Federal Contractor Allegedly Breaks Law, Donates $200K to Clinton-Backing PAC

The donation to Priorities USA is just the latest in bipartisan donations that violate a 1940 law. But the law has been ineffective, thanks to a deadlocked Federal Elections Commission.

By Dustin Siggins Published on June 30, 2016

A company with nearly one million dollars in federal contracts has donated $200,000 to a liberal Super PAC backing presumptive Democratic nominee Hillary Clinton, according to a report published early Wednesday morning by The Hill.

And according to Craig Holman of Public Citizen, Suffolk Construction broke a 1940 law when it sent the money to Priorities USA.

“The federal pay to play law prohibits federal contractors from making campaign contributions to campaigns, candidates or political committees. And political committees does include Super PACs,” Holman told The Stream.

“In fact, the [Federal Elections Commission] had weighed in on that, and decided that Super PACs are also political action committees, subject to the pay to play law,” continued the campaign finance expert.

The donations by Suffolk, a Boston-based contractor, to Priorities USA are part of a long trend of bipartisan lawbreaking by companies who are gambling they won’t be punished. The Hill outlined 14 contractors that donated $173,250 to a group that backed Senator Marco Rubio’s (R-FL) run for president. The CEO of one company, Gulf Power Co., told The Hill, “We believe Gulf Power’s right to make the contribution in question is constitutionally protected.”

Suffolk’s CEO has given to both parties, including backing President Barack Obama, though the company has donated mostly to Republican-leaning groups, including a Super PAC backing 2012 GOP presidential nominee Mitt Romney. That year, according to The Hill, $510,000 was given to Restore Our Future.

Sunlight Foundation spokesperson Jenn Topper told The Stream that “voters should be concerned about any contributions that are in violation of federal law, and they should expect the Federal Election Commission to do its job and enforce the rules to ensure the integrity of our elections.”

But Holman said the FEC is unlikely to be coming to the rescue anytime soon, thanks to a loophole it allowed Chevron to use in 2012. “The FEC bought Chevron’s argument hook, line and sinker, where Chevron said, ‘we’re actually two different divisions — there’s Chevron Corporation, which makes the campaign contributions, but Chevron USA receives the contracts.”

The FEC’s decision came after Public Citizen filed a complaint against Chevron. The company had given $2.5 million to the Super PAC Congressional Leadership Fund, which was connected to then-House Speaker John Boehner (R-OH). Holman led the complaint, and he also attempted to get the FEC “to reconsider its rulemaking,” without success.

Holman “had other agencies across the country who enforce pay to play laws … weigh in, to explain to the FEC that they will effectively gut the pay to play law if they allow a government contractor to artificially claim they are two different divisions.”

Several state agencies joined Holman, with no luck — the FEC “deadlocked 3-3,” Holman told The Stream.

Unlike Gulf Power, Holman says the federal pay to play law does not violate constitutional rights. Last year, the D.C. Circuit Court of Appeals agreed, holding that First Amendment and Fifth Amendment rights were not violated by its enforcement. Earlier this year, the U.S. Supreme Court declined to hear the case, leaving the law in place.

The Circuit Court’s decision was written by Judge Merrick Garland, who Obama’s nominee to the U.S. Supreme Court.

Earlier this year, President Obama said he would sign an Executive Order requiring federal contractors and senior executives in federal contractors to disclose campaign contributions. That Order has not been signed.

In his comments to The Stream, Holman distinguished between campaign donations from for-profit companies that conduct business with the government and federal grant recipients. He said pay-for-play laws don’t look at grants in part because they are more numerous and used for social welfare and other goals, as opposed to commercial contracts for the purchase and sale of goods and services.

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