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Obama's Hypocrisy on Unions and Political Disclosure

The president's proposed executive order is a transparent attempt to help his own political allies.

2:46 PM, Apr 22, 2011 • By MARK HEMINGWAY
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A proposed draft of an executive order that would require disclosure of political contributions by federal contractors has been circulating in Washington, D.C.:

The White House is drafting new rules that would require companies making bids on government contracts to disclose their contributions to political candidates and organizations, including donations that otherwise would remain secret.

The White House casts the proposal as an effort to improve transparency and accountability, but Republicans charged that the rules would inject politics into what should be an unbiased procurement process.

White House Press Secretary Jay Carney said Wednesday that President Barack Obama "intends to pursue" the executive order, but said details have not yet been settled.

Mr. Carney told reporters that Mr. Obama "believes very strongly" that "taxpayers deserve to know" how contractors are spending taxpayer dollars. "His goal is transparency and accountability. That's the responsible thing to do when you're handling taxpayer dollars," he said.

But Senate Minority Leader Mitch McConnell (R., Ky.) called the rules "an effort to silence or intimidate political adversaries' speech through the government contracting system."

Whether this idea has any merit is certainly debatable, and Democrats and the White House have been scrambling to do something ever since the Supreme Court upended the campaign finance regulatory regime with the Citizens United decision.

On the surface, such disclosure would seem to discourage pay-to-play federal contracts. However, the White House is probably hoping that no one pays much attention to the underlying politics of the proposed executive order. That's because unions would be exempted from increased disclosure, and hampering corporate donations is really about preserving a structural fundraising advantage for Democrats.

If you care about the influence of money in politics, your first concern should probably be unions -- not corporations. That's because 12 of the 20 biggest political contributors over the last two decades have been unions; in last year's election the single biggest political donor was public-sector union AFSCME which spent $87.5 million and actually bragged about it to the Wall Street Journal; and unions collectively spent over $400 million during Obama's 2008 election. Nearly all of that money went to Democrats.

Democrats are keenly aware of this, which is why their last attempt at instituting new campaign finance rules, last year's failed DISCLOSE Act also created the same imbalance:

A Democratic amendment tucked into campaign finance legislation Wednesday night also drew fire from Republicans and their allies, who contend it gives special treatment to Democrat-allied labor unions. The language in question would exempt from disclosure requirements transfers of cash from dues-funded groups to their affiliates to pay for certain election ads. It was inserted into the bill by Rep. Robert Brady (D-Pa.), chairman of the House Administration Committee and a big union backer.

The DISCLOSE Act also had a similar rationale as the executive order but it went even further, barring companies that have more than $7 million in federal contracts from spending money to influence elections.

Either way, the Democrats' desire to crackdown on corporate donations while leaving unions untouched is especially troubling because union political influence is often in direct opposition to corporate interest. Just to cite on example, recently the National Labor Relations Board has come under fire for trying tell Boeing that they cannot set-up a manufatcuring facility in South Carolina, a right to work state, because they claim its tantamount retalition against the union in Washington state. This is patent nonsense.

Now the National Labor Relations Board has been controversial for much of the Obama administration. This is largely due to Obama's recess appointment of radical labor lawyer Craig Becker to the board -- after his nomination was rejected by a bipartisan vote in the Senate due to concerns about Becker's inability to be impartial. A former lawyer for both the AFL-CIO and the SEIU, Becker has controversially handed down at least 17 decisions in cases involving his former client, the SEIU. It's widely observed by the business community that Becker's pushing the board in a radical direction and that his unusual appointment was payback to organized labor for their generous support of Obama.

So even as unions are running roughshod in the federal government, if Obama's executive order were enacted that would make it much harder for companies such as Boeing to counter their obvious political influence. And since the draft of the executive order covers corporate officers, directors, affiliates and subsidiaries -- that would undoubtedly be used by unions and their friends in Congress to demagogue those running these companies by name. Knowing the way that unions play hardball, things would turn nasty and personal fast.

It's also hypocritical in the extreme that Obama would make such a big deal about alleged political corruption with regard to federal contractors while ignoring the role unions play in the awarding of federal contracts. As I noted in my cover story in the current WEEKLY STANDARD, one of Obama has previously signed an executive order stacking the deck on government contracts in favor of unions and Democrats also used the stimulus to line the pockets of unions with federal contracts:

One of Obama’s first official acts as president was a February 6, 2009, executive order that in effect mandates union labor on large federal contracts through “project labor agreements” (PLAs). According to a study by the Beacon Hill Institute, PLAs make construction projects cost an average of 12 percent to 18 percent more.

Just after the executive order on PLAs, the stimulus bill was passed, which contained $188 billion in federally overseen construction projects as well as a provision applying Davis-Bacon “prevailing wage” laws to stimulus projects. This further slanted the awarding of federal contracts to the 17 percent of the construction industry that is still unionized. Heritage Foundation labor expert James Sherk estimates that the Davis-Bacon requirement alone could inflate the cost of the stimulus by as much as $17 billion.

Perhaps there is an argument to be made for more campaign finance transparency. But that transparency must apply equally across the board. What Obama is proposing here is to codify a galling double standard.

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