[EL] contractors and super pacs

[Rick Hasen]

    The Status of the Federal Contractor Ban as Applied to Super PACs
    <http://electionlawblog.org/?p=74113>

Posted onJuly 7, 2015 10:22 am 
<http://electionlawblog.org/?p=74113>byRick Hasen 
<http://electionlawblog.org/?author=3>

As I noted inmy earlier post <http://electionlawblog.org/?p=74090>on 
today’s Wagner v. FEC decision, the DC Circuit today did not address the 
question whether federal contractors have a constitutional right to make 
contributions to super PACs despite the contractor ban. It turns out the 
issue was raised in a matter involving Chevron at the FEC a few years 
ago, but the FEC did not resolve it.  Here’s aCovington Bulletin 
<http://www.insidepoliticallaw.com/2014/04/11/in-chevron-case-fec-brings-clarity-to-the-federal-contractor-ban-and-super-pacs/>(my 
emphasis):

    *In Chevron Case, FEC Brings Clarity to the Federal Contractor Ban
    and Super PACs*

    ByRobert Kelner
    <http://www.insidepoliticallaw.com/authors/#rkelner>,Robert Lenhard
    <http://www.insidepoliticallaw.com/authors/#rlenhard>andKevin
    Glandon <http://www.insidepoliticallaw.com/authors/#kglandon>onApril
    11th, 2014

    The rules on corporate contributions to Super PACs were made clearer
    today when the Federal Election Commission (FEC)released its finding
    <http://eqs.fec.gov/eqsdocsMUR/14044353483.pdf>that Chevron
    Corporation’s $2.5 million contribution in 2012 to the Congressional
    Leadership Fund (a Super PAC) had not violated the bar on government
    contractors making contributions in federal elections.

    Public Citizen and several environmental groups had alleged that
    Chevron Corporation and Chevron U.S.A. Inc. had numerous federal
    contracts, and consequently could not contribute to a Super PAC.  On
    abipartisan 5-1 vote
    <http://eqs.fec.gov/eqsdocsMUR/14044353409.pdf>, the FEC dismissed
    the charges, finding that Chevron Corporation—which made the
    contribution—was not a federal contractor at the time, and that
    federal contractor status could not be imputed to the company merely
    because it had a wholly-owned subsidiary that owned a subsidiary
    that in turn owned a subsidiary that owned a federal contractor.  In
    so doing, the FEC followed the agency’s longstanding practice of
    permitting a parent company with a federal contractor subsidiary to
    make a contribution as long as it has sufficient funds from sources
    other than the contractor subsidiary.  Nor is the federal contractor
    ban particularly stringent, permitting officers, shareholders, a
    corporate PAC, and subcontractors to contribute, even when the
    contractor cannot.

    *Having resolved the case by applying the facts to existing law, the
    FEC did not address an even more fundamental issueraised by Chevron
    <http://eqs.fec.gov/eqsdocsMUR/14044353375.pdf>:  Applying the
    federal contractor ban to contributions to a Super PAC is
    inconsistent with the Supreme Court’s limiting of campaign finance
    restrictions to the prevention of/quid pro quo/corruption or its
    appearance.  Last Wednesday’s decision in/McCutcheon v.
    FEC/highlights the doctrinal fragility of the federal contractor ban
    in cases like this.*

    Full disclosure: Covington represented Chevron before the FEC in
    this matter.

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On 7/7/15 9:52 AM, Rick Hasen wrote:
> Can someone tell me the status of the issue at the FEC whether federal 
> contractors may make contributions to Super PACs supporting federal 
> candidates?  I recall some action about this, but do not remember 
> where things stand.
> Thanks.
>

-- 
Rick Hasen
Chancellor's Professor of Law and Political Science
UC Irvine School of Law
401 E. Peltason Dr., Suite 1000
Irvine, CA 92697-8000
949.824.3072 - office
949.824.0495 - fax
rhasen at law.uci.edu
http://www.law.uci.edu/faculty/full-time/hasen/
http://electionlawblog.org

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