Opinion ID: 2814836
Heading Depth: 3
Heading Rank: 1

Heading: We begin with Congress itself, where a number of

Text: 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).16 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). 25 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, 529 F. Supp. 1085, 1091 (E.D.N.Y. 1981), aff’d, 705 F.2d 603 (2d Cir. 1983). 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, 424 U.S. at 27-28. Although the criminal cases certainly confirm the appetite for corruption in contracting -- and the availability of channels for carrying it out -- corruption and its appearance are no doubt more widespread in the contracting process than our criminal dockets reflect. 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., WATERGATE REPORT 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 26 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 DEP’T OF DEFENSE, OFFICE OF GEN. COUNSEL, ENCYCLOPEDIA OF ETHICAL FAILURE 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 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 HAW. REV. STAT. § 11-355; W. VA. CODE § 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 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.19 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 STATE OF N.J. COMM’N OF INVESTIGATION, N.J. ENHANCED MOTOR VEHICLE INSPECTION CONTRACT 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 CAL. GOV’T CODE § 84308(d); CONN. GEN. STAT. § 9-612(f)(1)-(2); 30 ILL. COMP. STAT. 500/50-37; IND. CODE §§ 4-30-3-19.5 to -19.7; KY. REV. STAT. ANN. § 121.330; LA. REV. STAT. ANN. §§ 18:1505.2(L), 27:261(D); MICH. COMP. LAWS § 432.207b; NEB. REV. STAT. §§ 9-803, 49-1476.01; N.J. STAT. ANN. § 19:44A-20.13 to -20.14; N.M. STAT. ANN. § 13-1-191.1(E)-(F); OHIO REV. CODE ANN. § 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 PA. CON. STAT. § 895.704-A(a); S.C. CODE ANN. § 8-13-1342; VT. STAT. ANN. tit. 32, § 109(b); VA. CODE ANN. § 2.2-3104.01. 19 Further evidence also comes 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, 61 F.3d 938 (D.C. Cir. 1995). 28 Warner, 498 F.3d 666, 675 (7th Cir. 2007); see Ray Long, Illinois Senate Overrides Blagojevich’s Veto, Enacts ‘Pay-toPlay’ Ethics Law, CHI. TRIB., Sept. 23, 2008, at 1. The law’s passage prompted Ryan’s successor, Governor Rod Blagojevich, to redouble his efforts to solicit contributions from state contractors before the new rules took effect. See Mike McIntire & Jeff Zeleny, Obama’s Intervention for Ethics Bill Indirectly Led to Case Against Governor, N.Y. TIMES, Dec. 10, 2008, at A32. Those efforts in turn drew the interest of federal prosecutors, and Blagojevich was ultimately convicted of various forms of pay-to-play corruption, including attempting to extort campaign contributions from the chief executive of a hospital in exchange for raising Medicaid reimbursement rates, as well as offenses in connection with his effort to sell a U.S. Senate seat. See Jury Verdict, United States v. Blagojevich, No. 1:08-cr-888 (N.D. Ill. June 27, 2011). In 2005, Connecticut passed a Campaign Finance Reform Act that prohibited “campaign contributions by state contractors, lobbyists, and their families.” Green Party, 616 F.3d at 192. In upholding the contractor contribution ban, the Second Circuit noted that it was passed “in response to several corruption scandals in Connecticut,” which together had “helped earn the state the nickname ‘Corrupticut.’” Id. at 193 (quoting Green Party of Conn. v. Garfield, 616 F.3d 213, 218-19 (2d Cir. 2010)) (internal quotation marks omitted). As the court detailed: 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, 616 F.3d at 218-19). In light of that experience, the court found “sufficient evidence” of “actual corruption stemming from contractor contributions,” as well as “a manifest need to curtail the appearance of corruption created by contractor contributions.” Id. at 200. Later, the Second Circuit also upheld New York City’s law limiting contributions by entities “doing business with” the City. Ognibene v. Parkes, 671 F.3d 174 (2d Cir. 2011). In so doing, the court noted that there were “actual pay-to-play scandals in New York City in the 1980s,” id. at 188-89, and that there were “several recent scandals . . . specifically involv[ing] pay-to-play campaign donations” in New York State, id. at 190 n.15.20 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 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. 689 F.3d 543 (6th Cir. 2012). The court did so because, inter alia, the defendant Secretary of State “concede[d] that he ha[d] no evidence at all in support of his theory that [the statute] prevent[ed] actual or perceived corruption among prosecutors in Ohio.” Id. at 547 (emphasis added). As we discuss in the text, that is emphatically not the situation here. See also id. (distinguishing Green Party on the ground that there the state did have evidence “to demonstrate how its ban on contributions from contractors would help bring such scandals to an end”). 30 Fact, J.A. 298-313.21 But we think that the evidence canvassed 21 See also, e.g., Yamada, 2015 WL 2384944, at  (upholding Hawaii contractor contribution ban “in light of past ‘pay to play’ scandals and the widespread appearance of corruption that existed at the time” the ban was passed in 2005); United States v. Dimora, 750 F.3d 619, 623 (6th Cir. 2014) (affirming conviction of Ohio county official who “influenced Cleveland decision-makers and steered public contracts in return for approximately 100 bribes worth more than $250,000”); Plea Agreement at 3, United States v. Montoya, No. 1:05cr-2050 (D.N.M. Nov. 8, 2005) (guilty plea of New Mexico State Treasurer, who explained that “it was quite easy to get bribes from people who wanted to keep or obtain business,” including individual investment and financial advisors); James Drew & Steve Eder, Petro: Noe Stole Millions, TOLEDO BLADE, July 22, 2005 (reporting on an Ohio scandal in which state workers’ compensation funds were invested with a major political contributor who was ultimately convicted of both corruption and theft from the funds, see State v. Noe, 2009 WL 5174163 (Ohio Ct. App. 2009)); Carl Ingram, Former Davis Aide Faces Charges in Oracle Probe, L.A. TIMES, Mar. 3, 2004 (recounting incident in which a corporate lobbyist delivered a $25,000 contribution to the Governor of California’s reelection campaign, via his policy director, days after the state signed a $95 million contract with the company; the contribution was ultimately returned and the contract rescinded); Bruce Dunford, Jail Time, Fines Are Levied in Hawaii Election Probe, BOSTON GLOBE, Jan. 12, 2004, at A3 (detailing “a scandal in which respected architects and engineers illegally made political donations in the names of their employees, wives, and children, allegedly to win government contracts” in Honolulu); United States v. Troutman, 814 F.2d 1428, 1433-36 (10th Cir. 1987) (affirming the extortion conviction of New Mexico’s State Investment Officer for demanding that a bank make political contributions in order to obtain a state contract); cf. Patrick Madden, The Cost of D.C. Council’s Power Over Contracts, WAMU (Oct. 14, 2014), http://wamu.org/projects/paytoplay/#/story (reporting on an investigation that “identified more than $5 million in political contributions from more than 300 firms with [D.C.] Council-approved contracts from 2005 to 2014,” and that revealed that “[r]oughly half 31 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.