The White House disclosed Wednesday that it is circulating a draft of a presidential order that would require companies bidding for government contracts to publicly disclose the money they give, directly and indirectly, to try to influence elections for Congress and the presidency.  A version of the draft, dated April 13, can be found here.  Various news and lobbying groups have reported on the draft in recent days, and the effort was conformed Wednesday in the daily White House briefing for news reporters.  With partisan division in Congress barring passage of any measure to react to the Supreme Court’s 2010 campaign finance decision in Citizens United v. Federal Election Commission, President Obama is said to be pondering the use of his own Executive power to compel disclosure of contractors’ role in campaigns.

In the Citizens United decision, the Court struck down any federal limits on campaign spending by groups that are not directly tied to federal candidates or their campaign organizations — that is, independent groups.  Less than a week after the ruling, President Obama, during his State of the Union message (observed in person by several members of the Supreme Court), sharply criticized the ruling.  Later, the decision was widely credited (or blamed) in political circles for freeing a huge outpouring of business spending on last year’s congressional election, resulting mainly in huge gains for Republicans, especially in taking control of the House of Representatives and of a number of state governorships and legislative houses.

While the spending part of the Court’s ruling could only be overturned by a constitutional amendment, the Court did uphold federal requirements for fairly full public disclosure of the spending by corporations and labor unions, using their newly declared freedom to spend.  Relying on the second part of the decision, Democratic lawmakers tried last year to get Congress to pass what was called the “DISCLOSE Act” to compel public release of data about independent spending activity, and to put new limits on spending by government contractors.  The measure failed.

On Wednesday, White House Press Secretary Jay Carney, talking to reporters, used a phrase that appears in the draft Executive Order, saying that the President wanted to promote “transparency and accountability” in the political role of companies that are seeking government business.  His comments made it appear that the President is committed to issuing the Executive Order.  Business and conservative advocacy organizations have been publicly complaining about the draft this week, apparently hoping to try to head off its actual adoption.  If it is issued, it appears virtually certain that it will be challenged in court, very likely on a First Amendment free speech argument.   Liberal or progressive advocacy organizations have made clear publicly that they support the President’s plan.

The draft order would apply to every federal agency’s contracting department, requiring disclosures of campaign financing that bidders for contracts have done over the prior two years.  The disclosure obligation would cover two kinds of activity: first, donations and spending “to or on behalf of federal candidates, parties or party committees” by the companies, their directors or officers, or any affiliates or subsidiaries they control, and, second, donations made to non-candidate organizations that intend to use those funds to spend independently to promote or defeat candidates, or to spend on campaign advertising on radio and television.

A company would have to make such a public disclosure any time it, its officers, or affiliates gave more than $5,000 to any one recipient during the year.  All of the money data would be publicly available in a centralized and searchable database on the site, data.gov, as soon as possible after being submitted.

If the proposed Executive Order goes into effect this year, as seems likely, a federal agency that writes rules for government contracting — the Federal Acquisition Regulatory Council — would be required to write implementing regulations by the end of this calendar year.   Such rules, the draft order said, should “not interfere with the ability of contractors” or those associated directly with them “to engage in political activities to the extent otherwise permitted by law.”

Corporations and labor unions, under laws that are still in existence, are barred from making contributions directly to candidates or to their campaign organizations, but individual corporate executives or employees or union members generally are not covered by that ban.

Posted in Cases in the Pipeline

Recommended Citation: Lyle Denniston, New reaction to Citizens United, SCOTUSblog (Apr. 20, 2011, 3:34 PM), http://www.scotusblog.com/2011/04/new-reaction-to-citizens-united/