested, this is an issue to watch.
While the White House has been pretty quiet about the proposal, there is some movement on it from advoacy groups. For example, Public Citizen, drafted a letter to President Obama urging that he sign the proposed Executive Order into law, which, as of May 2nd, had been signed by 22 various election-watch and shareholder advocacy groups including the Center for Corporate Policy, Common Cause, and the Social Equity Group (Download Public Citizen letter). Of course opposition is also forming, which includes 25+ members of Congress who have sent (or signed onto) letters to President Obama urging that he reconsider the proposed Order and its impact on small businesses, the federal procurement process, and the First Amendment rights of corporations (Download Opposition Letter/ Download Graves Letter).
Future posts will not be this long!