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Industry Fights Disclosure of Contractors’ Political Donations

Members of Congress, including some Democrats, denounced President Obama’s proposed executive order requiring federal contractors to disclose their political contributions.

Chairman Darrell Issa of the House Oversight and Government Reform Committee described the proposal as “Chicago hardball politics.” Even some Democrats who supported the disclosure requirement urged that it be amended to minimize the reporting burden on small contractors.

The White House has confirmed that the draft order is under consideration. According to the draft, when submitting a bid, a contractor and the company’s directors and officers would have to disclose all contributions of more than $5,000 in one year to political parties, federal candidates and any independent third-party entity trying to influence an election. The information would be made public. Administration officials described it as a way to increase transparency in federal contracting.

President Obama has publicly opposed the Supreme Court decision that allows corporations and unions to donate to organizations that try to influence elections. Such organizations spent millions on 2010 congressional campaigns, often without disclosing the names of contributors. Rep. Bruce Braley, D-IA, said, “It’s the unlimited amount of secret money coming into elections that is the greatest threat to democracy today.”

Republican members of Congress joined industry representatives in opposing the executive order at a joint hearing May 12 of the Oversight and Government Reform Committee and the House Small Business Committee.

“All Americans should be concerned by a policy that directly and purposefully injects political giving into the procurement process,” said Small Business Committee Chairman Sam Graves, R-MO. He charged that the order is politically motivated and could be used to reward administration supporters and deny contracts to political opponents.

The Obama administration’s designated defender was Dan Gordon, administrator of federal procurement policy. Gordon declined to testify specifically about the draft order because it is still in the review stage, but he defended the idea behind it under sharp questioning.

He acknowledged that the disclosure of political contributions is not relevant to help contracting officers award contracts, but said the public has a right to the information.

“I can unequivocally state that this administration has always been and remains fully committed—100% committed—to a merit-based contracting process rooted in the highest levels of integrity and transparency,” he testified. “There simply is no place for politics in federal acquisition.”

The oversight committee’s ranking Democrat, Elijah Cummings of Maryland, said more than 30 open-government groups have publicly supported the disclosure requirement. He said Chairman Issa refused to allow any of them to testify at the hearing.

The ranking Democrat on the Small Business Committee, Nydia Velazquez of New York, urged that the order be modified to ease the administrative burden on small firms. The U.S. Women’s Chamber of Commerce, while supporting the disclosure policy, suggested that reporting be limited to contracts above a certain dollar threshold.

Representatives of three contractor groups—the Professional Services Council, the National Defense Industrial Association and the Aerospace Industries Association—opposed the disclosure requirement.


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