Watchdog Group Calls Chevron's $2.5m Super PAC Donation Illegal

A collection of government watchdog and environmental organizations has filed a complaint with the Federal Election Commission (FEC) against Chevron and the Congressional Leadership Fund, a super PAC to which Chevron donated $2.5 million during the 2012 campaign.

The complaint, filed by Public Citizen, Friends of the Earth U.S., Greenpeace and Oil Change International, alleges that Chevron violated a federal law that prohibits government contractors from making political contributions.  The complaint also urges the FEC to investigate whether the Congressional Leadership Fund broke the law by accepting the contribution even when it knew that Chevron was a federal contractor.

The provision in question is a section of the Federal Election Campaign Act which states:

 It shall be unlawful for any person who enters into any contract with the United States... to make any contribution of money or thing of value... to any political party, committee, or candidate for public office or to any person for any political purpose or use; or knowingly to solicit any such contribution from any such person for any such purpose during any such period.

The provision, also known as the "pay-to-play" prohibition, was initially enacted at the federal level in 1940. The ban was upheld as recently as Nov. 2, 2012, when the District Court for the District of Columbia ruled that the ban does not violate either the First or Fifth Amendments (although it is unclear whether the Supreme Court would now uphold the ban given its permissive attitude toward corporate political spending).

"The ‘pay-to play’ prohibition exists because of a long and seedy record of companies attempting to buy lucrative government business by filling the campaign coffers of politicians,” said Craig Holman, government affairs lobbyist for Public Citizen. “The same process also protects against officials extorting money from companies wishing to do business with the government."

Specifically, the complaint states that Chevron Products Company, a division of Chevron U.S.A., made a $2.5 million contribution to the Congressional Leadership Fund on October 7, 2012. The complaint further alleges that Chevron U.S.A. has received hundreds of contracts valued in excess of $1.4 billion since the year 2000.

Chevron's donation accounted for 22 percent of the $11.3 million in contributions the Congressional Leadership Fund received for the 2012 elections. The super PAC spent more than $9.4 million on negative attack ads against over a dozen Democratic House candidates.

"The sheer size of the donation raises questions whether the Congressional Leadership Fund solicited the support from Chevron or, at the very least, raises questions why the Congressional Leadership Fund did not check to see if Chevron is a government contractor and return the donation in compliance with the law as required and noted on the Fund’s own web site," states the complaint.

Both Chevron and the Congressional Leadership Fund strongly rejected the complaint's allegations. Dan Conston, the so-called "wunderkind spinner" who leads the Congressional Leadership Fund's communications efforts, dismissed the complaint out of hand.

"This is an obvious coordinated intimidation tactic from the left masquerading as just one more utterly baseless complaint," Conston told TriplePundit in an email.

Lloyd Avram, a Chevron spokesman, said that the company "does not believe that the federal government contractor ban applies to this specific contribution" because Chevron’s subsidiaries hold the government contracts while Chevron Corporation made the contribution.

"The Corporation does not conduct business with the federal government," Avram told TriplePundit in an email. "Any such federal contracts are held by Chevron subsidiaries."

Indeed, a search of USASpending.gov, a database the keeps detailed records of all government contracts, shows that Chevron Corporation held no government contracts in fiscal year 2012. In 2011, the company held two contracts with the Department of Defense, although records indicate that the company received no payment.

But Public Citizen said that the FEC database makes it appear that Chevron Products Company, not Chevron Corporation, made the donation.

"Based on the address indicated in the FEC’s database, it appeared that Chevron Products Company, which is at that address, was the donor," said Public Citizen in a statement. "Chevron Products Company is a name under which Chevron USA, Inc., which has a great many contracts, does business, not a separate company."

According to an investigation by the Huffington Post, however, the address in question is also used by Chevron Corporation and a number of other Chevron-related organizations.

Regardless of who made the donation – Chevron Corporation or its subsidiaries – some question whether the distinction even matters, given that Chevron Corporation obviously derives financial benefit from its subsidiaries' lucrative government contracts.

"Chevron’s multimillion dollar contribution to the super PAC run on behalf of the National Republican Congressional Committee and House Speaker John Boehner is classic ‘pay-to-play’ abuse at its worst,” said Stephen Kretzmann, executive director of Oil Change International. "That money buys them government contracts and House leadership that reliably backs Big Oil’s agenda including preserving subsidies and gutting regulations."

"It’s a bargain for Chevron, and the American people have to pay."

[Image credit: ford8n, Flickr]