Congress Responds to Draft Obama EO on Contractor Contributions

Over the holidays, President Obama signed into law two pieces of legislation (the FY 12 Consolidated Appropriations Act and the FY12 National Defense Authorization Act) that contain statutory language related to federal contractors and the disclosure of certain political contribution and expenditure information. These statutory provisions are a direct response from Congress to a draft Executive Order (EO) circulated by the White House in April of 2011. The draft EO would have required entities submitting bids for federal contracts to disclose certain campaign contributions and expenditures made by the entity itself, as well as its directors, officers, and affiliates. The draft EO also would have required disclosure of contributions to third parties if the contribution was intended or expected to be used for independent expenditures or electioneering communications.

The language in the FY 12 Consolidated Appropriations Act (P.L. 112-74, H.R. 2055) prohibits the executive branch from requiring or requesting this type of information from prospective contractors. This prohibition does not, however, apply to current contractors. The provision in the FY12 National Defense Authorization Act (P.L. 112-81, H.R. 1540) prohibits DOD and certain intelligence agencies (but not other executive branch agencies) from imposing these disclosure requirements on both prospective and current contractors. The differences between the language in the Consolidated Appropriations Act and the NDAA must be worked out by those agencies subject to both laws.

The draft EO was part of a response to the controversial Supreme Court opinion in Citizens United v. FEC, which allowed corporations and labor unions to pay for independent expenditures and electioneering communications (but not direct campaign contributions) for the first time. To date, the President has not signed the draft EO and it is unknown whether it has undergone revisions since it was released back in April of 2011. It is also unclear why the Consolidated Appropriations Act language applies only to prospective (and not current) federal contractors. Some have speculated the language is part of a deal negotiated between Republicans and Democrats in order to allow the President to move forward with the draft EO in a more limited form.