Case Information
*2 Before: G ARLAND , Chief Judge , and H ENDERSON , R OGERS , T ATEL , B ROWN , G RIFFITH , K AVANAUGH , S RINIVASAN , M ILLETT , P ILLARD , and W ILKINS , Circuit Judges .
Opinion for the Court filed by Chief Judge G ARLAND . G ARLAND , Chief Judge
: Seventy-five years ago, Congress barred individuals and firms from making federal campaign contributions while they negotiate or perform federal contracts. The plaintiffs, who are individual government contractors, contend that this statute violates their First Amendment and equal protection rights. Because the concerns that spurred the original bar remain as important today as when the statute was enacted, and because the statute is closely drawn to avoid unnecessary abridgment of associational freedoms, we reject the plaintiffs’ challenge.
I
The statute at issue, 52 U.S.C. § 30119(a)(1), makes it unlawful for any person “who enters into any contract with the United States . . . directly or indirectly to make any contribution . . . to any political party, committee, or candidate for public office or to any person for any political purpose.” This prohibition applies “between the commencement of negotiations . . . and . . . the completion of performance” of the contract. Id . The Federal Election Commission (FEC) has construed the section not to apply “in connection with State or local elections.” 11 C.F.R. § 115.2(a).
The plaintiffs are three individuals who hold or have held federal contracts. The first two, Lawrence Brown and Jan Miller, spent much of their careers as full-time employees of the U.S. Agency for International Development (USAID). Each went back to work at USAID under a personal services contract after retirement. The third plaintiff, Wendy Wagner, is a law professor. In 2011, the Administrative Conference of the United States (ACUS) hired Wagner under a consulting contract to prepare a report about science and regulation.
All three plaintiffs wanted to make campaign contributions during the 2012 federal elections, but each was barred from doing so by § 30119. On October 19, 2011, they filed suit against the FEC in the United States District Court for the District of Columbia, challenging the statute’s constitutionality. The plaintiffs contend that § 30119 violates their rights undеr both the First Amendment and the equal protection component of the Fifth Amendment’s Due Process Clause.
The plaintiffs have been careful to frame their challenge narrowly. First, they challenge the constitutionality of § 30119 “only as it applies to plaintiffs and other individual contractors,” not as it applies to contractors that are corporations or other kinds of entities. Pls. Br. 1. Second, they do not challenge the statute as the FEC might seek to apply it to a contractor’s independent expenditures on electoral advocacy, as opposed to his or her contributions to candidates, parties, or political action committees (PACs). Id. at 40 n.5 (stating that the “[p]laintiffs have no interest in making independent expenditures”); Oral Arg. Recording 26:59-27:06 (same). Nor do they challenge the law as the Commission might seek to apply it to donations to PACs that themselves make only independent expenditures, commonly known as “Super PACs.” Oral Arg. Recording 25:59-26:33 (“Super PACs . . . . are not at issue here; none of my clients wants to make a contribution to them or anything like them.”); id. 26:59-27:06 (same). In short, the plaintiffs challenge § 30119 only insofar as it bans campaign contributions by individual contractors to candidates, parties, or traditional PACs that make contributions to candidates and parties.
After considering the merits of this challenge, the district
court granted summary judgment in favor of the FEC.
Wagner
v. FEC
,
The case has now returned to us. But time does not stand
still, and some important facts have shifted in the years sinсe
this litigation began. The plaintiffs advise us that both Wagner
and Brown have now completed their federal contracts and
hence are once again free to make campaign contributions.
See
Brown Supp. Mootness Decl. ¶ 3; Second Wagner Supp. Decl.
¶ 2. Brown, at least, has already done so.
See
Brown Supp.
Mootness Decl. ¶ 3. Accordingly, Wagner’s and Brown’s
claims are moot.
See, e.g.
,
Arizonans for Official English v.
Arizona
,
5
Amendment challenge to a law regulating the speech of state employees).
Miller’s contract is ongoing, however, and his constitutional claims therefore remain alive. But the mootness of the other plaintiffs’ claims matters because Miller’s injury is notably narrower than theirs. Whereas Wagner and Brown alleged that they wanted to support a variety of political “causes,” and that they had given to “PACs” or “political committees” in the past, Miller tells us only that he wants to contribute to “candidates running for federal offices and/or their political parties.” Compare Wagner Decl. ¶ 6, and Brown Decl. ¶¶ 6, 8, with Miller Decl. ¶ 7. Miller thus has standing to challenge the statute only as it applies to contributions to candidates and parties. See Davis v. FEC , 554 U.S. 724, 734 (2008) (“[S]tanding is not dispensed in gross. Rather, a plaintiff must demonstrate standing for each claim he seeks to press . . . .” (citation and internal quotation marks omitted)).
6
Our limited jurisdiction therefore narrows the plaintiffs’ already-narrow challenge even further: the only issue properly before us is the application of § 30119 to contributions by an individual contractor to a federal candidate or political party. In Parts II through V, we address the plaintiffs’ First Amendment arguments. In Part VI, we consider their equal protection arguments.
II
Since
Buckley v. Valeo
, the Supreme Court has instructed us
to review different kinds of campaign finance regulations with
different degrees of scrutiny.
Laws that regulate campaign contributions, however, are
subject to “a lesser but still ‘rigorous standard of review,’”
McCutcheon
,
The Supreme Court has repeatedly applied this “closely
drawn” standard to challenges to campaign contribution
restrictions.
[3]
And it has repeatedly (and recently) declined
invitations “to revisit
Buckley
’s distinction between contributions
and expenditures and the corollary distinction in the applicable
standards of review,”
McCutcheon
,
The plaintiffs further maintain that
Citizens United v. FEC
“casts doubt” on
Beaumont
. Pls. Br. 40. We do nоt see the
basis for that claim. The plaintiffs correctly note that
Citizens
United
“applied strict scrutiny to the ban on for-profit corporate
independent expenditures.”
Id
. But the reason for applying
strict scrutiny was not that the case involved a ban, but that it
involved independent expenditures rather than contributions.
See
9
734-35 (4th Cir. 2011); Green Party of Conn. v. Garfield , 616 F.3d 189, 199 (2d Cir. 2010).
There is one respect, however, in which the “closely drawn”
standard may not be a perfect fit for this case. But that
consideration would cut in favor of a more, rather than less,
deferential standard of review. Section 30119 is a restriction on
First Amendment activity aimed only at those who choose to
work for the federal government. To be sure, citizens do not
check their First Amendment rights at the agency door.
[5]
Nonetheless, the Court has “consistently given greater deference
to government predictions of harm used to justify restriction of
employee speech than to predictions of harm used to justify
restrictions on the speech of the public at large.”
Bd. of Cnty.
Comm’rs v. Umbehr
, 518 U.S. 668, 676 (1996) (internal
quotation marks omitted);
see, e.g.
,
U.S. Civil Serv. Comm’n v.
Nat’l Ass’n of Letter Carriers
,
Although the plaintiffs are contractors rather than
employees, they acknowledge that their positions are often
indistinguishable from those of employees. Pls. Br. 17, 19;
see
Miller Decl. ¶¶ 6-7 (stating that “the nature of the work
performed by an individual rarely varied depending on whether
the person was an employee or a contractor,” and that “in almost
every respect” his relationship to his agency and supervisor is
“identical” to that of an employee);
see also
District Court
Findings of Fact ¶ 13 [hereinafter D. Ct. Findings]. In fact, two
of the plaintiffs “are retired employees from the same agency
where they [were hired as] contractual consultants [to] do much
the same work they prеviously did.” Pls. Br. 35-36. The
plaintiffs further acknowledge, in light of the case law described
above, that Congress has greater latitude to restrict the
expression of both employees and government contractors than
it does with respect to the general public.
See
Oral Arg.
Recording 6:00-08, 14:21-33. Indeed, the Court has expressly
extended the
Pickering
balancing test to cases involving
government contractors.
See Umbehr
, 518 U.S. at 684-85
(holding that there is no “difference of constitutional magnitude
between independent contractors and employees” in the context
of a speech-retaliation claim, and “that the same form of
[
Pickering
] balancing analysis should apply to each” (internal
quotation marks and citation omitted));
see also O’Hare Truck
Serv., Inc. v. City of Northlake
,
To resolve this case, we need not precisely parse the way in
which the “closely drawn” standard intersects with or differs
from the
Pickering
balancing test. It will suffice for us to
proceed under the rubric of the former, since it is -- if anything
-- the less deferential standard. In doing so, however, we will
take into account the considerations that the Supreme Court has
performs through its employees.’”
NTEU
, 513 U.S. at 465-66
(quoting
Pickering
,
indicated are particularly relevant in evaluating restrictions the
government imposes in its role as employer. We therefore now
proceed to examine whether, with respect to § 30119, the
government has “‘demonstrate[d] a sufficiently important
interest and employ[ed] means closely drawn to avoid
unnecessary abridgment of associational freedoms.’”
McCutcheon
,
III
Our initial responsibility under the “closely drawn” standard is to determine whether the government has advanced a “sufficiently important interest” in support of § 30119. The FEC argues that there are two such interests, each of which has been accepted by the Supreme Court as sufficient to warrant appropriate restrictions on First Amendment rights. We briefly address the sufficiency of each of those interests in the abstract, before turning to whether they are properly invoked in light of the particular problems that § 30119 addresses.
A
The two interests аsserted by the government are: (1) protection against quid pro quo corruption and its appearance, and (2) protection against interference with merit-based public administration.
The first interest is the most significant, as the Supreme
Court has repeatedly held that “the Government’s interest in
preventing
quid pro quo
corruption or its appearance [is]
‘sufficiently important’” to justify the regulation of campaign
contributions.
McCutcheon
, 134 S. Ct. at 1445 (quoting
Buckley
,
12
the interest would satisfy even strict scrutiny.”
Id.
at 1445
(citing
FEC v. Nat’l Conservative Political Action Comm.
, 470
U.S. 480, 496-97 (1985)). As the Court has explained, “[t]hat
Latin phrase captures the notion of a direct exchange of an
official act for money,”
id.
at 1441, and such exchanges
undermine “the integrity of our system of representative
democracy,”
Buckley
, 424 U.S. at 26-27. “Of almost equal
concern [is] . . . the appearance of corruption,” which threatens
“‘confidence in the system of representative Government.’”
Id.
at 27 (quoting
Letter Carriers
,
The second interest is also significant, and in combination
with the first makes this case even stronger for the FEC.
Although the Supreme Court has identified no congressional
objective beyond protection against quid pro quo corruption and
its appearance that warrants imposing campaign finance
restrictions on the citizenry at large,
see McCutcheon
, 134 S. Ct.
at 1450;
Citizens United
, 558 U.S. at 359, it has “upheld a
narrow class of speech restrictions that operate to the
disadvantage of certain persons, . . . . based on an interest in
allowing governmental entities to perform their functions,”
Citizens United
, 558 U.S. at 341 (citing, inter alia,
Letter
Carriers
, 413 U.S. at 557). That narrow class of approved
speech restrictions includes the Hatch Act’s limits on political
activities by federal employees, which, as the Court put it in
Citizens United
, rest on the principle that “‘[f]ederal service
should depend upon meritorious performance rather than
political service.’”
The Cоurt’s cases indicate that this interest in protecting
merit-based public administration has two distinct but mutually
reinforcing components. The first is that the Government
“operate effectively and fairly,”
Letter Carriers
, 413 U.S. at
564, which in turn comprises a series of interrelated concerns.
The “‘interest of the [government], as an employer, in
promoting the
efficiency
of the public services it performs
through its employees,’”
id.
(emphasis added) (quoting
Pickering
, 391 U.S. at 568), is perhaps best captured by the
Court’s rationale for upholding the original 1876 employee
contribution ban: “If . . . a refusal [to make political
contributions] may lead to putting good men out of the service,
liberal payments may be made the ground for keeping poor ones
in.”
Ex parte Curtis
,
The flip side of the interest in governmental efficiency and
fairness is the employees’ interest in being “sufficiently free
from improper influence” or coercion, which the government
may also vindicate on their behalf.
Id.
As the Court has
explained, it upheld the Hatch Act’s restrictions on “political
campaigning” by federal employees in part because, in the
Court’s “judgment[,] . . . congressional subordination of those
activities was permissible to safeguard the core interests of
individual belief and association.”
Elrod v. Burns
, 427 U.S.
347, 371 (1976).
See NTEU
,
The Supreme Court has repeatedly credited these
“obviously important interests sought to be served by . . .
limitations on partisan political activities,”
Letter Carriers
, 413
U.S. at 564, for over a century. And there is no reason why
they should not be heard in support of restrictions on contractors
as well as regular employees.
Cf. NASA v. Nelson
, 562 U.S.
134, 150 (2011) (rejecting the respondents’ argument that,
“because they are contract employees and not civil servants, the
Government’s broad authority in managing its affairs should
apply with diminished force”);
Umbehr
, 518 U.S. at 676-79
(noting that, under the
Pickering
balancing test, “‘[t]he
government’s interest in achieving its goals as effectively and
efficiently as possible is elevated . . . to a significant one when
it acts as employer,’” and holding that
Pickering
applies to
claims by independent contractors that they were terminated for
their speech (quoting
Waters v. Churchill
,
We now proceed to examine whether these two Court- approved justifications for limitations on campaign activities -- to protect against quid pro quo corruption and its appearance, and to protect merit-based administration -- are furthered by the contractor contribution statute.
B
We begin with the historical pedigree of § 30119, which stretches back to the 1870s. That history demonstrates that Congress did indeed aim to protect the two interests articulated by the FEC, and that its concerns on both fronts were well warranted.
1. Congress began to tackle problems related to the political
activity of those who work for the government in the late 19th
century.
See generally Letter Carriers
,
The 1876 statute was limited to employees of the Executive
Branch. In the 1883 Pendleton Act, Congress took the next step,
making it a crime for its own members, among others, to “solicit
or receive” political contributions from federal workers, ch. 27,
§ 11, 22 Stat. 403, 406, and for those workers to “give or hand
over” such contributions,
id.
§ 14, 22 Stat. at 407. The
Pendleton Act further declared that “no person in the public
service is for that reason under any obligations to contribute to
any political fund.”
Id.
§ 2,
In 1925, Congress broadened the ban to include solicitation
and receipt by congressional challengers as well as incumbents,
while continuing to tweak the range of forbidden donors.
See
Federal Corrupt Practices Act, 1925, ch. 368, sec. 312, § 118, 43
Stat. 1070, 1073. When Congressman Harry Wurzbach was
subsequently indicted for receiving contributions from federal
employees, the Supreme Court again upheld the statute as a
proper exercise of Congress’ powers.
United States v.
Wurzbach
,
Alongside these early bans on campaign contributions,
Congress and the Executive Branch incrementally expanded the
scope of the nascent civil service system, imposing limitations
on political activity by employees and implementing merit-
based hiring rules.
See Letter Carriers
, 413 U.S. at 557-60.
Those efforts culminated in the Hatch Act of 1939, which aimed
to consolidate civil service reforms and “to combat
demonstrated ill effects of Government employees’ partisan
political activities.”
NTEU
,
The Hatch Act was particularly aimed at certain notorious abuses that occurred during the 1936 and 1938 election campaigns. See id. at 559-60. Responding to reports that workers paid by the Works Progress Administration (WPA) had been coerced to contribute to the Democratic Party, for example, the Hatch Act criminalized accepting political contributions from anyone known to be receiving “compensation, employment, or other benefit” from work relief funds. Hatch Act, ch. 410, §§ 5, 8, 53 Stat. 1147, 1148.
The Act imposed other restrictions on political activity by
government employees as well, including barring them from
“tak[ing] any active part in political management or in political
campaigns.”
Id.
§ 9(a), 53 Stat. at 1148. In subsequently
upholding those restrictions against a First Amendment
challenge, the Supreme Court noted that they were “not
dissimilar in purpose from the statutes against political
contributions of money.”
Mitchell
,
Although the 1939 Hatch Act focused on public employees and recipients of work relief, exploitation of government contractors drew congressional interest as well. Arguing that the original bill “does not go far enough,” Congressman J. Will Taylor pointed to the coercion of contractors in the “‘celebrated’ Democratic campaign book” scandal as a prime example of “political immorality and skullduggery that should not be tolerated.” 84 C ONG . R EC . 9598-99 (1939). Representative Taylor recounted that, at the behest of the Democratic National Committee, party representatives paid visits to government contractors, reminding each one “of the business he had received from the Government” and explaining that the contractor was expected to buy a number of the party’s souvenir convention books -- at $250 each -- “in proportion to the amount of Government business he had enjoyed.” Id. In addition, “large concerns, which directly or indirectly, benefitted from Government business, were . . . by sinister methods, convinced of the importance of taking advertising space in the book.” Id. ; see also 81 C ONG . R EC . 6429-30 (1937) (statement of Rep. Taylor) (citing newspaper report regarding solicitation of contractors in Tennessee). Taylor urged that the bill “should be amended to include rackets of this character.” 84 C ONG . R EC . 9599 (1939).
The next year, as the scandal surrounding the campaign
books persisted, Congress took up that task in a package of
amendments to the Hatch Act. Denouncing contracting abuses
as “[t]he greatest source of corruption in American politics
today,” Senator Harry Byrd argued for a broad amendment that
would “prevent those who are making money out of
governmental contracts from making contributions to any
political party,” and thereby “prevent them from making
contributions which may be considered in some instances as
bribery in order to secure governmental contracts for
themselves.” 86 C ONG . R EC . 2982 (1940). Thus, in addition to
specifically banning the purchase of goods (such as the
campaign books) from political parties,
see
Act of July 19, 1940,
ch. 640, sec. 4, § 13(c), 54 Stat. 767, 770-71, Congress enacted
the general contractor contribution ban that is now before us,
id.
§ 5(a),
The statute that Congress passed in 1940 has retained its essential features since that time. Then, as now, it barred any person or firm negotiating or performing a federal contract from contributing “to any political party, committee, or candidate for public office or to any person for any political purpose or use.” Id. (codified as amended at 52 U.S.C. § 30119(a)(1)).
2. Just as the Hatch Act was spurred by outrage over misconduct in the 1936 and 1938 elections, “deeply disturbing examples” of corruption “surfacing after the 1972 election” led to the Federal Election Campaign Act (FECA) Amendments of
20
1974.
Buckley
,
As the Watergate Committee recognized, much of the conduct that it exposed squarely implicated the contractor contribution statute (then 18 U.S.C. § 611). See W ATERGATE R EPORT at 440. The Committee reported that the 1972 election gave rise to the first indictments of contributors under that statute, resulting in guilty pleas and then-maximum fines. Id. at 486-89. “In view of the abuses discovered,” it recommended that Congress take care not to “lessen the penalties” or otherwise “weaken[] . . . the law in this area.” Id. at 444. The Committee further concluded that the statutory scheme was “deficient in failing to provide a civil penalty,” which made it difficult to address “nonflagrant cases,” and recommended that the new Federal Election Commission be given primary civil enforcement jurisdiction with respect to, inter alia, the contractor contribution statute. Id. at 566-67.
A few months after the Watergate Committee made its
recommendations, Congress increased the maximum fine for
violations of the contractor contribution statute from $5,000 to
$25,000,
see
FECA Amendments of 1974, Pub. L. No. 93-443,
§ 101(e)(2), 88 Stat. 1263, 1267, and authorized the
Commission to initiate civil enforcement actions for violations
of that provision,
see id.
sec. 208(a), § 314(a)(7), 88 Stat. at
1285. It also strengthened enforcement of the longstanding
bans on campaign contributions by corporations and labor
unions.
See id
. § 101(e)(1),
3. As we have recounted, Congress enacted § 30119 in the aftermath of a national scandal involving a pay-to-play scheme for federal contracts. The statute was itself the outgrowth of a decades-long congressional effort to prevent corruption and еnsure the merit-based administration of the national government. And it was followed by subsequent scandals that led to further legislative refinements, again motivated by concerns over corruption and merit protection.
This historical pedigree is significant. As the Court said in
Beaumont
, “[j]udicial deference is particularly warranted where,
as here, we deal with a congressional judgment that has
remained essentially unchanged throughout a century of ‘careful
legislative adjustment.’”
C
More recent evidence confirms that human nature has not
changed since corrupt quid pro quos and other attacks on merit-
based administration first spurred the development of the present
legislative scheme. Of course, we would not expect to find --
and we cannot demand -- continuing evidence of large-scale
quid pro quo corruption or coercion involving federal contractor
contributions because such contributions have been banned
since 1940. As the Supreme Court has recognized, “no data can
be marshaled to capture perfectly the counterfactual world in
which” an existing campaign finance restriction “do[es] not
exist.”
McCutcheon
, 134 S. Ct. at 1457. Instead, “‘the
question is whether experience under the present law confirms
a serious threat of abuse.’”
Id
. (quoting
FEC v. Colo.
Republican Fed. Campaign Comm.
,
24
The experience of states with and without similar laws is also
relevant.
See id.
at 1451 n.7;
Citizens United
,
Unfortunately, as was the case with the coordinated expenditure limits at issue in Colorado Republican , “[d]espite years of enforcement of the challenged” contractor contribution ban, “substantial evidence demonstrates” that individuals and firms continue to “test the limits of the current law[s],” 533 U.S. at 457 -- at both the federal and state levels. This experience readily confirms that the government’s fear of the consequences of removing the current ban is not unwarranted.
1. We begin with Congress itsеlf, where a number of corruption scandals point to the danger that contributions from government contractors would pose. Indeed, although the plaintiffs contend that Members of Congress are insulated from the contracting process, see infra Part III.D.1, many significant congressional corruption cases involve quid pro quo agreements regarding contracts. In 2005, for example, Representative Randy “Duke” Cunningham pled guilty to accepting millions of dollars in bribes in exchange for influencing Defense Department contract awards. See Plea Agreement at 4-6, ECF No. 40 ex. 2, United States v. Cunningham , No. 3:05-cr-2137 (S.D. Cal. Nov. 28, 2005). Mitchell Wade, the defense contractor who pled guilty to bribing Cunningham, admitted to making illegal “straw” contributions to two other Members of Congress as well, both of whom he targeted for their perceived “ability to request appropriations funding that would benefit” his company. Statement of Offenses at 12, United States v. Wade , No. 1:06-cr-49 (D.D.C. Feb. 24, 2006).
In 2006, Representative Bob Ney similarly pled guilty to a
series of quid pro quos with the lobbyist Jack Abramoff,
including steering a “multi-million dollar” contract for a House
of Representatives infrastructure project to one of Abramoff’s
clients.
See
Factual Basis for Plea at 6,
United States v. Ney
,
No. 1:06-cr-272 (D.D.C. Sept. 15, 2006). And in 1981, Senator
Harrison Williams was convicted on bribery and corruption
charges for crimes exposed in the FBI’s Abscam investigation.
Williams “agreed to use his position as a United States Senator
to obtain government contracts” for titanium to be produced by
a mine financed by fictional Arab businessmen.
United States
v. Williams
,
One might argue from this record that the general ban on
contractor contributions is unnecessary prophylaxis: after all,
congressmen who enter into quid pro quo agreements go to jail
anyway. But as the Supreme Court has explained, “laws making
criminal the giving and taking of bribes deal with only the most
blatant and specific attempts of those with money to influence
governmental action.”
Buckley
,
The Executive Branch is also an obvious site of potential corruption in the contracting process, since its agencies are the ones that ultimately award contracts. This was a key focus of congressional concern during the Watergate hearings. See supra Part III.B.2; see also, e.g. , W ATERGATE R EPORT at 409 (describing a consultant who “was made to feel that his continued success in obtaining Government contracts would, in significant degree, be dependent on his contributing to the President’s reelection”). [17] Many more recent instances of corruption or its appearance in the agency contracting process are collected in the Defense Department’s aptly named Encyclopedia of Ethical Failure . See generally D EP ’ T OF D EFENSE , O FFICE OF G EN . C OUNSEL , E NCYCLOPEDIA OF E THICAL F AILURE 4-58, 77-78, 82, 84-88, 132-46 (updated 2014).
2. Further evidence comes from the states, many of which have enacted pay-to-play laws in response to their own recent experiences. At least seventeen states now limit or prohibit campaign contributions from some or all state contractors or licensees. [18] The fact that many states have such laws shows that
27
the federal statute is no outlier. Moreover, the corruption scandals that prompted the adoption of those laws further demonstrate the dangers that § 30119 helps stave off at the federal level.
New Jersey’s law, for example, was enacted in the aftermath of a state investigation finding that a $392 million contract for a failed project went to a firm that had made extensive campaign contributions to state candidates and political committees. See S TATE OF N.J. C OMM ’ N OF I NVESTIGATION , N.J. E NHANCED M OTOR V EHICLE I NSPECTION C ONTRACT 1-2, 62-65 (2002). Similarly, Illinois’ law was passed after former Governor George Ryan was convicted of racketeering charges based on his efforts, as Secretary of State, to steer state contracts to friendly firms in exchange for financial support for his gubernatorial campaign. United States v. particular industries or imposing ceilings on contract or contribution size. See C AL . G OV ’ T C ODE § 84308(d); C ONN . G EN . S TAT . § 9-612(f)(1)-(2); 30 I LL . C OMP . S TAT . 500/50-37; I ND . C ODE §§ 4-30-3-19.5 to -19.7; K Y . R EV . S TAT . A NN . § 121.330; L A . R EV . S TAT . A NN . §§ 18:1505.2(L), 27:261(D); M ICH . C OMP . L AWS § 432.207b; N EB . R EV . S TAT . §§ 9-803, 49-1476.01; N.J. S TAT . A NN . § 19:44A-20.13 to -20.14; N.M. S TAT . A NN . § 13-1-191.1(E)-(F); O HIO R EV . C ODE A NN . § 3517.13(I)-(Z), invalidated in part on other grounds , United Auto Workers, Local Union 1112 v. Brunner , 911 N.E.2d 327 (Ohio Ct. App. 2009); 53 P A . C ON . S TAT . § 895.704-A(a); S.C. C ODE A NN . § 8-13-1342; V T . S TAT . A NN . tit. 32, § 109(b); V A . C ODE A NN . § 2.2-3104.01. Further evidence also comеs from the Securities and Exchange
Commission, which in 1994 approved a pay-to-play rule for municipal
financing in response to concern that brokers and dealers were making
political contributions to state and local officials to influence the
choice of underwriters. This court upheld that rule against First
Amendment challenge in
Blount v. SEC
,
In 2005, Connecticut passed a Campaign Finance Reform
Act that prohibited “campaign contributions by state contractors,
lobbyists, and their families.”
Green Party
,
The most widely publicized of the scandals involved Connecticut’s former governor, John Rowland. In 2004, Rowland was accused of accepting over $100,000 worth of gifts and services from state contractors . . . . Rowland accepted the gifts, it was alleged, in exchange for assisting the contractors in securing lucrative state contracts. Rowland resigned amidst the allegations, and in 2005 pleaded guilty --
29
along with two aides and several contractors -- to federal charges in connection with the scandal.
Id.
(quoting
Green Party
,
Later, the Second Circuit also upheld New York City’s law
limiting contributions by entities “doing business with” the City.
Ognibene v. Parkes
,
We could go on. The FEC has assembled an impressive, if dismaying, account of pay-to-play contracting scandals, not only in the above states, but also in New Mexico, Hawaii, Ohio, California, and elsewhere. See FEC’s Proposed Findings of Fact, J.A. 298-313. But we think that the 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.
D
Notwithstanding the above, the plaintiffs argue that the interests asserted by the Commission are not furthered by § 30119 for two reasons.
1. The plaintiffs contend that changes in government contracting practices since the 1940s -- especially the advent of formalized competitive bidding -- render the current system “immune from political interference” in the majority of cases. Pls. Br. 11. Thus, they maintain, “even if a pay-to-play rationale might have made [the statute] defensible in 1940, the vast changes in federal procurement since then have made it indefensible on that basis today.” Id. at 13. We are unpersuaded.
First, the facts that we have recounted above speak for themselves. See supra Part III.C.1. If сontracting were truly immune from political interference, for example, Rep. Cunningham could not have “pressure[d] and influence[d] United States Department of Defense personnel to award and execute government contracts.” Plea Agreement at 6, United of the contractors’ campaign cash was donated to lawmakers within a year of their contracts getting approved,” often “months and weeks ahead of when the contracts were voted on” or even the same day as the vote).
States v. Cunningham , No. 3:05-cr-2137 (S.D. Cal. Nov. 28, 2005). Nor would the myriad of other instances of corruption and self-dealing in the contract bidding process have occurred. See generally D EP ’ T OF D EFENSE , E NCYCLOPEDIA OF E THICAL F AILURE 4-58, 77-78, 82, 84-88, 132-46. Moreover, those facts are hardly surprising. Although agencies do rely on specialized contracting officers to help ensure independence, contracting officers in turn rely on information about needs and objectives provided by the “customer” agency, which may include input from political appointees. See D. Ct. Findings ¶ 23 (citing Schooner Dep. 110-16). And Members of Congress have many opportunities of their own to intercede on behalf of their constituents. See, e.g. , M ORTON R OSENBERG & J ACK H. M ASKELL , C ONG . R ESEARCH S ERV ., C ONGRESSIONAL I NTERVENTION IN THE A DMINISTRATIVE P ROCESS : L EGAL AND E THICAL C ONSIDERATIONS 80 (2003); H.R. R EP . N O . 113-666, at 4 (2014).
Second, most contracts held by individuals to provide personal services on a regular basis, such as those held by plaintiffs Brown and Miller, “‘are not . . . . subject to full and open competition and the full range of rights and responsibilities that follow.’” D. Ct. Findings ¶ 24 (quoting Schooner Dep. 89); see 48 C.F.R. § 13.003(d). Nor is full-blown competitive bidding required for contracts with values below the “simplified acquisition threshold” -- set at $150,000 in most cases, 48 C.F.R. § 2.101. See 41 U.S.C. § 1901; 48 C.F.R. § 13.003(a). Instead, “‘the government can call two or three people on the phone and operate in a very informal manner.’” D. Ct. Findings ¶ 24 (quoting Schooner Dep. 107-08). Wagner’s contract, for example, was arranged under the simplified acquisition procedures. Id. She was proactively approached by a staff member at ACUS, and then discussed the arrangement with ACUS’s Chairman, who is appointed by the President and confirmed by the Senate. Wagner Decl. ¶ 3. In short, because
33
the plaintiffs challenge § 30119 as it applies to individual contractors, the competitive bidding regime does little to help their case.
Finally, perhaps the most relevant change in government
contracting over the past several decades has been the enormous
increase in the government’s reliance on contractors to do work
previously performed by employees.
See
Schooner Dep. 35-36,
cited in
D. Ct. Findings ¶ 22.
[22]
If anything, that shift has only
strengthened the original rationales for the contractor
contribution ban by increasing the number of potential targets of
corruption and coercion -- targets who do not have the merit
system protections available to government employees.
See
5
U.S.C. §§ 1214-15, 2301(b)(1)-(2);
infra
Part V.B. 2. The plaintiffs also question whether there is sufficient
evidence of corruption or coercion specifically with respect to
individual contractors, as compared to those organized as
corporations or other kinds of firms. It is true that most of the
examples set forth in Parts III.B and III.C above involve firms. We see no reason, however, to believe that the motivations for
corruption and coercion exhibited in those examples are
inapplicable in the case of individual contractors. Consider Sam
Harris, a consultant who told the Watergate Committee that “he
was made to feel that his continued success in obtaining
Government contracts would, in significant degree, be
dependent on his contributing to the President’s reelection.”
W ATERGATE R EPORT at 409. There is no basis for thinking that
Harris would have been less vulnerable to such coercion if,
instead of doing business as Sam Harris & Associates,
id.
, he
had contracted with the government in his personal capacity.
We are also mindful that less direct evidence is required when,
as here, the government acts to prevent offenses that “are
successful precisely because they are difficult to detect.”
Burson
, 504 U.S. at 208 (upholding restriction of campaign
see
52 U.S.C. § 30109(d)(1)(A) (imposing criminal penalties on those
who “knowingly and willfully” violate FECA);
Bryan v. United
States
,
Reps. Taylor and Michener) (detailing the coercion of WPA-paid workers to contribute to the Democratic Party that led to passage of the Hatch Act); W ATERGATE R EPORT at 413 (describing how federal employees were pressured to help meet a “management objective” by contributing to a Republican Party fundraiser); id. 429 (describing evidence that contributions were solicited from Veterans’ Administration employees).
speech near voting places as warranted to prevent “[v]oter
intimidation and election fraud,” notwithstanding limited record
evidence). “[N]o smoking gun is needed where . . . the conflict
of interest is apparent, the likelihood of stealth great, and the
legislative purpose prophylactic.”
Blount v. SEC
,
Moreover, the trend we identified above, toward a larger
federal workforce outside the protection of the civil service
system, necessarily poses an increased threat of both corruption
and coercion. If anything, past experience suggests that such
workers are particularly vulnerable to tacit (or not so tacit)
demands for political tributes.
See, e.g.
,
Rutan v. Republican
Party of Ill.
, 497 U.S. 62, 66 (1990) (describing state
government promotion decisions predicated on “whether the
applicant has provided financial or other support to the
Republican Party and its candidates”);
Elrod
,
E
Our historical review makes clear that the two Court- approved justifications for limitations on campaign activities -- to protect against quid pro quo corruption and its appearance, and to protect merit-based public administration -- were the justifications that lay behind the contractor contribution statute. Likewise, our national experience supports Congress’ fear that political contributions by government contractors can corrupt and interfere with merit-based administration.
The Supreme Court has instructed that the “quantum of
empirical evidence needed to satisfy heightened judicial scrutiny
of legislative judgments will vary up or down with the novelty
and plausibility of the justification raised.”
Nixon v. Shrink Mo.
Gov’t PAC
,
In sum, 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. Accordingly, we now turn to the remainder of the “closely drawn” test.
IV
Even if a contribution ban serves sufficiently important interests, to satisfy the First Amendment it still must employ “‘means closely drawn to avoid unnecessary abridgment of associational freedoms.’” McCutcheon , 134 S. Ct. at 1444 (quoting Buckley , 424 U.S. at 25). Clearing this hurdle “require[s] ‘a fit that is not necessarily perfect, but reasonable; that represents not necessarily the single best disposition but one whose scope is in proportion to the interest served[;] . . . that employs not necessarily the least restrictive means but . . . a means narrowly tailored to achieve the desired objective.’” Id. at 1456-57 (quoting Bd. of Trs. v. Fox , 492 U.S. 469, 480 (1989)). The plaintiffs contend that § 30119 fails this test because it is overinclusive in several respects, which we consider in turn.
A
The plaintiffs first maintain that the statute is overinclusive
because Congress banned their contributions entirely, rather than
simply resting on the contribution limits generally applicable to
all citizens,
see
52 U.S.C. § 30116(a), or on some more modest
limits. Such a contribution ban, applicable to a particular
category of persons, is not unique. Federal law has long
prohibited all federal campaign contributions by corporations
and labor unions.
See
52 U.S.C. § 30118(a);
Beaumont
, 539
U.S. at 161-63. Several states have their own bans on certain
contributions by classes of individuals or firms that do business
with the government. And every judge on this court -- indeed,
on every lower federal court -- is likewise banned from making
political contributions.
See
C ODE OF C ONDUCT FOR U NITED
S TATES J UDGES , Canon 5(A)(3). So, too, are judicial employees.
See
C ODE OF C ONDUCT FOR J UDICIAL E MPLOYEES § 310.10(a);
id
. § 320, Canon 5(A).
See also Bluman v. FEC
, 800 F. Supp.
2d 281 (D.D.C. 2011) (three-judge court) (upholding ban on
contributions by foreign nationals, 52 U.S.C. § 30121(a)),
summ.
aff’d
,
We do not dispute that the total ban on federal contributions
by contractors is a significant restriсtion. But the point of the
“closely drawn” test is that “‘[e]ven a significant interference
with protected rights of political association may be sustained if
the State demonstrates a sufficiently important interest and
employs means closely drawn to avoid unnecessary abridgment
of associational freedoms.’”
McCutcheon
,
First, the contracting context greatly sharpens the risk of
corruption and its appearance. Unlike the corruption risk when
a contribution is made by a member of the general public, in the
case of contracting there is a very specific quo for which the
contribution may serve as the quid: the grant or retention of the
contract. Indeed, if there is an area that can be described as the
“heartland” of such concerns, the contracting process is it.
Cf.
Green Party
,
Moreover, because of that sharpened focus, the appearance problem is also greater: a contribution made while negotiating or performing a contract looks like a quid pro quo, whether or not it truly is. As the sponsor of the 1940 contractor contribution ban explained to his Senate colleagues, the ban was needed because contractor contributions “may be considered in some instances as bribery in order to secure governmental contracts,” 86 C ONG . R EC . 2982 (1940) (statement of Sen. Byrd). See Green Party , 616 F.3d at 205 (upholding Connecticut’s ban because, inter alia, “[e]ven if small contractor contributions would have been unlikely to influence state officials, those contributions could have still given rise to the appearance that contractors are able to exert improper influence on state officials”); cf. Preston , 660 F.3d at 736 (upholding North Carolina’s ban on lobbyists’ contributions because it rested on “a legitimate legislative judgment” that “a complete ban was necessary as a prophylactic to prevent not only actual corruption but also the appearance of corruption in future state political campaigns”).
Second, the contracting context also greatly sharpens the risk of interference with merit-based public administration. Because a contractor’s need for government contracts is generally more focused than a member of the general public’s need for other official acts, his or her susceptibility to coercion is concomitantly greater. And coercing a contractor to contribute, even if limited by a contribution ceiling, is still coercion.
In sum, we conclude that a flat prohibition is closely drawn
to the important goals that § 30119 serves.
Cf. Williams-Yulee
v. Fla. Bar
,
B
The plaintiffs also argue that § 30119 is overinclusive
because it bans contributions not only to candidates for
President and Congress, but also to political parties, which,
“[u]nlike elected officials who might have the theoretical power
to influence a contract, . . . plainly have no ability to affect the
award of any contract.” Pls. Br. 51. But the Democratic
campaign book scandal of the 1930s gave Congress sufficient
reason to target contributions to parties: it was the Democratic
National Committee whose agents reportedly told government
contractors that the continuation of their contracts hinged on
their financial support of the party.
See
84 C ONG . R EC . 9598-99
(1939). Indeed, the 1876 law concerning federal employees was
also “aimed at the suppression of the practice which has
prevailed among
party organizations
of soliciting contributions
for
party purposes
from their office-holding members, or
exacting them by a moral coercion.”
United States v. Curtis
, 12
F. 824, 838 (C.C.S.D.N.Y. 1882) (emphasis added). Likewise
the Watergate Committee’s report on the 1972 election included
evidence that federal employees were pressured to contribute to
the Republican Party. W ATERGATE R EPORT at 413. Nor did the
role of contributions to political parties in influencing
government employment wane as the 20th century progressed.
See, e.g.
,
Elrod
,
More recently, in upholding FECA’s restrictions on soft-
money contributions to political parties, the Supreme Court
noted that “‘[t]here is no meaningful separation between the
national party committees and the public officials who control
them.’”
McConnell
,
42
summ. aff’d
,
C
In addition to those we have just considered, the plaintiffs propose a miscellany of further ways in which Congress could make § 30119 less restrictive. We address only the more substantial of these.
First, the plaintiffs propose that the ban should at least exclude sole-source contracts for experts like plaintiff Wagner, particularly when it is the government that initiates the contact, “because the requirements to enter them are sufficiently rigorous” to address the risk of corruption. Pls. Br. 53 n.9. But the plaintiffs do not explain what those requirements are, or why they provide the requisite assurances. Cf. K ATE M. M ANUEL , C ONG . R ESEARCH S ERV ., C OMPETITION IN F EDERAL C ONTRACTING : A N O VERVIEW OF THE L EGAL R EQUIREMENTS (2011) (noting “high-profile incidents of alleged misconduct by contractors or agency officials involving noncompetitive contracts”). Moreover, this argument appears contrary to the plaintiffs’ principal contention, that it is the rise of competitive bidding -- not the private placement of sole-source contracts -- that has eliminated the risk of pay-to-play. See supra Part III.D.1. In any event, because Wagner’s claims are moot, this argument need not detain us.
Second, the plaintiffs argue that § 30119 unnecessarily bars contractors from contributing to ideological PACs that, in turn, contribute to candidates. Whether or not this argument has merit, it suffers from a similar problem: the one plaintiff whose claim is not moot lacks standing to challenge limitations on contributions to PACs. See supra Part I.
Third, the plaintiffs suggest that the statute would be more
closely drawn if it applied only to large contracts, pointing out
that Colorado and New York City enacted pay-to-play laws
limited to contracts worth more than $100,000.
See
Pls. Br.
52-53. Although such a dollar limit would of course reduce the
number of covered contractors, the plaintiffs do not explain why
§ 30119 is not closely drawn to the interests it serves in the
absence of such a limit, or why a dollar limit would draw it more
closely to those interests. Perhaps quid pro quos and coercion
are more likely when larger contracts are involved because,
since more money is at stake, the parties are more willing to risk
detection and prosecution. Or perhaps such abuses are just as
likely when smaller contracts are involved because the relative
value to the small contractor is high and the risk of detection is
comparatively low. Because the plaintiffs have advanced no
argument on this point, there is no need for us to speculate
further. We do note, however, that the historical record provides
support for legislative concern that corrupt and coercive
patronage regimes can take root even when relatively small
amounts of money are at stake.
See supra
Parts III.B.1-2,
III.D.2., IV.A. And we also note again that a contribution ban
need not be a perfect fit to be constitutional,
see McCutcheon
,
Finally, the plaintiffs maintain that Congress should have
rested on the criminal statutes that directly ban quid pro quos
and coercion, rather than also banning political contributions.
But the Supreme Court has repeatedly dispatched this argument.
As
McConnell
explained, “[i]n
Buckley
, we expressly rejected
the argument that antibribery laws provided a less restrictive
alternative to FECA’s contribution limits, noting that such laws
‘deal[t] with only the most blatant and specific attempts of those
with money to influence governmental action.’”
D
Because the operative question in the plaintiffs’ overinclusiveness challenge is whether § 30119 avoids “unnecessary abridgment” of First Amendment rights, it is also important to consider how much the statute leaves untouched. Campaign contributions are banned, but other forms of political engagement are left entirely unrestricted. The plaintiffs are free to volunteer for candidates, parties, or political committees; to speak in their favor; and to host fundraisers and solicit contributions from others. See 52 U.S.C. § 30101(8)(B) (enumerating activities to which the term “contribution” does not extend). And even the contribution ban itself is limited to the period between commencement of negotiations and completion of contract performance. Id. § 30119(a)(1).
The plaintiffs insist that the fact that the statute preserves
other avenues of political communication is irrelevant to First
Amendment analysis. Pls. Br. 61. But that argument is
incorrect. As the Court recognized in
McCutcheon v. FEC
, “in
the context of [upholding the] base contribution limits,
Buckley
observed that a supporter could vindicate his associational
interests by personally volunteering his time and energy on
behalf of a candidate.”
McCutcheon
,
In
Blount v. SEC
, for example, this court upheld a rule
restricting political contributions by municipal finance
professionals to state and local officials from whom they hoped
to secure underwriting contracts.
E
We conclude that the ban on contractor contributions is
closely drawn to the government’s interests in preventing
corruption and its appearance, and in protecting against
interference with merit-based administration. It strikes at the
dangers Congress most feared while preserving contractors’
freedom to engage in many other forms of political expression.
We do not discount the possibility that Congress could have
narrowed its aim even further, targeting only certain specific
kinds of government contracting or doing so only during
specific periods. But as the Court has made clear, “most
problems arise in greater and lesser gradations, and the First
Amendment does not confine a State to addressing evils in their
most acute form.”
Williams-Yulee
,
47 V What we have said thus far establishes that § 30119’s ban on contractor contributions serves sufficiently important interests and employs means closely drawn to avoid unnecessary abridgment of protected expression. The plaintiffs make one further First Amendment argument: not only is § 30119 over inclusive because it restricts too much speech, but it is also under inclusive because it permits too much speech. That is, it fails to ban contributions by three categories of individuals or entities that might implicate the same interests.
The first category proffered for comparison by the plaintiffs consists of entities and individuals associated with firms that have government contracts: PACs established by contracting corporations; officers, employees, and shareholders of contracting corporations; and individuals who control limited liability companies (LLCs) that contract with the federal government. The second category is composed of federal employees. The final category comprises individuals who seek other government benefits or positions, particularly grants and loans, admission to the military аcademies, and ambassadorships.
We begin with some general principles relevant to
evaluating a claim that a statute violates the First Amendment
because it is “underinclusive.” To put it most bluntly: “The First
Amendment does not require the government to curtail as much
speech as may conceivably serve its goals.”
Blount
,
[T]he First Amendment imposes no freestanding “underinclusiveness limitation.” A State need not address all aspects of a problem in one fell swoop; policymakers may focus on their most pressing concerns. We have accordingly upheld laws -- even under strict scrutiny -- that conceivably could have restricted even greater amounts of speech in service of their stated interests.
This is not to say that underinclusiveness plays no role in
First Amendment analysis. As the Court explained in
Williams-
Yulee
, a law’s underinclusiveness raises “a red flag” that may
indicate a different kind of problem.
49
killings indicated that the ban’s object was not (as it asserted)
animal welfare but rather the suppression of particular religious
beliefs.
Williams-Yulee
,
But the plaintiffs do not challenge § 30119 on these grounds. They do not contend, for example, that Congress’ true interest was to favor corporate affiliates, federal employees, or government grantees over individual contractors, see Oral Arg. Recording 18:20-19:03, which would require us to undertake closer analysis of the basis for such disparate treatment. To the contrary, they agree that the interests that motivated and have sustained § 30119 are the anticorruption goals the government invokes today. See id. 22:05-45. Moreover, it is plain that the statute “applies evenhandedly to all [government contractors], regardless of their viewpoint,” Williams-Yulee , 135 S. Ct. at 1668, and regardless of their form of organization, see 52 U.S.C. § 30119(a)(1) (barring the “person” who enters into the contract from making the contribution); id. § 30101(11) (defining “person” to “include[] an individual, partnership, committee, association, corporation, labor organization, or any other organization or group of persons”). And nothing in the statute’s history even hints at any purpose to disfavor individual contractors as against the categories proffered by the plaintiffs.
In
Williams-Yulee
,
the Court noted
that
“[u]nderinclusiveness can also reveal that a law does not
actually advance a compelling interest.”
With these general principles in mind, we now briefly examine each of the categories of underinclusiveness to which the plaintiffs draw our attention.
A
The plaintiffs’ first category includes entities and individuals associated with corporations that have government contracts. Like the plaintiffs, corporations that contract with federal agencies cannot make contributions in federal elections. See 52 U.S.C. §§ 30119(a), 30101(11). [34] At the same time, it is true that corporate contractors (like other corporations) are permitted to form PACs -- separate segregated funds that can make campaign contributions with non-treasury funds solicited from shareholders, certain personnel, and their families. See 52 U.S.C. § 30119(b); id . § 30118(b). Officers, employees, and shareholders of corporate contractors are also free to make direct contributions “from their personal assets.” 11 C.F.R. § 115.6. And it may be that individuals who control LLCs that contract with the federal government can make contributions as well. But none of these allowances fatally undermines the statutory regime.
1. A corporation is a separate legal entity from a PAC.
See
Citizens United
,
In
Williams-Yulee
, the Court considered a similar
underinclusiveness challenge to Florida’s ban on personal
solicitation of campaign funds by judicial candidates. That ban
“allow[ed] a judge’s campaign committee to solicit money,”
which the petitioner argued “reduces public confidence in the
integrity of the judiciary just as much as a judge’s personal
solicitation.”
2. Respecting the corporate form, and therefore according
separate treatment to shareholders and other individuals
associated with corporations, is also constitutional. In
Blount
,
we considered and rejected a similar underinclusiveness
challenge to the SEC’s pay-to-play rule, which, while restricting
contributions by municipal securities professionals, did not
extend the restriction to the chief executives of banks with
municipal securities departments. “[A] regulation is not fatally
underinclusive,” we said, “simply because an alternative
regulation, which would restrict
more
speech or the speech of
more
people, could be more effective.”
Blount
,
In upholding the SEC’s rule, Blount also noted the SEC’s explanation that this “loophole,” like others in the rule, reflected the Commission’s sensitivity to First Amendment concerns about overinclusiveness. Id. at 947. Here, too, Congress could reasonably have concluded that banning contributions by all those associated with corporate contractors would go too far at too great a First Amendment cost.
3. The plaintiffs further argue that, while they contract directly with the federal government for their services and so are barred from making contributions, they or other individuals could instead establish an LLC to formally contract with the government and receive payment for their work. Then, because the FEC has ruled that the contractor contribution ban does not apply to an entity’s “employees, officers, or members,” 11 C.F.R. § 115.6, the plaintiffs maintain that such individuals would remain free to make contributions. The availability of this LLC loophole, they say, vitiates the statutory purpose.
54
Although the FEC’s briefs accepted the plaintiffs’ description of the regulatory treatment of individuals who establish LLCs, the agency submitted a post-argument letter clarifying that the Commission itself “has not addressed the application of FECA’s contractor contribution prohibition to contributions made by an individual who is the sole member of an LLC that is a federal contractor.” FEC Post-Argument Letter at 6 (Nov. 24, 2014) (emphasis omitted). [35] Perhaps for that reason, there is no evidence in the record that anyone has ever used an LLC as a loophole to permit him or her to make an individual campaign contribution.
The plaintiffs’ own evidence highlights the not insignificant
costs involved in both establishing and operating as an LLC.
See
Tiemann Decl. ¶ 3,
cited in
D. Ct. Findings ¶ 19. Moreover,
at oral argument, plaintiffs’ counsel acknowledged that “persons
like Mr. Miller and Mr. Brown almost certainly could not have
[contracted] through [an] LLC” -- both because the agency may
not have allowed it, and because of the “substantial sacrifice”
they would have incurred by forgoing various benefits that come
with employment-like contracts. Oral Arg. Recording 23:13-58.
In short, in the absence of any evidence of circumvention-by-
LLC, the failure to plug this speculative loophole is hardly a
basis for invalidating the statute.
Cf. Williams-Yulee
, 135 S. Ct.
at 1670 (“Even under strict scrutiny, ‘[t]he First Amendment
does not require States to regulate for problems that do not
exist.’” (quoting
Burson
,
B
The second category proffered by the plaintiffs as evidence of § 30119’s underinclusiveness is composed of federal employees who, unlike federal contractors, are generally not barred from making campaign contributions. See 5 C.F.R. § 734.208(a). As with the other categories, there is no ground for concluding that Congress chose to invidiously discriminate against contractors in favor of employees. And while federal employees are permitted to make contributions, they are subject to other restrictions (pursuant to the Hatch Act) and enjoy other protections (pursuant to the Civil Service Reform Act) that do not apply to contractors.
56
Congress could reasonably have thought that the difference in status of the two kinds of workers warrants this difference in treatment. Because regular employees do not generally need new contracts or renewals with the frequency required by outside contractors, permitting them to make contributions carries less risk of corruption or its appearance: employees have less to gain from making contributions and less to lose from not making them. [38] It is true, as the plaintiffs note, that employees have other concerns that could make them susceptible to coercion, including the desire for promotion or the fear of termination. But Congress has provided them with merit system protections that guard against that risk. See supra note 37. We see no basis for overturning Congress’ decision about how to calibrate these different restrictions.
C
Finally, the plaintiffs’ comparison of contractors to a
miscellany of other individuals who seek government benefits
or positions -- particularly grants and loans, admission to the
military academies, and ambassadorships -- is equally
unavailing. Once again, there is no basis for a claim that
Congress invidiously discriminated against contractors and in
favor of others. Nor is there any reason to believe that
permitting contributions by these other individuals defeats
§ 30119’s purpose of protecting against corruption and
interference with merit-based administration. Congress is surely
not prohibited from fighting such problems in one sector unless
it fights them in all. As the Supreme Court has said, “‘a
legislature need not strike at all evils at the same time.’”
Buckley
,
D
We conclude that the contractor contribution ban is not
fatally underinclusive. There is no doubt that “the proffered
state interest actually underlies the law,” and that it can “fairly
be said” that the statute “advance[s] a[] genuinely substantial
governmental interest.”
Blount
,
Accordingly, and in light of the analysis of the preceding Parts, we reject the plaintiffs’ First Amendment challenge.
VI
In addition to their First Amendment claim, the plaintiffs challenge § 30119 under the equal protection component of the Fifth Amendment. Equal protection is violated, they maintain, because the statute subjects individual contractors like themselves to a ban that it does not apply to two categories of similarly situated persons: (1) entities and individuals associated with firms that have government contracts (i.e., PACs of contracting corporations; officers, employees, and shareholders of contracting corporations; and individuals who control contracting LLCs); and (2) individuals who are regular employees rather than contractors.
If this argument sounds familiar, it should. It is the same argument that we have just considered, and rejected, when clothed in the garb of a First Amendment claim that § 30119 is too underinclusive to satisfy the “closely drawn” standard. Now dressing their argument as an equal protection claim, the plaintiffs insist that we must evaluate it under strict scrutiny. That is so, they say, because “the right to make a political contribution is a fundamental right protected by the First Amendment,” and because “strict scrutiny is required when a law . . . ‘impinges upon a fundamental right explicitly or implicitly protected by the Constitution.’” Pls. Br. 25 (quoting San Antonio Indep. Sch. Dist. v. Rodriguez , 411 U.S. 1, 17 (1973)).
We reject this doctrinal gambit, which would require strict scrutiny notwithstаnding the Supreme Court’s determination that the “closely drawn” standard is the appropriate one under the First Amendment. Although the Court has on occasion applied strict scrutiny in examining equal protection challenges in cases involving First Amendment rights, it has done so only when a First Amendment analysis would itself have required such scrutiny. [41] There is consequently no case in which the Supreme Court has employed strict scrutiny to analyze a contribution restriction under equal protection principles. Indeed, the plaintiffs acknowledge that they know of no case in any court “in which an equal-protection challenge to contribution limits succeeded where a First Amendment one did not.” Wagner , 901 F. Supp. 2d at 112. This will not be the first.
As we explained in
Ruggiero v. FCC
, “[a]lthough equal
protection analysis focuses upon the validity of the classification
rather than the speech restriction, ‘the critical questions asked
are the same.’ We believe that the same level of scrutiny . . . is
therefore appropriate in both contexts.”
It is certainly true that the Court “has occasionally fused the
First Amendment into the Equal Protection Clause” in
concluding that “content-based discrimination” is not a
legitimate government interest because it “violates the First
Amendment.”
R.A.V.
,
VII
As should by now be clear, this is a somewhat unusual
campaign finance case in at least two respects. First, there is no
dispute regarding the legitimacy or importance of the interests
that support the contractor contribution ban. In § 30119,
Congress was plainly not attempting “to reduce the amount of
money in politics, or to restrict the political participation of
some in order to enhance the relative influence of others.”
McCutcheon
,
Second, the contractor contribution ban rests on not one but
two such interests. The ban is not only supported by the
“compelling” interest in protecting against quid pro quo
corruption and its appearance,
McCutcheon
,
The long historical experience recounted in Part III further makes clear that these important concerns supporting § 30119 are neither theoretical nor antiquated, but rather are grounded in unhappy experience stretching to the present day. And for the reasons set forth in Parts IV through VI, we also conclude that the statute employs means closely drawn to avoid unnecessary abridgement of associational freedoms, and does not deprive the plaintiffs of equal protection of the laws. Accordingly, we uphold the statute against all of the plaintiffs’ constitutional challenges.
So ordered.
Notes
[1] Although Wagner’s ACUS contract is her first, she says that she
“expect[s]” to “be offered other similar opportunities in the future”
because her area of expertise “is a very important topic for federal
regulatory agencies.” Wagner Decl. ¶ 4. Brown also plans to seek
future work with the federal government, “either as an employee or as
a contractor,” and therefore “may or may not be subject to” § 30119
at some future point. Brown Supp. Mootness Decl. ¶ 4. These
possibilities are too speculative to sustain a concrete interest in this
litigation.
See Munsell v. Dep’t of Agric.
,
[2] We continue to describe the arguments as those of the “plaintiffs,” notwithstanding that only a single plaintiff’s arguments remain alive, because the plaintiffs presented their arguments collectively in a single set of briefs and oral arguments.
[3]
See
,
e.g.
,
McCutcheon
, 134 S. Ct. at 1446-62 (aggregate
contribution limits);
Randall v. Sorrell
,
[4]
See, e.g.
,
Shrink Mo. Gov’t PAC
,
[5]
See Bd. of Cnty. Comm’rs v. Umbehr
,
[6] Under the Pickering test, a court must “‘arrive at a balance between the interests of the [employee], as a citizen, in commenting upon matters of public concern and the interest of the State, as an employer, in promoting the efficiency of the public services it
[7] Throughout this opinion, when we use the terms “corruption” or its “appearance,” we refer to the quid pro quo variety.
[8]
See, e.g.
,
Citizens United
,
[9] Because the Pendleton Act prohibited accepting contributions
from “any person receiving any salary or compensation from moneys
derived from the Treasury of the United States,”
id.
§ 11,
[10] See, e.g. , 84 C ONG . R EC . 9598 (1939) (statement of Rep. Taylor) (reporting that WPA workers had been required to place $3 to $5 out of their $30 monthly pay under a Democratic donkey paperweight on their supervisor’s desk); see also R EPORT OF THE S PECIAL C OMM . TO I NVESTIGATE S ENATORIAL C AMPAIGN E XPENDITURES AND U SE OF G OVERNMENTAL F UNDS IN 1938, S. R EP . N O . 76-1, pt. 1, at 8-33, 39 (1939) (recounting WPA abuses and recommending reforms).
[11] See, e.g. , 86 C ONG . R EC . 9362 (1940) (statement of Rep. Knutson) (recounting advertising rates for the 1940 Democratic campaign book and speculating that “all of this space will be taken by Government contractors,” who would be “solicit[ed] . . . at the point of a gun”); see also Editorial, That Convention Book , N.Y. T IMES , Mar. 13, 1940, at 22.
[12]
See also
W ATERGATE R EPORT at 440 (“There is evidence that
plans were laid for Government officials and others to solicit
campaign contributions from minority recipients of Federal grants,
loans, and contracts. Moreover, the committee has obtained evidence
that these plans were in part consummated.”);
id.
at 384-85
(recounting testimony that a contract was awarded to a Nixon
fundraiser “based solely on political motivations” and “‘rammed down
the throats’ of Depаrtment officials”). In the passage of our
Buckley
opinion later relied upon by the Supreme Court, this court leaned
heavily on the Watergate Report.
See
[13] That monetary penalty has since been superseded by FECA’s own penalty scheme. See 52 U.S.C. § 30109(a)(5)-(6) (civil penalties); id. § 30109(d) (criminal penalties).
[14]
See, e.g.
, Hatch Act Reform Amendments of 1993, Pub. L. No.
103-94, sec. 2(a), § 7323, 107 Stat. 1001, 1002 (1993) (codified at 5
U.S.C. § 7323);
id.
§ 4(b),
[15]
See Burson v. Freeman
,
[16] Wade and the contracting corporation later agreed to pay a $1 million civil penalty for violating, inter alia, § 30119 (then 2 U.S.C. § 441c). Conciliation Agreement at 6-7, In re MZM, Inc. and Mitchell Wade , Matter Under Review 5666 (FEC, Oct. 30, 2007).
[17] Another notorious pay-to-play contracting scheme of the Watergate era involved Vice President Spiro Agnew. In 1973, a federal investigation uncovered evidence that Agnew had accepted bribes (including campaign contributions) in exchange for infrastructure contracts while serving as Baltimore County Executive and Governor of Maryland -- and that he had continued to request payments from contractors as Vice President, “stat[ing] expressly that he hoped to be able to be helpful . . . with respect to the awarding of Federal engineering contracts.” Exposition of the Evidence at 3-4, United States v. Agnew , No. 73-0535 (D. Md. Oct. 10, 1973), reprinted in FBI Records: Spiro Agnew, Part 16, at 130, http://vault.fbi.gov/Spiro%20Agnew. The Attorney General agreed that Agnew could plead nolo contendere to a single count of tax evasion if he resigned his office, which he did. See Transcript of Plea Hearing at 7-8, United States v. Agnew , No. 73-0535 (D. Md. Oct. 10, 1973), available at http://research.archives.gov/description/279170.
[18] The laws of Hawaii and West Virginia most closely track the text and design of § 30119. See H AW . R EV . S TAT . § 11-355; W. V A . C ODE § 3-8-12(d). Other states have tailored their restrictions differently -- often more broadly than the federal model in some respects, such as by sweeping in the individual principals of contracting firms, and more narrowly in others, such as by targeting
[20] The plaintiffs point out that, in
Lavin v. Husted
, the Sixth
Circuit overturned an Ohio statute that made it a crime for candidates
for attorney general or county prosecutor to accept contributions from
Medicaid providers.
[21]
See also, e.g.
,
Yamada
,
[22] See also Test. of John K. Needham, Director, Acquisition & Sourcing Management, Gov’t Accountability Office, S. Hrg. 111-626, at 3 (2010) (“[I]t is now commonplace for agencies to use contractors to perform activities historically performed by government employees.”); Presidential Memorandum for the Heads of Executive Departments and Agencies on Government Contracting, Mar. 4, 2009 (noting that spending on government contracts had more than doubled since 2001 and that the line between traditional public functions and contracting functions “has been blurred and inadequately defined”); P AUL C. L IGHT , R ESEARCH B RIEF : T HE N EW T RUE S IZE OF G OVERNMENT 1 (2006) (noting that the Bush Administration “has overseen the most significant increase in recent history in the largely hidden workforce of contractors and grantees who work for the federal government”).
[23] Increased reliance on individual contractors -- particularly retirees such as Brown and Miller -- also raises a concern that some former federal employees may unwittingly violate § 30119 because they are unaware that they have become subject to a different set of restrictions as contractors. However, as FEC counsel advised the court, there is no criminal violation unless the individual knows his or her conduct violates the law. Oral Arg. Recording 1:01:19-1:02:19;
[25] See, e.g. , C ONN . G EN . S TAT . § 9-612(f)(1)-(2); H AW . R EV . S TAT . § 11-355; 30 I LL . C OMP . S TAT . 500/50-37; I ND . C ODE §§ 4-30-3-19.7; L A . R EV . S TAT . A NN . § 18:1505.2(L); M ICH . C OMP . L AWS § 432.207b; W. V A . C ODE § 3-8-12(d).
[26] See McConnell , 540 U.S. at 155 (explaining that the “close connection and alignment of interests” between parties and federal officeholders are likely to create the risk of “actual or apparent” corruption); Emily’s List v. FEC , 581 F.3d 1, 6 (D.C. Cir. 2009).
[27] The Supreme Court has upheld restrictions on contributions to
multicandidate committees as a necessary means to avoid
circumvention of other limits.
Cal. Med. Ass’n
,
[28] See, e.g. , 18 U.S.C. § 201 (proscribing bribes and gratuities); id. § 601 (proscribing causing or attempting to cause persons to make political contributions by denying or threatening to deny them work in or for the federal government).
[29]
See Buckley
,
[30] The plaintiffs’ opening brief proffers only the third category as an example of First Amendment underinclusiveness, discussing the first two as part of their equal protection challenge. Pls. Br. 23, 55-59. In their reply brief, the plaintiffs identify all three categories as supporting their First Amendment argument. Reply Br. 26-28. Because the issues are intertwined, see infra Part VI, we consider all three categories here.
[31]
See also City of Ladue v. Gilleo
,
[32]
See also Citizens United
,
[33]
Cf. Reed v. Town of Gilbert
, No. 13-502,
[34] The ban on corporate contractor contributions is a consequence
not only of § 30119, but also of 52 U.S.C. § 30118, which bans
contributions by any corporation in a federal election.
See Beaumont
,
[35] The statute, of course, does not mention LLCs, which first emerged in the late 1970s. See Treatment of Limited Liability Companies Under the Federal Election Campaign Act, 64 Fed. Reg. 37397, 37398 (July 12, 1999).
[36] One witness opined that, at least with respect to consulting-type contracts, client agencies are indifferent between contracting with an LLC and contracting with an individual. See Schooner Decl. ¶ 8, cited in D. Ct. Findings ¶ 20. The witness did not say how many such arrangements there are, or that any individuals using LLCs had actually made campaign contributions. Id. ; see also Lubbers Decl. ¶ 8, cited in D. Ct. Findings ¶ 20.
[37] The Hatch Act bars most federal employees from, inter alia, soliciting or accepting political contributions, running for office in a partisan election, hosting a political fundraiser, or engaging in political activity while on duty or in a federal building. See 5 U.S.C. §§ 7323(a), 7324(a); 5 C.F.R. §§ 734.302-.306. Employees of more than a dozen specific agencies, as well as others who hold certain senior or adjudicative positions, are more broadly prohibited from “tak[ing] an active part in . . . political campaigns.” 5 U.S.C. § 7323(b)(2)(A). Under the Civil Service Reform Act, covered employees are protected against “prohibited personnel practices,” including discrimination on the basis of political affiliation and coercion to make political contributions. 5 U.S.C. § 2302(a)(1), (b)(1)(E), (b)(3). Aggrieved employees who have been subjected to such practices can seek redress through the Office of Special Counsel and the Merit Systems Protection Board. 5 U.S.C. §§ 1214-15, 1221.
[38] Cf. 86 C ONG . R EC . 2580 (1940) (statement of Sen. Brown) (“[T]he Government clerk, if he is not under civil service , is interested in keeping in power the party that is in power and that gave him a job. . . . I can apply the same principle . . . . to contractors who are doing business with the Government of the United States.” (emphasis added)).
[39] Cf. Broadrick v. Oklahoma , 413 U.S. 601, 607 n.5 (1973) (rejecting equal protection challenge to Oklahoma statute “singling out classified service employees for restrictions on partisan political expression while leaving unclassified personnel free from such restrictions” because “the legislature must have some leeway in determining which of its employment positions require restrictions on partisan political activities and which may be left unregulated”).
[40] As noted above, the plaintiffs’ underinclusiveness argument included a third category as well: individuals seeking a miscellany of other government benefits or positions. See supra note 30.
[41]
See Austin v. Mich. Chamber of Commerce
,
[42] In
Ruggiero
, that level of scrutiny was “heightened rational
basis.”
[43]
See City of Ladue
,
[44]
Cf. Blount
,