By Emily Davis, a Summer 2022 CLC intern
Companies spend on political contributions and lobbying to influence elections and advance their policy goals.
Most of this spending is legal, but there are important, necessary legal barriers that help preserve the integrity of the democratic process.
For instance, corporations cannot give directly to federal candidates; their political spending must be “independent” — i.e., not coordinated with candidates — to remain legal.
Companies likewise cannot reimburse, or even promise to reimburse, their employees for making political contributions to favored candidates or the PACs supporting them; they cannot even pay employees a “bonus” to offset their political spending.
Each of these legal prohibitions helps avoid fostering a political culture of corruption — real or apparent — in which special interests are given favored treatment in exchange for supporting candidates for elected office.
In the same vein, federal campaign finance laws specifically prohibit political contributions from companies contracted to provide goods or services to the federal government because such spending creates the appearance, or even the reality, that federal contracts are effectively “for sale” to generous political donors.
American voters should be able to trust that elected officials are making decisions on how to spend taxpayer dollars with an eye toward the public’s best interests, not the interests of the corporations and wealthy special interests most willing to fill their campaign coffers.
Nevertheless, some federal contractors try to flout this crucial, legal barrier.
Campaign Legal Center (CLC) has filed a complaint with the Federal Election Commission (FEC) alleging that gun manufacturer Daniel Defense, LLC violated the federal contractor contribution ban by contributing $100,000 to the Gun Owners Action Fund, a super PAC, while the company had multiple open contracts with federal agencies.
Daniel Defense has been awarded millions of dollars in federal contracts, including, most recently, a $9.1 million Department of Defense contract awarded in March 2022.
When it gave $100,000 to the Gun Owners Action Fund — which made up 90% of the contributions the super PAC received during the 2022 election cycle — Daniel Defense had four open federal contracts to provide guns and gun accessories to the Department of Defense, Department of State and Department of Justice.
Courts have consistently upheld the decades-old ban on federal contractor contributions, recognizing the corruption risks inherent in a political system that would allow the beneficiaries of taxpayer-funded federal contracts to use some of their profits to effectively exchange campaign contributions for additional contracts.
As the U.S. Court of Appeals for the D.C. Circuit said in the decision on the 2015 case Wagner v. FEC, which upheld the federal contractor contribution ban, “If the dam barring [such] contributions were broken, more money in exchange for contracts would flow through the same channels already on display.”
Troublingly, this is not the first time that the Gun Owners Action Fund has received an illegal political contribution. In 2020, Sig Sauer, another gunmaker and prolific federal contractor, made a $100,000 contribution that Gun Owners Action Fund that was eventually refunded, just weeks after CLC filed an FEC complaint. That complaint remains unresolved and pending before the FEC.
For a super PAC that has only ever received money from six contributors, it’s deeply concerning that two of those contributors — Sig Sauer and Daniel Defense — were legally prohibited from making political contributions.
Taxpayer-funded federal contracts are not for sale, and the FEC must act to enforce this critical prohibition and deter further violations.