Simone Lawson
Defense contractors are prohibited by federal law from making contributions or expenditures to any political party, committee, or candidate for federal office. This ban applies to all federal government contractors, including those bidding on or performing under federal contracts. Despite this, some defense contractors have been known to make political donations, with the top five defense contractors donating millions to election-denying lawmakers. The largest defense contractor, Lockheed Martin, donated at least $450,500 to 91 Republicans who voted against certifying the 2020 presidential election results. While it is illegal for federal contractors to donate to politicians' PACs, there have been instances of contractors violating this law, such as Detroit International Bridge, which donated to a super PAC supporting Representative John Moolenaar's first congressional campaign.
| Characteristics | Values |
|---|---|
| Federal law | Prohibits federal contractors from making political contributions |
| --- | --- |
| Federal contractors | Prohibited from making contributions or expenditures to any political party, committee, or candidate for federal office |
| --- | --- |
| Spouses of individuals and sole proprietors | May make contributions from personal funds |
| --- | --- |
| Individuals | Prohibited from making contributions or expenditures using any funds (business or personal) under their control |
| --- | --- |
| Domestic subsidiaries of foreign corporations | May donate to state and local elections |
| --- | --- |
| Federal contractors | Have donated to election-denying lawmakers |
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What You'll Learn
- Federal law prohibits federal contractors from making political contributions
- Federal contractors' spouses may contribute from personal funds
- Defense contractors have donated millions to election-denying lawmakers
- Federal contractors can contribute to independent expenditure committees
- Federal contractors are prohibited from making political contributions to federal candidates
Federal law prohibits federal contractors from making political contributions
The prohibition applies to a person who enters into a contract or is bidding on a contract with any agency or department of the United States government and is paid or to be paid for services, materials, equipment, supplies, land, or buildings with funds appropriated by Congress. It primarily targets contributions from partnerships or limited liability companies (LLCs) bidding on or entering into government contracts. However, an individual partner in such a firm may make contributions and expenditures from personal funds, rather than from the partnership's account.
The spouses of individuals and sole proprietors who are federal government contractors and employees of federal government contractors are also allowed to make contributions from personal funds. In contrast, an individual who is 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.
Despite this longstanding prohibition, some federal contractors continue to violate the law by making political contributions while performing on federal contracts. For instance, in 2023, Detroit International Bridge, LLC donated $236,800 to Never Back Down, Inc., a super PAC supporting Republican presidential candidate Ron DeSantis, while actively working on federal contracts.
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Federal contractors' spouses may contribute from personal funds
Federal contractors are prohibited from making contributions or expenditures to any political party, committee, or candidate for federal office. This ban applies to both business and personal funds. However, this prohibition does not extend to the spouses of federal contractors, who are allowed to make contributions from their personal funds.
The Federal Election Campaign Act prohibits corporations and labor organizations from making contributions in connection with federal elections. This includes federal government contractors, who are prohibited from making any contributions or expenditures for any political purpose. This ban applies to individuals under contract with the federal government, as well as sole proprietors of businesses with federal contracts.
The spouses of federal contractors are not bound by the same restrictions and are permitted to make personal contributions or expenditures in their own name. This exception allows them to financially support political campaigns or parties of their choice, regardless of their spouse's occupation. It is important to note that the spouse's contribution must be made from their own personal funds and not from funds under the control of their spouse, the federal contractor.
While the spouses of federal contractors have the freedom to contribute from their personal funds, it is essential to ensure that these contributions comply with other applicable laws and regulations. The Federal Election Commission provides guidelines and advisory opinions to help individuals navigate the legal framework surrounding political contributions. These contributions must also be made from permissible sources, and the amount contributed may be subject to certain limits.
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Defense contractors have donated millions to election-denying lawmakers
Defense contractors are prohibited by the Federal Election Commission from making contributions or expenditures to any political party, committee, or candidate for federal office. However, this ban does not apply to contributions from individuals who are partners in a partnership or LLC that is negotiating a contract with the federal government. In addition, the spouses of individuals and sole proprietors who are federal government contractors are allowed to make contributions from their personal funds.
Despite these regulations, defense contractors have donated millions of dollars to election-denying lawmakers. During the 2022 election cycle, the five largest defense firms contributed nearly $2 million to Republicans who voted against certifying the 2020 election results. Boeing, the third-largest defense contractor, spent the most out of the top five defense firms, donating at least $455,000 to 68 Republicans who objected to the election results. The company has made nearly $5 million in campaign donations during this election cycle.
Lockheed Martin, the largest defense contractor, donated at least $450,500 to 91 Republicans who voted against certifying the presidential election results. The company reported nearly $64.5 billion in defense revenue in 2021 and has spent at least $3.2 million in campaign donations during the most recent cycle. Other top defense contractors, including Raytheon Technologies, Northrop Grumman, and General Dynamics, have also contributed significant amounts to election-denying lawmakers.
The resumption of political donations by defense contractors has been criticized by watchdog groups such as Accountable.US. These firms initially paused contributions following the violent pro-Trump riot at the US Capitol on January 6, 2021. However, many defense contractors quickly resumed donations to lawmakers who denied the election results, despite publicly condemning the insurrection and expressing support for democracy.
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Federal contractors can contribute to independent expenditure committees
Federal contractors are prohibited from making contributions or expenditures in connection with federal elections. This includes independent expenditures, which are communications that expressly advocate for the election or defeat of a clearly identified federal candidate and are not made in consultation with the candidate or their agents. However, spouses of individuals who are federal contractors may make contributions from their personal funds.
While federal contractors cannot donate directly to political campaigns, they can contribute to independent expenditure committees, also known as Super PACs. These committees can support or oppose candidates by making independent expenditures, which are not considered contributions and are not subject to limits. However, these expenditures must include a disclaimer notice identifying who paid for the communication and indicating whether any candidate authorized it.
It is important to note that federal contractors must comply with the Federal Election Campaign Act (FECA) and Federal Election Commission (FEC) regulations, which prohibit certain activities. For example, a firewall must be implemented to prohibit the flow of information between employees providing services to the person paying for the communication and those working for the political party or candidate. Additionally, political committees that make independent expenditures must disclose them on Schedule E of their regular FEC report and within 24 and 48 hours.
In summary, while federal contractors cannot donate directly to political campaigns, they can indirectly influence elections by contributing to independent expenditure committees and making independent expenditures. However, they must comply with FECA and FEC regulations to ensure transparency and avoid prohibited activities.
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Federal contractors are prohibited from making political contributions to federal candidates
The FEC defines a federal government contractor as an individual or entity that enters into a contract or bids on a contract with any agency or department of the United States government. The contractor is paid or will be paid for services, materials, equipment, supplies, land, or buildings with funds appropriated by Congress. The ban primarily applies to contributions from partnerships or limited liability companies (LLCs) that have entered into or are bidding on a government contract.
It is important to note that spouses of individuals who are federal government contractors and employees of federal government contractors are allowed to make contributions from their personal funds. Additionally, an individual partner in a firm negotiating a federal contract may contribute from their personal funds rather than the partnership's account. However, an individual who is 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.
The Federal Election Campaign Act (FECA) prohibits corporations and labor organizations from making contributions in connection with federal elections. This includes all types of incorporated organizations, except political committees that incorporate only for liability purposes. FECA also allows individuals to make contributions to party committees, with certain limitations, such as age and ownership of funds.
While the FEC prohibits federal contractors from contributing to federal candidates, there have been calls for greater transparency in their political spending. Some have advocated for mandatory disclosure of political spending by contractors to shed light on potential violations and increase public trust in the contracting process.
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Frequently asked questions
No, federal law prohibits federal contractors from making contributions or expenditures to any political party, committee, or candidate for federal office.
Yes, the spouses of individuals and sole proprietors who are federal government contractors and employees of federal government contractors may make contributions from their personal funds.
If a defense contractor donates to a political campaign, independent watchdogs like the CLC can identify the illegal contribution and file a complaint with the FEC.
Yes, in 2023, Detroit International Bridge, LLC donated $236,800 to a super PAC backing Republican presidential candidate Ron DeSantis while performing on active federal contracts.
No, defense contractors have donated to both Republican and Democratic political campaigns. For example, the top three House Democrats — Nancy Pelosi, Steny Hoyer, and Jim Clyburn — received at least $50,000, $91,000, and $64,500, respectively, in direct contributions and PAC donations from the top five defense contractors.
