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Wagner v. FEC

On April 16, 2012, the U.S. District Court for the District of Columbia denied a motion for a preliminary injunction filed against the Commission by three plaintiffs who are federal contractors. The plaintiffs alleged that the Federal Election Campaign Act’s (the Act’s) prohibition on federal contributions by federal contractors violates the First and Fifth Amendments. The plaintiffs had moved to enjoin the Commission from enforcing the ban until a final determination had been made in their action. The court denied the plaintiffs’ motion because they did not have a likelihood of success on the merits of their claims.

Background

The Act prohibits any person who is under contract with the federal government for either the rendition of personal services or for the furnishing any material, supplies or equipment to the federal government from making federal contributions to any political party, committee or candidate for public office or to any person for any political purpose or use. 2 U.S.C. §441c; see 11 C.F.R. §115.2(a). The plaintiffs in this case, Wendy E. Wagner, Lawrence M.E. Brown and Jan W. Miller, are three individuals who have contracts with federal agencies and wish to donate to candidates, but are forbidden by law from doing so because of their status as contractors. The plaintiffs argue that the Act’s ban on contributions by federal contractors is facially unconstitutional as it applies to individual government contractors (as opposed to incorporated contractors) because the ban violates the First Amendment and the Fifth Amendment’s guarantee of equal protection. The plaintiffs sought a preliminary injunction that would bar the Commission from enforcing the federal contractor ban against them during the time that this case was pending.

First Amendment Claims

Previous case law has established that political contributions are protected by the First Amendment, see, e.g., Buckley v. Valeo, 424 U.S. 1, 22 (1976), but restrictions on such political contributions are constitutional as long as they are “closely drawn to match a sufficiently important interest.” FEC v. Beaumont, 539 U.S. 146, 161 (2003).  The ban on federal contractor contributions dates to the 1940 amendments to the federal Hatch Act. Congress, in passing the ban, was responding to a then-recent history of political corruption involving government contractors. The ban was enacted by Congress to prevent corruption and the appearance of corruption by ensuring that federal contracts were awarded based on merit.

The plaintiffs argued that there is no current evidence that individual federal contractors may corrupt the electoral process or be pressured to give, but the court held that an absence of corruption does not necessarily mean that the ban is no longer needed; indeed it may indicate instead that the ban is working. Additionally, the court also stated that contractors, while prohibited from making contributions directly to federal candidates, may exercise their associational rights in other ways, such as by volunteering for campaigns or offering the use of their homes for candidate-related or political party-related activities. See 2 U.S.C. §431(8)(B) and 11 CFR 100.74-100.77.

The court stated that there is no need for it to interfere in legislative judgments made by Congress in enacting the ban on contributions by federal government contractors. Furthermore, the court also noted that the plaintiffs voluntarily chose to become federal contractors and are thus only subject to the ban as long as they are under contract with the federal government.

Equal Protection Claims

The plaintiffs also contended that the Act’s ban on federal contractor contributions violates the equal-protection guarantee of the Fifth Amendment by banning contributions from federal contractors but not by similarly situated individuals such as federal employees, or officers, employees or stockholders of contracting corporations.

In examining the claims made by the plaintiffs, the court held that while federal employees and federal contractors may have overlapping duties, a government contract may be “worth far more than an employment position with the federal government and specific protections in place to ensure that federal employment is awarded based on merit do not exist for federal contractors.” The court stated that federal employees and federal contractors therefore were not similarly situated with respect to Congress’s interest in preventing corruption or the appearance of corruption and that it would defer to the legislative judgment of Congress in this area.

The plaintiffs also claim that corporate contractors and individual contractors are similarly situated but are unconstitutionally treated differently under the statute. Contracting corporations are subject to the same ban on contributions as individual contractors, but the officers, directors, employees and stockholders of contracting corporations are permitted to make political contributions from their personal funds.

The court held that this distinction is constitutional because the individual employees and stockholders of a contracting corporation are acting in their personal capacity rather than speaking for the corporation; thus, their contributions do not necessarily express the views or associations of the corporation. Individual contractors are not similarly situated, and the court stated that their disparate treatment did not pose an equal protection problem.

Since the plaintiffs did not show a likelihood of success on the merits of their claim, the court denied their motion for a preliminary injunction.

(Posted 4/20/12; By: Myles Martin)

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The FEC Record is produced by the Information Division, Office of Communications. Toll free 800-424-9530; Local 202-694-1100; E-mail info@fec.gov. Greg Scott, Director; Amy Kort, Asst. Director; Myles Martin, Editor