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Legislative Options After Citizens United v. FEC: Constitutional and Legal Issues

expressly bar the use of contract or grant funds by private recipients for political or lobbying purposes, or the paying for or “charging off” of expenses for political advocacy or lobbying to any government contract or grant; and provide criminal penalties for the diversion of government funds to non-authorized purposes. Such limitations are less restrictive means of providing assurances concerning the proper use of government funds than a ban on all political speech by private recipients with their own resources. If the interest of the government is merely to avoid a direct subsidy for private political activities out of public monies, then a restriction in any proposed legislation which barred all privately funded advocacy by grant or contract recipients might arguably, in the first instance, be considered “over-inclusive” because it reaches activities, speech, and conduct paid for completely with private, non-federal monies, as well as privately- funded activities wholly outside of the realm of the federal program. As such, the restriction may arguably be found, with respect to otherwise protected First Amendment speech and conduct, to be unnecessarily over-broad and burdensome on such First Amendment rights. 129

A further interest of the government forwarded by legislation might also arguably be to prevent an “indirect” subsidy for groups which engage in political advocacy by providing such groups with federal funds for other non-advocacy activities, goods, or services which the government desires. The argument in such case would be that money is “fungible,” and thus grants and contracts for proper public purposes to private groups “frees up” other non-federal money which the private contractor or grantee may then use for any purposes, including campaign or public policy advocacy activities. The Supreme Court, however, in another context, has found that a grant for one purpose is not a subsidy of the other, non-federally funded activities, and expressly rejected the “fungibility” of funds argument as a justification to prohibit federal funding of an organization engaging in First Amendment activities. 130

Other Government Interests or Narrower Tailoring Sufficient to Justify Restrictions Involving Government Contractors131

While conditioning the political speech of all government contractors upon their forgoing their rights to political speech seems likely to raise significant First Amendment issues, as discussed in prior sections, it is possible that the government could assert hitherto unrecognized interests in such conditions, especially if any restrictions targeted specific categories of contractors.

Alleged government interests in preventing contractors from using the “wealth” generated by their dealings with the government to influence the political process,132 or in avoiding the appearance of corruption created when “contractors endorse their friends in power,”133 may be insufficient to support conditions affecting all government contractors in the aftermath of Citizens

129

See, e.g., FCC v. League of Women Voters, 468 U.S. at 399-401.

130 In Committee for Public Education and Religious Liberty v. Regan, 444 U.S. 646, 658 (1980), the Court specifically found that providing grant funds to a religious organization for one (secular) purpose, does not constitute a federal “subsidy” of the other, private, non-federally funded religious activities of the organization under the “fungibility” argument. See also Hunt v. McNair, 413 U.S. 734,743 (1973).

131 This portion of the report discussing other government interests or narrower tailoring was written by Kate M. Manuel.

132 See, e.g., Bruce Ackerman & Ian Ayres, Despite Court Ruling, Congress Can Still Limit Campaign Finance, Wash. Post, pg. A15 (noting that “almost three-quarters of the largest 100 publicly traded firms are federal contractors”).

133

Id.

Congressional Research Service

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