Supreme Court campaign contribution rule could unleash ethics conundrum

But existing conflict of interest rules might hold the answer

If you have concerns about the effects of the Supreme Court ruling issued on Jan. 21 regarding companies discretion to contribute to political candidates, there’s a solution hiding in plain sight.

The ruling removes two precedents and more than half a century of limitations on candidate contributions from a firm’s general funds. For government contractors, the only way a company can weigh in with elected officials is through constitutent pressure, conventional lobbying, locking arms with clients, and public relations and media campaigns.

Now, it would seem, contractors are allowed to use cold, hard cash.

It’s easy to imagine industry elements who don’t want the change. Small business, clearly, could be disadvantaged by free-spending businesses with bigger pots of money available for political contributions. Companies with activist, conservatively ethical boards, plus watchful institutional investors, may get queasy about making political contributions. In certain situations that could backfire, say, when a company’s chosen candidate loses.

Selected members of Congress are already gearing up to legislate the door closed on company’s contribution to candidates — which certainly would undergo future court tests — and the president has already stated his opposition. But the administration has another obvious means.

Over multiple administrations the government has put in place policies and regulations and progressively strong enforcement of organizational conflict-of-interest (OCOI) regulations.

Let’s check our thinking: Isn’t a cash contribution to a candidate running for office by an organization the most obvious organizational statement one could make that is partisan and self-interested (and certainly acceptable from individual voters, as opposed to the “person” that corporations sometimes are for legal purposes)?

If that’s so, it needs full disclosure, which it would receive under existing Federal Election Commission regulations on contributions.

It’s then up to the agency planning to buy something to determine if the OCOI is acceptable. That’s an interesting hand grenade for an executive agency to pick up and examine.

Imagine the analysis. Connect the dots of the new or incumbent political candidate with the company’s present and future business interests. Be sure to triangulate the candidate with his/her committee assignments and ties with a federal facility or program or workers or officials.

Then, make a judgment about whether it is permissible for the contractor to both fund candidates and accept federal contracts.

We’ll let the administration, Congress, and the courts decide. Meanwhile, there will be a new spectacle of the usual acquisition pundits and skilled industry lobbyists doing their thing.

This is just what we need in the federal acquisition community, another sideshow that will drain valuable time and attention from the many persistent and vexing issues, while threatening the interests of both customer and company alike.

About the Author

Michael Lent is editor and publisher of Government Services Insider, a newsletter covering industry developments and government policies that affect industry.

Reader Comments

Sat, Jan 30, 2010

Too many people seem to forget the vast majority of our media, our path to information what's happening in this country, is owned by big businesses. We the People are already misinformed, misguided, and emotionally swayed by what we read, hear, and see. This SCOTUS decision simply removes most of the remaining constraints on big money. We can't just "vote the rascals" who are harming our interests "out." We won't know what they're doing, how they are doing it, or who they are working for.

Thu, Jan 28, 2010 Michael Lent Washington, DC

To E A Thibaudeau re your Jan. 27 comment. I agree the decision is very important, as is free speech. Problem is, the SCOTUS has now opened the way for companies to buy elections for candidates of their liking. As I said in the commentary, this poses an obvious, daunting organizational conflict of interest of an unusual type--one not really subject to mitigation. In the end, such company contributors to candidates may suffer when they compete for contracts for which funding and/or oversight is exercise by their funded candidates.

Wed, Jan 27, 2010 E A Thibaudeau Utah

My opinion is that this is the most important Court decision in 100 years restoring First Amendment rights to everyone. Why should we fear Big Business or Corporations and for that matter Religious Organizations who advertise their opinion to inform and sway voters. Labor Unions and other special interest groups including the entertainment industry and coalitions of entertainers have long used their money and public image to attempt the Voter Sway. Politicians always use their Bully Pulpit and the President in particular uses his best efforts even thru chicanery and existential promises to mould the masses to a particular agenda.

Let’s not forget we The Voters have the Right and Obligation to be informed and exercise our Free Agency to Vote OUR Position and Choice of Government.

Business’s Don’t Vote, Unions Don’t Vote and if we don’t like the Politicians then we can kick the rascals out! Government at any level should not be allowed to suppress any voice save sedition and overthrow by force and as citizens of these United States we are all bound by Oath of Allegiance to uphold and defend our Government for a season once installed and then by the Vote to change it if we collectively desire to do so.

Tue, Jan 26, 2010

This is not my area of expertise but my understanding of the Supreme Court ruling was that the laws in place limiting the type and timing of speech paid for directly by corporations was in question. Not corporate contributions direct to candidates. Those laws were not directly addressed by the court.

Tue, Jan 26, 2010 DC Metro

Very thought provoking article. My concern would be the private companies, most public companies have (like you said) “ethical boards, plus watchful institutional investors…” and shareholders. Depending on the candidate running, I can see a company saying, “Well here is the max cash we can give, but we can run this Ad (for $xx million).” Being from upstate New York and living though the McHugh replacement, when for weeks up to the election 8 out 10 ads were campaign related. Not a fun time. However, there is the first amendment “Congress shall make no law…”. We do live in an interesting time.

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