Pay-to-Play Corruption Thrives in the Shadows, Public Citizen Tells Obama

June 15, 2011 

Pay-to-Play Corruption Thrives in the Shadows, Public Citizen Tells Obama

Public Citizen Encourages President to Sign Executive Order Promptly, Give Public Ability to Assess Merits of Government Contracts

WASHINGTON, D.C. – While critics have said that President Barack Obama’s proposed disclosure executive order would politicize government contracting, contractors in fact have long given substantial sums to campaign coffers, nearly all of which had been disclosed until recently, Public Citizen said in a letter sent yesterday to Obama.

The president’s proposed executive order, which would make companies vying for government contracts disclose their campaign contributions, would shed light on the financial support government officials receive from hopeful contractors and would help limit the practice of “pay-to-play” in our contracting system, the letter said. Public Citizen urged Obama to sign the executive order promptly.

“In most cases, pay-to-play influence peddling falls short of bribery but is nevertheless designed to rig the bidding process for government contracts,” said Robert Weissman, president of Public Citizen. “Pay-to-play abuse is by far most pervasive when the cash-for-favors schemes stay out of the public’s eye. When contractors can make campaign contributions and expenditures that are not subject to public disclosure, the contracting process is at dire risk of favoritism. Contractors and their lobbyists are not shy about selectively letting government officials responsible for awarding contracts know about their campaign spending in support of those responsible for awarding the contracts.”

As the letter points out, the timing and targeting of campaign contributions demonstrates that contractors seek access to politicians with oversight of contracting, and interviews with contractors reveal that they believe this access helps them win contracts.

Federal contractors traditionally have spent a great deal on political candidates, the letter said. Accompanying the letter was documentation of the 50 largest contractors that showed that nearly all had disclosed their political spending to the public until 2010, when a Federal Election Commission (FEC) loophole and the U.S. Supreme Court decision in Citizens United v. FEC combined to permit unlimited secret spending in elections. Although businesses still must disclose direct campaign spending on independent expenditures or electioneering communications, they may readily sidestep the disclosure requirement by laundering their money through a third party group, such as the U.S. Chamber of Commerce, to spend on their behalf.

“Now, contractors can still spend money to elect certain officials, but they can do it in a manner that allows government officials to know where much of their financial support is coming from but leaves the American public in the dark,” said Craig Holman, government affairs lobbyist with Public Citizen. “This means the contracting process will become not just more political, but likely more corrupt.”

Of the 50 largest federal contractors in 2010, 34 of these contractors have made campaign contributions through their political action committees (PACs) since the 2000 election cycle, the letter said. These 34 contractors have contributed $114 million to candidates, party committees and leadership PACs. Cumulatively, they received $203.1 billion in federal revenue in 2010.

“Though PAC disclosures do not readily identify federal contractors from other business interests for the public, this information is part and parcel of the electoral relationship between special interests and government officials,” Holman said.

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Public Citizen is a national, nonprofit consumer advocacy organization based in Washington, D.C. For more information, please visit www.citizen.org.