A Pay-to-Play Platypus

April 14, 2011

Pay-to-play laws are generally designed to curb the risk that a political contribution would be made as a quid pro quo for a government contract. Thus, limits and prohibitions are generally made applicable both to business entities that seek and to those that receive government contracts. In Citizens United v. FEC, the U.S. Supreme Court reaffirmed its longstanding view that, unlike political contributions, independent expenditures do not pose a risk of quid pro quo corruption. Thus, one might think that pay-to-play type restrictions would not be a means of restricting independent expenditures. Yet legislation sometimes yields surprising amalgamations. (Hence, Platypus.)  Exhibit A: a bill in the New York State Legislature, S.1565/A.5907, described in press reports as “eliminating pay to play.”  The stated purpose of this bill “is to ensure that business entities receiving or renewing state contracts cannot directly or indirectly make expenditures for political purposes, which could influence their ability to receive such a contract or renewal, and would in effect involve the use of public funds to buy such influence.” Oddly, the bill lets prospective contractors off the hook; prior to a contract award, a business entity’s right to make contributions in the hope of influencing a contract award remains unhindered. This seems like an unintended loophole, until you parse the bill’s purpose and discover it’s really not a pay-to-play restriction at all. The bill is actually a restriction on the indirect use of public funds for political purposes, a familiar feature of government grants and tax exemptions. There is potential danger in mixed-up motives, however. The recent oral argument before the Supreme Court in the Arizona public financing case is a reminder that judges may not take kindly to a law founded on intentions of questionable constitutionality. In other words, if you are looking to curb quid pro quo corruption, your pay-to-play law should cover both prospective and actual contractors (so as to be effective) but not prohibit independent expenditures (so as to be constitutional).

Tags: New York StateArizona