Small Business Advocates Urge President Obama to Sign Disclosure Order and Take Further Steps to Curb Political Influence in Federal Contracting

As House committees and lobbyists attack draft disclosure order, business groups support signing and stronger measures to level the playing field

FOR IMMEDIATE RELEASE: Thursday, May 12

CONTACTS:
Main Street Alliance – Sam Blair, (603) 831-1835
American Sustainable Business Council – Richard Eidlin, (303) 478-0131
American Independent Business Alliance – Jeff Milchen, 406-582-1255

WASHINGTON, D.C. – On Thursday, the American Independent Business Alliance, American Sustainable Business Council, and Main Street Alliance hosted a joint press call urging President Obama to move ahead with the Administration’s draft executive order requiring disclosure of contractors’ political spending, and to take additional steps to curb the influence of political spending in contracting.

“Small businesses know that they can’t compete for government contracts that appear to be influenced by heavy hitter political spending,” said Frank Knapp, President and CEO of the South Carolina Small Business Chamber of Commerce. “We should stop this unfair and unseemly practice or at the very least let the public get information about the political spending, both direct and indirect, being made by successful contractors.”

The press call, which featured two small business owners with connections to the contracting world, preceded an afternoon joint hearing of the House Small Business Committee and House Committee on Government Oversight staged to attack the draft order and paint it as bad for small businesses.

Marybeth Gardam, owner of Earthstuf, LLC in Cedar Rapids, Iowa disagreed with this portrayal. “Transparency is a small business value: we say what we do and we do what we say,” Gardam said. “When big corporate contractors show such strong opposition to disclosing their political spending, it leaves small business owners to wonder, what have they got to hide?” Gardam, who developed a renewable protective packaging material, was shut out of a procurement opportunity by a secretive, multi-year contract held by Hallmark.

The U.S. Chamber of Commerce has “fired warning shots” signaling its staunch opposition to the draft executive order, saying it “is not going to tolerate” such a disclosure requirement. The Chamber’s Board of Directors includes representatives of more than 50 companies that contracted with the government in 2010, with contracts totaling over $44 billion. These corporate heavy hitters of contracting include the likes of Lockheed Martin, Pfizer, Verizon, WellPoint, and JPMorgan Chase. Under the draft order, such companies would be required to disclose contributions to third party groups made with the intention of funding political spending.

“The U.S. Chamber of Commerce claims that shining a light on political spending will have a chilling effect on free speech. That argument doesn’t fly with me,” said Henry Passapera, co-founder of P&R Trading in East Rutherford, New Jersey and a leader with the New Jersey Main Street Alliance.

Passapera’s company sources and sells replacement airplane parts to a wide range of clients and does a brisk business with the government. “As a small business owner, I stand by my word, and when I want to have my voice heard, I sign my name at the bottom,” Passapera added. “Big corporate players like the Lockheed Martin Corporation and the other 52 government contractors on the Chamber’s Board should be required to do the same.”

Opponents of the order will no doubt cry “foul” about disclosure and other steps to limit political spending by contractors, citing the U.S. Supreme Court’s Citizens United ruling. But, says Jeff Milchen, co-founder of the American Independent Business Alliance, “When a government agency solicits bids for goods or services, it is inviting voluntary business contracts and transactions. The government already issues a wide range of standards for various contracts. It is entirely reasonable and defensible for a government agency to accept bids solely from companies that voluntarily decline to exercise the political power granted by the Court. For any court to interfere in purely voluntary business transactions would be judicial overreach in the extreme.”

“Our businesses strongly believe all political donations by contractors must be made transparent, but even better would be the complete restriction of those donations,” said David Levine, Executive Director of the American Sustainable Business Council. “A fair bidding process should be based on price, quality and other related criteria of products and services but not influenced by any hidden political donations.”

MSA, AMIBA, and ASBC outline the business case for moving forward with the order and advancing additional measures in letters to President Obama and to the chairs and ranking members of the House committees holding Thursday’s hearing. The letters read, in part:

Success in business should come from hard work, creativity and good customer service – not political influence. That’s true in any business, but especially where taxpayer dollars are involved. Thus, we support both strong disclosure measures and removing pay-to-play politics from the equation completely by setting new standards for prospective government contractors.

Allowing continued political spending by current and potential government contractors perpetuates both the perception and the real danger of corruption. Allowing that spending to continue in secret perpetuates “deniability” – giving a corporation the ability to advance its agenda without having to stand by its actions, instead funneling its political spending through third parties. “Deniability” is not a business value we share.

The groups' joint letter to President Obama is posted (pdf) here. Audio of our May 12 joint telephone press conference (also featuring two contractors) is available as an mp3 file (40 min). Frank Knapp (ASBC) begins at 1:45, Henry Passapera (contractor) at 5:15, Marybeth Gardam (contractor) at 9:20, Jeff Milchen (AMIBA) at 15:00, Media Q&A at 19:40).

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The American Independent Business Alliance (AMIBA) helps communities successfully implement programs to support community-based entrepreneurism, build local wealth and help independent businesses compete successfully against major corporations. Since 2001, AMIBA has helped more than 70 communities nationwide to launch Independent Business Alliances to achieve these goals, collectively representing nearly 20,000 businesses. www.AMIBA.net  

The American Sustainable Business Council (ASBC) is a growing coalition of business networks and businesses committed to advancing a new vision, framework and policies that support a vibrant, equitable and sustainable economy. Today, we represent over 100,000 businesses and more than 200,000 entrepreneurs, owners, executives, investors and business professionals and other individuals. www.ASBCouncil.org 

The Main Street Alliance (MSA) is a national network of state-based small business coalitions representing over 10,000 small businesses nationwide. MSA creates opportunities for small business owners to speak for themselves on issues that impact their businesses, their employees, and local economies. www.MainStreetAlliance.org