Federal government contractors

Federal government contractors are prohibited from making contributions or expenditures, or promising to make any such contribution or expenditure, to any political party, committee, or candidate for federal office, or to any person for any political purpose or use. A federal government contractor is a person who enters into a contract, or is bidding on such a contract, with any agency or department of the United States government and is paid, or is to be paid, for services, material, equipment, supplies, land or buildings with funds appropriated by Congress. Since corporate contributions are already prohibited, the government contractor ban applies primarily to contributions from a partnership (or a limited liability company that has not elected to be treated as a corporation for federal tax purposes) that has entered into or is bidding on a government contract. It also applies to the personal and business funds of:

• Individuals under contract to the federal government; and
• Sole proprietors of businesses with federal contracts.

This prohibition does not apply to contributions or expenditures in connection with state or local elections.

Time period for prohibition

The prohibition begins when the request for proposals are sent out or the negotiations have begun (whichever is earlier) and ends when performance under a contract is completed or negotiations have terminated (whichever is later).

Spouses and employees

The spouses of individuals and sole proprietors who are federal government contractors and employees of federal government contractors, however, may make contributions from personal funds.

Partnerships or LLCs with federal government contracts

A partnership or LLC that is negotiating a contract with the federal government or that has not completed performance of such a contract is prohibited from making contributions and expenditures. However, an individual partner in such a firm may make contributions and expenditures from personal funds (rather than from funds drawn on the partnership’s account).

Also, an individual, who is, in their own right or as a sole proprietor, a federal government contractor or negotiating a contract with the federal government may not make contributions or expenditures using any funds (business or personal) under their control. Note that the spouse of such an individual is not prohibited from making a personal contribution or expenditure in their own name (as long as they are not otherwise prohibited from making contributions or expenditures in connection with a federal election).

Indian tribe with federal government contracts

In a previous advisory opinion, the Commission determined that a federally recognized Indian tribe with a tribally chartered unincorporated entity, which operates as a subordinate commercial enterprise and qualifies as a federal contractor, can be treated as a separate entity from the tribe and its political activities.