Type: Law Bulletins
Date: 04/25/2011

Contractors May Be Required to Disclose Political Contributions

The Obama Administration has drafted an executive order that would require all companies bidding for government work to include in their proposals a complete list of political contributions made over the preceding two years by the company, its senior executives, and any affiliates or subsidiaries within its control. Included in the list of required disclosures are contributions to third-party nonprofit groups if the company has the "reasonable expectation" that the funds would be used to pay for electioneering communications such as paid advertisements. The draft executive order would not apply to public-sector unions or grantees.

The draft executive order would require companies to disclose this information whenever the aggregate amount of the contributions and expenditures made by the company, its directors or officers, or any affiliates or subsidiaries within its control exceeds $5,000 to a recipient in a given year. Essentially, it would require disclosure regarding contributions made by officers out of their wallets and not out of corporate accounts. The disclosed contractor data would be made publicly available in a centralized, searchable database at Data.gov.

Although the draft executive order states that it is necessary to ensure that politics are not allowed to impair the integrity of the procurement process, it is being attacked as doing just that—politicizing the procurement process. This certainly appears to be the case, as campaign contributions are already publicly available in two searchable databases, the FEC’s disclosure database and in the congressional lobbying database, while contributions to third-party organizations by law do not need to be disclosed.

The draft order requires the Federal Acquisition Regulatory Council to adopt implementation regulations by the end of 2011. If this occurs, it is possible that the order could go into effect as early as January 2012.

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