Transparency Measure Is Ripe For Abuse

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BY THOMAS A. SCHATZ – The lowest qualified bid by the most competent contestant traditionally wins the government contract. Unfortunately, the “Change” gang now wants to fiddle with this decades-old, generally reliable formula.


President Obama hopes to throw another item onto the scale as bureaucrats weigh bids: political donations. He could sign an executive order any day now that would instruct federal officials to consider the political contributions of prospective government contractors. While this move is being portrayed as a matter of increased transparency, it will actually fuel unintended consequences and indirectly overturn an important Supreme Court decision on free speech.

Forcing companies to disclose political gifts supposedly will expose covert “pay-to-play” schemes and ensure that private industry does not unduly influence Washington’s decisions when awarding lucrative contracts. Rather than depoliticize procurement, this practice would empower public officials to scrutinize a particular company’s political philanthropy. The Obama administration’s supporters could score government deals while opponents leave with empty pockets and a simple message: “If you want our checks, show us yours.”

The executive order could transport such old-fashioned, Chicago-style wheeling and dealing from Lake Michigan to the Potomac.

This executive order – drafted in April – requires contractors to disclose annual donations of more than $5,000 that were made in the past two years and paid to political candidates, parties or independent political groups. Directors, officers and other top managers would have to declare their personal political contributions from the past two years – even if they were made without their employers’ knowledge or consent.

This order is in part designed to thwart last year’s Citizen’s United Supreme Court decision, which lifted certain restrictions on the donations corporations and labor unions can make to campaigns and independent organizations.
Congressional Democrats quickly tried to counteract that ruling by re-limiting the third-party donations. But a House- approved bill sputtered in the Senate.

Since the legislation will not be passed, Obama is trying to accomplish that same goal through the executive order. A clothing company would have to reveal its donations to a conservative advocacy nonprofit before bidding to manufacture military uniforms. A landscaping firm would have to list its checks to a liberal third- party group before applying to maintain a national park.

Clearly, such rules could foster political discrimination. Obama would enable his administration to deliver literally billions of dollars in government contracts to pro-Democrat businesses while denying billions to pro-Republican firms.

And when the GOP takes the White House again, that administration could turn around and practice the exact same kind of discrimination against Democrat-friendly contractors.

And the favoritism would not necessarily be confined to contracting work. The entire federal government would be made aware of private firms’ political affiliations. Other agencies could use that information to determine where and how to award billions of dollars.

Even the appearance of political favoritism would be a problem.

The Agriculture Department, for example, might hire a company to upgrade 30 regional offices. That firm may have backed Obama’s campaign and other Democratic causes. It also could finish its work on time, under budget, and with elegant results. Nonetheless, a losing, pro-Republican bidder might cry foul – even though it lost to a truly superior bidder, picked by honest public servants with no partisan axes to grind.

When awarding contracts, federal decision-makers should consider only one issue: the bidders’ merits. Officials should evaluate the price and quality of the products and services on offer, the supplier’s performance under previous contracts and how closely each bid follows federal contract rules.

This proposal is generating bipartisan opposition. Connecticut’s independent Sen. Joe Lieberman, who caucuses with Democrats, and Missouri’s Democratic Sen. Claire McCaskill, who chairs the Government Contracting Subcommittee, have both publicly opposed the executive order. Twenty-seven Republicans senators signed a letter urging the president to scrap this plan.

Imposing campaign- disclosure requirements on government contractors sets the table for a feast of patronage based not on the content of each contractor’s character, but on the color of his PAC money.

Thomas A. Schatz is president of Citizens Against Government Waste.