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Obama weighs disclosure order for contractors

By Perry Bacon Jr. and and T.W. Farnam,April 20, 2011

President Obama speaks at a DNC fundraiser at Nob Hill Masonic Center in… (Pablo Martinez Monsivais/AP )

President Obama is considering an executive order that would force government contractors to disclose their donations to groups that participate in political activities, a move Republicans slammed Wednesday as an attempt to restrict political speech.

White House press secretary Jay Carney told reporters that the administration has a draft proposal and would not offer details. But he said Obama thinks it is crucial to allow taxpayers to learn more about contractors who seek federal funds.

The provision is similar to one in a bill that Democrats pushed before the midterm elections called the Disclose Act. That legislation was part of a broader effort by Democrats and the White House to limit the influence of interest groups, which played an expanded role in last year’s midterm elections.

A string of Supreme Court decisions has freed corporations, labor unions and other interest groups to participate in elections as long as they operate independently of candidates.

Many interest groups were formed last year to spend millions of dollars on the elections, and most of the money was spent on campaign commercials that were against congressional Democrats. Many of the groups did not disclose their funding sources, leading Democrats to call for greater transparency.

Republicans denounced the proposed executive order.

“Just last year, the Senate rejected a cynical effort to muzzle critics of this administration and its allies in Congress,” said Senate Minority Leader Mitch McConnell (R-Ky.) “Now, under the guise of ‘transparency,’ the Obama administration reportedly wants to know the political leanings of any company or small business, including those of their officers and directors, before the government decides if they’ll award them federal contracts.”

The Professional Services Council, a trade coalition that represents nearly 350 companies that work with the federal government, also condemned the idea.

“The draft order says it is necessary to ensure that politics are not allowed to impair the integrity of the procurement process,” said Stan Soloway, the group’s president. “But by force-feeding irrelevant information to government contracting officers, who would otherwise never consider such factors in a source selection, the rule would actually do precisely what it is intended to stop: inject politics into the source selection process.”

Carney denied that the order was related to politics.

Obama “believes very strongly that taxpayers deserve to know” how contractors are spending their money and how they’re spending in terms of political campaigns, Carney said. “And his goal is transparency and accountability. That’s the responsible thing to do when you’re handling taxpayer dollars.”

The move suggests Democrats are not backing down from their effort to make transparency in elections a priority. During the midterms, Obama and Democratic congressional leaders spoke often about the need to disclose donors’ identities to the interest groups, which tended to favor Republican candidates.

After the election, Democrats were split on whether the effort was successful for them. Conservative groups got the upper hand in fundraising while demoralized Democrats were hoping to blunt the new rules with laws requiring disclosure.

Since then, two Obama administration officials have left the White House to form an outside political organization to aid the president’s reelection campaign next year. The new group would take large contributions, possibly including some shrouded in secrecy.

It is not known how many government contractors contribute to interest groups active in elections because many of those contributions don’t need to be disclosed, but the number of companies with government contracts means that could be significant. Federal agencies spent about $535 billion in fiscal 2010 on government contracts.

One of the biggest spenders on election ads was the U.S. Chamber of Commerce, which has about 300,000 corporate members.

Staff writer Ed O’Keefe contributed to this report.