Pay to Play Law Blog : Pay to Play Lawyer & Attorney : Bribery, Campaign Contributions

In upholding the portion of the law pertaining to contributions by state contractors, the Court noted Connecticut’s sordid (but hardly unique) history with political scandal that fostered the law. Because of this past history with corruption, and the State’s recognized interest in preventing even the appearance of future such corruption, the Second Circuit determined that the contractor contribution ban survived First Amendment scrutiny. (See Green Party of Ct. v. Garfield, 09-0599-cv(L) at p.15-16 & 18-19). That analysis, as far as it goes, seems sensibly grounded and well rooted in Constitutional precedent.

Where the Court’s opinion could be argued to deviate from the terra firma of reality, and where compliance officers throughout the country can be forgiven for muttering to themselves in disbelief, is with respect to the analysis upholding the prohibition on contributions by spouses and children of contractors. Without even identifying past evidence that malevolent contractors have ever used their immediate families to circumvent any laws, the Court nonetheless upheld the ban:

In light of the recent corruption scandals, [the Connecticut] General Assembly must be given “room to anticipate and respond to concerns about” the “circumvention” of the bans on contractor contributions. Indeed, were we to affirm the ban on contributions by contractors but strike down the ban on contributions by their family members, we would invite the very circumvention that the General Assembly was trying to prevent.

Id. at 22.

What may appear logical in judicial chambers can take on an entirely new light when confronted from the perspective of a compliance officer tasked with ensuring that the CEO’s spouse complies with the ban and then periodically inquiring about ongoing compliance. I know I wouldn’t want to be put in the position of telling my own wife who she could make a campaign contribution to. It is especially difficult counseling clients that this conversation has to take place with the CEO. And equally as troubling when weighed against the First Amendment privileges it infringes upon.

Nonetheless, the law and constitutional analysis are clearly here to stay. Look for more states to follow Connecticut’s lead and impose pay-to-play restrictions on extended families.

In November 2008, Colorado voters narrowly passed Colorado’s Pay-to-Play law, which took the form of Amendment 54 to the Colorado Constitution. Citing a "presumption of impropriety between contributions to any campaign and sole source government contracts, "Amendment 54 prohibits holders of sole source state and local contracts from contributing to any political party or any candidate for elected office in the state. The law defines a sole source contract as “any government contract that does not use a public and competitive bidding process soliciting at least three bids prior to awarding the contract.”

The Colorado Supreme Court held that the Pay-to-Play law was unconstitutional in its entirety because, among other things, the law was not drafted narrowly enough to achieve its goal of eliminating the appearance of impropriety in the award of sole source contracts without significantly limiting constitutionally protected activity. The Court also noted that the cross-jurisdictional nature of the Amendment meant that fundraising in local governments would be limited by a donating entity’s contractual relationships with other, unrelated jurisdictions, like state government.

For contractors doing business in Colorado, the state’s Supreme Court decision means that they are no longer subject to the Pay-to-Play law’s prohibitions on political contributions. Importantly, however, the decision does not eliminate the possibility that Colorado may seek to enact laws similar to the “Pay-to-Play” law that was found to be unconstitutional. Instead, the Court’s decision implied that similar laws, even if they specifically target contractors, may be constitutional as long as the laws are drafted narrowly enough to address the laws’ stated concerns without significantly limiting constitutionally protected speech.

While it is impossible to predict future legislation, in light of the current anti-contractor sentiment and the political gains that can be had by proposing sweeping legislation to eliminate perceived “corruption,” contractors in Colorado and elsewhere should not expect the Colorado Supreme Court’s decision to prevent attempts to enact similar “Pay-to-Play” laws. MLA will continue to follow efforts to enact such laws, and contractors may wish to involve themselves in responding to such proposed laws by educating lawmakers and the public as to the ineffective and counterproductive nature of such laws.