Holman: Pay-to-Play Will Thrive With Budget Debate

What you don’t know will hurt you.

The debt ceiling compromise, in which a super committee of 12 Members of Congress will determine the fate of the federal budget, has elevated pay-to-play politics in government contracting to new heights.

Pay-to-play politics occurs when government contractors use campaign contributions and expenditures to curry favor with politicians in an effort to win lucrative government contracts. Experience shows many contractors are quite willing to “grease the wheels” with campaign money to win contracts, all of which can lead to the costly and wasteful use of taxpayer dollars.

As former U.S. Attorney and now New Jersey Gov. Chris Christie described the pay-to-play game in his state, which led to its law regulating campaign contributions from government contractors: “Contracts are being given for work that isn’t needed. Or second, contracts are given to people who aren’t qualified to do the job, so the job isn’t done right and they have to come back and do the work again.”

The opportunities for pay-to-play corruption will reach an all-time high in just a few months. By Thanksgiving, the 12-member Joint Committee on Deficit Reduction is to dictate what will and will not be cut from the federal budget.

Though the committee is only beginning to operate, it has already kicked corporations, government contractors and their K Street lobbyists into high gear to lobby, manipulate and shape the decisions of these 12 officials. More than 100 former staffers of committee members have become lobbyists and will no doubt be knocking on their doors.

At the same time, just hours after appointing the final members to the committee, a Wall Street firm announced the first of what will be many fundraising events hosted for members of the committee. With $535 billion spent on federal contracts last year, the stakes are high, and contractors and their lobbyists will use all means necessary to reap the largess.

The Supreme Court’s Citizens United v. Federal Election Commission decision, allowing corporations to spend unlimited money promoting or attacking candidates, coupled with an FEC that has largely gutted the disclosure laws, makes the situation ripe for pay-to-play corruption.

Though wasteful and costly to taxpayers, pay-to-play is not necessarily illegal. In most cases, pay-to-play influence-peddling falls short of bribery but is clearly designed to rig the bidding process for government contracts. As long as a company avoids admitting quid pro quo, pay-to-play comes off as a perfectly legal game of campaign contributions and expenditures.

Nevertheless, political scientist Roland Zullo documents a suspicious pattern of campaign contributions by government contractors targeting officials responsible for awarding contracts, frequently timed just before or during the awarding decision.

Christopher Witko, another political scientist, concludes in a study that “companies that contributed more money to federal candidates subsequently received more contracts.”

And journalist Kimberly Palmer notes in interviews with contractors that they believe campaign and lobbying spending help win contracts.

Pay-to-play corruption thrives in the shadows. As long as the public is generally kept in the dark as to how much a corporation is spending on behalf of super committee officials and their respective parties, pay-to-play can be an exceedingly effective tool in shaping the budget debate.

Though it is extraordinarily difficult for the public to connect the dots of which company is spending how much in support of which candidates, contractors and their lobbyists are not at all shy about selectively informing officeholders and party officials whom they support and whom they oppose. The gap in knowledge of campaign spending by contractors and who wins federal contracts is primarily among the public.

There is a viable solution that could take effect almost immediately: a proposed executive order under consideration by President Barack Obama that would require government contractors to fully disclose their campaign contributions and expenditures to the public, including corporate funds for spending on elections laundered through third-party groups.

The executive order has been on hold while many Members of Congress and government contractors loudly protest that full disclosure would “politicize” the contracting process. Nothing could be further from the truth.

The current, secretive system is already politicized. But with full disclosure, the public may discern when contracts are being awarded based on money rather than merit.

Furthermore, transparency to improve the government contracting process is nothing new. About a dozen state and local jurisdictions already address pay-to-play corruption precisely through such enhanced disclosures for government contractors.

Full disclosure of campaign spending by government contractors is simply good policy, and it could go a long way toward lifting the veil of secrecy over corporate campaign spending that has overwhelmed this nation since the Citizens United decision.

As we near the deadline for the super committee to choose winners and losers in the federal budget, full disclosure is absolutely imperative to preserve the integrity of the government contracting process.

Craig Holman is the government affairs lobbyist for Public Citizen.