No Preliminary Injunction Against Federal Pay-to-Play Ban

Judge James E. Boasberg (D.D.C.) yesterday denied the plaintiffs' motion for a preliminary injunction in their facial First Amendment challenge against the federal ban on contractor donations to candidates for federal office, political committees, and parties in connection with federal elections. 

The case, Wagner v. FEC, arose out of three federal contractors' claims that the so-called pay-to-play ban violates free speech.  The contractors refiled their claim in federal district court after they agreed to abandon their expedited en banc review at the D.C. Circuit (permitted under the FECA).  They argued that the ban violates the First Amendment and Fifth Amendment equal protection and sought a preliminary injunction.

Judge Boasberg denied the injunction, ruling that they lacked a likelihood of success on the merits of either claim.

Judge Boasberg applied "closely drawn" scrutiny, not strict scrutiny, to the ban and ruled that it served a sufficiently important interest and was closely drawn to achieve that interest.  As to the interest, Judge Boasberg wrote that "[t]here can thus be no doubt that preventing 'pay-to-play' deals or pressure on contractors to give--or the appearance that either is occurring--is sufficiently important to warrant restrictions on political contributions by federal contractors."  As to "closely drawn," Judge Boasberg looked to the history of the ban:

When Congress first enacted the ban on political contributions by federal contractors, it was responding to a recent history of corruption.  As just discussed, the ban was originally passed in 1940 on the heels of the "campaign-book racket," in which those seeking government contracts were effectively required to buy copies of the Democratic campaign book at highly inflated prices in order to secure government business.  In the wake of this scandal, it was eminently reasonable for the legislature to ban contributions by federal contractors.  Doing so would not only insulate prospective contractors from pressure to give money to politicians, but it would also help ensure a merit-based system of awarding contracts and "reassure[] citizens that its politicians are acting on their behalf and not on behalf of the highest bidder."  Because . . . Congress reacted to recent scandals in imposing the ban on contractor contributions, its restrictions are more easily characterized as closely drawn. . . .

An absence of [current] corruption does not necessarily mean, however, that the ban is no longer needed.  It could simply be an indication that the ban is working.

Op. at 11-12.  Judge Boasberg also looked to the contractors' other ways of expressing political support and association as a factor suggesting that the ban is a good fit for the government end.  (Note that the ban allows contracting corporations to donate by way of their PAC.)

As to equal protection, Judge Boasberg ruled that intermediate scrutiny applied, and that the contractors did not demonstrate a likelihood of success in comparing their ban to FECA treatment of government employees, contracting corporation officers or PACs, or sole proprietor contractors--all of whom may contribute.  Judge Boasberg said that these others did not raise the same kind of problems that contracting corporations raised, and that these retained their own distinct identity (and could contribute under their distinct identity).

SDS