Federal Court of Appeals upholds ban on federal contractor political donations

In Wagner v. FEC, Wendy Wagner, a law professor who is working under a consulting contract for the Administrative Conference of the United States, sought to overturn a federal law prohibiting federal contractors from making contributions to federal candidates and their parties, so that she could make contributions to “candidates running for federal offices and/or their political parties.” Wagner argued that such a prohibition violates her First Amendment Rights.

The D.C. Circuit Court of Appeals, ruling en banc, applied a heightened scrutiny (the State must demonstrate “a sufficiently important interest and employ a means closely drawn to avoid unnecessary abridgment of associational freedoms”), a standard just below traditional First Amendment analysis (i.e. Strict Scrutiny, requiring a the state show a compelling governmental interest and the means must be narrowly tailored to achieve that interest).

Using the “rigorous standard of review” set forth by the Supreme Court in Buckley v. Valeo, 424 U.S., at 29, the Court of Appeals distinguished the recent Citizens United case in which strict scrutiny was applied, stating that strict scrutiny was applied in Citizens United not because the case involved a ban on contributions, but because the case involved independent expenditures rather than contributions.

The Court found that there are two important governmental interests at stake: (1) protection against quid pro quo corruption and its appearance; and (2) protection against interference with merit-based public administration. The Court pointed to historical examples of bribery and pay to play schemes involving among others, Duke Cunningham of California, and Ohio’s Bob Ney; as well as testimony to the Watergate Committee from government contractors that they felt pressured to contribute – that their contracts were dependent upon the President’s re-election.

In determining that the restriction on political contributions during the time of contracting and performing under the contract, the Court found that the risk of corruption is greatest at such time. ”Unlike the corruption risk when a contribution is made by a member of the general public, in the case of contracting there is a very specific quo for which the contribution may serve as the quid: the grant or retention of the contract… a contribution made while negotiating or performing a contract looks like a quid pro quo, whether or not it truly is.“

Likewise, the risk that politicians would coerce contributions from employees or contractors is greater than coercion of the general public. “Because a contractor’s need for government contracts is generally more focused than a member of the general public’s need for other official acts, his or her susceptibility to coercion is concomitantly greater. And coercing a contractor to contribute, even if limited by a contribution ceiling, is still coercion. ”

Thus, federal employees and contractors must accept, in the D.C. Court of Appeals’ eyes at least, a limit on their First Amendment rights as part of the bargain.