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D.C. Circuit Unanimously Upholds Constitutionality of Ban on Federal Contractor Contributions

July 2015

By Jan Witold Baran and Stephen J. Kenny

In a unanimous decision by an en banc panel, the D.C. Circuit this month upheld the constitutionality of the statutory ban on contributions from federal contractors. The plaintiffs in Wagner v. FEC, No. 13-5162, 2015 WL 4079575 (D.C. Cir. July 7, 2015) had challenged the constitutionality of the contribution ban, 52 U.S.C. § 30119, as applied to individuals who are federal contractors seeking to make contributions to federal candidates, political parties, and traditional PACs. Jurisdictional issues narrowed the question presented even further to the ban on campaign contributions by individual contractors to candidates and parties. (The ban as applied to corporate contractors was not at issue.)

Writing for the court, Judge Merrick Garland concluded that the contractor ban satisfied the “closely drawn” standard of review. The government offered two sufficiently important interests in support of the ban:  the prevention of quid pro quo corruption (and its appearance) and the need to protect against interference with merit-based public administration. Acknowledging that the total ban on federal contractor contributions is a significant restriction, the court nevertheless concluded that it was a reasonable fit in the context of government contracting, which the court described as the “heartland” of the government’s anti-corruption interest. The court also rejected the plaintiffs’ “underinclusiveness” challenge, holding that Congress’s ban on contributions from federal contractors was consistent with permitting contributions from associated PACs and corporate officers.

The court did not have occasion to address whether the ban is constitutional as applied to federal contractors’ contributions to federal independent-expenditure-only committees (Super PACs). Although the FEC maintains that the ban covers such contributions, it remains unclear whether, in the wake of Citizens United v. FEC, 558 U.S. 310 (2010), and v. FEC, 599 F.3d 686 (D.C. Cir. 2010), the FEC may constitutionally prohibit donations by contractors to Super PACs.

Wagner exemplifies the different calculus that applies when weighing the constitutionality of restrictions on contractors’ political speech, as compared to restrictions on the general public’s. Every active judge on the D.C. Circuit agreed that the government’s interest in preventing corruption and its appearance is more acute with respect to contractors. Whether a ban on contractors’ contributions to super PACs is sufficiently tailored to this interest is an issue likely to arise in the near future.

As a side matter, the court noted state pay-to-play laws that impose similar and more stringent requirements with respect to state and local contractors in relevant jurisdictions. For contractors, these laws, which often apply to officers and directors of contractors, present a greater compliance risk.