Earlier this year, Campaign Legal Center (CLC) filed complaints with the Federal Election Commission (FEC) alleging that six companies violated the federal contractor contribution ban by donating to super PACs.
The 80-year-old ban on federal contractors making political donations protects against the appearance or reality that taxpayer-funded contracts are for sale. The ban is a key defense against the formation of a pay-to-play system in which wealthy special interests are rewarded for their political contributions with lucrative government contracts.
Post-general FEC reports filed Dec.3, 2020, show that most of those contributions have been refunded:
- Marathon Petroleum Company gave $500,000 each to the conservative super PACs Congressional Leadership Fund (CLF) and Senate Leadership Fund (SLF) while holding a nearly $2 million contract with the Department of Defense. One week after CLC’s complaint was filed in October, CLF and SLF each refunded the $500k contributions.
- TonerQuest, a New York-based office supply company, gave $25,000 to the Trump-aligned super PAC American First Action last November while under contract with the GSA. American First Action issued a refund of the contribution less than three weeks after CLC’s complaint.
- Kirby-Smith Machinery, Inc. (a heavy equipment distribution company) gave $10,000 to Restore Oklahoma, a new super PAC that supported Republican Rep. Stephanie Bice in the 5th District congressional race, while under multiple contracts with the Department of Defense. Restore Oklahoma returned the contribution less than a month after CLC filed its complaint.
- Excel Dryer, Inc., a hand dryer producer, gave $10,000 to American Working Families, a Democratic super PAC, which ran ads to support Rep. Richard Neal in Massachusetts’ 1st District congressional race, after the company publicly touted Rep. Neal’s support earlier this year, and while under contract with the General Services Administration (GSA). American Working Families refunded the contribution just three weeks after CLC’s complaint.
Additionally, the Senate Leadership Fund reattributed a $25,000 contribution from Amedisys, Inc. to Amedisys Holding LLC, the parent company of the nursing home corporation, which itself does not appear to hold any federal contracts.
While FEC staff review reports filed by super PACs to verify accounting calculations and timeliness, the agency does not look for broader violations, like whether super PAC contributors receive federal contracts. Instead, it falls to groups like CLC to identify such violations of the law.
The contractor contribution ban is one area of the law that the FEC has tended to enforce and refunds may not save these contractors from civil penalties.
In recent years, the FEC has fined federal contractors tens of thousands of dollars for illegal contributions to super PACs, even despite their contributions having been refunded. With good reason: without the threat of stiff civil penalties, political donors and operatives will not be deterred from breaking the law.