Influence of corporate campaign contributions in government contract award decisions

 
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In the wake of the 2010 Supreme Court decision “Citizens United v. Federal Elections Commission,” the level of corporate spending on federal elections has increased significantly. In making such donations, corporations are not selfless, of course — one goal is often to secure government contracts. Awarding contracts for political reasons can lead, obviously, to systemic corruption, and for taxpayers it can mean the inefficient allocation of public resources.

A 2011 study from St. Louis University published in the Journal of Public Administration Research and Theory, “Campaign Contributions, Access, and Government Contracting,” examined the success of corporations in securing government contracts through campaign donations.  The researcher conducts case studies of two instances of politically motivated contracts — one related to the Iraq war and the other with Hurricane Katrina — and analyzes data from 367 firms with corporate PACs active between 1979 and 2006 across a variety of industries.

Key findings from the study include:

  • For each additional $201,220 in campaign contributions, a firm could expect to receive an additional 107 contracts on average.  This increase translates into roughly $5,300,000 in additional revenues.
  • Campaign contributions, firm reputation, and past contracting relationships are all important factors influencing contract award decisions. Of these three, past relationships are the most important in this sample.
  • In the realm of defense contracting, there is no evidence that the process is overly politicized compared to non-defense contracting; in fact, the process may be less politicized and depend more strongly on the management of ongoing relationships.

The contractor-politician relationship is not generally a quid pro quo, but the access that contractors receive for their contributions can confer tangible benefits, the study’s author concludes: “In many ways, the results of this analysis confirm what many public administration scholars argue in studies of different aspects of public manager decision making—that managers balance political and technical considerations in an attempt to fashion programs that serve the public good.”

Tags: Congress, ethics, law, elections, campaign fundraising, corruption

Last updated: October 25, 2011

 

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