Last Friday, a district court upheld a long-standing ban on federal political contributions made by federal contractors. In practice, the universe of those directly affected by this ban, and the opinion upholding it, is relatively small. Corporations are already prohibited from contributing to candidates and parties. The prohibition therefore generally applies only when the federal government has contracted with individuals and certain other non-corporate entities. Generally speaking, it would not bar contributions made by employees of government contractor corporations.
The opinion could have two broader implications. First, the court concluded that the ban was justified because it served the government’s interest in avoiding corruption and the appearance of corruption. In future battles over state and federal pay-to-play laws that prohibit employees of government contractors from making contributions, this conclusion may be cited by regulators for the proposition that since the appearance of corruption justifies a ban on contributions from individual contractors, it should also justify a ban on contributions from employees of corporate contractors. Whether that will be enough to overcome the serious constitutional concerns posed by pay-to-play laws is not yet clear.
Second, the opinion did give federal contractors a consolation prize. Although it did not ultimately reach the issue, the court explained that there is “substantial doubt” as to the constitutionality of the provision insofar as it would prevent contractors from contributing to SuperPACs and making independent expenditures in connection with federal elections.