Beware Broad Scope Of Gov't Contract PAC Contribution Ban

“Beware Broad Scope Of Gov't Contract PAC Contribution Ban,” an article by Akin Gump government contracts partner Scott Heimberg, senior political law consultant Kenneth Gross and public law and policy associate Kevin Paulsen, with contributions from public law and policy partner Melissa Laurenza, has been published by Law360.

The article discusses the need for businesses to verify whether it is “negotiating or performing a federal contract before making a contribution to an independent expenditure-only political action committee using company funds.”

The authors write that government watchdog groups are scrutinizing these contributions and, as in recent high-profile cases, referring alleged campaign finance violations to the Federal Election Commission (FEC) for enforcement.

The article then looks in detail at political contribution prohibitions on corporations and on federal contractors, delving into investigations and enforcement actions by the FEC and noting that certain criminal violations of the Federal Election Campaign Act are prosecuted by the Department of Justice.

The authors close by noting, “Liability under federal law is not the only consideration for government contractors making political contributions. Contractors should also be aware of the laws in state and local jurisdictions where they have government contracts. Many states and localities restrict, or require disclosure of, contributions by individuals or entities who contract with the government under their own campaign finance or pay-to-play laws.

Businesses' political contributions are facing heightened scrutiny in the current political climate by the media, watchdog groups and federal law enforcement alike. Recent enforcement actions demonstrate just how easily a company with a government contract could violate the law if it does not have sufficient oversight and controls in place.”

Subscribers can read the full article here.