Political Law Roundup – July 13, 2015

This is the first post in a new series on the blog, providing a quick recap of recent political-law news and developments.

  • What role will non-profits have on the 2016 presidential election? According to a report in the New York Times, 501(c)(4) political activity is expected to be an important factor in the upcoming race.
  • In Wagner v. FEC, the DC Circuit Court upheld the prohibition on political contributions by federal contractors. You can see our full analysis of this important case here.
  • Challenges in defining coordination and enforcing restrictions means that Super PACs will continue to play an important role in federal elections, including the 2016 presidential race.
  • The New York City Campaign Finance Board is holding a hearing on Monday, July 13, 2015 to solicit comments on proposed amendments to Board rules on public-funds eligibility and disclosure-statement documentation. More information is available here.
  • The Brennan Center for Justice, the New York City Campaign Finance Board, and the Committee for Economic Development will be hosting a conference titled American Elections at the Crossroads, on Wednesday, July 22. Ann Ravel, chair of the FEC, will deliver remarks.

DC Circuit Upholds Federal Contractor Pay-to-Play Ban

Today, the DC Circuit issued its decision in Wagner v. FEC and upheld the 75 year-old pay-to-play prohibition applicable to federal contractors.

The Federal Election Campaign Act prohibits federal contractors from making contributions to party committees and candidates for federal office.  As we previously described here, three federal contractors had challenged the provision.

In addressing the correct scrutiny to apply, the court found that the “closely drawn” standard remained the appropriate standard for review of a ban on campaign contributions, notwithstanding Citizens United as that case involved independent expenditures rather than contributions.  Because this was a restriction on government contractors, the court noted that Congress had greater latitude to restrict the expression of both employees and government contractors than it did with the general public.

As such, the government’s stated interests in: 1) protecting against quid pro quo corruption and; 2) protecting merit-based administration of government contracts were compelling.  Delving into the 75 year-old history of the provision, the court found that “more recent evidence confirms that human nature has not changed since corrupt quid pro quos and other attacks on merit-based administration first spurred the development of the present legislative scheme,” citing to corruption scandals in Congress as well as the passage of pay-to-play laws in at least seventeen states, including New Jersey, Illinois, Connecticut and New York City, due to corruption scandals.

The court also found that the ban as applicable to political parties was narrowly tailored because there “is no meaningful separation between the national party committees and the public officials who control them.”

The court made specific reference to independent expenditure-only committees, finding that the challenge at issue did not involve the “law as the [FEC] might seek to apply it to donations to PACs that themselves make only independent expenditures, commonly knowns as ‘Super PACs.’”  Instead, the only issue before the court was the application of the ban by an individual contractor to a federal candidate or political party.

As acknowledged in today’s decisions:

  • Corporate federal contractors remain able to form political actions committees (i.e. separate segregated funds)
  • Officers, employees and shareholders of such contractors remain free to make contributions from personal assets.

ELEC Issues August Newsletter

The New Jersey Election Law Enforcement Commission has issued its August newsletter. The newsletter discusses the role of public financing in New Jersey’s gubernatorial election, trends on independent spending by outside groups and fundraising by the “Big Six” Committees in the second quarter of 2013. The newsletter also discusses the pending appeal in Wagner v. Federal Election Commission (a challenge to the long-standing federal contractor ban) and the impact that the ultimate decision in that case may have on New Jersey’s own pay-to-play laws.

The U.S. Court of Appeals for the District of Columbia (DC) is scheduled to hear oral arguments in Wagner v. FEC on Monday, September 30, 2013.