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On July 7, 2015, the en banc U.S. Court of Appeals for the District of Columbia Circuit upheld the provision in the Federal Election Campaign Act (the Act) that prohibits contributions made in connection with federal elections by federal government contractors.
The Act prohibits federal government contractors from making contributions, either directly or indirectly, in connection with federal elections. 52 U.S.C. § 30119 (formerly 2 U.S.C. § 441c). In Wagner v. FEC, three federal contractors challenged § 30119 as violating the First Amendment and the equal protection guarantee of the Fifth Amendment. On November 2, 2012, the U.S. District Court for the District of Columbia upheld the federal contractor ban and concluded that Congress had the authority to prohibit contributions from all federal contractors. On May 31, 2013, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit held that the Act denied the district court and that appellate panel jurisdiction to consider the constitutional questions in Wagner v. FEC. The court vacated the lower court’s judgment and remanded the case to the district court to comply with the Act’s judicial review provision at 52 U.S.C. § 30110 (formerly 2 U.S.C. § 437h). On June 5, 2013, the district court entered an order issuing its findings of fact and certifying constitutional questions to the en banc court of appeals.
On July 7, 2015, the en banc court of appeals unanimously rejected the plaintiffs’ constitutional challenges and upheld the statute.
The court first addressed the standing of the three plaintiffs. Nearly four years have passed since the case was filed, and in that time, Wendy Wagner and Lawrence Brown completed their federal contracts. Since they are once again able to make contributions in connection with a federal election, the court declared Wagner and Brown’s claims moot. Jan Miller, the remaining plaintiff, has an ongoing federal contract, but the court determined that its jurisdiction was narrowed by Miller’s limited claim: application of the statute to contributions by an individual contractor to a federal candidate or political party. (Wagner and Brown wanted to support a variety of political "causes" and had contributed to PACs and other political committees in the past.)
In addressing the remaining plaintiff’s First Amendment challenges, the court rejected the argument that it must review the claims under a strict scrutiny standard. The court referenced the Supreme Court’s instructions to review laws that regulate campaign contributions under a "closely drawn" standard—"a lesser but still rigorous standard of review" where even a significant interference with protected rights of political association may be sustained if the state 1) demonstrates a sufficiently important interest and 2) employs means closely drawn to avoid unnecessary abridgment of associational freedoms.
Applying this "closely drawn" standard, the court accepted the FEC’s assertions that the statute demonstrates a sufficiently important interest because it protects against quid pro quo corruption and its appearance and prevents interference with merit-based public administration. The court found persuasive the lengthy review of federal and state legislative efforts to combat corruption and concluded that "substantial evidence demonstrates" that individuals and firms continue to test the limits of the contractor contribution ban at both the federal and state levels. "[T]he evidence canvassed thus far suffices to show that, in government contracting, the risk of quid pro quo corruption and its appearance, and of interference with merit-based administration, has not dissipated. Taken together, the record offers every reason to believe that, if the dam barring contributions were broken, more money in exchange for contracts would flow through the same channels already on display…. The interests supporting the contractor contribution statute are legally sufficient, and the dangers it seeks to combat are real and supported by the historical and factual record."
The court also found that the statute employed means closely drawn to avoid unnecessary abridgment of associational freedoms. The plaintiffs had argued that the statute fails this test because it is overinclusive and bans their contributions entirely, and that it is underinclusive because it permits too much speech and fails to ban contributions by certain groups. In rejecting the overinclusive argument, the court pointed out that, although campaign contributions are banned, there are other forms of unrestricted political engagement in which the plaintiffs could participate. The ban was also temporally limited to the time between commencement of negotiations and completion of the contract’s performance. See 52 U.S.C. § 30119(a)(1). The court also rejected the plaintiffs' underinclusive argument by stating that although Congress could have swept in more potential contributors, the statute aims squarely at the conduct most likely to undermine its underlying interests.
Finally, the court rejected the plaintiffs' equal protection argument. The plaintiffs had maintained that the statute subjects individual contractors to a ban that does not apply to certain similarly situated persons. The court rejected this approach as an attempt to get the court to reevaluate the same claims under a strict scrutiny standard.
The court issued its judgment and order in favor of the FEC, finding that the flat prohibition of contractor contributions was closely drawn to the important goals of preventing quid pro quo corruption and its appearance and interference with merit based administration. Therefore, application of 52 U.S.C. § 30119 to contributions by an individual contractor to a federal candidate or political party does not violate the First Amendment or the equal protection component of the Fifth Amendment’s Due Process Clause.