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LEAKED: Obama Executive Order Intends to Implement Portions of DISCLOSE Act

Says our source: "They lost in the Supreme Court, they lost in Congress, they lost at the FEC, so now the president is just going to do it by edict." Download the PDF here.

by
Hans A. von Spakovsky

Bio

April 19, 2011 - 7:54 am

An impeccable source has provided me with a copy of a draft Executive Order that the White House is apparently circulating for comments from several government agencies. Titled “Disclosure of Political Spending By Government Contractors,” it appears to be an attempt by the Obama administration to implement — by executive fiat — portions of the DISCLOSE Act.

This was the bill introduced last year by Sen. Chuck Schumer and Rep. Chris Van Hollen to overturn the Supreme Court’s decision in Citizens United v. FEC. The bill had onerous requirements that were duplicative of existing law and burdensome to political speech. It never passed Congress because of principled opposition to its unfair, one-side requirements that benefited labor unions at the expense of corporations. Democratic commissioners at the Federal Election Commission then tried to implement portions of the bill in new regulations.  Fortunately, those regulations were not adopted because of the united opposition of the Republican commissioners.

As my source says:

It really is amazing — they lost in the Supreme Court, they lost in Congress, they lost at the FEC, so now the president is just going to do it by edict.

The draft Executive Order says it is intended to “increase transparency and accountability,” an interesting claim given the fact that federal contractors are already completely barred by 2 U.S.C. § 441c from making:

Any contribution of money or other things of value, or to promise expressly or impliedly to make any such contribution to any political party, committee, or candidate for public office or to any person for any political purpose or use.

Yet this proposed Executive Order would require government contractors to disclose:

(a) All contributions or expenditures to or on behalf of federal candidates, parties or party committees made by the bidding entity, its directors or officers, or any affiliates or subsidiaries within its control.

(b) Any contributions made to third party entities with the intention or reasonable expectation that parties would use those contributions to make independent expenditures or electioneering communications.

The problem is that this will require companies to delve into the personal political activities of their officers and directors — and require them to report political contributions those employees have made, not out of corporate funds (which is illegal), but out of their personal funds.

And note that these disclosure requirements will only apply to companies that make bids on government contracts. Federal employee unions that negotiate contracts for their members worth many times the value of some government contracts are not affected by this order. Neither are the recipients of hundreds of millions of dollars of federal grants.

Clearly, this administration is not interested in increasing “transparency and accountability” when it comes to forcing union leaders or the heads of liberal advocacy organizations such as Planned Parenthood from disclosing the personal political contributions they make to candidates running for federal office.

The draft order also tries to interfere with the First Amendment rights of contractors. It requires them to disclose independent expenditures that can be made legally on everything from politics to grassroots lobbying on issues. This is clearly intended to deter charitable and other contributions to third-party organizations, since the contractors will have to report any such contributions made with the “reasonable expectation” that the money will be used for First Amendment-protected activities.

“Reasonable expectation” is the kind of broad, nebulous legal term that can cover almost any situation that the government — and government prosecutors — want it to cover. This makes it almost impossible for contractors to know what the acceptable legal standard is for engaging in First Amendment activity.

This administration completely mischaracterized the Supreme Court’s decision in Citizens United, especially when President Obama attacked the Court in his State of the Union speech. It misrepresented the intended effects and requirements of the DISCLOSE Act, which former FEC Chairman Brad Smith correctly observed should really have been called the “Democratic Incumbents Seeking to Contain Losses by Outlawing Speech in Elections Now” Act.

With this proposed Executive Order, the administration is engaging in a back-door maneuver that promotes transparency only in the form of transparent political gamesmanship. It’s an alarming proposal that should raise great concern among members of Congress and the American public.

Hans A. von Spakovsky is a Senior Legal Fellow at The Heritage Foundation and a former counsel to the assistant attorney general for civil rights at the Justice Department. He is the coauthor of the book “Who’s Counting? How Fraudsters and Bureaucrats Put Your Vote at Risk”.
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