Federal contractors sidestep ban on giving to political committees

A longstanding ban on political spending by federal contractors has not stopped some from giving money to a “super PAC” backing Republican presidential candidate Mitt Romney, as The Times reported Monday, despite questions about the legality of such donations. Other federal contractors have found an easy way around the ban to support their favorite candidates.

Election law attorneys said that the Federal Election Commission has historically viewed companies and their subsidiaries as separate corporations, allowing the parent company of a federal contractor to donate to a super PAC.

“The FEC differentiates subsidiaries from parent corporations, so even if the FEC were to confirm that the government contract ban on expenditures applies to independent expenditures and to super PACs, there are other ways to get around such a ban,” said attorney Jan Baran, who heads the election law group at the firm Wiley Rein.

Read the Times’ earlier report on donations to super PAC donations to Romney

Two of the largest corporate donors to super PACs are connected to companies with federal contracts, a review of campaign finance data and federal contracting records shows.

Rooney Holdings, a privately held construction company in Oklahoma, made two donations totaling $1 million last year to Restore Our Future, the pro-Romney super PAC, while one of its subsidiaries was engaged in a $53 million project for the Department of Veteran Affairs.

Contran Corp., a holding company owned by Texas billionaire Harold Simmons, gave $1 million to Make Us Great Again, a super PAC backing Rick Perry, and $2 million to American Crossroads, a group that supports conservative Republican candidates. A company indirectly owned by Contran through Valhi Holdings, another holding company, was doing waste cleanup for the Environmental Protection Agency.

The companies did not respond to requests for comment.

California utility PG&E, which has received at least $255 million from federal agencies for electric and gas service, gave $10,000 in December through its corporate parent to Rebuilding America, a super PAC backing Democratic Rep. Howard Berman (D-Valley Village).

PG&E spokeswoman Lynsey Paulo said the donation was permissible because it came from a different company than the one with federal contracts.

A review of campaign finance records and government contracts found at least five companies with federal contracts giving to Restore Our Future, despite an FEC regulation banning such spending. But the rules regulating election spending have been thrown into disarray in the wake of the Supreme Court’s 2010 decision in the Citizens United case. The FEC, whose commissioners often deadlock along party lines, has been unable to finalize new rules.