Finding that the problem of corruption in government contracting is still a major civic scandal, a unanimous federal appeals court on Tuesday rejected a new constitutional challenge to the seventy-five-year-old ban on political contributions by individuals who are hired under contract to do work for federal agencies — an increasing way that federal agency tasks get done.
The sweep of the ruling by the en banc, eleven-judge U.S. Court of Appeals for the District of Columbia Circuit would also appear to support the ban as it applies to business firms with federal contracts, even though the ruling was technically limited to individuals who act as federal contractors because those were the only challengers.
In the wake of a series of controversial Supreme Court decisions in recent years making the First Amendment a strong shield for a wide variety of campaign financing tactics, the Circuit Court ruling was a major victory for groups that contend that money is increasingly corrupting American politics.
The Circuit Court took advantage of the legal fact that older precedents by the Supreme Court, not undone by the new round of cases favorable to money in politics, had treated government contracting as an especially tempting arena to made a direct swap of political contributions for an award of public contracts.
The new ruling found that the donation ban for contractors still served two purposes: curbing the corrupt practice of giving money to politicians in return for government contracts, and in protecting the integrity of the contracting system that is supposed to be based upon merit and not political favoritism.
Citing a series of modern scandals in that arena, the Circuit Court said the situation that led Congress to impose the ban on contractor donations in the first place in 1940 persists today. “The long historical experience” recounted in the sixty-two-page ruling, the court said, “makes clear that important concerns supporting [the ban] are neither theoretical nor antiquated, but rather are grounded in unhappy experience stretching to the present day.”
Thus, the Circuit Court turned aside broad new challenges based upon the First Amendment and on the Constitution’s guarantee of legal equality under the Fifth Amendment’s Due Process Clause.
The case was decided by the en banc D.C. Circuit because a special federal law assigns that full court the task of ruling on constitutional challenges to federal campaign finance controls.
Still, the fact that eleven judges on that court, of widely varying philosophical views, had signed onto a single opinion in favor of the ban enhanced the weight of the ruling. Further symbolic weight came with the fact that the Circuit Court’s Chief Judge, Merrick Garland, filed the opinion for the full court, thus stressing its unanimity.
Aside from its direct impact on the flat ban on contractor contributions, the new decision’s rejection of the First Amendment challenge may have a legal and political effect on two other potential campaign law controversies that have been developing in the Obama administration for several years.
Both of those potential initiatives have been strongly challenged on First Amendment grounds, as potential restrictions on the free-speech aspects of campaign financing.
The first of those possible changes has been under study by President Obama and his White House aides for some time: a plan to issue a presidential order to force business firms doing business with the federal government to disclose publicly all of their political activity. Although contractors are banned from making direct political contributions to candidates or campaign organizations, they may channel money into politics in other ways..
The second possible revision was a study by the Internal Revenue Service — now suspended, perhaps for an indefinite period, because of political opposition — to revise the rules on eligibility fo tax-exempt status of private groups that are active in funding federal election campaigns. Current IRS rules allow many such groups to gain tax-exempt status on the theory that they are doing “charitable” work. The IRS had draft plans to severely restrict that status for such groups.