Breaking: DC Circuit En Banc Unanimously Upholds Ban on Federal Contractor Contributions to Candidates

You can read the 62-page opinion at this link. This is quite a big deal, especially in its unanimity. The en banc DC Circuit in Wagner v. FEC holds that the ban on contractor contributions to federal candidates is supported by two interests: (1) preventing corruption and (2) promoting sound merit-based administration of federal contracts.  On the first point, the court discussed the special dangers of corruption which occur in the contracting process. The court surveys various state and federal corruption scandals, many of which involve the procurement of government contracts. On the second interest, the court relies in large part on the Hatch Act cases, in particular on the government’s interest in somewhat curtailing the First Amendment activities of government employees in order to assure a merit-based governmental process.

Perhaps what is most important doctrinally about this ruling is the court’s rejection of the argument that a higher level of scrutiny should apply because the law imposes a ban, rather than merely a limit, on contractor contributions.  Relying upon the Supreme Court’s decision in FEC v. Beaumont (which upheld the ban on corporate contributions to candidates), the Court held the ban was still subject to the lesser “exacting scrutiny” which applies to contribution limits. Opponents of the ban have argued that Beaumont‘s reasoning has been undermined by more recent Supreme Court cases, such as Citizens United. But the DC Circuit did not accept that argument.

This question (the vitality of Beaumont and the constitutionality of a ban, rather than limit on contributions) remains the most interesting issue which could provide a basis for the Supreme Court to grant cert. in the case. It is not clear whether the Court will bite on this one, for reasons I will be writing about in coming days.

Also interesting is that the DC Circuit did not address whether federal contractors may make contributions to Super PACs. (“Nor do they challenge the law as the Commission might seek to apply it to donations to PACs that themselves make only independent expenditures, commonly known as “Super PACs.” Oral Arg. Recording 5:59-26:33 (“Super PACs . . . . are not at issue here; none of my clients wants to make a contribution to them or anything like them.”).)  If indeed contractors can make such contributions, then the ban won’t be all that effective in stopping corruption.

[This post has been updated.]

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