How the FEC Can Improve the Federal "Pay-to-Play" Law

The Campaign Finance Board (CFB) is urging the Federal Election Commission (FEC) to strengthen its regulation of the federal “pay-to-play law” which bans federal contractors from making political contributions to candidates running for federal office.

As we wrote last week, in 2014 the FEC determined that Chevron Corporation could make political contributions while its subsidiary, Chevron USA, Inc. held federal contracts, concluding that the two corporate entities were distinct. In response to this ruling, Public Citizen submitted a petition asking the Commission to exercise more stringent scrutiny when applying the law to corporate affiliates.

Allowing federal contractors to bypass the pay-to-play law in this fashion undermines public confidence in the government contracting system. The FEC should adopt strict enforcement standards to uphold this vital law, and the integrity of our government.

New York City law prohibits city candidates from accepting contributions from corporations and other business entities. Individuals doing business with the city may make contributions to candidates, but lower contribution limits apply.

Even under the current law, there are instances in which the CFB must determine how to apply contribution limits to nominally separate entities. The CFB has long utilized its “single source” rule. The single source rule establishes four criteria by which to assess whether multiple affiliated entities constitute a single source with respect to campaign contributions: 1) policy-making practices; 2) authority over personnel; 3) similarity in contribution patterns; and 4)the entities’ public representations.

The adoption of a single source rule similar to the CFB’s would enable more robust enforcement of the law, particularly when applied to complex business entities. The CFB therefore encourages the FEC to undertake the rulemaking urged by Public Citizen and adopt a similar rule.

There is still time for you to weigh in! The FEC is accepting comments on the Public Citizen petition until May 29. Written comments may be submitted electronically via the FEC’s website at http://www.fec.gov/fosers (reference REG 2014-09), by email to ContractorPetition@fec.gov, or by mail to Federal Election Commission, Attn. Amy. L. Rothstein, Assistant General Counsel, 999 E Street NW, Washington DC, 20463. For more information, visit the FEC’s rulemaking website, http://www.fec.gov/fosers.