President-elect Barack Obama has indicated that one of his highest priorities will be a large federal stimulus package. Informed observers are speculating that it will be roughly $1 trillion over two years, much of it dedicated to infrastructure - roads, bridges, public transit and power grids.
To get the most bang for our infrastructure buck, Obama must put in place pay-to-play reforms, severing the link between political contributions and the awarding of federal contracts.
Increased federal spending on infrastructure is likely to mean a dramatic increase in federal contracts, which already amount to more than $400 billion annually.
Unfortunately, political contributions often pervert the awarding and management of government contracts, resulting in higher costs to taxpayers, poor contractor performance, and fertile soil for corruption. Tellingly, one executive with a Homeland Security contractor recently told a trade magazine that beefing up a company's political action committee "is a logical step for a company that hopes to grow."
Government contractors contribute millions of dollars per campaign cycle in an effort to gain a bigger piece of a growing federal-contracting pie. About 40 percent of federal contracts, or $150 billion worth, are awarded without real competition, making them even more subject to influence through political contributions.
Recent growth in federal contracts has been driven largely by the war in Iraq and homeland-security efforts. And the House Committee on Oversight and Reform has identified billions of dollars in waste, fraud and abuse during this period of growth.
Now we are poised for the greatest increase in infrastructure spending since the building of the national highway system under President Dwight D. Eisenhower. This makes it all the more important to ensure that contracts are awarded on the basis of quality and cost-effectiveness - not campaign contributions.
That's why Obama should issue an executive order banning political contributions during the negotiation and performance of federal contracts. Since the awarding of federal contracts is mainly a function of the executive branch, Obama has the power to take this step. The next president must act to end "business as usual" in federal contracting and ensure that our tax dollars are no longer wasted. Federal legislation can follow.
There is precedent for this kind of executive order. The gold standard of pay-to-play reform was first adopted by executive order in New Jersey four years ago. Soon afterward, the Legislature made it state law.
The New Jersey order and the law that followed were based on a model drafted by the Citizens' Campaign Legal Task Force. They were narrowly tailored to regulate only those negotiating or performing government contracts - and therefore to pass constitutional muster.
The New Jersey model has effectively restricted political contributions by state contractors, restoring merit, integrity and cost-effectiveness to a broken state contracting system. Versions of this approach have been adopted in other states, including Connecticut, Ohio, Kentucky, South Carolina and West Virginia. The cities of New York and Philadelphia have adopted pay-to-play protections as well.
In an odd way, the well-publicized allegations against Illinois Gov. Rod R. Blagojevich underscore the effectiveness of this approach. The governor allegedly stepped up his attempts to trade state contracts for political contributions partly because he wanted to amass as much campaign cash as possible before Illinois' new pay-to-play reform was to take effect as of yesterday.
State contracts also would rise dramatically under Obama's proposed stimulus. After all, most road projects are awarded or distributed by state governments.
As such, a reform-minded executive order by the president-elect would not only help establish a new culture of pay-to-play-free federal contracting. It also could provide strong leverage and a prominent example for state and local governments, so that our stimulus dollars are not wasted on corrupt government contracting.