Under federal law, government contractors are prohibited from contributing to any candidate, political committee, or political party in connection with an election for federal office. This limitation applies to corporations and individuals who hold federal government contracts.
A work around to this law exits for corporations – that is, corporations may effectively bypass this prohibition by establishing and administering a separate segregated fund for the purpose of influencing federal elections (i.e., a political action committee or “PAC”). However, no such alternative is available for individuals who hold government contracts. This disparity has led to the filing of a suit in the U.S. District Court for the District of Columbia challenging the constitutionality of this campaign finance rule as applied to individuals.
The plaintiffs in the Wagner v. Federal Election Commission case hold various personal services contracts with federal agencies, including a human resources advisory contract with USAID and an environmental law research contract with the Administrative Conference of the United States, which are paid with congressionally appropriated funds. These contractors argue that the Government cannot support the narrow application of this ban on individuals who have federal contracts since they often work along side federal employees who are not similarly prohibited from making contributions. The plaintiffs argue that there is no compelling rationale for distinguishing between these groups of people – which violates the plaintiffs’ First Amendment rights.
The outcome of this case will directly impact individuals with government contracts, but it could also signal the continued weakening of the campaign finance limitations imposed on government contractors. In the wake of the Supreme Court’s Citizen United decision, which enabled corporations to spend directly from their treasury funds to influence elections, the existing regulations that strictly proscribe the ways in which government contractors may donate to federal elections are rapidly changing.
The Plaintiffs have sought immediate certification of the constitutional issues to the U.S. Court of Appeals for the District of Columbia Circuit. We will provide updates as the case develops.