[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]






  POLITICIZING PROCUREMENT: WILL PRESIDENT OBAMA'S PROPOSAL CURB FREE 
                    SPEECH AND HURT SMALL BUSINESS?

=======================================================================

                             JOINT HEARING

                               before the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                                and the

                      COMMITTEE ON SMALL BUSINESS

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 12, 2011

                               __________

                           Serial No. 112-47

                               __________

   Printed for the use of the Committees on Oversight and Government 
                       Reform and Small Business








         Available via the World Wide Web: http://www.fdsys.gov
                      http://www.house.gov/reform



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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director
                      COMMITTEE ON SMALL BUSINESS

                     SAM GRAVES, Missouri, chairman
ROSCOE G. BARTLETT, Maryland         NYDIA VELAZQUEZ, New York, Ranking 
STEVE CHABOT, Ohio                       Member
STEVE KING, Iowa                     KURT SCHRADER, Oregon
MIKE COFFMAN, Colorado               MARK S. CRITZ, Pennsylvania
MICK MULVANEY, South Carolina        JASON ALTMIRE, Pennsylvania
SCOTT R. TIPTON, Colorado            YVETTE D. CLARKE, New York
JEFFREY M. LANDRY, Louisiana         JUDY CHU, California
JAIME HERRERA BEUTLER, Washington    DAVID N. CICILLINE, Rhode Island
ALLEN B. WEST, Florida               CEDRIC L. RICHMOND, Louisiana
RENEE L. ELLMERS, North Carolina     GARY C. PETERS, Michigan
JOE WALSH, Illinois                  WILLIAM L. OWENS, New York
LOU BARLETTA, Pennsylvania           WILLIAM R. KEATING, Massachusetts
RICHARD L. HANNA, New York           JANICE HAHN, California
ROBERT T. SCHILLING, Illinois

                      Lori Salley, Staff Director
                    Paul Sass, deputy Staff Director
                      Barry Pineles, Chief Counsel
                  Michael Day, Minority Staff Director










                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 12, 2011.....................................     1
Statement of:
    Chvotkin, Alan, senior vice president, Professional Services 
      Council; Mark Renaud, partner, Wiley Rein LLP; M.L. Mackey, 
      CEO, Beacon Interactive Systems; Lawrie Hollingsworth, 
      president, Asset Recovery Technologies, Inc.; Marion 
      Blakey, president and CEO, Aerospace Industries 
      Association; and Brad Smith, professor, Capital University 
      Law School.................................................   135
        Blakey, Marion...........................................   173
        Chvotkin, Alan...........................................   135
        Hollingsworth, Lawrie....................................   169
        Mackey, M.L..............................................   165
        Renaud, Mark.............................................   145
        Smith, Brad..............................................   178
    Gordon, Daniel, Administrator for Office of Federal 
      Procurement Policy, Office of Management and Budget........    99
Letters, statements, etc., submitted for the record by:
    Blakey, Marion, president and CEO, Aerospace Industries 
      Association, prepared statement of.........................   175
    Chvotkin, Alan, senior vice president, Professional Services 
      Council, prepared statement of.............................   138
    Cummings, Hon. Elijah E., a Representative in Congress from 
      the State of Maryland, prepared statement of...............     8
    Gordon, Daniel, Administrator for Office of Federal 
      Procurement Policy, Office of Management and Budget, 
      prepared statement of......................................   102
    Gosar, Hon. Paul A., a Representative in Congress from the 
      State of Arizona, prepared statement of....................    70
    Hollingsworth, Lawrie, president, Asset Recovery 
      Technologies, Inc., prepared statement of..................   171
    Issa, Hon. Darrell E., a Representative in Congress from the 
      State of California:
        Letter dated May 12, 2011................................    35
        Prepared statement of....................................     4
    Mackey, M.L., CEO, Beacon Interactive Systems, prepared 
      statement of...............................................   167
    Renaud, Mark, partner, Wiley Rein LLP; M.L. Mackey, CEO, 
      Beacon Interactive Systems, prepared statement of..........   147
    Smith, Brad, professor, Capital University Law School, 
      prepared statement of......................................   180

 
  POLITICIZING PROCUREMENT: WILL PRESIDENT OBAMA'S PROPOSAL CURB FREE 
                    SPEECH AND HURT SMALL BUSINESS?

                              ----------                              


                         THURSDAY, MAY 12, 2011

        House of Representatives, Committee on Oversight 
            and Government Reform, joint with the Committee 
            on Small Business,
                                                    Washington, DC.
    The committees met, pursuant to notice, at 2:40 p.m., in 
room 2154, Rayburn House Office Building, Hon. Darrell E. Issa 
(chairman of the Committee on Oversight and Government Reform) 
presiding.
    Present from the Committee on Oversight and Government 
Reform: Representatives Issa, McHenry, Jordan, Walberg, 
Lankford, Amash, Buerkle, Gosar, Labrador, DesJarlais, Gowdy, 
Guinto, Farenthold, Kelly, Cummings, Kucinich, Connolly, 
Quigley, Braley, Welch, and Murphy.
    Present from the Committee on Small Business: 
Representatives Graves, Chabot, Mulvaney, West, Ellmers, Hanna, 
and Velazquez.
    Staff present from the Committee on Oversight and 
Government Reform: Richard A. Beutel, senior counsel; Robert 
Borden, general counsel; Will L. Boyington and Drew Colliatie, 
staff assistants; Molly Boyl, parliamentarian; Lawrence J. 
Brady, staff director; Benjamin Stroud Cole, policy advisor and 
investigative analyst; John Cuaderes, deputy staff director; 
Gwen D'Luzansky, assistant clerk; Adam P. Fromm, director of 
Member liaison and floor operations; Linda Good, chief clerk; 
Frederick Hill, director of communications and senior policy 
advisor; Christopher Hixon, deputy chief counsel, oversight; 
Justin LoFranco, press assistant; Mark D. Marin, senior 
professional staff member; Laura L. Rush, deputy chief clerk; 
Jeff Solsby, senior communications director; Becca Watkins, 
deputy press secretary; Daniel Epstein, professional staff 
member; Kevin Corbin, minority staff assistant; Ashley Etienne, 
minority director of communications; Jennifer Hoffman, minority 
press secretary; Carla Hultberg, minority chief clerk; Lucinda 
Lessley, minority policy director; Adam Miles and Any Miller, 
minority professional staff members; Dave Rapallo, minority 
staff director; and Mark Stephenson, minority senior policy 
advisor/legislative director.
    Chairman Issa. Since we have a quorum for a hearing, I am 
going to go forward. We won't go past the first opening 
statement until or unless the--one of the ranking members 
arrives. Today we have a joint hearing on the politicizing 
procurement: Will President Obama's proposal curb free speech 
and hurt small business?
    The Oversight Committee's mission statement is we exist to 
secure two fundamental principles. First, Americans have a 
right to know that the money Washington takes from them is well 
spent. And second, Americans deserve an efficient, effective 
government that works for them.
    Our duty on the Oversight and Government Reform Committee 
is to protect these rights. Our solemn responsibility is to 
hold government accountable to taxpayers, because taxpayers 
have a right to know what they get from their government. We 
will work tirelessly in partnership with citizen watchdogs to 
deliver the facts to the American people and bring genuine 
reform to the Federal bureaucracy.
    Today's hearing is about the Federal Government and its 
honest contracting proposals. I am glad to see that the 
administration has agreed to testify before this joint hearing. 
There are many questions to be answered, and I have been 
concerned about the indifference, and perhaps disdain, of the 
administration as shown at times toward congressional 
oversight.
    There is clear concern about a now well-circulated 
Executive order that may have a chilling effect on political 
participation, free speech, based on partisan issues. The 
American people have a right to know what the government is 
doing and to impact, through this Congress, proposed rules, 
regulations, and statutes in this country.
    There is now bipartisan and bicameral alarm on Capitol Hill 
regarding the proposed Executive order and its potential 
effects on politics in procurement.
    The concern about injecting politics into procurement is 
not new. It is not a Republican concern. It is not a Democratic 
concern. The acquisition and procurement laws and regulations 
are designed to preserve impartiality. We hold our very 
dedicated contractors to a high standard of seeking to get a 
level playing field, maintained fairness, and in fact obtain 
goods and services from the best sources on a decision made on 
price and quality.
    To protect the interest of U.S. taxpayers, contracts must 
be awarded on the merits of the proposed bid and not on 
political affiliations or political donations of the 
prospective contractors. Yet, under the President's proposed 
Executive order, contractors would be required to disclose 
information about political contributions of some employees, 
and the information would be readily available to political 
appointees who are intimately involved in the decisions to 
award contracts. The risk that politics could play a role in 
the outcome of contracting and award decisions is too high.
    I believe the United States has some of the finest public 
servants in the Federal contracting officers. Day after day, 
they do the hard work of examining proposed bids, crunching the 
numbers, always seeking to get the best for the U.S. taxpayer. 
Notwithstanding an attempt to always do an analytical 
assessment, we will always have some contracts that are awarded 
on a no-bid or cost-plus basis. Particularly in these 
contracts, there is a high risk that the whim of a political 
appointee could in fact be swayed one way or the other based on 
a public record of contributions.
    During the Bush administration, when my friends on the 
other side of the aisle were in the majority, the committee 
spared no expense to hurl accusations of political bias in 
contracting process, and in the process the names and 
reputations of some very good people were smeared. This 
committee is not going to take that approach, precisely because 
we want to protect procurement officers and contractors alike 
from the charge of political bias when we have this and other 
hearings. Meanwhile, I believe it is telling that the 
President's proposal says nothing about requiring similar 
disclosures from labor unions and liberal advocacy groups.
    Is the President not concerned about transparency on 
grantees, many of them trade unions, trade unions themselves or 
other groups that serve the country but do not fall under the 
general umbrella of Corporate America?
    Nevertheless, we are here to examine what effects this 
proposed order will have on the contracting community. We must 
determine the cost both to contractors and the U.S. taxpayers 
if this proposal or one similar goes into effect.
    We must consider the efficiency of such a requirement. Will 
the President's political disclosure rule serve to delay the 
delivery of goods and services to the Federal Government? We 
have to ask if it is appropriate for government to require 
businesses to ask for information from employees that may be 
deeply personal and potentially detrimental to their career. 
Imagine your employer demanding to know, have you made 
donations to an organization that supports or opposes abortion? 
Do you have or have you given money to a group that advocates 
gay rights--gay and lesbian rights, or those that may have a 
religious objection? Can you imagine the effect of having to 
disclose that and then questioning whether your career is in 
jeopardy.
    Further, you could ask, are you supporting organizations 
that seek to expand union representatives of workers or seek to 
implement rights related to work laws.
    And finally, we must consider the constitutionality of this 
proposal. In fact, it appears that the order currently is not 
narrowly tailored to a compelling government interest. Although 
we will not ask questions as to deliberative process here 
today, we do feel that, as drafted, it is legitimate to ask 
what the effects might be on Federal work force, on employees 
that would be covered under this, and ultimately whether or 
not, constitutionally, this is ground we should go into.
    And with that, I recognize the distinguished ranking member 
for his opening statement, Mr. Cummings.
    [The prepared statement of Hon. Darrell E. Issa follows:]



    
    Mr. Cummings. Thank you very much, Mr. Chairman.
    The Committee on Oversight and Government Reform is 
supposed to enhance transparency and shine light on waste, 
fraud, and abuse. I have been a member of this committee for 15 
years and I never thought I would see the day when our 
committee would view transparency as the enemy.
    The draft Executive order being developed by the 
administration would require Federal contractors to disclose 
more information about their political contributions than they 
currently provide, particularly those given to a third-party 
entity.
    Chairman Issa said this week that he opposes this effort 
because additional information could be used nefariously to 
create, ``a Nixonian-type enemy list.'' In other words, 
companies should not disclose more information, because people 
in power could misuse the information to retaliate against 
them.
    I have a fundamental problem with this premise. Under this 
logic, all campaign disclosures would be bad, not just new 
ones. Government contractors already disclose contributions and 
expenditures by their PACs and those who contribute to them. 
Contributions by the officers and directors of government 
contractors are also required to be disclosed. Should we 
eliminate those provisions, too? Of course not.
    A second argument made by the opponents is that contracting 
officers might review political contributions in order to 
reward allies or punish foes by awarding or withholding 
government contracts. Again, this can happen now under current 
law, under current disclosure rules, but Federal procurement 
laws prohibit it.
    The draft Executive order also reiterates that, ``every 
stage of the contracting process,'' must be free from the undue 
influence of factors extraneous to the underlying merits of 
contracting decisionmaking such as political activity or 
political favoritism.
    A third argument that the draft Executive order violates 
the First Amendment is also misplaced. Even in the recent 
Citizens United case, eight of nine justices agreed that 
campaign disclosure rules are consistent with the First 
Amendment because they do not prohibit contributions and do not 
prevent anyone from speaking.
    For all of these reasons, a broad coalition of dozens of 
open government groups and other organizations strongly 
supports the administration's draft Executive order. More than 
30 groups, including nonpartisan, nonprofit organizations like 
Democracy 21, the Project on Government Oversight, Public 
Citizens, and many others have concluded that the draft 
Executive order would enhance transparency and decrease 
corruption.
    Unfortunately, we will not be hearing from these groups 
today because Chairman Issa refused my request to invite Fred 
Wertheimer, the president of Democracy 21, to testify on behalf 
of this coalition.
    Although I was encouraged when Chairman Graves agreed to to 
request from his ranking member, Ms. Velazquez, to invite a 
small business owner to today's joint hearing, Chairman Issa 
chose not to follow this example.
    These are not the only groups that support the draft 
Executive order. On Tuesday, a coalition of institutional 
investors and investor coalitions, collectively managing more 
than $130 billion, also wrote to express their support. In 
their letter they explained that corporate political activity 
presents significant risk to shareholder value, and 
transparency allows investors to put together a more complete 
picture of the various risks to our investments.
    For these reasons, I ask unanimous consent to place the 
following documents into the official record of today's 
hearing.
    First, I would like to submit the testimony that Mr. 
Wertheimer prepared for today's hearing but was not allowed to 
deliver.
    Second, I would like to submit a letter written on May 4th 
by more than 30 open government organizations and others 
expressing their, ``strong support,'' for the Executive order 
and its transparency goals.
    And third, I would like to submit a letter written on May 
10th from the Coalition of Institutional Investors who support 
the draft Executive order to protect the interest of corporate 
shareholders.
    And I would ask that they be admitted into the record, Mr. 
Chairman.
    Chairman Issa. Without objection so ordered.
    [The prepared statement of Hon. Elijah E. Cummings 
follows:]




    Mr. Cummings. Thank you very much and with that I yield 
back.
    Chairman Issa. I thank the gentleman. And we now recognize 
the chairman of the Committee on Small Business, Mr. Graves.
    Chairman Graves. Good afternoon. I want to thank Chairman 
Issa for working with me on this joint hearing and look forward 
to hearing all of our witnesses today and their testimony.
    All Americans should be concerned by a policy that directly 
and purposefully injects political giving into the contracting 
process, the integrity of which every single person here has 
worked so hard to maintain. Ensuring that contracts are awarded 
based on the merits to be offered, free of political and other 
inappropriate bias, is a fundamental responsibility of the 
procurement system of committees and Congress.
    As chairman of the Small Business Committee, I would like 
to address the impact of this proposal to small businesses. 
Small businesses play a vital role in the U.S. economy in 
general and in the government contracting process in 
particular. There are over 360,000 small businesses seeking to 
do business with the Federal Government. Small businesses 
received over a $100 billion in Federal contracts in fiscal 
year 2010. That is over 20 percent of all Federal contracts. 
Previous statements from the President have recognized that 
small businesses have the capability, the flexibility, and 
innovation needed by Federal agencies, and that small business 
participation keeps Federal contracting costs down.
    Why then has he not publicly rejected an Executive order 
that will force small businesses out of this market where they 
are clearly needed?
    Make no mistake, the compliance burden of this Executive 
order will force small businesses out of the market and keep 
them from entering, since small business--some small businesses 
will be ill-prepared to comply with the proposed Executive 
orders, recordkeeping requirements, reporting regimes, 
potential criminal liability.
    Small businesses already bear a disproportionate share of 
the regulatory burdens. Businesses with fewer than 20 employees 
annually spend 45 percent more per employee in larger firms to 
comply with the Federal regulations. Given that small 
businesses create 64 percent of net new jobs, I want these 
businesses growing, not stifled by unnecessarily duplicative 
and punitive regulations.
    Any small business brave enough to face the compliance 
burden of the Executive order will need to worry about their 
contributions being used against them by competitors alleging 
the improper disclosure by politically motivated appointees, 
which will again deter small business participation.
    Contracting officers under pressure from political 
appointees may choose not to award any contract to small 
businesses who may have been unable to donate to a political 
entity, but who nonetheless may have the appropriate winner.
    Even if this hypothetical never materializes, the fear of 
improper scheming will remain and will have a chilling effect 
on small businesses and their willingness to compete in the 
Federal marketplace.
    The Obama administration is already failing to meet the 
congressionally mandated small business goals, and the 
President should be focused on bringing small businesses into 
the Federal marketplace. Instead, this proposed Executive order 
will drive small businesses away. While this would be harmful 
at any time, it is especially ill-conceived now when our 
economy needs vibrant, small business participation at every 
level. And I hope this hearing is going to convince the 
President to disavow this proposal.
    You know, the way I see it, this is a very simple argument 
and has already been pointed out. After the fact, after the 
contract has been awarded, anybody can find out which small 
businesses gave to whom, and that process is completely open. 
But doing this ahead of the fact, doing this ahead of the 
contract award and having that information out there, can serve 
no other purpose than to be politically motivated or 
politically charged or preventing somebody from getting a 
contract just based on who they are giving to and why they are 
giving it.
    I think it is a very simple argument. Again, I want to 
thank all of our witnesses for their participation and the 
Government and Oversight Committee for hosting the hearing 
today. I thank the chairman.
    Chairman Issa. I thank the chairman.
    We now recognize the ranking member of the Small Business 
Committee, the gentlelady from New York, Ms. Velazquez, for her 
opening statement.
    Ms. Velazquez. Thank you, Chairman Graves and Chairman 
Issa.
    Contracting with the Federal Government represents an 
unparalleled opportunity for small businesses. In fact, the 
Federal Government is the world's largest purchaser of goods 
and services. For many of this, government contracts provides 
reliable, sustainable growth. Last year alone, Federal 
contracting accounted for $540 billion in taxpayers' dollars 
and small businesses received over $100 billion of those funds.
    Given the importance and enormity of the fairer procurement 
process, the American taxpayer deserves to know that when 
contracts are awarded, it is on the merits, not because of 
political contributions. While contracts should be awarded 
without such interference, recent court rulings on political 
spending and current campaign finance laws making their 
validity of the procurement process to remain insulated from 
improper political influence.
    Under the current campaign finance system, much of the 
contractors' political spending may be undisclosed and unknown 
to the public. And because of the Supreme Court's recent 
ruling, big corporations can now contribute unlimited sums to 
influence Federal campaigns. These undisclosed sums have great 
potential to improperly influence Federal procurement and 
disadvantage persons that play by the rules.
    In 2010, there was nearly $300 million in spending on 
elections by organizations not directly affiliated with 
political campaigns. Nearly 50 percent of that total was spent 
by organizations that did not disclose their donors. This type 
of spending is increasing rapidly, outpacing spending by 
political parties on congressional campaigns by nearly $100 
million in 2010.
    As undisclosed spending increases, so does the potential 
for improper influence in fair procurements. The Obama 
administration draft Executive order increases taxpayer 
transparency regarding fairer contracts and levels the playing 
field by publicly disclosing campaign contributions. Yet while 
it is important to reform the system to prevent potential 
improper influence and to engender public trust, it is 
paramount that small business concerns be put first. This is 
particularly important because small businesses are at the 
forefront of the economic recovery, generating nearly two out 
of every three new jobs.
    Historically, small businesses have faced many challenges 
in entering the Federal marketplace. Therefore, as we look to 
work to level the playing field for businesses, we must also 
work carefully to minimize the burden of disclosure 
requirements on small businesses. There are a number of 
sensible policy options to reduce the burden of disclosure on 
small businesses. To this end, as the administration's 
rulemaking moves forward, this committee will be certain to 
carefully review and comment on this process so that 
commonsense disclosure requirements are adopted and burden is 
minimized.
    In closing, companies that do business with the government, 
and thus with taxpayers, should be transparent in their 
political giving. However, as we seek to increase 
accountability in the Federal marketplace, the needs of small 
businesses must be a priority and we must take great care not 
to discourage their participation in small businesses.
    I look forward to today's testimony and thank the witnesses 
for their participation.
    I yield back.
    Chairman Issa. I thank the gentlelady.
    Without objection, I would like to submit for the record a 
letter signed by Senators McCaskill and Lieberman, expressing 
concern about this Executive order; comments made to the 
Associated Press by Minority Whip Steny Hoyer expressing his 
concerns; comments made by Mr. Connolly of this committee 
reported in the Washington Post.
    Additionally, I would like to submit the following 
statements for the record: a statement from the chair of the 
Federal Election Commission; a statement from the vice chair of 
the Federal Election Commission; a statement from the president 
of the Business Coalition for Fair Competition; a statement of 
Paul Miller on behalf of the Virginia Small Business 
Partnership; and a statement by Joel Gora, professor at 
Brooklyn Law School.
    Without objection, so ordered.
    [The information referred to follows:]



    
    Chairman Issa. All Members may have 7 legislative days 
within which to insert opening statements and insert extraneous 
material in the record.
    [The prepared statement of Hon. Paul A. Gosar follows:]



    
    Chairman Issa. The chair would now like to recognize our 
first panel witness. The Honorable Dan Gordon is the 
Administrator for Federal procurement policy.
    Mr. Gordon, pursuant to committee rules all witnesses will 
be sworn. Would you please rise and take the oath?
    [Witness sworn.]
    Chairman Issa. Let the record indicate the witness answered 
in the affirmative. Please be seated.
    It is customary, as you know, to have a 5-minute opening 
statement. Your entire opening statement will be placed in the 
record. If you go past the 5 minutes, we're not going to cut 
you off, but please feel free to go off message at the greatest 
amount--or on message, but off of your opening statement, and 
then we will round of questions. Thank you.
    Mr. Gordon.

STATEMENT OF DANIEL GORDON, ADMINISTRATOR FOR OFFICE OF FEDERAL 
      PROCUREMENT POLICY, OFFICE OF MANAGEMENT AND BUDGET

    Mr. Gordon. Thank you Mr. Chairman. I'll try not to go off 
message.
    Chairman Issa. Actually, that was a Freudian slip, I am 
sure.
    Mr. Gordon. Chairman Issa, Chairman Graves, Ranking Member 
Cummings, Ranking Member Velazquez, I appreciate the 
opportunity to appear before you and all of the members of the 
committee this afternoon. As the administrator for Federal 
procurement policy, I am responsible for overseeing the 
development of governmentwide acquisition policies and 
regulations and ensuring that they promote economy, efficiency, 
and effectiveness and the increased participation of small 
businesses in our Federal marketplace.
    As you know, our President has made contracting reform a 
top priority, and he has called on agencies to expand 
opportunities for our small businesses. I am pleased to say 
that we are making progress on both fronts although, as we say 
in my former employer, GAO, much work remains to be done.
    I understand that the committee had requested testimony 
from OMB about a draft Executive order regarding disclosure of 
political contributions by Federal contractors. As you know, no 
such Executive order has been issued and it would be 
inappropriate for me or for any executive branch official to 
testify about matters that are still undergoing comment and 
review and do not yet reflect final administration policy.
    As a result, I appreciate the committees' recognition that 
my testimony today will be limited to addressing our efforts to 
enhance integrity, efficiency, and transparency in Federal 
procurement and will not address the draft Executive order.
    That said, I can unequivocally state that this 
administration has always been and remains fully committed, 100 
percent committed, to a merit-based contracting process that 
meets the highest standards of integrity and transparency. 
There simply is no place for politics in Federal acquisition. 
Accordingly, our process must ensure, and the public must have 
confidence that it ensures, that no political considerations 
are allowed to bear on Federal contracting decisions at any 
point during the acquisition process.
    In that regard, one of the bedrock principles in the 
evaluation of proposals and the award of contracts in our 
Federal procurement system is that agencies may consider only 
the factors that are set out in the solicitation. Nothing more, 
nothing less.
    If a company that competes for a contract unsuccessfully 
believes that it lost because the agency has taken into account 
some factor that is not set out in the solicitation, it has 
available an established accountability mechanism, the bid 
protest process.
    I had the honor, as some of you know, of working at GAO for 
17 years, most of that time in the bid protest process. It is a 
process I am intimately familiar with, and I can tell you that 
it works well in providing disappointed bidders with an 
opportunity to get independent review if they believe that the 
award of a contract has been tainted by an improper factor or 
any other factor not set out in a solicitation.
    With respect to improving efficiency in our system, we are 
strengthening tools to increase competition, to decrease the 
use of sole-source or no-bid contracts. And I am pleased to 
tell you that many of the successes we have had in that regard 
in increasing competition have rebounded to the benefit of 
small businesses. We are working to help small businesses more 
easily navigate the Federal market space to find business 
opportunities.
    For example, earlier this spring, the General Services 
Administration [GSA], unveiled a new Web-based tool that now 
allows small businesses to access from one Web site all 
information about agency outreach, business development 
opportunities, and training events across the entire Federal 
Government.
    With respect to transparency, a very high priority for this 
administration, we are shining a brighter light and a stronger 
light on our acquisition processes to help protect the public 
from wasteful spending practices and inspire public confidence 
in the integrity of the contracting process. We have 
significantly improved the content and the functionality of USA 
Spending dot-gov, which is a one-stop source for information on 
Federal contract spending, so that the public will have 
unprecedented access to information about how their tax dollars 
are being spent.
    In addition, spending data on subcontracts is now posted on 
that site so that taxpayers can see how much work is 
subcontracted, and to whom, and for what purpose. In addition, 
the public now has access to salary information for the top 
executives of many of our Federal prime contractors and 
subcontractors.
    And finally, let me say a few words about the Federal 
acquisition work force mentioned by several of the opening 
speakers, a very important factor for me personally. The 
Federal acquisition work force is our most important resource, 
and it is the key to preserving the integrity of the 
acquisition process. This administration has taken unparalleled 
steps to increase the capability and the capacity of the 
acquisition work force, as evidenced by the President's budget 
request for both fiscal year 2011 and 2012, and it has been and 
it remains my top priority to make sure that the good women and 
men of our acquisition work force have access to the training 
and to the development opportunities that they need, to be the 
best possible stewards of our Federal taxpayer dollars. Their 
professionalism is one of our greatest assets, and among my 
core responsibilities as Administrator is to be their champion.
    Finally, let me reiterate this administration's unwavering 
commitment to protecting the integrity of the Federal 
contracting process and ensuring that our taxpayer dollars 
continue to be spent appropriately and that taxpayers see that 
they can have confidence in our procurement system.
    There is much left to be done. And we welcome the 
opportunity to work with both of these committees and with 
other Members of Congress to make meaningful and sustained 
improvements to our procurement system, to ensure that it 
remains merit-based and meets the highest standards of 
integrity, efficiency, and transparency.
    This concludes my prepared remarks, and I am happy to 
answer questions from either of the committees.
    Chairman Issa. Thank you.
    [The prepared statement of Mr. Gordon follows:]



    Chairman Issa. Could we go ahead and run that quick video 
to set the theme for questioning?
    [Video shown.]
    Chairman Issa. The chair now recognizes himself for 5 
minutes.
    You undoubtedly saw that clip when it was fresher, I 
suspect. It is clear that the President believes that the 
unlimited right of free speech is not appropriately decided. He 
made that clear.
    Do you believe that free speech is in fact a right that 
relies to a certain extent on privacy of how money is spent?
    Mr. Gordon. Mr. Chairman, I am going to get a bit out of my 
depth when I go beyond the procurement system.
    Chairman Issa. Let's put it another way. Do you believe the 
government has a legitimate right to know whether I gave to the 
pro-life movement, whether I gave to United Gays and Lesbians, 
or whether I gave to the Democratic Party, if I am a vendor of 
the government submitting a bid?
    Mr. Gordon. I don't feel comfortable addressing the issue 
of campaign--of campaign finance disclosure.
    Chairman Issa. It is not campaign finance disclosure. It is 
political activity, not currently covered by the disclosure, 
which ultimately we are not going to be endlessly asking you 
questions about the specifics of that. But the broad question 
is, do you believe that is necessary information in order for a 
nonpartisan or a partisan appointee to participate fairly in 
the procurement?
    In your opening statement you made it very clear. You said 
it is supposed to be only in the structured requirement. Have 
you ever sent one out? Have you ever sent out a bid request 
that asked how much you gave to United Gay and Lesbian 
organizations or to the National Right to Life or any of these? 
Has that ever been part of the procurement process?
    Mr. Gordon. No, sir. I would not expect that to be an 
evaluation criterion at any point in the future, just as it has 
not been in the past.
    Chairman Issa. So if I read you correctly--and I want to be 
very careful--you don't see that as necessary information in 
the procurement process?
    Mr. Gordon. In the selection of a contractor, a contractor 
can only be selected based on the factors that are set out in 
the solicitation. If the question is would the public like to 
know what contributions are made, that is separate from the 
procurement process itself.
    Chairman Issa. OK. So in looking at the draft Executive 
order, we found that it would be a requirement in order to 
participate in the contracting process.
    Do you believe--not talking to the Executive order--but do 
you believe that we have a right to ask for information 
completely unrelated to the fitness of a vendor in order to 
give information to the public that would not otherwise be 
available, simply because somebody wants to be a vendor to the 
government?
    Mr. Gordon. There are many sorts of information that we 
require vendors to submit; information about lobbying, for 
example. It is not taken into account in the selection of 
contractors. But it is required to be submitted and it is 
publicly available. There are other examples I could give you 
of information that we believe the public should have access 
to, even though they are not taken into account in the award of 
a contract.
    Chairman Issa. So where is the constitutional charge of the 
President, without an act of Congress, to in fact require 
private citizens to turn over information in order to enter 
into the flow of commerce? I don't want to know about historic 
things that nobody argued about. We're now talking about 
Chicago hardball politics that clearly could lead to a chilling 
effect on contributions by those required to participate. 
Clearly, unions are exempt from this draft order, while 
corporations generally are not and their key employees. Where 
is the authority, in your opinion, or the need? You've already 
said there isn't a need. Where is the authority, in your 
opinion?
    Mr. Gordon. Mr. Chairman, you won't be surprised to hear 
that I am not a constitutional lawyer, and I won't be citing to 
the Constitution.
    Chairman Issa. So you head up the procurement. You are the 
responsible party at OMB. You see no need. So therefore if this 
Executive order, or one substantially similar, were to happen, 
it would not be based on need. It would probably be based on 
the President's statement at the State of the Union and his 
opinion that follows that, obviously?
    Mr. Gordon. I don't understand your reference to ``need.'' 
Let me be clear. What I was saying was in the selection of the 
contractor, the winning competitor for the contract, the 
information about political contributions is not needed.
    Chairman Issa. OK. So the Executive order, as we read it, 
is asking for information that is not needed.
    Mr. Gordon. To decide which company should receive a 
contract; that is correct.
    Chairman Issa. That's OK. So you're asking for unneeded 
information.
    Do you believe that people may choose not to make 
contributions if they are forced to make, for example, known 
that they gave to Planned Parenthood or National Right to Life?
    Mr. Gordon. Sir, you're outside the area where I feel 
comfortable expressing an opinion.
    Chairman Issa. I think it is very clear this Executive 
order is outside the procurement process.
    With that, I recognize the ranking member for his 
questions.
    Mr. Cummings. Thank you very much. Mr. Gordon, I would 
thank you for being here. And I want to help answer the 
question that the chairman just asked.
    He asked about full disclosure and whether that is 
appropriate. And let me just read this quote--and listen 
carefully. ``I think what we ought to do is we ought to have 
full disclosure, full disclosure of all of the money that we 
raise and how it is spent. And I think that sunlight is the 
best disinfectant.'' And that was said by Speaker Boehner.
    By the way, before he became Speaker, on Meet the Press 
back on February 11, 2007. So I just wanted to help answer the 
question. The Speaker clearly was of the opinion back then and 
I think he's of the opinion now--and let's not get confused 
about some things.
    The public knowing--first of all, let's get back to what 
the chairman talked about a few moments ago. He was very 
complimentary of contracting officers. And I was just so 
impressed and so moved. And then he implies that you talk about 
how they must--folks must, in dealing with these contracts, 
they must deal with only the factors stated and set out in, I 
guess, the bid documents or whatever; is that correct?
    Mr. Gordon. Yes, sir.
    Mr. Cummings. Now, so it is true that it is not about bid 
officers, these good people that the chairman just talked about 
doing their job well, doing it with integrity. It is not about 
them looking at these documents, trying to decide what a bid--
who should be awarded a bid; is that right?
    Mr. Gordon. That is right.
    Mr. Cummings. This is more about the public having an 
opportunity to know, the public having an opportunity to know 
generally what's going on with these contributions or whatever; 
is that right?
    Mr. Gordon. It is, sir.
    Mr. Cummings. Now, Mr. Gordon, last week a coalition of 34 
good government and other organizations sent a letter to the 
President supporting this draft, you know, Executive order. And 
the letter said this, and this is very interesting. It says, 
``The undersigned organizations, on behalf of our members and 
supporters, write today to express our strong support for the 
April 13th draft Executive order. It simply requires that a 
business entity, as a condition of bidding on a government 
contract, disclose campaign contributions and expenditures of 
the company. It seems management and afflicted political action 
committees for all''--for all--``to see.''
    And it just seems to me that we have disclosure now and 
folks can always go to certain reports and see what people have 
been giving; is that right.
    Mr. Gordon. It is correct, sir.
    Mr. Cummings. Yeah. So if they wanted to, I guess--so 
following this logic, no disclosure would be appropriate. You 
know, you've got a situation where folks already are 
disclosing, and now they're giving money to organizations that 
don't disclose. So I guess the public--and the public is 
getting very, very frustrated.
    All of our polling shows that the frustrated--the public, 
not contracting officers, but the public wants to know more 
about, you know, who's giving money where. They want to know. 
They want to have an idea.
    As a matter of fact, very shortly, in a matter of 3 or 4 
days, you know what's going to happen, Mr. Gordon? Everybody up 
here, we've got to do some disclosing.
    And again, the organizations that have come forward, they 
have said, Look, they have looked at this. This is what they 
do. This is what they do. They are trying to make sure that the 
public has an opportunity to know as much information as 
possible. And you know why, Mr. Gordon? The reason why they 
want to know is because many of them feel powerless. Many of 
them feel that government goes off and does its thing, and they 
have no idea what's going on generally behind the scenes.
    And I think that is what these organizations, in the 
letters that I asked to be admitted into the record, that is 
what that is all about; 30 organizations basically begging the 
President to sign the Executive order.
    Now, there's another thing that is very interesting. I know 
you're not commenting on all of this, but this is a draft. So 
we're here talking about a draft. We don't know what--first of 
all, we don't know that there will be a final Executive order. 
We don't know what will be in the final Executive order. And so 
with that, I just--it is kind of frustrating and I'm glad 
you're here to testify.
    Mr. Gordon. Thank you.
    Chairman Issa. The chair now recognizes the chairman of the 
full Committee on Small Business, Mr. Graves.
    Chairman Graves. Thank you, Mr. Chairman. Just to kind of 
dovetail on what the ranking member said--and he's correct. You 
can find out this information, you know, if somebody gets a 
contract for the Federal Government, you can go look at what 
their contributions were. So in terms of the public feeling 
powerless, I don't understand where that comes from because 
they can find out. He stated himself.
    So my question to you, Mr. Gordon, is, ahead of the fact, 
submitting this information ahead of the fact--and you said 
yourself it is information we don't need to make determination 
on a contract--so submitting this information ahead of the 
fact, what purpose does it serve?
    Mr. Gordon. Chairman Graves, as you know, that would get me 
into a discussion of the draft Executive order, and I don't 
think it is appropriate for me to do that. But I can make a 
couple of points that may be helpful.
    I used to teach for a good number of years at George 
Washington University's law school. I taught international and 
comparative public procurement law. And one of the principles 
that we talked about when we look both at our State procurement 
systems and foreign procurement systems, the fact is a huge 
amount of taxpayer funds flows through government contracting. 
That is true whether you're talking about, in my home State, 
the city of Annapolis, or the Federal Government or foreign 
governments.
    And one of the things that we talked about in those classes 
is the importance of transparency, the enormous value of 
transparency. I sometimes used to refer to it in class as 
Vitamin T. It is enormously helpful to strengthen public 
confidence that their tax dollars are being used properly, that 
they feel that information is available to them.
    Chairman Graves. Let me ask you, then, how does this 
information do that? How does your agency know ahead of time 
who gave to what and how much they gave? How does that help in 
terms of transparency? Are we talking about your contract or 
how you're going to award the contract, or are we talking 
about--you know, I don't understand that. I don't understand 
the purpose when you can find out the transparency is there, if 
you award a contract to a company and they can go see what that 
company gave and who they gave to.
    But it seems to me that it would serve no other purpose 
doing it ahead of the fact. You already said your agency 
doesn't need that information to make a determination on that 
contract. So I still fail to see what purpose it serves, 
whatsoever, in that determination.
    Mr. Gordon. The transparency, transparency serves an 
extremely important purpose to the information.
    Chairman Graves. Can you get that information? Can the 
public get that information? Once you've awarded a contract to 
a company, can they get that information and find out, all 
right, this company just got a contract for X number of dollars 
from the Federal Government. I want to see who they gave to and 
what organization, how much, whatever. Can they get that 
information?
    Mr. Gordon. I understand that. I am not an expert----
    Chairman Graves. You agreed with Mr. Cummings they can get 
that information. They can get that information. And you agreed 
with Mr. Cummings when he said that.
    Mr. Gordon. My understanding is that some information about 
political contributions is currently available already.
    Chairman Graves. The fact of the matter is it is available. 
It is fully available. And so if a company gets a contract from 
the Federal Government, you can go look and see total 
transparency. But the simple idea that you want that 
information ahead of time disturbs me in a big way. And why the 
administration would want that information ahead of time, ahead 
of awarding the contract, it disturbs me in a big way.
    And the fact of the matter is, we asked a lot of small 
businesses to come in and testify today, and they didn't want 
to testify today because they are afraid of retribution from 
this administration. Well, the simple fact that they are afraid 
of retribution from this administration and they're in the 
contracting process means that there is at least that paradigm 
or that idea that is out there.
    So my question to you is, how are you going to assure that 
at least the appearance of awarding these contracts based on, 
or the appearance of--let's look at it the other way. How are 
you going to assure small businesses that the appearance is on 
the up-and-up and that you don't need that information to make 
that award? How are you going to assure that to these small 
businesses who are already scared to even come in here and 
testify?
    Mr. Gordon. We have, as Chairman Issa said, we have a 
terrific corps of contracting officers. They know what the 
rules are. They are set out in the Competition in Contracting 
Act and in the Federal Acquisition Regulation. No factors, no 
factors can be considered except those set out in the 
solicitation. If the company feels those rules weren't 
followed, they can file a bid protest. They will get 
independent review.
    Chairman Graves. Are any of those people in that process 
politically appointed?
    Mr. Gordon. We are generally dealing with career people, 
although there is an exemption and it is worth pointing out, by 
statute chief acquisition officers of the agencies are in fact 
politically appointed. I remember hearing years ago when that 
was originally created some concern that having a political 
appointee could cause trouble. In fact, at least to my 
knowledge, there have never been allegations of interference. I 
don't think that there is a problem, but if there were a 
problem a company can file a bid protest.
    Chairman Graves. I am out of time now, but the fact remains 
you said you don't need that information for the contracting 
process and that information is widely available after the 
fact, after the contract is awarded, and anybody in this 
country or worldwide can find out what that information is.
    So submitting it ahead of the fact is something that 
disturbs me a great deal, and what the motivation, the true 
motivation, is behind asking for this.
    Thank you, Mr. Chairman.
    Chairman Issa. Thank you.
    The chair now recognizes the ranking member, Ms. Velazquez.
    Ms. Velazquez. Mr. Gordon, there are many concerns that 
providing donor information to contract officers willfully 
decides the procurement process. Is there an example of another 
program where there are safeguards to prevent such a conflict 
of interest?
    Mr. Gordon. Conflicts of interest, if I could, Ranking 
Member Velazquez, is a subject to which I'm particularly 
sensitive and my office is particularly sensitive. In my year 
and a half as the Administrator for Federal Procurement Policy, 
I have led an effort to strengthen the rules about conflicts of 
interest, both personal conflicts of interest and 
organizational conflicts of interest. Those, again, go to the 
importance of protecting the integrity of our process. It is a 
very important area.
    Ms. Velazquez. So let me ask you, are there situations 
where an intermediary is placed between participants needing 
sensitive information and a Federal agency who might be biased 
by such information?
    Mr. Gordon. I would want to hear more specifics, but we 
would certainly be sensitive to ensuring that there is 
insulation and there could--you can imagine an arrangement 
where there would be a firewall so that contracting officials 
could be separated from any sensitive information that could 
create an appearance of a problem.
    Ms. Velazquez. We hear from many people that say that 
transparency can help engender public trust and increase 
taxpayers' confidence in government. My question to you is, can 
transparency efforts also generate cost savings by creating 
more competitive and efficient Federal programs?
    Mr. Gordon. Absolutely. I should tell you that the 
Organization for Economic Cooperation Development, the OECD, 
just did an international peer review of the U.S. Federal 
procurement system. And I am happy to report that one of the 
things they focused on was integrity and competition, and 
frankly we came through with flying colors.
    The fact is that increasing transparency and increasing 
trust in the system brings more businesses in. It is a special 
concern for us in the area of small businesses. When I go 
around the country talking with small businesses, they so often 
say, Dan, the system is so difficult; how are we ever going to 
break in? We will never get a contract.
    We work with our friends at the Small Business Association 
and other agencies to get them to try to get a contract with 
the Federal Government. The more trust we have in the system, 
the more competition we have. The more competition we have, the 
lower the prices, the more innovation we can get.
    Ms. Velazquez. Whenever we are debating legislation here, 
there are some that says that localities and municipalities, 
that we should not be dictating the Federal Government to 
localities of the State government. The fact of the matter is 
that many States have enacted pay-to-play laws.
    Even today there is in Wall Street Journal an article about 
Andrew Cuomo putting pressure on the legislature to pass pay-
to-play laws to prevent favoritism in contracting. So given the 
many recent scandals, contracting scandals, are there similar 
issues in Federal procurement that need to be addressed 
immediately?
    Mr. Gordon. I am not an expert on State laws. But I will 
tell you that because so many taxpayer dollars are at issue, 
there is always concern about improper decisions. And the 
little bit I know about the State pay-to-play statutes suggests 
that you can have disclosure of those contributions there 
without, in fact, ever taking them into account, in contracting 
award decisions.
    Ms. Velazquez. Thank you.
    Chairman Issa. The chair recognizes the gentleman, Mr. 
Walberg.
    Mr. Walberg. Thank you, Mr. Chairman. And thank you, Mr. 
Gordon, for being here.
    Mr. Chairman, I would like to submit for the record an 
article that was published in today's Washington Examiner. I 
think it accurately points out that if this draft Executive 
order goes through and gets finalized, it will effectively 
restore the partisan spoil system in Federal contracting that 
civil service reformers struggled for decades to eradicate.
    I believe that acquisition award should be based on merits. 
Despite what the administration may say, there is no way one 
can claim that politics won't be taken into consideration in 
the source selection process if this is EO finalized. So I 
would like to submit this for the record.
    Chairman Issa. Without objection so ordered.
    Mr. Walberg. Mr. Gordon, the White House has stated clearly 
that disclosure is one of their overall goals, but under this 
draft Executive order, isn't it true that contributions to 
unions that sign collective bargaining contracts with the 
Federal Government, yet are engaged in independent political 
activities, are exempt from the EO?
    Mr. Gordon. Sir, as you know, I can't speak to the draft 
Executive order at this point. But if the question is are 
unions Federal contractors, I'm not aware of situations where 
they actually hold a Federal contract, although I may be wrong 
on that.
    Mr. Walberg. But they're exempted in this draft Executive 
order from this provision, so there must be some expectation 
about that at the very least. And if transparency is the goal, 
wouldn't this have the opposite effect?
    Mr. Gordon. I'm not in a position to speak to that, sir, 
sorry.
    Chairman Issa. Would the gentleman yield?
    Mr. Walberg. Yes, I'll yield.
    Chairman Issa. Mr. Gordon, if you would presume that the 
draft Executive order that you have read is a draft piece of 
legislation from here forward and answer it as though it was 
draft legislation of Congress which you are able to respond to.
    I yield back.
    Mr. Gordon. It feels, sir, like I'm being asked indirectly 
to talk about the draft Executive order. I'm simply not 
comfortable doing it. Although I must say I don't understand 
the question about an exemption for unions. I'm simply not 
familiar with that.
    Chairman Issa. If the gentleman would further yield.
    Mr. Walberg. To the chairman, yes.
    Chairman Issa. We can only deal with what fortuitously 
became available to us. It exempts unions which do have a 
limited amount of contracts and a great many grants to the 
Federal Government. We clearly saw that as a deliberate effort. 
And if it is draft legislation, how would you feel about 
exempting anybody who is a contractor to the government?
    And I yield back and thank the gentleman.
    Mr. Walberg. Well, thank you, Mr. Chairman. Good points. 
And I have information in front of me that clearly indicates 
that union support in elections goes on and there are grants 
and contracts that are made effectively to these unions as 
well.
    But let me move on here. Is the Executive order, as you 
understand it, I know you say you can't respond to it, but--I 
mean, that's the purpose we're here today. Is the Executive 
order narrowly tailored to serve an important government 
interest, in your opinion?
    Mr. Gordon. Sir, there is no Executive order that has been 
signed by the President. There is a draft.
    Mr. Walberg. Is the draft Executive order narrowly tailored 
to serve an important governmental interest?
    Mr. Gordon. I remember from my days working at the Office 
of General Counsel at GAO that ``narrowly tailored'' is a 
phrase not chosen at random, and I don't feel comfortable using 
constitutional language. I can tell you that disclosure serves 
an extremely important public purpose of transparency and 
therefore increasing public trust in the procurement system.
    Mr. Walberg. Now, let me ask you this, following up on 
that. Does, in your opinion, disclosure per se eliminate 
corruption in government contracting?
    Mr. Gordon. You bring me back, sir, to Vitamin T. 
Transparency is one of the best ways of fighting corruption. 
Sunlight is the best disinfectant.
    Mr. Walberg. One of the best ways of fighting corruption 
within governmental system itself, within Congress, and I 
certainly agree with Speaker Boehner on that statement as it 
relates to us, our body, in being clear and with sunlight on 
us, but to put sunlight on, as someone once said, 
inappropriately on the private sector in ways like this is an 
excessive amount of sunlight that can bring cancer. And that's 
my concern with what's going on here, that it's a cancerous 
approach, and within government contracting it can shut down 
all sorts of good things.
    Let me ask one more final question because of time. Do you 
imagine certain entities will instead of giving up their 
Federal contracts withdraw from engaging in political speech as 
a result of this draft Executive order?
    Mr. Gordon. I don't feel comfortable speculating on that 
question, sir. I understand that many--much political speech 
already has to be disclosed. I'm not aware of that chilling 
that speech, but I'm really not in a position to speak.
    Mr. Walberg. Well, I thank you for appearing, but I'm 
concerned that the light of day from this administration was 
not afforded to us today. Thank you.
    Chairman Issa. The gentleman from Virginia, Mr. Connolly.
    Mr. Connolly. Thank you, Mr. Chairman. And welcome, Mr. 
Gordon. It's interesting to have sparring matches between 
committee members and a witness when he really is not at 
liberty to comment on the subject matter. And I must say I find 
it a little ironic that many of the people who now are so 
concerned about the rights of Federal contractors had no such 
concern just a few weeks ago when this committee very 
peremptorily decided that if you were a Federal contractor and 
you were charged with delinquent taxes, by God, we were going 
to judge you guilty and we were going to short circuit due 
process and make sure that you were suspended from doing 
business with the Federal Government.
    Having said that, and having been a major critic of the 
Supreme Court in what I consider one of the top 10 worst 
Supreme Court decisions in American history with respect to 
Citizens United which is going to upend the politics of America 
and is going to profoundly affect how campaigns are funded and 
what the public gets to see or not see, I am concerned about 
unintended consequences. So if you and I can engage in a 
hypothetical conversation, Mr. Gordon.
    Hypothetically I might want--you and I might both agree 
that disclosure is a good thing, it's the best disinfectant, as 
Speaker Boehner said. However, I am concerned theoretically if 
somebody were to come up with the idea of requiring contractors 
before they--before an award of a contract were made, or even 
after, immediately after the award of a contract being made, to 
disclose any and all campaign contributions that their 
political action committee may have made and their top officers 
may have made, the unintended consequence of that is that it 
suggests to the public that there's a relationship between the 
two when in fact there may--as you have testified, there is 
not. Would you share my concern that could be an unintended 
consequence hypothetically of such activity?
    Mr. Gordon. Thank you for setting out that hypothetical. 
Let me say, sir, that I want to reflect both on those possible 
unintended consequences, and in all fairness to all the Members 
here, I want to reflect on the other comments that the Members 
have shared. I do think it is--you could have a situation of an 
unintended consequence and it is certainly worth reflecting on 
that, because you don't want a situation where transparency 
ends up rebounding against the intended goal.
    Mr. Connolly. And to that end I would strongly urge you, at 
least as one Member on this side of the aisle, to consider that 
or to take that back to those colleagues you have who may be 
participating in cogitating about theoretically such a draft, 
because I am very concerned that all kinds of people are going 
to make a conclusion that in fact it's false even though the 
dots are both there. I made a contribution, I got an award of a 
contract. You have testified we don't take that into account at 
all, and you've never been aware of that being taken into 
account. Yet nonetheless, once we change this procedure that is 
the risk that both the media and the public could draw that 
conclusion, albeit a false one, and now somebody's good name is 
damaged. So I think that's not a trivial issue.
    The other issue that concerns me, again, with the best of 
intentions, the intention being disclosure is the best 
disinfectant, I agree with that principle. But I am also 
concerned that by changing the policy at this time it could 
have a chilling effect on the ability or willingness of people 
in fact to participate in the political process, to exercise 
the First Amendment rights, whether we agree with it or not, to 
make a contribution, to show up at an event, whatever it may 
be.
    Might that be, again hypothetically, a concern you and I 
might have if we were contemplating such a change of policy?
    Mr. Gordon. Your first hypothetical, sir, involved a 
possible allegation against the procurement system, so I'm more 
comfortable ruminating, if you will, and reflecting on that. 
The second hypothetical takes me outside the procurement 
system, and I'm not sure that my ruminations would lead to any 
useful product on that score.
    Mr. Connolly. Yes. I just thought you could put your 
professorial hat back on, Mr. Gordon, and share with me just a 
genuine concern--a general concern as a citizen that we not 
have the unintended effect here of chilling, of having a 
chilling effect on people's participation, including Federal 
contractors.
    Mr. Gordon. I understand, sir. The fact is, again, my 
understanding is that many political contributions, although 
not as--perhaps not all of them, but many political 
contributions are already publicly available, including by 
Federal contractors and their leaders. I'm not sure that 
there's evidence that the political--excuse me, that the 
transparency that already exists about those political 
contributions has in fact had any chilling effect on government 
contractors.
    Mr. Connolly. My time is up. Thank you, Mr. Chairman.
    Chairman Graves [presiding]. The chair now recognizes the 
gentleman from Florida, Mr. West.
    Mr. West. Thank you, Mr. Chairman. Honorable Gordon, 
pleasure to have you here today. I would like to speak from 
experience on this, because after serving 22 years in the U.S. 
Army I was a DOD contractor. So I want to ask you this very 
simple question. The Department of Defense sends out an RFP to 
have, you know, recently retired individuals that can go and 
help to augment the military in Afghanistan or Iraq. Why before 
a contract is awarded would you then have the head of an 
organization, a retired three-star or four-star general, 
disclose his political affiliations or contributions? What 
impact does that have on that request for proposal?
    Mr. Gordon. I want to make very clear, Congressman West, 
two points. One, to the extent that you're taking me into a 
discussion of the details of the draft Executive order I don't 
feel comfortable speaking, but I think I can still address the 
point.
    Mr. West. But why are you here, sir?
    Mr. Gordon. I think I can address the point. As soon as I 
heard the acronym RFP I realized that you do have experience in 
this area and that's helpful.
    Mr. West. Absolutely.
    Mr. Gordon. The contracting officer who is awarding that 
contract will never take into account political contributions, 
but, but, the public may want to know, she the contracting 
officer, he the contracting officer, will not take that 
information into account. The only thing that they will take 
into account are the factors in the RFP. The question isn't is 
it going to be a factor in the selection, the question is does 
the public have the right to know what contributions were made 
by contractors.
    Mr. West. But what bearing does that have on the request 
for proposal for someone to come in and provide services for 
the Department of Defense, you know, their political 
contributions? I guess my question is, what has been broken in 
the procurement process up to this point which leads to that 
draft Executive order being proposed?
    Mr. Gordon. As a general matter, as I said earlier, every 
procurement system, ours, the States, the local governments and 
foreign ones, are constantly facing a risk that the public will 
view their system as tainted. Because the fact is enormous 
numbers of dollars of taxpayer funds are at risk in the 
procurement system, and in order to instill confidence in the 
public you want to have as much transparency as you can.
    Mr. West. But you don't think that the American people will 
have confidence in a retired three-star or four-star general to 
be able to, with his team, be able to write an RFP to compete 
for a contract? What purpose does it have with this draft 
Executive order to bring forth this requirement to disclose 
your political contributions? What is the purpose of that with 
that RFP? What is the purpose of that in the awarding of this 
contract? As we have said, I can understand after a contract is 
awarded that's public knowledge, but why is that part of the 
criteria that we have up front?
    Mr. Gordon. It would absolutely not be part of the 
evaluation criteria, absolutely not part of the criteria, sir.
    Mr. West. But correct me if I'm wrong, that's what this 
draft Executive order brings forth?
    Mr. Gordon. The only question is whether companies that 
want to get contracts should be required to have made 
disclosure of their contributions. Contributions would never 
be, would never be a criterion for selecting a company.
    Mr. West. And then I come back to my original premise. What 
has been broken with the process up to this point that was the 
impetus for this draft Executive order to be created?
    Mr. Gordon. There is concern in every system, including 
ours, that award decisions may have been affected by 
inappropriate considerations. Having more information available 
to the public, having more transparency, can help strengthen 
confidence in the system.
    Mr. West. Would subsequent subcontractors or subsequent 
employees also be under the jurisdiction of this draft 
Executive order, such as myself when I was hired on to go to 
Afghanistan in June 2005?
    Mr. Gordon. I don't feel comfortable responding to the 
question, sir. I'm not in a position to.
    Mr. West. Well, then I'm going ask this one last question. 
As you sit here today do you support that draft Executive order 
or not?
    Mr. Gordon. I'm not in a position to talk about the draft 
Executive order, sir.
    Mr. West. Well, I don't understand why you're here. It's a 
simple question. Do you support the draft Executive order that 
is placed before you right now or not? Yes or no question.
    Mr. Gordon. I am not in a position to express an opinion 
about the draft.
    Mr. West. I yield back.
    Chairman Graves. The chair recognizes the gentleman from 
North Carolina, Mr. McHenry.
    Mr. McHenry. I thank the gentleman. Thank you, Chairman. 
Mr. Gordon, I want to thank you for your service to your 
government. We know that this is probably not the highlight of 
your career to come before Congress with this draft Executive 
order that Mr. West was asking about. But I want to start by 
saying, you know, for the average American business, small 
businesses especially, they're dealing with high government 
regulations, they're dealing with the burden of government 
regulations every day.
    I was just talking to a group of constituents up here, 
small business folks, heating and plumbing contractors, and 
they're talking about regulations, the burden on their ability 
to hire folks. And what we're talking about with this is in 
essence employers going to their employees and saying, we need 
you to give us every donation you've made to the causes most 
dear to you. That's an additional burden. And, you know, 
Americans are private folks. You know, even if you have to 
disclose a political contribution, for instance, on the 
Internet, it's a little different when your boss comes in and 
says, hey, tell me who you've been voting for. I mean, that's 
basically what we're saying with this. So, you know, but I've 
got a larger question.
    In a time when the cost of government has gone up and 
government is spending more this year as a percentage of the 
economy than it has since World War II, so my question is, with 
this disclosure requirement will this in any way reduce the 
costs to the taxpayers of these government contracts?
    Mr. Gordon. The issue of the cost that we spend on 
contracts that you raise, sir, is an extremely important one 
for us. I have to tell you, and I tell you this with pride, 
that over the prior 12 years we saw the amount of money being 
spent on government contracts year after year increasing. In 
fact, over the 8 years before this administration came in we 
were increasing on average year after year 12 percent. People 
said to us you'll never be able to stop that. We stopped it. In 
fiscal 2010 we spent something on the order of $15 billion less 
on Federal contracts for services than the year before.
    Mr. McHenry. Mr. Gordon, I appreciate that, and that's not 
the question I'm asking, with all due respect. Someone is 
offering--someone--you put out a bid for paper products. With 
this disclosure requirement, this additional certification that 
you would require, does that reduce the cost of those paper 
products to the government?
    Mr. Gordon. I understand the question, I think, sir.
    Mr. McHenry. Does it reduce the cost of providing that good 
or service to their government? And if you don't want to 
answer, just say that.
    Mr. Gordon. No, no. It's an area we focus on a lot. The 
fact is transparency requirements impose burdens as we 
implement them.
    Mr. McHenry. Or costs, burdens or costs?
    Mr. Gordon. Absolutely, sir. Those burdens turn into costs 
and we the taxpayers pay for them. Transparency is not free. 
One of the benefits we hope to get through transparency, 
though, that was alluded to earlier, is more competition, and 
more competition can lower cost, absolutely.
    Mr. McHenry. So more competition by having a greater 
requirement on a contractor to do business with government. 
That seems a little interesting to me and sort of defies logic. 
But let me ask another question. And, you know, you talk about 
the bid protest process which you have a great level of 
expertise in.
    Would you anticipate that this additional disclosure would 
increase the bid protests?
    Mr. Gordon. Actually, sir, I don't think it is likely to do 
that. I think it's good to have bid protests available as a 
check. But if you have a system in place where there is 
information available to the public but not taken into account 
in award decisions, you shouldn't have an increase in protests.
    Mr. McHenry. Well, thank you. And additionally, as this 
would operate, in the bid process you would ask those that are 
bidding, the government, if they--you would ask them to certify 
that they've made these disclosures on their political 
contributions, right, you would ask for a certification; is 
that likely how it would work operationally?
    Mr. Gordon. Boy, you're several steps ahead of me, sir. But 
I understand that one method that's been used in some States is 
to say that, yes, companies have to say they've made all 
required disclosures, just like today we require companies to 
say we don't have a tax liability above $3,000.
    Mr. McHenry. OK. And would you verify that certification is 
indeed correct or was made?
    Mr. Gordon. Normally--we try to minimize the burden on our 
contracting staff, so normally unless they have reason to doubt 
a certification we don't require them to check. For example, if 
a company certifies that they're small, normally the 
contracting officer can simply accept that certification unless 
she or he has a reason to believe that it's inaccurate.
    Mr. McHenry. Thank you, Mr. Chairman. I appreciate the 
opportunity to comment. And it is certainly interesting with 
that certification, you know, we would just simply hope that 
procurement officer wouldn't look at those contributions that 
are publicly made to certify that they were indeed made public. 
And if they did view those contributions, it would have to 
necessarily influence the outcome of the bid.
    Chairman Graves. The chair now recognizes Mr. Lankford from 
Oklahoma.
    Mr. Lankford. Thank you, Mr. Chairman. Mr. Gordon, thank 
you for being here as well. Let me try to clarify something. 
You were just talking about the hope of this and adding more 
transparency and such as to increase competition. So it is your 
belief if we ask companies to disclose who they're giving to 
and ask their employees who they're giving to more companies 
are going to say, yes, I want to get in that, this will 
increase competition, therefore decrease price. Is that what 
you're saying with that?
    Mr. Gordon. We always hope that increasing trust in the 
system will cause more companies to participate in the system, 
yes.
    Mr. Lankford. So you anticipate when we ask people who they 
give to they're going to say, yes, I haven't done bidding 
before, but I want to jump in, I want to participate in that, 
now that I'm going to be required to say who I give to before I 
bid I'm now going to engage in a process that's new so to 
increase competition on that?
    Mr. Gordon. Not because they're looking forward to making 
the disclosure, but because the disclosure can increase trust 
in the system, that's right.
    Mr. Lankford. Where would this data be distributed? We 
talked about a little bit about this before. Who will make the 
decision on how this data gets out to the public?
    Mr. Gordon. You're really then getting into the specifics. 
And I should say a word about the specifics of a draft. The 
fact is a draft Executive order is a confidential document, 
we're discussing it internally.
    Mr. Lankford. Right. I understand that. I've got several 
questions. I understand that. I've heard that loud and clear. 
My concern is, obviously, once this data comes in and the 
political appointees begin to look at it there is a chance that 
they're going to look at it and suddenly 57 percent of the 
contracts gave predominantly to Democrats and this 
administration will go, oh, that's not a good idea to release 
because then it looks like we're giving preferential treatment 
to more people, and then suddenly there is a statement if this 
Executive order suddenly goes away, is this not a mining to go 
out and look and say, we are either going to expose one thing 
or another, and if it is politically not expedient there's the 
opportunity to say, I don't think we're going to release it at 
this time. Obviously, I understand we're two or three steps 
down the path on that, but it becomes this circle on this.
    And your comments about transparency, I understand the 
transparency concept. But having gone through job interviews 
and interviewed multiple people myself, I know when I'm looking 
at an application that's not about transparency, that's about 
who I'm hiring and who I'm not. Transparency is after the fact, 
it's exposed to everybody what's happened. Before the fact the 
information is an application. That's information I'm gathering 
to make a decision. So to say ahead of time I'm going to gather 
this information but I'm not going to really use it to make a 
decision begs the question why it's on the initial information. 
That seems to be something that would be exposed later, not 
before. As I've gone through interviews there's not been a time 
I've looked at it and said I'm not going to look at that 
section of the application, I'm pretty much looking at all of 
it.
    Do you anticipate with this that there will be a time as we 
get down the road, again it's a hypothetical, to say, we need 
to balance this out better, we have too many people that are in 
companies that give from Republicans or Democrats, let's 
establish a quota system that will only do procurement based on 
we need to have a balanced number of companies that give to 
Democrats, Republicans or don't give at all? Do you anticipate 
this is the way that would head to just try to balance things 
out and make it more fair if we determine there are a lot of 
Republicans, let's say, that give to these companies so we need 
to make sure we have more companies that are Democrat owned 
that actually get engaged in this in the procurement process 
and set that quota aside?
    Mr. Gordon. Absolutely not. We need to protect. We need to 
keep politics out of the contracting process.
    Mr. Lankford. I would completely agree, and there is a good 
way to do that, is to keep it exposed as we are right now.
    One last thought on this. OMB currently has the authority 
to put out a circular to require, you know, information about 
grant writing, in particular. Is there any conversation that 
you're aware of in OMB on the grant writing to put out a 
circular saying, well, let's do for all of those that get 
grants, let's say, from unions, that they would have to give 
who they give to and the union members that are leadership to 
note political contributions. Now, that wouldn't take an 
Executive order. OMB could do that now. They already have the 
authority to do that.
    Do you know if there's been any conversation related to 
that.
    Mr. Gordon. You won't be surprised to hear, sir, that I'm 
not in a position to disclose internal discussions.
    Mr. Lankford. OK. Well, that would be interesting to note 
just on that.
    The President has been very good to just say, we don't want 
to do an end around Congress. But this certainly feels like the 
previous Congress said this wasn't a good idea, and so they're 
going to do an end around Congress just to be able to find a 
way to legislate in an area that is not, does not have 
legislative authority. I understand you have a responsibility, 
but this was a clear decision made by a previous Congress not 
to do this and now we're going to currently try to do it 
anyway. And I find that fascinating and an interesting 
conversation for another day on constitutional issues and 
authority.
    So thank you for your time.
    Chairman Graves. The chair now recognizes Mr. Mulvaney of 
South Carolina.
    Mr. Mulvaney. Thank you, Mr. Chairman. Mr. Gordon, thank 
you for coming before us today. I want to go back to something 
that I thought I heard you say earlier on in the testimony, 
which is I believe you said that the contractor's action, that 
their conduct in participating in the political process doesn't 
really, it's not really related to what they're doing for the 
government, is that correct?
    Mr. Gordon. What I said, sir, was that a contracting 
officer in deciding who should win a contract will look only at 
the selection factors in the solicitation, not at political 
activities or political contributions.
    Mr. Mulvaney. So political activity is not a selection 
factor?
    Mr. Gordon. That's right, sir.
    Mr. Mulvaney. So it's fair to say that political activity 
has nothing to do with whether or not they'll be fully able to 
perform their duties to the government?
    Mr. Gordon. Certainly nothing to do with whether they're 
going to get the contract.
    Mr. Mulvaney. Thank you. Well, if it did have an impact on 
whether or not they could perform the contract, would you 
consider it?
    Mr. Gordon. Boy, it feels very hypothetical. If you told me 
factor X would make a company incapable of performing should 
that be taken into account, then the answer to that would be 
yes.
    Mr. Mulvaney. Certainly.
    Mr. Gordon. But why would political activity have any 
ability on their ability to perform.
    Mr. Mulvaney. Actually, Mr. Gordon, I know will come as a 
surprise to you, but I'm trying to agree with you on that 
point.
    Mr. Gordon. I had a suspicion of that.
    Mr. Mulvaney. Which is why I asked the question, because 
I'm trying to figure out where this directive is coming from. 
If political activity has nothing to do with a firm's ability 
to perform its contract for the government, is it coming from 
your office, is this directive coming from the Office of 
Federal Procurement?
    Mr. Gordon. The direct answer is that's an internal matter 
within the Executive Office of the President that I'm not in a 
position to discuss. But I think the broader question is, would 
it help the procurement system to have more disclosure, and 
that takes us back to the earlier conversation. The hope is 
that transparency increases public trust, which brings more 
companies into the competitive process, which improves economy 
and efficiency. That's the hope.
    Mr. Mulvaney. Well, again, then it goes back to my original 
question, which I understand you're not going to answer, which 
is, did this directive come from your office? And I understand 
that you're invoking a privilege that I'm not familiar with, is 
that correct, that you're invoking a type of executive 
privilege here today?
    Mr. Gordon. No. I'm simply explaining that this is a matter 
of internal deliberation that I don't think it's appropriate 
for me to be disclosing here.
    Mr. Mulvaney. What department does the OFPP operate under?
    Mr. Gordon. OFPP is an office within the Office of 
Management and Budget, which is within the Executive Office of 
the President.
    Mr. Mulvaney. Are you the head of that department?
    Mr. Gordon. I am the Administrator and the head of the 
Office of Federal Procurement Policy.
    Mr. Mulvaney. Are you head of the department under which 
OFPP functions?
    Mr. Gordon. As I said, sir, there is not actually a 
department, it's the Executive Office of the President, and no, 
I'm not the head of the Executive Office of the President.
    Mr. Mulvaney. Do you have--when we've been asking these 
questions today about where this directive began, do you 
actually know the answers to those questions?
    Mr. Gordon. I'm not comfortable answering questions, sir. I 
don't think it's appropriate for me to be disclosing our 
internal deliberations.
    Mr. Mulvaney. And I think you've explained for us at some 
length why you're not comfortable giving that.
    Let me ask you some general questions then, which is would 
a disclosure requirement in general, not dealing with this 
specific draft, would a disclosure requirement put an 
obligation on members of the public in order to do business 
with the United States of America?
    Mr. Gordon. Yes. We have many disclosure requirements. I 
mentioned one earlier. You have to disclose lobbying activities 
if you want to get a Federal contract, you've got to disclose 
the compensation of your five highest paid executives. We have 
a whole series of things which frankly can be quite burdensome 
for private companies. And we're always looking at the balance. 
These are often driven, I might add, by statute.
    Mr. Mulvaney. And that was my point. In fact they're always 
driven by statute. That the requirement that you disclose your 
lobbying activities and the other requirements are driven by 
statute, not by Executive order, that's correct, isn't it?
    Mr. Gordon. On those two specific ones, yes, but there are 
others that are not driven by statute. For example, 
organizational conflicts of interest, the requirement for 
disclosure is driven by regulation.
    Mr. Mulvaney. By regulation?
    Mr. Gordon. That's right. That my office is responsible for 
issuing.
    Mr. Mulvaney. Mr. Gordon, finally, I'll ask you this. Is 
the violation of an Executive order a punishable offense?
    Mr. Gordon. That's a question to ask counsel, sir.
    Mr. Mulvaney. Do you believe that it should be?
    Mr. Gordon. I'm not in a position to express a view. I 
would turn to the lawyers and ask them that question.
    Mr. Mulvaney. I'm not asking you--I think you actually have 
to answer that question unless you are invoking a privilege. Do 
you think a violation of an Executive order should be a 
punishable offense?
    Mr. Gordon. I'm not sure I understand the question. Should 
executive agencies be following Executive orders? Absolutely.
    Mr. Mulvaney. No. Should a member of the public be able to 
be punished for a violation of an Executive order?
    Mr. Gordon. I'm not sure that it--you've got me over my 
depth, but I don't think an Executive order would actually 
apply to a member of the public. An Executive order typically 
is implemented through regulations, and obviously the 
regulations might apply to the public.
    Mr. Mulvaney. Thank you, Mr. Gordon.
    Chairman Issa [presiding]. I thank the gentleman. The 
gentleman from Connecticut, Mr. Murphy.
    Mr. Murphy. Thank you very much, Mr. Chairman. You know, 
campaign finance laws have existed for more than a century. I 
mean, going back to 1907, the Tillman Act prohibited 
contributions by corporations to political parties for the 
first time. And most recently in 2002 Congress passed the 
bipartisan Campaign Finance Reform Act. Mr. Gordon, I know 
you're a procurement expert, you're not an expert on campaign 
finance laws, but I think it's useful to explain what's on the 
books already today. Today, all individual contributors or 
aggregate contributors in excess of $200 have to be disclosed. 
All contributors from PACs and party committees have to be 
disclosed. All contributors and expenditures made by PACs have 
to be disclosed. All independent expenditures in electioneering 
communications have to be disclosed.
    I lay this out because one of the arguments that's used by 
the opponents of increasing disclosure requirements is that by 
doing so you're going to chill free speech, that by requiring 
individuals or entities to disclose the contributions that they 
make that all of a sudden they're going to stop making them.
    But here's what we know: That political contributions from 
people who do business with the Federal Government have 
increased from $5 million in 1998 to almost $10 million today. 
That's what we know about. That's the people that are 
contributing through existing disclosure laws, mainly through 
individual contributions. And so I guess I say all of this by a 
means of asking you this simple question. We have a lot of 
disclosure requirements on the books today. In fact, what we're 
talking about is just really one loophole within our existing 
laws that prevent donations to 527 and like organizations from 
the light of day. And I'm interested to know, Mr. Gordon, if 
you think that the disclosure requirements that we have already 
have had a chilling effect on either contributions to political 
candidates from existing government contractors or on firms or 
companies willing to do government work.
    Mr. Gordon. I can only tell you what I know, sir. No. 1, 
I've never heard a complaint that the existing disclosure 
requirements have deterred any company from competing for a 
Federal contract. And No. 2, I'm not aware of any complaint 
that the fact that we know which companies give money to which 
political candidates that's publicly available, I've never 
heard of a bid protest being filed because of an allegation 
that information somehow was improperly used.
    Mr. Murphy. It seems as if that we're litigating this issue 
for the first time on this committee, as if this is a contest 
of first impression. It's not. Individuals and companies for 
100 years have been required in some way, shape or form to 
disclose the political contributions that they make. And we 
have pretty irrefutable data to show that over the last 10 
years at least that government contractors have not been making 
less contributions, they've been making more.
    And I go straight to Justice Scalia when I think about this 
argument regarding a chilling effect. In Doe v. Reed Justice 
Scalia, one of the most conservative justices in the Court, 
said that, ``requiring people to stand up in public for their 
political acts fosters civic courage without which democracy is 
doomed.''
    And with that, I yield back.
    Chairman Issa. I thank the gentleman. The gentleman from 
Tennessee, Mr. DesJarlais.
    Mr. DesJarlais. Thank you, Honorable Gordon, for attending 
today. How does the draft EO improve transparency above and 
beyond the status quo? I know we've talked about it, but can 
you explain it again?
    Mr. Gordon. Sir, I hesitate to point out again that I'm not 
comfortable talking about the details of the draft. But I will 
just say from the earlier conversation, and in fact from 
Congressman Murphy's remarks, that there are some aspects of 
political contributions which have long been required to be 
disclosed and there are some aspects of political contributions 
which are not today required to be disclosed.
    Mr. DesJarlais. But you talked about how public perception 
would improve this process.
    Mr. Gordon. Absolutely, sir. Disclosure and transparency 
can strengthen the public trust in the procurement system.
    Mr. DesJarlais. Is the public involved in any way in 
advance of the awarding of these contracts by your agency?
    Mr. Gordon. In many ways actually. When there is public 
trust--this is an issue that's come up when I've worked with 
developing companies in improving their procurement system. 
When there is public trust in the integrity of the system, you 
get more companies willing to participate in competitions. It's 
extremely important, absolutely.
    Mr. DesJarlais. So you're saying then that by this draft 
EO, essentially what we're going to see is that people will 
have a better idea of who these contractors are and that would 
influence your decision whether or not to award a contract.
    Mr. Gordon. Without talking about the draft, as a general 
matter when people have more trust in the system you can hope 
to have greater competition, absolutely.
    Mr. DesJarlais. So I guess what I'm trying to get at, are 
you expecting the general public to influence your decision on 
a specific contract award?
    Mr. Gordon. I'm sorry, I'm not sure I understand the 
question. The award decision has to be based on the selection 
criteria and the solicitation, not public perception.
    Mr. DesJarlais. OK. So there's no political involvement in 
the decision?
    Mr. Gordon. Absolutely not. It is prohibited. And we have a 
very strong core of acquisition professionals that know that 
the Competition in Contracting Act would prohibit them from 
considering any factor, except what's set out on the 
solicitation.
    Mr. DesJarlais. OK. And so you believe contracting 
officials are able to award contracts without regard to 
political consideration or how it is achieved?
    Mr. Gordon. Absolutely.
    Mr. DesJarlais. Are political appointees removed from the 
selection process, for example?
    Mr. Gordon. It depends on the situation. There are very 
large procurements where the selecting official, I think, could 
be a political appointee, but they are bound just like anybody 
else by the evaluation criteria. No one can deviate from what's 
in the solicitation. And if someone deviates they're going to 
face an independent review by GAO or the Court of Federal 
Claims.
    Mr. DesJarlais. And you feel that we do need more 
disclosure than we currently have; the current system that we 
have in place is not good enough?
    Mr. Gordon. I will say as a general matter I am an advocate 
of transparency.
    Mr. DesJarlais. OK. So you think we need more than we 
currently have, you agree with this draft EO?
    Mr. Gordon. I was asked earlier, sir. I want to say that 
respecting the sensitivity and the confidentiality of 
deliberations on drafts is very important. That's true whether 
it's a discussion in the Situation Room or whether we're 
talking about a draft Executive order. Until the President 
decides I don't think either I or any executive branch official 
should be discussing the content.
    Mr. DesJarlais. Do you think this is an important hearing 
for this process?
    Mr. Gordon. I always respect congressional committees. I 
worked at GAO for 17 years, sir. I know the enormous value that 
congressional oversight committees bring.
    Mr. DesJarlais. Just earlier when Ranking Member Cummings 
seemed shocked that we were doing this and that we needed more 
disclosure, it just kind of took me back to the last time 
before I was an elected official when we heard that we need to 
pass the bill before we know what's in it, and that was of 
course the Affordable Health Care Act that was referred to by 
both the President and the former Speaker. And I think that the 
example of the 1099 provision which was repealed and the 
President subsequently signed into law would be an example of 
why we have these hearings. So I was a little shocked at 
Ranking Member Cummings' displeasure for this hearing today.
    But I appreciate your attendance and I yield back.
    Chairman Issa. I thank the gentleman. The gentleman from 
Ohio, Mr. Chabot.
    Mr. Chabot. Thank you, Mr. Chairman. Just a number of 
questions for Mr. Gordon. I would like to read to you a few 
descriptions of what others have called this Executive order 
and see if you agree with them or not. One example was that 
this order amounts to the White House brazenly directing the 
power of government against its political opponents. And it's 
an unabashedly partisan move. Would you agree with that 
representation?
    Mr. Gordon. Sir, I'm not going to feel comfortable coming 
up with a view on the various opinions that have been 
expressed, but I guess on that particular one I will tell you 
that, no, I don't agree with it.
    Mr. Chabot. All right. Let me ask you about this one. The 
minority leader of the U.S. Senate said that this was the 
crassest political move he's ever seen, this is almost gangster 
politics to shut down people who oppose them, referring to the 
administration. I would assume that you probably don't agree 
with that statement.
    Mr. Gordon. You assume correctly, sir.
    Mr. Chabot. I thought so. Let me ask you this one. As 
designed to muzzle corporations and businesses, it would at the 
same time allow unions to continue spending at will, isn't that 
accurate? Even though you may not agree with it, wouldn't that 
be accurate?
    Mr. Gordon. No, sir, I don't believe it's accurate.
    Mr. Chabot. All right. Well, let me try another one then. 
This particular individual is also in the Senate, and this 
person is a moderate, and in fact actually voted for the 
McCain-Feingold campaign finance reform, which a lot of 
Republicans did not vote for. This person did. This person 
called this Executive order Orwellian, and also said that the 
order undermines decades of work by this person and others to 
ensure Federal business is free of corruption of political 
influence, called it the equivalent of repealing the Hatch Act, 
and further said that it's taken decades to create a Federal 
contracting system based on best prices, best value, best 
quality, and that the effect of this order is to again have 
politics play a role in determining who gets contracts. 
Companies may choose not to bid, which will reduce competition 
and raise government cost.
    Now, I know you believe that this is going to help us 
relative to cost and make there be more transparency and more 
competition, but this person disagrees with that. I assume you 
would disagree with the statement that I just read there as 
well.
    Mr. Gordon. Yes, sir.
    Mr. Chabot. And let me conclude with this one. Supporters 
of the President, President Obama, are predicting that he's 
going to raise $1 billion this year for his campaign. Talk 
about campaign finance reform and the corruption of money and 
politics and all of that, $1 billion this year for the first 
time if he attains that. And that simultaneously that he'd be 
positioned even more strongly if he could in effect by this 
Executive order dry up some at least, and maybe a substantial 
amount, of Republican donations.
    I would assume that you would disagree with that point of 
view.
    Mr. Gordon. I've spent many years, sir, working to improve 
and protect the integrity of the procurement system. I intend 
to continue doing that.
    Mr. Chabot. Let me just conclude, because I've only got a 
minute left.
    Now I will tell you what I think. I think that this is 
nothing more than blatant raw politics, and I think in the 15 
years that I've been here I've not seen anything as outrageous 
and as much of an exercise of naked political power than this 
Executive order. I think it's shameful, I think it's 
disgusting, I think it's despicable, I think it's outrageous. 
And this administration is talking about doing this by fiat 
essentially. That is what an Executive order is. Rather, if 
you're going to do something this dramatic it ought to be done 
by the will of the people, by their elected representatives. 
That's the U.S. Congress, it's not by an Executive order coming 
out of a White House. And I think the administration ought to 
be ashamed of what it's trying to do here. And as I say, I've 
been here a while, 15 years now, although I had a 2-year 
involuntary sabbatical.
    Chairman Issa. Would the gentleman yield?
    Mr. Chabot. I would be happy to yield.
    Chairman Issa. On that I agree. Thank you for your 
comments.
    Mr. Chabot. Thank you. I yield back.
    Chairman Issa. The gentleman from Iowa, Mr. Braley.
    Mr. Braley. I thank the chairman. And I want to start by 
going back to the clip the chairman played at the beginning of 
this hearing. Because if you go back and listen closely to what 
President Obama said, he is a prophet, because that is exactly 
what happened after Citizens United. We've seen a massive flow 
of secret money, which is something that's a much greater 
threat to democracy in this country than this Executive order 
is. And you indicated, Mr. Gordon, that you had taught at a law 
school dealing with procurement issues, so you know that the 
Federal procurement slice of nearly $500 billion is an enormous 
part of the Federal budget. And yet 4 years ago in this very 
committee we had a hearing where the head of the General 
Services Administration, Lurita Doan, came and testified about 
illegal activity taking place in a Federal agency in violation 
of the Hatch Act when a gentleman named Scott Jennings, who 
worked in the White House as Karl Rove's chief deputy, was 
doing political briefings on government time in violation of 
the Hatch Act. And President Bush fired her because of that. 
That was the only recourse he had. And it's ironic that Scott 
Jennings was the deputy of Karl Rove, who heads Crossroads and 
many of the secret donor groups that are engaged in pumping 
millions of dollars of secret money to try to influence the 
outcome of political elections. And one of the things that 
nobody talked about in this hearing is the very different 
levels of scrutiny applied to different types of speech. 
Because as a fundamental part of constitutional First Amendment 
law there's the regulation of content, which is a high level of 
scrutiny, and the government is supposed to have very little 
impact on what you say, and then there's the regulation of 
time, manner and place of speech, where the government is given 
much more leeway. And that's exactly what this Executive order 
is all about.
    So I am confused by the people who come to this hearing and 
claim about the threat to the right of free speech and the 
threat to our democracy when in fact it's the unlimited amount 
of secret money coming into elections that's the biggest threat 
to democracy we face today. And I'll say that whether it's 
money coming in to support a Republican candidate or a 
Democratic candidate.
    One of the things we know is that in their opinion the 
Supreme Court rejected the arguments being offered today, 
because Justice Kennedy wrote for the majority and made it 
clear that disclosure doesn't prevent speech. He said, the 
First Amendment protects political speech and disclosure 
permits citizens and shareholders to react to the speech of 
corporate entities in a proper way. This transparency enables 
the electorate to make informed decisions and give proper 
weight to different speakers and different messages.
    The Executive order, Mr. Gordon, does nothing to regulate 
the content of what anyone wants to say, isn't that true?
    Mr. Gordon. Transparency is what is at issue here, and 
transparency is something that I very much agree with as an 
extremely important value, including in the Federal procurement 
system.
    Mr. Braley. And one of the reasons why that's so important 
is something we've talked about, and that's because American 
taxpayers are the ones whose money is being used to fund these 
projects with these contractors, isn't that true?
    Mr. Gordon. Absolutely. More than half a trillion dollars a 
year.
    Mr. Braley. Absolutely. And that's a big chunk of money. So 
taxpayers across the political spectrum have a strong interest 
in making sure those contracts, regardless of who is in the 
White House, are not being unduly influenced by political 
contributions, isn't that true?
    Mr. Gordon. Absolutely.
    Mr. Braley. And you look at what goes on in this country, 
in States where they elect judges, and the massive amount of 
money that's being spent to elect judges, and then you come 
into court in some of these States and you may be facing a 
judge that your opponent has given millions or hundreds of 
thousands of dollars to, and I think everyone should have a 
right to know what those donations are so that they can judge 
for themselves whether that's a fair and impartial 
decisionmaker.
    Isn't that the same way we're talking about here with this 
level of transparency.
    Mr. Gordon. I think that is the goal of the advocates, 
absolutely.
    Mr. Braley. And one of the reasons why this is so important 
is because the Supreme Court made clear in Citizens United that 
you can have opportunities to engage in greater forms of 
political speech, but that transparency is a legitimate and 
noble purpose that everyone should embrace, and apparently the 
Speaker of the House himself has embraced, isn't that true?
    Mr. Gordon. Indeed.
    Chairman Issa. The gentleman's time has expired.
    Mr. Braley. I yield back.
    Chairman Issa. Thank you. In support of the gentleman's 
statements, I would ask unanimous consent that the copy of The 
Hill from May 10, 2011 entitled, Unions Spent $100 Million in 
2010 Campaigns to Save Democratic Majorities, and the Wall 
Street Journal entitled, Public Employee Union is Now 
Campaign's Biggest Spender. Without objection so ordered.
    And I now recognize the gentlelady from North Carolina.
    Mrs. Ellmers. Thank you, Mr. Chairman. Thank you for being 
here today, Mr. Gordon. I don't usually--I usually maybe jot 
down a few things, but I have pages here. I keep running into 
conflict after conflict after conflict in your statements, so 
I'm going to start off with No. 1, one being you said that you 
believe that this will increase competition amongst businesses 
wanting to participate because of this up front disclosure, is 
that correct?
    Mr. Gordon. I wasn't actually speaking about the draft 
Executive order. I said that in general the hope with 
transparency is that transparency engenders more trust in the 
system and therefore increases competition, that's correct.
    Mrs. Ellmers. OK. But the Office of Advocacy in the Small 
Business Administration found that regulations cost small 
businesses 45 percent more than large businesses in regard to 
this situation. Doesn't that show that we will have a decrease 
in the number of small businesses that will participate in 
this?
    Mr. Gordon. You're actually talking about one of our very 
highest priorities. We are working hard to meet the statutory 
goal of 23 percent of our Federal contracting dollars going to 
small businesses. And the President has made clear meeting that 
goal is not enough. We need to exceed that goal, including for 
the subcategories, such as the small businesses owned by our 
service disabled vets.
    Mrs. Ellmers. On the point of the idea of the trust in the 
system by the American people, which is what you are saying 
that this process will provide, did you or did you not say that 
there is, that these things will be handled internally so that 
the information will not come out as to which candidates or 
contributions are made? Is that information disclosed right off 
the bat as soon as that contract is bid on or is that held 
internally, as you stated?
    Mr. Gordon. Actually, I don't believe I spoke to that issue 
before. But it's been said earlier that the information about 
political contributions would be publicly available.
    Mrs. Ellmers. Publicly available immediately.
    Mr. Gordon. You're getting into a level of detail that--
we're in a situation where we're talking about or rather not 
talking about a draft Executive order, and I don't feel 
comfortable getting into the details. The advantage of having 
our executive branch review of a draft is Executive orders are 
improved.
    Mrs. Ellmers. So what is the difference then? What is the 
difference, because we know that these things have to be 
disclosed after the contracts are obtained? This is 
information, the transparency is already there. So the 
difference I'm seeing is the time that they would have to 
disclose this information up front with their application, the 
contract process rather than afterwards. So what is the change?
    Mr. Gordon. I'm not an expert in campaign finance 
disclosures, but my understanding is there is, and it was said 
earlier in one of the colloquies, more information being 
disclosed than is in fact disclosed today. I'm not sure that 
the timing is actually any different at all. The timing, the 
information is, some information is already available today.
    Mrs. Ellmers. Well, in closing I just would like to say 
this. You know, the American people, I know you have basically 
stated that this is about transparency for the American people 
and instilling trust in the system. I don't see how that 
happens with this. And I think that the American people are so 
wonderfully filled with common sense that they're going to come 
up with the same conclusion that I have right now, which is 
this is nothing more than a political move, I agree with my 
colleague Mr. Chabot, that this is politics at its worst, and 
this is nothing more than retaliation against the Supreme Court 
decision for Citizens United.
    Thank you, and I yield back.
    Chairman Issa. Will the gentlelady yield?
    Mrs. Ellmers. Yes, sir.
    Chairman Issa. I thank the gentlelady.
    Mr. Gordon, you've basically said you're not comfortable, 
you don't know, you're not an expert repeatedly. Isn't that the 
best reason that your part of government should not be 
reviewing or doing this, that in fact the Federal Election 
Commission, which is charged with campaign disclosure and which 
is charged by Congress, should be the appropriate way to handle 
this?
    Your choice is to say yes or suddenly become an expert and 
start answering our questions. You may pick.
    Mr. Gordon. There is one other possibility, Mr. Chairman, 
and that's that there are other people in the Executive Office 
of the President and across the executive branch who have 
knowledge and expertise that I do not.
    Chairman Issa. Well, we asked for the person most 
knowledgeable in an agreement when the OMB Director wasn't 
available. They sent you. We'll undoubtedly have to ask for 
some additional people who are more knowledgeable, because it 
does appear as though the questions of the procurement--the 
only thing we've decided today is this is not necessary to do 
your job, your people will not look at it, but in fact we can 
see that the draft order circumvents current IRS laws that 
protect disclosure for nonprofits and other groups that would 
fall under this.
    With that, I recognize the gentleman from Vermont Mr. 
Welch.
    Mr. Welch. Thank you, Mr. Chairman. You know, part of the 
issue for me, sitting here listening to this, is if it were, if 
the things that are feared by opponents of this were in fact to 
be allowed, then I would share their concerns. So I just want 
to pin down what is the effect of this. No. 1, any individuals 
or corporations that make contributions have to disclose them 
under current law, isn't that right?
    Mr. Gordon. I do believe that there is extensive disclosure 
already.
    Mr. Welch. And the effect of this would be to put in one 
place for easier review by the public the contributions that 
were made, correct?
    Mr. Gordon. I think that is one of the ideas.
    Mr. Welch. And so to the extent there's a reporting 
requirement, that burden is already part of what a contributor 
must deal with, right?
    Mr. Gordon. Yes.
    Mr. Welch. And have you had input from some of the--also, 
if a union were to get a contract, a Federal contract, they 
would be subject to this law just like a private corporation, 
is that correct?
    Mr. Gordon. You heard my colloquy earlier. I was rather 
surprised at reference to an exemption for unions.
    Mr. Welch. Right. I mean, everybody is in the same boat 
here basically?
    Mr. Gordon. This applies--the draft, if it were ever 
finalized, the draft would apply, as I understand it, to 
contractors, whoever they are.
    Mr. Welch. And have you had reactions from corporations 
that are saying one thing or another about this requirement or 
this draft order?
    Mr. Gordon. I think the committees are going to have an 
opportunity in the next panel to hear from many of those 
responses. I've seen several articles in the press.
    Mr. Welch. In the drafting of this--let me ask you this. Do 
you anticipate any difficulties that contractors would have in 
complying with this?
    Mr. Gordon. I don't feel comfortable talking about a draft. 
The fact is that a draft Executive order as it goes through the 
process may be changed substantially, may never be finalized. I 
can't predict that. What I can tell you is that disclosure 
requirements, and there are many of them today, can be 
challenging for the companies, especially for small companies. 
We look for ways to minimize the burden on companies because we 
don't want disclosure requirements to deter them from 
participating in the procurement process.
    Mr. Welch. The disclosure requirement here would be that, 
if I were a small company, that I would just simply have to 
list the contributions that I made and the individuals and 
where I made them, correct?
    Mr. Gordon. I understand your point, sir.
    Mr. Welch. All right. I yield back.
    Chairman Issa. I thank the gentleman. The gentleman from 
South Carolina, Mr. Gowdy.
    Mr. Gowdy. Thank you, Mr. Chairman. Mr. Gordon, I want to 
thank you for being here and also thank you for your service to 
our country.
    Can you please describe for me what involvement you 
personally had in the drafting of this draft Executive order?
    Mr. Gordon. Sir, I don't think it's appropriate for me or 
any executive branch official to disclose our internal 
deliberations.
    Mr. Gowdy. Are you relying on any specific testimonial 
privilege in reaching that conclusion?
    Mr. Gordon. I'm telling you, sir, that in my experience it 
is extremely important to protect the confidentiality of advice 
shared within the Executive Office of the President and across 
the executive branches.
    Mr. Gowdy. Well, rather than disclose for me the contents 
of any communication, can you answer whether or not there was 
communication? Not the content of it, but whether or not there 
was any between you and the President.
    Mr. Gordon. I understand, sir. My concern, and our shared 
concern across the government, and I should say this is true 
across administrations, there is nothing unique in this 
administration about this. We need to be able to have frank 
discussions internally and not share even the fact of who 
participated outside.
    Mr. Gowdy. Do you believe the privilege belongs to you as 
the witness or to the President if we were to seek a waiver of 
that privilege?
    Mr. Gordon. Actually, sir, I didn't mention the word 
``privilege.'' I was talking about the need to protect the 
confidentiality of our process.
    Mr. Gowdy. But that would be the only legal basis for not 
answering the question, would be the executive privilege, 
correct.
    Mr. Gordon. Sir, I'm not talking about privilege, I'm 
talking about my belief about the importance of protecting the 
confidentiality of our internal deliberations.
    Mr. Gowdy. Well, let me ask you this. Would you agree with 
me, let's assume arguendo that there were a privilege, well, 
let's assume arguendo about the need for confidentiality in all 
regards, would you agree with me that confidentiality is waived 
by the presence of third parties who are not members of the 
executive branch? So let me ask you this. Were there any third 
parties who were not members of the executive branch present 
for any communications, thereby waiving any confidentiality?
    Mr. Gordon. Sir, you're talking in the area of privileges, 
and that's not where I am. But you're also asking me questions 
where frankly if you or other members of the committee want to 
pursue that it's something that I think we should pursue with 
the assistance of counsel.
    Mr. Gowdy. Can you tell me where the Executive order 
originated?
    Mr. Gordon. No, sir, I don't think that it's appropriate 
for me to be disclosing that.
    Mr. Gowdy. And by your answer I take it that you do know 
the answer to it but you choose not to disclose the answer?
    Mr. Gordon. I don't think it's appropriate for me to be 
talking about any of the--either the content or the process in 
the development of a draft document.
    Mr. Gowdy. How did you become aware of the Executive order, 
or the draft Executive order?
    Mr. Gordon. Sir, it's another way of asking me to disclose 
either the content or the process. I'm not comfortable 
disclosing that. Protecting the confidentiality of 
deliberations within the Executive Office of the President is 
nothing unique to this President. It is, in my opinion, 
extremely important, extremely important, for us to be able to 
deliberate without having to disclose outside who we met with 
and what we discussed and who participated.
    Mr. Gowdy. Does it strike you at all as being ironic to 
invoke confidentiality and not answering questions when we're 
having a hearing about transparency?
    Mr. Gordon. It does not, sir. I think that there are 
discussions even about transparency and developing rules about 
transparency that we need to be able to have quietly and behind 
closed doors. That's true when we were working recently on a 
rule about conflicts of interest. You could say, well, surely 
if you're talking about conflicts of interest you should be 
open. In fact, we needed to have quiet discussions internally.
    Mr. Gowdy. You would agree with me, though, let's assume 
for the sake of argument that your analysis is correct, and I 
in some regards do agree with you about the need for 
confidentiality, if there were third parties who are not part 
of the executive branch who were present for those 
conversations then your need for confidentiality or your desire 
for it has already been breached, correct?
    Mr. Gordon. Sir, I feel like the conversation--the question 
feels too hypothetical. I would need to think about that 
afterwards and get back to you if you would like.
    Mr. Gowdy. Well, let me ask you this. Are you aware of one 
scintilla of evidence or study supporting the notion that 
contracting officials are swayed by undue influence or factors 
extraneous to the underlying merits of contracting 
decisionmaking such as political activity or political 
favoritism?
    Mr. Gordon. Am I aware of such allegations? Absolutely.
    Mr. Gowdy. Have any hearings been conducted in that regard?
    Mr. Gordon. I'm not aware of a hearing by a congressional 
committee, but there have certainly been allegations. In fact, 
in GAO, in bid protests we would--you would get occasionally 
allegations that an award decision was swayed by an improper 
and in some cases a political consideration, absolutely.
    Mr. Gowdy. Were there studies that were relied upon in the 
drafting of this draft Executive order?
    Mr. Gordon. You're asking me a question about our internal 
deliberations. I'm not comfortable disclosing our internal 
deliberations.
    Mr. Gowdy. All right. One final question. And I apologize, 
Mr. Chairman. The draft says, the failure to make a full 
disclosure in the certification could result in criminal 
prosecution. That's an interesting word to me, because if it 
could then it could not. And my question is who are you going 
to prosecute and who is going to make the decision?
    Mr. Gordon. I can answer the question in general terms. 
When we have requirements for disclosure, to give you an 
example, contractors today have to disclose whether they have a 
tax delinquency above $3,000 and over a certain period of time. 
If they fail to accurately disclose, they could be making 
themselves liable for prosecution, absolutely. Do we prosecute 
every case? No.
    Mr. Gowdy. So an Executive order can provide criminal 
liability for average citizens?
    Mr. Gordon. That I don't know, sir, to be the case. But an 
Executive order is frequently, and in fact in the area of 
procurement is generally implemented through a regulation, and 
if in fact a contractor takes action inconsistent or that 
violates a regulation that's a very serious matter, absolutely.
    Mr. Gowdy. Thank you, Mr. Chairman.
    Chairman Issa. The gentleman's time has expired. I would 
ask unanimous consent that the article, The Daily Briefing, 
from March 31, 2011 be inserted into the record. It's entitled, 
Former OSC Scott Bloch Sentenced to One Month in Prison. Of 
course he was the one who found Lurita Doan to have committed 
the Hatch Act. Without objection, so ordered.
    We now recognize the gentleman from Idaho, Mr. Labrador.
    Mr. Labrador. Thank you, Mr. Chairman. And it seems to me, 
and I think the comment was already made by the good gentleman 
from South Carolina, that in a transparency hearing this has 
been one of the most opaque hearings that I've ever been a 
participant in. And I'm not really sure why you're here.
    Can you tell me why you're here? Why exactly did the 
administration send you, because I have no idea what exactly 
you have aided this committee in doing today?
    Mr. Gordon. I was asked--I was asked to appear in order to 
talk about the general issues of integrity. And in fact I think 
the issues of integrity are directly relevant to the subject 
matter of the hearing. And I think you've seen, although I 
can't talk about a draft Presidential document before the 
President makes a decision, I can certainly, and I have talked 
at some length, about the principles that are at issue.
    Mr. Labrador. Let's talk about those principles real quick. 
You told us toward that the no award decision will be based on 
this information that's being given, that you're going to base 
it on the selection criteria; is that correct.
    Mr. Gordon. Award decisions can only be based, according to 
the Competition in Contracting Act, on the selection criteria 
in the solicitation.
    Mr. Labrador. So you're a law school professor. You were a 
law school professor. I was a law school student at one point, 
so this is kind of fun for me. Let's--when you gave law school 
exams, there was--at least in my law school I was not able to--
I never wrote down my name. Did your law school have that 
same--that same requirement?
    Mr. Gordon. At GW where I taught, yes. You used the number 
rather than a name.
    Mr. Labrador. Why is that?
    Mr. Gordon. Because you want to be sure that your judgment 
about the quality of the exam is not based on your knowledge of 
the individual, but rather on the content of their answer.
    Mr. Labrador. And that's because there are certain 
students, right, that you don't like in your class or that you 
have a problem with.
    Mr. Gordon. Never in my class, sir.
    Mr. Labrador. OK. But some professors--hypothetically there 
are some professors who don't like some of their students.
    Mr. Gordon. They also may like somebody------
    Mr. Labrador. Or they may like somebody too much; is that 
correct?
    Mr. Gordon. Yes.
    Mr. Labrador. OK. So it's in order for us to make--for the 
professor to make an unbiased decision; isn't that correct?
    Mr. Gordon. Absolutely.
    Mr. Labrador. So under this proposed rule, and let's just 
speak hypothetically about it, any requirement to do this, 
would the contracting agent have the document in front of him 
or her that shows what those donations were?
    Mr. Gordon. It depends, sir. My understanding is that in 
some of the States that have pay-to-play laws, in fact, the 
contracting officials do not have the information. All they 
know is that the company affirms that it made the disclosure. 
So if you had that on the Federal level, all you would know is 
the company says, yes, we made all required disclosures. The 
contracting officer would see nothing, nothing about who 
received the money or how much.
    Mr. Labrador. But somebody would in the administration see 
that document, correct?
    Mr. Gordon. Oh, just as today. Today there is already 
public information about contractors' disclosures. Absolutely.
    Mr. Labrador. Absolutely.
    Then let's followup on that comment. There's already public 
information, and you're telling us that you're an advocate of 
transparency, correct?
    Mr. Gordon. I am an advocate of transparency in 
procurement.
    Mr. Labrador. And it increases public trust.
    Mr. Gordon. That is always our hope.
    Mr. Labrador. So what is unavailable at this time that you 
think we need to have more information of that is not currently 
found in the public documents out there?
    Mr. Gordon. As actually several members of the committee 
has pointed out, there is information about third-party 
donations which is not publicly disclosed today.
    Mr. Labrador. OK. Now, does that have anything to do--were 
you an advocate or did you have a problem with Citizens United?
    Mr. Gordon. Sir, I'm a procurement person, Not a campaign 
finance person.
    Mr. Labrador. No, but you must have an opinion. You're a 
law school professor.
    Mr. Gordon. I was a law school professor before I came into 
this job, before Citizens United was decided, and I was 
professor of procurement law, sir.
    Mr. Labrador. And did you read the opinion of Citizens 
United?
    Mr. Gordon. I did not.
    Mr. Labrador. You are aware that the administration has 
some problems with that opinion?
    Mr. Gordon. Yes, sir. I am aware of that.
    Mr. Labrador. So let me just give you another hypothetical. 
If I am the procurement officer--you know, one of the concepts 
that I was taught in law school is to make sure in drafting 
legislation you have to be really careful not to encourage 
future lawsuits when you're drafting legislation. So let's say 
we have a Republican conservative--socially conservative 
administration, and we have one contractor who shows that he or 
she has donated thousands and thousands of dollars to the 
prolife community, and you have another contractor who shows 
that he or she has donated thousands and thousands of dollars 
to a prochoice or a proabortion community, and this Republican 
administration gives the contract to the person who did the 
prolife--gave the money to the prolife community. Don't you 
think there might be a cause for a lawsuit? Because you are an 
expert in procurement law. Would there be a cause for a lawsuit 
here?
    Mr. Gordon. There are? You do have allegations. As I said, 
in my years--in the 17 years I was at GAO, we had a small 
number, I am happy to say, but there were a few cases where 
there were allegations that political interference had caused 
the contract to go one way or the other. In my recollection, 
GAO found when it did an independent investigation, it never 
found a basis for it to be true. But could a company have 
concern about that today already? Absolutely.
    Mr. Labrador. Let me ask you another hypothetical. OK. My 
time is up.
    Chairman Graves. Thank you.
    This concludes the first part of our panel. Mr. Gordon, we 
appreciate you being here during the first part of our hearing. 
Appreciate you being here, and appreciate your testimony. We 
will now seat the second panel.
    Chairman Graves. We will now recognize our second panel of 
witnesses. We have with us today Mr. Alan Chvotkin, senior vice 
president of Professional Services Counsel.
    We have Mr. Mark Renaud. He's a partner at the law firm of 
Wiley and Rein.
    We have Ms. M.L. Mackey, who is the CEO of Beacon 
Interactive Systems and the vice chair of the small business 
division of the National Defense Industrial Association. And of 
all of the businesses that raised this issue with our 
committee, Ms. Mackey was the only one that wanted to testify 
today. All of the other cited feared some reprisals. So we 
thank you very much for coming Ms, Mackey.
    We also have Lawrie Hollingsworth, who is president of 
Asset Recovery Technologies, Inc., and is testifying on behalf 
of the U.S. Women's Chamber of Commerce.
    We have Ms. Marion Blakey, who is the president, chief 
executive officer of the Aerospace Industries Association.
    And Mr. Brad Smith, who is the former Federal Election 
Commission chairman and is professor of law at Capital 
University Law School.
    Pursuant to the committee rules, we have to swear in all of 
the witnesses, all of you today. So you if you will please 
stand and raise your right hands.
    [Witnesses sworn.]
    Chairman Graves. Let the record reflect that all witnesses 
answered in the affirmative.
    Please be seated.
    In order to allow time for discussion, I would ask that you 
please limit your testimony to 5 minutes. But your entire 
written testimony will be made a part of the record. And we 
will start with you, Mr. Chvotkin. And, again, I want to thank 
all of the witnesses for coming today. I appreciate it very 
much. I am looking forward to your testimony.

      STATEMENTS OF ALAN CHVOTKIN, SENIOR VICE PRESIDENT, 
PROFESSIONAL SERVICES COUNCIL; MARK RENAUD, PARTNER, WILEY REIN 
   LLP; M.L. MACKEY, CEO, BEACON INTERACTIVE SYSTEMS; LAWRIE 
 HOLLINGSWORTH, PRESIDENT, ASSET RECOVERY TECHNOLOGIES, INC.; 
    MARION BLAKEY, PRESIDENT AND CEO, AEROSPACE INDUSTRIES 
ASSOCIATION; AND BRAD SMITH, PROFESSOR, CAPITAL UNIVERSITY LAW 
                             SCHOOL

                   STATEMENT OF ALAN CHVOTKIN

    Mr. Chvotkin. Chairman Graves, Mr. Issa, members of the two 
committees, thank you for your invitation and the opportunity 
to testify at this joint hearing. So there's no mistake about 
it, the Professional Services Council is opposed to the draft 
Executive order in its current form, and we hope that it will 
not be issued.
    Political contributions currently are not and should not be 
disclosed as part of the bidding and source selection process 
for Federal contract awards. Yet the draft Executive order 
takes the ill-conceived approach of injecting that very 
information into the contracting process, forcing all bidders 
for Federal contracts to disclose--collect and disclose that 
information as part of their bid.
    Furthermore, only those competing for Federal contracts are 
covered by this draft order. We are not aware of any action 
that has been taken elsewhere to cover other entities or even 
the Federal employees who are source decisionmakers for those 
Federal procurements. Singling out Federal contractors adds its 
own political tinge to the draft order.
    The first paragraph of section 1 of the draft order spells 
out the policy foundation. We fully endorse those statements. 
They spell out a necessary and appropriate requirement that is 
and, in our view, must be at the very heart of the Federal 
contracting process. Today no information about campaign 
contributions or other political activity is ever asked to be 
presented to a contracting officer or other source selection 
official.
    I doubt that any procurement official has done her own 
research in the publicly available campaign contributions to 
aid them in their source selection, but if there is that 
concern, rather than insulating contracting officers from this 
tainted information, this draft order requires every bidder for 
a Federal contract to affirmatively disclose that information, 
and further provides that making the required disclosure is a 
condition of award. For us, this is not a question of 
disclosure of political contributions; it is a question of the 
linkage to the Federal procurement process.
    The first paragraph of section 2 of the draft order 
requires a certification that disclosure of this information 
has been made and the FAR Council is given authority to 
establish the manner in which the certification is made. It is 
not clear whether the draft order also gives the FAR Council 
the flexibility to determine the nature of the certification 
required.
    Certifications have special importance in the Federal 
procurement system. Typically and ideally where they are 
required, they should be made subject to the certifier's best 
knowledge and belief where the contractor's dependent on 
obtaining information from others in order to make the 
necessary certification.
    Second, there should be some method for the bidder to be 
able to identify areas outside the contractor's control where 
the certification cannot be made, such as when a contributor 
refuses to provide the relevant information to a bidding 
entity.
    Section 2 of the order also requires the disclosure of two 
types of contributions. The first is contributions to Federal 
candidates, like the discussion, while that is publicly 
available. Today companies are not now required to collect this 
information. Once the contributions are made, it is the 
recipient of the contribution that makes the disclosure, not 
these companies.
    We also have concerns about the threshold that has been 
established, because the bidder still has to collect the 
information in order to know whether the aggregate exceeds the 
$5,000 threshold in the Executive order.
    The second type of contribution is to third-party entities 
with the intent or reasonable expectation that those parties 
would use the contribution to make independent expenditures. 
None of these contributions as have been discussed today are 
now subject to reporting, yet the draft order used as an 
undefined standard of reasonable expectation whose 
interpretation may vary, thus undercutting the value of the 
information.
    Further, by adding a requirement that the bidder ascertain 
from the contributor whether she was aware of the intent of the 
third party or had reasonable expectation of the likely use of 
the contribution, the bidding entity would have to further pry 
into the contributor's knowledge of the actions of the third-
party recipient. While the reporting requirements are not 
duplicative of existing reporting requirements, it would still 
impose a heavy information collection and compliance burden on 
contractors that does not exist today.
    PSC is opposed to this draft order and recommends that it 
not be issued. This type of political information has been 
intentionally kept out of source collection to ensure a merit-
based evaluation and award process. But the order would make 
its disclosure a condition of award. While the purpose of this 
order is to prevent pay-to-play contracting seen in some State 
procurement environments, the result will be to create the very 
pay-to-play environment on the Federal level where none exists 
today.
    Thank you for the opportunity to present these comments. I 
look forward to any questions you may have.
    Chairman Graves. Thank you, Mr. Chvotkin.
    [The prepared statement of Mr. Chvotkin follows:]



    Chairman Graves. Mr. Renaud.

                    STATEMENT OF MARK RENAUD

    Mr. Renaud. Thank you, Mr. Chairman, and Mr. Ranking 
Member, and the members of these two committees, for inviting 
me to testimony. This is an important issue facing Congress, 
and I hope my comments prove useful. These views are solely my 
own and do not reflect the views of my firm or any of its 
clients.
    In short, there is simply no connection between the 
political information sought by the President's draft Executive 
order and the contracting process, no corruption to be 
remedied, and no need to burden on core First Amendment rights 
of speech and association.
    Among other things, under current campaign finance law, 
employees and PACs of government contractors are subject to the 
same contribution limits as other contributors, and their 
contributions are fully reported. As just mentioned, businesses 
are currently not required to collect or report their 
employees' contributions and are advised against it. All 
contributions are voluntary.
    The President's draft EO is styled as a pay-to-play law, 
the laws that stops the giving of contributions for the receipt 
of contracts. But terminology alone is insufficient. I have 
extensive experience working on compliance issues related to 
Federal, State and local pay-to-play laws. Many of these laws 
suffer from the same infirmities as this draft EO. Here there 
is no evidence of corruption from campaign activity in the 
Federal contracting process; maybe in New Jersey and 
Connecticut in the past, but not here.
    The nexus, then, between the contracting process and the 
contributions is created solely by this draft EO and its 
supporters, because Federal acquisition officers, as we just 
heard today, are insulated from the campaign system, as they 
ought to be. The connection put forward pollutes the 
marketplace of ideas with this idea of corruption.
    Because there is no nexus, the draft EO is unlike pay-to-
play regimes that target elected officials and their political 
cronies who are thoroughly and unavoidably involved in the 
procurement process.
    The draft EO also reaches beyond contributions to 
independent expenditures, which no other pay-to-play regime 
does directly, save the rules of the Nebraska Lottery 
Commission. The Supreme Court has reminded us frequently that 
independent expenditures do not cause corruption or the 
appearance of corruption. The Securities and Exchange 
Commission, in its recent rigorous pay-to-play rulemaking, 
fully disclaimed affecting independent expenditures.
    The draft EO, unlike any other pay-to-play system, also 
targets grassroots lobbying in the form of electioneering 
communications. Because of its inclusion in the contracting 
process--that's the key, inclusion in the process--the 
disclosures under the draft EO will have a negative effect on 
corporate and personal political activities of those covered.
    Because of uncertainty about how the information will be 
used, the contractors will rationally move to eliminate any 
activity that might make them less competitive. The disclosures 
also will politicize the employer and employee relationship 
with officers, especially for small businesses who may not be 
able to afford parallel compliance systems that many large 
corporations use, forcing subordinate officers to report 
political activity to their superiors and fear for the 
consequences.
    The vagueness of the draft EO exacerbates this chilling 
effect. The FAR Council is tasked with providing guidance, but 
campaign finance is not its core competency, and it will be 
undertaking this task on an accelerated basis during the 
Presidential election cycle. With vagueness, an ever larger 
group of persons will curtail an even wider set of activities.
    In closing, I leave you with a sample of the burdens 
imposed. Contractors must report contributions made to third 
parties with the intention or reasonable expectation that the 
parties will use the contributions for independent expenditures 
or electioneering communications. This is a precursor to an 
unending number of disputes over contribution certifications.
    With hindsight, competing and losing bidders will be able 
to protest awards based upon donations, perhaps even trade 
association dues paid by the bidder but not reported, given the 
attention or reasonable expectation of the bidder at the time. 
And some think there will be no chilling here.
    Thank you. I am happy to answer any questions you might 
have.
    Chairman Issa. Thank you.
    [The prepared statement of Mr. Renaud follows:]



    Chairman Issa. Ms. Mackey.

                    STATEMENT OF M.L. MACKEY

    Ms. Mackey. Good afternoon. I'm speaking to you today in my 
capacity as vice chair of National Defense Industrial 
Association small business division, legislative affairs 
committee, and as CEO and cofounder of Beacon Interactive 
Systems. NDIA membership is composed of over 90,000 individual 
members and 17,000 corporate members, over half of which are 
small businesses. Beacon Interactive Systems is a 17-year-old 
small business that for the past 9 years has been a Federal 
contractor actively developing and delivering innovative 
technology and cost savings to the Department of Defense.
    In terms of today's discussion, the contribution that I can 
make is to describe the potential impact of this proposed 
Executive order on small businesses that actively engage in the 
Federal procurement process.
    The intent of ensuring that campaign contributions do not 
unduly influence the award of Federal contracts is laudable. 
Unfortunately, the approach taken by this proposed order could 
have serious negative consequences on business, especially 
small business.
    The order presents five areas of significant concern. 
First, it politicizes the Federal procurement process, which by 
all accounts should be completely independent and transparent.
    Second, it puts company management in the distasteful 
position of invading the privacy of their senior management by 
requiring disclosure of their personal political contributions.
    Third, this proposed Executive order could have the effect 
of silencing the voice of small businesses, who might, in an 
effort to mitigate potential contracting risks, no longer be 
comfortable making the grassroots contributions to advocate for 
the issues that are important to them.
    Fourth, the small business may decide that operating under 
the proposed order is not worth the effort of doing business 
with the Federal Government.
    And fifth, this order will increase the reporting burden on 
small business and contracting officers, which in turn 
increases costs and further prolongs an already lengthy 
procurement process.
    None of these consequences are acceptable.
    Let me expand on some of these challenges.
    It is imperative in the realm of government contracting 
that small businesses be able to operate on a level playing 
field. In order for small businesses to compete effectively, 
proposals must be evaluated in an open and consistent manner 
with a laser focus on three main factors: technical merit, cost 
competitiveness, and past performance history.
    The proposed disclosures will now shine a spotlight on a 
company's political contributions. At the end of a lengthy, 
rigorous, and often convoluted evaluation process, small 
business owners will be required to provide contracting 
officers with a detailed record of a company's political 
expenditures. It is not hard to imagine that this information 
could, whether intentionally or not, be used to influence the 
procurement decision, precisely the outcome the proposed 
Executive order seeks to prevent. Even if there were no 
impropriety, a competing vendor who lost a procurement 
opportunity might argue and protest that political affiliations 
were a contributing factor in the decisionmaking.
    Second, the proposed Executive order requires me, as an 
example, to report individual contributions made by my company 
officers. As a small business owner, I do not want to force my 
employees to disclose their political leanings. How employees 
allocate their campaign contributions should have no bearing on 
my hiring, compensation or promotion policies. My employees 
should be concentrating on how to best execute their job 
responsibilities, not worrying about whether their political 
choices are consistent with mine. This is a personal matter 
that does not need to be thrust into the workplace. In the same 
manner, personal political choices should not be unnecessarily 
thrust into contracting.
    The third area of concern is that this proposed Executive 
order could have a chilling effect on the political activities 
of small business and their management. It is difficult enough 
for small businesses to compete effectively and navigate the 
often complex waters of Federal contracting. Politicizing the 
process will add one more possible obstacle to small business 
participation. From my personal experience as a small business 
owner, I can tell you that I do not have the resources or the 
inclination to manage this unquantifiable risk. If my political 
contributions can negatively affect my ability to win Federal 
contracts, I will not make them.
    As you know, true small business advocacy is funded at the 
grassroots level. If small businesses fear that their 
operations will be harmed by their political choices, they may 
remove themselves from the public discourse and halt future 
donations. This effectively limits free speech and may leave 
the small business constituency without adequate 
representation. Alternatively, some small businesses might feel 
coerced into supporting the party in power in order to bolster 
their chances of winning contracts. Either way, the political 
process is compromised.
    And finally, there is likelihood that the proposed 
Executive order could discourage small businesses from pursuing 
Federal contracts. The intrusive disclosures of personal 
political contributions combined with the additional reporting 
requirements would add unproductive time and costs to the 
procurement process. If this pushed small businesses to adopt 
the ``why bother'' stance, our Nation and particularly our men 
and women in uniform would be deprived of the innovations, 
agility and cost efficiencies that small business brings to the 
table.
    Mr. Chairman, on behalf of the National Defense Industrial 
Association, I would like to thank you and the committee for 
your leadership on this important issue. We appreciate your 
efforts to keep the Federal procurement process fair and 
independent, as this is a critical component of successful 
small business participation.
    I'd be pleased to respond to any of your questions. Thank 
you.
    Chairman Issa. Thank you.
    [The prepared statement of Ms. Mackey follows:]



    
    Chairman Issa. Ms. Hollingsworth.

               STATEMENT OF LAWRIE HOLLINGSWORTH

    Ms. Hollingsworth. Good afternoon, Chairman Graves, Ranking 
Member Cummings, Chairman Issa and members of the committee. I 
am here today as a member of the U.S. Women's Chamber of 
Commerce representing our half a million members, three-
quarters of whom are American small business owners and Federal 
contractors.
    I am Lawrie Hollingsworth, president of Asset Recovery 
Technologies. My engineering business, founded in 1994 and 
headquartered in Chicago with multiple offices nationwide, 
provides technical services for disaster recovery and disaster 
response to business and government offices impacted by fire, 
flood, and catastrophe; and the recovery of technology assets 
to return these businesses and offices to operation. We were, 
by the way, proud responders to 9/11 and Hurricane Katrina.
    As a small business owner, I appreciate the opportunity to 
provide this testimony and appreciate being here. Hopefully I 
can impart some insights and perspectives from the small 
business viewpoint on the issues of political spending, 
campaign finance, transparency, and prevention of the 
politicization of the procurement process through unscrupulous 
pay-to-play tactics.
    Our political system, which is already too full of cash for 
influence, now faces a threat of undisclosed corporate 
political spending. With the landmark Citizens United case, we 
are already seeing a flood of corporate campaign spending, much 
of which will not be publicly disclosed. At stake are millions 
of dollars in undisclosed donations that will be provided by 
large corporations to trade associations and other not-for-
profit organizations and entities that will use the money for 
independent campaign expenditures.
    To get a grasp of the amount of money known to be used by 
the biggest firms to influence government, consider this. The 
top 10 Federal contractors spent over $65 million in 2010 for 
lobbying alone, and I believe I heard a figure of $100 million 
tossed around today. That is an amount that is considerably 
more than the gross annual sales of probably most small 
businesses as the SBA defines them.
    Small business owners do not possess the resources, 
financial and otherwise, to compete with the enormous amount of 
capital, influence and lobbyist activity the large businesses 
employ to gain access to and win government contracts, and I'd 
like to especially note single-source government contracts.
    Through enacting a policy as is detailed in the draft of 
the President's Executive order, it is my hope that by being 
aware of the influences that govern the awarding of government 
contracts, we will level the playing field for the small 
business owner.
    Currently small business owners have only limited resources 
to compete with large corporations in the awarding of 
government contracts. While many factors are at play, certainly 
campaign contributions and other politically related acts of 
large corporations place the small business owner at a 
substantial disadvantage in the awarding of government 
contracts.
    While I feel that the stated purpose of this policy, which 
is to cast light upon hidden interests and influences in 
letting of government contracts, is admirable and desirable, it 
is also desirable to impact small business with additional 
burdens as little as possible in the process. Small business 
owners already face substantial obstacles and impediments to 
the point of entry to government contracting, so much so that 
many small businesses literally give up on the process.
    Clearly, regulations and paperwork that do not result in 
increased opportunity for small business is undesirable. 
However, if a policy is enacted that brings greater 
transparency and integrity to our Federal contracting and our 
political fundraising processes in such a manner that our small 
business owners can respond without undue burden, then I feel 
this is a worthy proposal deserving the support of small 
business.
    The draft EO would allow the public to see the flow of 
money that is now hidden through third-party groups, cut-out 
funding mechanisms and other political strategies that allow 
donors to hide their contribution. Rather than hurting small 
business by politicizing the process, it is very likely this 
much-needed transparency will depoliticize the process, help to 
prevent pay-to-play schemes, and assure small businesses 
compete fairly. Public scrutiny will prevent contractors from 
using their taxpayer-funded deep pockets to secure an 
unwarranted advantage in the government procurement process.
    I believe certain steps can be taken to approve the draft 
Executive order, including raising the disclosure threshold and 
establishing a contract site, assuring that the rules and 
regulations developed to support the proposal provide easy, 
clear steps for compliance. In short, the right sort of rules 
will allow small business in many cases to be exempt from what 
is allegedly an onerous burden to comply with this act.
    I appreciate your time here today, and I would be happy to 
answer any questions. Thank you.
    Chairman Issa. Thank you.
    [The prepared statement of Ms. Hollingsworth follows:]



    
    Chairman Issa. Ms. Blakey.

                   STATEMENT OF MARION BLAKEY

    Ms. Blakey. Thank you, Chairman Issa, Congressman Cummings, 
Congresswoman Ellmers. I am delighted to be here testifying 
today. My name is Marion Blakey, and I am the president and CEO 
of the Aerospace Industries Association. I am here representing 
the 345 member companies of aerospace and defense industry and 
their 800,000 U.S. workers.
    We want to express our grave concerns about the provisions 
contained in the draft Executive order regarding political 
contributions. Through our member companies, we represent 
thousands of small businesses across the Nation, and I am 
particularly offering their voice today.
    As written, the draft EO would for the first time introduce 
political contributions into the government contracting 
process. It's unclear how that information will be used by a 
contracting officer in the source selection process. This 
creates the possibility that donations to a particular 
political party or candidate would be a consideration when 
evaluating contract proposals, whether specifically intended or 
not.
    This also might have the unfortunate consequence of 
contributing to the belief among some that particular political 
contributions are a requirement for winning contracts. 
Political contributions should never be considered by any 
procurement officer when making a decision to either award or 
deny a contract to an entity.
    In order to comply with this Executive order, any company 
bidding on the Federal contract would have to develop, 
implement and maintain a system to track and record all 
personal political contributions, to include retroactive 
contributions upon implementation. This will also result in an 
additional cost burden that in most cases will be reflected in 
higher contractor overhead rates. This is particularly 
challenging for small companies such as those in the extensive 
aerospace supplier base who don't have a large corporate 
infrastructure to meet the Federal mandates.
    Furthermore, the certification requirement places an undue 
risk on small companies in the event that any of their 
directors, officers, affiliates, subsidiaries would perhaps 
provide inaccurate or even incomplete information. If the 
company submission for the contract contains a list of donors 
that's incomplete, even though the company tried to fully 
comply, they may find themselves in an expensive legal 
proceeding for a violation of both Title 18 and Title 31 of the 
U.S. Code for making false claims or statements. Smaller 
companies that can't afford to defend themselves in these 
situations may instead opt to avoid government contracting 
altogether.
    The resulting impact is not necessarily restricted to small 
companies. The imposition of disclosure and certification 
requirements would also result in large and medium-sized 
commercial businesses opting out of selling to the Federal 
Government, potentially leaving the government without access 
to technologies and services necessary for its mission. This is 
a real liability in the aerospace and defense arena, where our 
defense and industrial base has shrunk, and there may be only 
one or two suppliers for a particular technology critical to 
protecting our fighting men and women.
    Requirements already exist, as has been reported out, to 
ensure transparency of political contributions. Those 
requirements apply evenly across the board for all individuals 
and organizations that make political contributions.
    AIA and its member companies support efforts to ensure 
there is greater transparency and accountability in the Federal 
contracting arena; however, we do not support actions which 
would introduce politics into that arena, increase the 
regulatory burden at risk for companies, or infringe upon the 
constitutional rights of a particular segment of corporate 
citizenry.
    As I stated earlier, political contributions should never 
be considered by any procurement officer when making a decision 
to either award or deny a contract to any entity. Not levying 
this requirement on companies to report such contributions to 
the procurement officer is one important way to safeguard 
against the risk that any such consideration would ever be 
given.
    Thank you very much.
    Chairman Issa. Thank you.
    [The prepared statement of Ms. Blakey follows:]



    
    Chairman Issa. And now for the only person who has the 
expertise our previous panel did not show, Mr. Smith.

                    STATEMENT OF BRAD SMITH

    Mr. Smith. Thank you, Mr. Chairman.
    First I will note that you--and thank the ranking member as 
well. I'm sorry. I want to note first that I know you took some 
flack for having an unbalanced panel. Fred Wertheimer, who has 
left and is undoubtedly out issuing a press release now, has 
said he's never seen such an unbalanced panel. And I just 
thought I'd mention that I have been on many of those in the 
last 4 years, usually as the minority witness. So in any case, 
I appreciate you having this hearing today.
    Whenever we get to a regulation speech, we find we talk 
immediately about constitutional issues. And in interpreting 
the Constitution, the Supreme Court, it's very clear, has 
granted quite a bit of leeway to regulating disclosure laws 
relating to campaigns, has given the government quite a bit of 
leeway to regulate in the area of disclosure. However, as Mr. 
Gordon eventually conceded in the last panel, transparency is 
not an unequivocal good in all circumstances at all times. And, 
in fact, the Supreme Court has never blessed everything that's 
tabled as campaign finance disclosure, and the Supreme Court 
has never blessed this particular kind of disclosure that is 
proposed in this draft order.
    Just to give a quick rundown, for example, in Thomas v. 
Collins, the Supreme Court held that labor organizers don't 
have to identify themselves; they can do that anonymously. In 
Tally v. California, the Supreme Court held that picketers and 
boycotters, such as people who might want to boycott the Koch 
brothers or Target, don't have to identify themselves; they can 
do that anonymously. In Watchtower Bible and Tract Society v. 
Village of Stratton, the Supreme Court said that people going 
door to door don't have to identify themselves, such as, for 
example, maybe people working for, what is it, Organizing for 
America; they could do that anonymously. In McIntyre v. Ohio 
Elections Commission, the Supreme Court held directly that 
individuals cannot be required to report small levels of 
political activity to the government, which is what this draft 
order would require to be done through an indirect process. 
And, of course, in NAACP v. Alabama and a series of other 
decisions, the Supreme Court held that membership 
organizations, at least those at a minimum that feared--had 
legitimate fears of harassment and retaliation, could not be 
required to disclose their members to the government.
    So the government--or the Court has not as a constitutional 
matter generally approved all disclosure. When it has approved 
disclosure, it has done so for political committees or where 
there is no vagueness. That is, it has required a bright line 
test.
    It goes without saying that we're not being mean with 
political committees here. So we're dealing with the question, 
is there a bright line? I don't think this meets this test as 
set forth in Buckley v. Vallejo and other cases. I won't go 
into the details other than to say that terms such as 
``intention'' or reasonable expectation that funds you gave to 
somebody 2 years ago were going to be used for some type of 
political activity are, I think, very vague terms.
    Other terms that could be vague, ``officers,'' how far down 
does it go, subsidiaries that are under control of a company or 
other organizations under control of a company, and to even 
terms such as ``independent expenditure'' and ``electioneer in 
communications'' are malleable; that is, they have meanings for 
election law specialists, but it is not at all clear that they 
have meanings for Federal compliance officers. And I doubt that 
most officers working there would have expertise in that area 
or know the relevant judicial precedence.
    Further, the government has to have a compelling government 
interest. What is that government interest here? We've heard 
repeatedly that A, this information won't actually be used by 
the government in contracting; B, there is no problem with 
contracting corruption, and if there were you should probably 
be issuing some subpoenas and having some investigations of the 
current process. We're told that it has been pointed out that 
most of these activities are already disclosed.
    What's not disclosed are contributions by contractors that 
would go to a third party that might spend them for political 
activity, but they're not designated for political activity. 
We've never seen something like that required and approved by 
the Court before.
    This is what we call at the Center for Competitive 
Politics--which, I should note, I also run--we call this ``junk 
disclosure.'' It basically just duplicates. It requires extra 
forms, extra reporting. It may create different standards for 
different people. And indeed there is quite a bit of growing 
evidence that this does not increase public confidence in 
government. Studies by Nate Persily of Columbia, Kelly Lanny of 
the University of Pennsylvania, Jeffrey Milo of the University 
of Missouri, have shown that excessive disclosure often in fact 
decreases public confidence in government.
    Here you would have the presumption out there that, Ah, 
here's disclosure and here is the contract and people are going 
to draw the connection; ah, you have to give to get the 
contract. What is a contractor going to think 6 years from now, 
someone who is not in business today and he sits down to bid on 
his first government contract and he sees who have you given 
your major political contributions to?
    So I don't see this reducing or, I mean, increasing public 
confidence in government, and I think we should recognize that 
the possibilities for retaliation that made the Supreme Court 
hesitant are very real. We know the Nixon enemy list. We know 
the K Street Project. We know that during the Clinton 
administration there was concern that trips on--international 
business trips were being sold to donors, and the answer to 
that was not to require more disclosure, not to say tell us all 
this stuff; it was to say, you cannot consider that, you cannot 
put that in your application. And I think that's the way that 
this should be dealt with here.
    Thank you.
    Chairman Issa. Thank you.
    [The prepared statement of Mr. Smith follows:]



    Chairman Issa. I'd recognize myself for 5 minutes.
    Ms. Hollingsworth, are you concerned that the disclosure 
nowhere in the draft Executive order would cause the unions of 
companies who are contractors to be disclosed, meaning that--
let's just assume for a moment that all contractors gave all of 
their money to Republicans and all unions gave all of their 
money to Democrats. Are you concerned you'd be seeing only half 
of the contributions?
    Ms. Hollingsworth. Well, I just assume that's actually the 
case today.
    Chairman Issa. Of course, both sides have some crossover. 
But I said assume for a moment just because, obviously, the 
truth is there is a leaning, about 90 percent of union money 
goes to the President's party. But that's not disclosed. Does 
it concern you that 90/10 ratio historically would not be 
disclosed and, more importantly, a specific independent 
activity of millions of dollars of union money in some 
independent way would not be disclosed, even if it's to further 
the contract of one of your large competitors, Boeing or 
somebody of that sort? You know, because you talked about small 
business being impacted. Isn't small business 
disproportionately not union, large business comparatively 
highly union and wouldn't that nondisclosure be of concern to 
you?
    Ms. Hollingsworth. Well, I think to answer the question 
somewhat similar to the gentleman before me, from the OMB.
    Chairman Issa. You mean evasively? Evasive? That's how the 
gentleman from OMB was. He could answer ``yes'' to the minority 
and he could answer ``I am not qualified to answer'' pretty 
consistently to the majority.
    Are you going to be more specific? Do you believe there is 
a concern because the draft Executive order completely exempts 
unions using their collective dues, involuntarily collected, 
where that money goes? Do you have a concern, please? Yes or 
no?
    Ms. Hollingsworth. That sounds like have I quit beating my 
dog, yes or no? But to answer that, the answer is no, I don't.
    Chairman Issa. OK. You're not concerned.
    Mr. Smith, because you came out of, among other things, the 
time at the FEC, does the FEC operate, to the best of your 
knowledge, under any Executive orders?
    Mr. Smith. As an independent agency, generally the FEC is 
not bound by Executive orders----
    Chairman Issa. Right. So if I understand correctly, the 
Federal Elections Commission was created by Congress under a 
law; and, periodically, new laws have been passed that set 
guidance and then empower the Federal Election Commission to 
set rulemaking after those are passed, including even rules by 
the House and Senate that you then act on; isn't that true?
    Mr. Smith. Yes. And a crucial point of that is that the FEC 
has a bipartisan makeup; that is, no one party can control that 
rulemaking process, or the prosecution is under it and you 
always have to have----
    Chairman Issa. So wouldn't this Executive order essentially 
circumvent that and create a new entity that is not bipartisan, 
that in fact is inherently partisan? It goes to one party's 
control or another, depending on who wins the Presidential 
election?
    Mr. Smith. That could certainly be an appearance that many 
people would draw.
    Chairman Issa. I am not trying to be argumentative.
    Mr. Smith. That's a yes.
    Chairman Issa. Thank you.
    Ms. Blakey, you heard my earlier question to Ms. 
Hollingsworth. Are you concerned that in fact there would be a 
disparity between union and non-union companies' ability to 
make undisclosed contributions because of their union 
activities that are not covered in this?
    Ms. Blakey. I think our feeling is that you have to have 
real parity and real equity across all entities involved in the 
political process. Our big concern is there simply should be no 
link between the political contributions and the Federal 
contracting process. That's making a false link and it is 
something that really introduced politicization where it should 
never be.
    Chairman Issa. Ms. Mackey, you've been very courageous. 
You're the only person that our side could find.
    Ms. Mackey. Courageous or ignorant. I'm not sure which one 
it is.
    Chairman Issa. Well, we'll take courageous. Willing to come 
forward both on behalf of an association and in a personal 
capacity.
    Do you feel--and this is a little bit of a stretch--that if 
something like this were going to be instituted, that it should 
be done by Congress, require full disclosure of all parties, 
and be handled by the Federal Election Commission? In other 
words, would you be more comfortable if this process was done 
in a way in which it was deliberative, it was done nonpartisan 
and, more importantly, you were not asked to ask your employees 
questions, but if there was a requirement to disclose, that 
requirement would be between the FEC and not your insisting on 
various people telling you and having a penalty if you're 
unable to get the facts right.
    Ms. Mackey. I don't think I have the civics expertise to 
know who should be making those calls. What I can tell you, 
it's very important that this discussion this private 
discussion gets taken out of two places for me: one, my 
business; and, two, my business development with the 
contracting officer. I am happy with transparency. I am happy 
with everyone knowing where people are contributing. I just 
don't want it brought into the private conversations in my 
company or the business development relationship with my 
contracting officer.
    Chairman Issa. I thank you. We may have a second round, but 
I recognize the gentleman from Maryland, Mr. Cummings.
    Mr. Cummings. I stand here and I listened to all of this. 
And one of the things that I say to my children is that I want 
to leave a better world than the one that I found. I want to 
leave a world with more opportunity. I want to leave a world 
where the rivers are not polluted. I want to leave a world 
that's safer and better.
    And as I listened to all of this, there's another thing I 
want to leave. A stronger democracy. A stronger democracy. You 
know it's easy to--you know, the public is in a position now, 
the general public is saying they want more disclosure. They 
want to know what's going on. You know why? Because they don't 
feel like they got--they have a chance, period.
    Ms. Hollingsworth, I heard what you said, and there are a 
lot of small business folks like you. Mr. Smith, you talked 
about Mr. Wertheimer. It would have been nice to have him here, 
I am sure you would agree with that. But his organization that 
stands up for all of those little people were shut out and 
unable to voice what they had to say in person.
    And I think that if we're going to leave a better world, 
we've got to be very careful, because, I mean, I think about 
the elections and where we've got situations where you can drop 
millions of dollars in a congressional district, millions, and 
literally wipe out a Representative, period. Period. And you 
know, a lot of people will talk and say Well, the Supreme Court 
said in Citizens United we can do certain things.
    I think we've got to guard this democracy that we've got, 
because I think that at the rate we're going, there will come a 
time when we won't even know it, you will have a district 
that's owned by this corporation or that. And it's interesting 
as I listen to all that has been said, on the one hand I hear 
business saying, ``Trust us,'' which is great. But on the other 
hand they say, ``We don't trust the President. We don't trust 
our elected officials.''
    You know, I think that when it comes to disclosure, if it 
were up to me, I'd want every single thing. Everything 
disclosed. Everything. Unions, everybody. Because I want the 
public, I want the public to know. I want them to have a clue 
of what's going on. And if they look at that information and 
they determine that, you know, that they believe that something 
is unfair, fine.
    And I go back to what Mr. Gordon talked about. You know, 
there is a thing about trust that I think he makes a point, and 
people tried to make fun of him and ridicule him for saying it. 
But there is something called the speed of trust. Covey writes 
about it in his book, The Speed of Trust, one of the greatest 
books ever written.
    What he says is, when you can establish the mechanisms for 
trust and if there is trust, that people are more likely--the 
relationships are better. And it does make sense that there 
would be more competition if people trust the process. If they 
feel like everything is stacked against them before they even 
get in the game, I mean that goes against everything. So why 
bother?
    But the interesting thing is that, you know, we're talking 
about an Executive order, and I can understand the chairman's 
position. We're talking about a draft document and, you know, I 
think that some kind of way we've got to move more toward 
disclosure than moving away from it, because the playing field 
that we're playing on now is a playing field that says no--less 
and less disclosure. And I don't think that's what America is 
all about. I really don't. I don't think that our Founding 
Fathers would about that.
    So with that, Mr. Chairman, my time is up. I yield back.
    Chairman Issa. Thank you. Mrs. Ellmers.
    Mrs. Ellmers. Thank you, Mr. Chairman. My first question is 
for Ms. Mackey.
    Ms. Mackey, I understand that you are an SBIR success 
story. And SBIR is near and dear to my heart, and I have 
legislation pending right now for us to reenact it and get it 
in place for another 3 years. So I would just like you to 
elaborate on that, on that process. And then I know in your 
opening statement, you did speak to the dangers that you feel 
exist with this draft EO. And I would just like for you to 
reiterate that as well.
    Ms. Mackey. So first I am very pleased to tell you we're a 
SBIR success story, on some level of effort. We started playing 
with the SBIR program and participating in 2002. It's taken us 
9 years. I can tell you that the technology that we were 
delivering to the private sector was expanded on the innovation 
and is now rolling out to every ship in U.S. Fleet Forces 
Command. So every maintainer will look at our application to 
understand what they should be maintaining to keep our ships 
ready for mission readiness. So it is a very good thing. It's a 
very proud experience for me. It's a great thing for my company 
that's growing and expanding. It's a good thing for my company, 
the jobs in my company, and my employees.
    And when I think about the risk that this kind of--that the 
approach taken by this Executive order could impact on stories 
like mine is that, as intimately aware with the SBIR program 
that you are, it takes some time--there are fits and starts 
when you are developing technologies and innovation, and it 
doesn't transition directly into a product. There are some 
places--and there are times that, maybe when we were little, is 
this going to happen, is this going to work; that if I had seen 
this kind of an onerous reporting and if I had seen myself 
exposed legally for the kind of HR challenges that I get by 
asking my employees--you should see the checklist I have when I 
recruit people of what I can ask, what I can't ask, and how I 
tell my employees to interview people.
    I could also tell you that in the business community in 
general, but certainly for small businesses, it's more painful 
as we don't have a lot of corporate resources. When you have to 
let someone go for poor performance, no one wants to hear 
they're being let go for poor performance, and they often want 
to find another reason. And if they don't find another job, 
they often want to be punitive on who let them go. I really 
don't want to introduce politics into that equation.
    So as far as your question about SBIR successes and will we 
as a country be getting back the investment in RDT&E that we 
need to go to our Federal Government, I think you run the risk 
of encouraging people to back away and step out because it's 
too much to overcome. I hope I answered your question.
    Mrs. Ellmers. Actually, you have. I appreciate that. My 
thought also is that would deter businesses from moving forward 
when we know that it is a lengthy process. You're going to have 
your ups and downs, and when faced with something like this, 
that would deter someone. And that is my feeling on it. Thank 
you very much.
    Yes, please.
    Ms. Mackey. I don't know that it would deter people to 
participate, but in that place where you choose now the 
investment that's been made, do I want to further look to 
giving that to the Federal Government or should I step out to 
the private sector, and that's the junction that I don't want 
our tax dollars--I mean, I think it should go back to our 
warfighters, especially in the DSDF division. Thank you.
    Mrs. Ellmers. Thank you. Thank you.
    Ms. Hollingsworth, I just wanted to clarify. My 
understanding from your opening statement is that you are in 
favor of this draft Executive order; is that correct?
    Ms. Hollingsworth. That's correct, Congresswoman.
    Mrs. Ellmers. But you feel that small businesses should be 
exempt from it?
    Ms. Hollingsworth. It seems to me this afternoon, I've 
heard small business being used as a sympathy card being played 
quite a bit. As a matter of fact, certain sized small 
businesses and the definition of small businesses is a very 
wide definition, depending on industry and so forth. I think a 
very straightforward remedy is to raise the threshold for 
contribution, whether it's 5,000 for a contribution or the size 
of contractors.
    So there are many of the concerns that Ms. Mackey and other 
people are speaking here today that are simply answered by 
exempting small business up to a certain point from falling 
under this act.
    Mrs. Ellmers. So at what point would you consider a 
business that this should be adhered into? Where would you draw 
the line? I mean, so you obviously do not see this as a 
deterrent for government contracts or working with the Federal 
Government. You just feel that it may be a little more costly 
for a small business.
    At what point would you consider a business, this Executive 
order would apply to them?
    Ms. Hollingsworth. Well, to answer the first part of your 
question, Congresswoman, no. I mean, I do agree with this 
potential draft EO. And in terms of thresholds or at what point 
should it apply to a small business, I would defer that to 
wiser if not older heads than my own. Certainly people familiar 
with the government contract process know the size of 
businesses that might fall under certain categories.
    So I don't have a concrete opinion for you, but I do 
believe that we can kind of take out the tiers aspect of this 
for small business by some simple thresholds similar to the 
thresholds that are in place for small business in other 
arenas.
    Mrs. Ellmers. OK. One last question on that. So along that 
line do you agree that there's already transparency, it's just 
an issue of when these things are divulged beforehand in the 
contract process rather than afterwards as a business reporting 
contribution, Federal contribution?
    Ms. Hollingsworth. Well, again, I'm an engineer, not a 
constitutional lawyer, as we've heard the excuse many times 
today, so I can't pretend to be a complete expert about that. 
From what I understand so far is the disclosure and the 
transparency is incomplete and lacking. I don't feel it's 
complete yet, and I do feel the parameters that have been 
discussed in this draft EO would shed additional sunlight, and 
I do think that is needed.
    Mrs. Ellmers. Because it would be beforehand rather than 
after an award of a contract?
    Ms. Hollingsworth. I think in general that the public could 
look at what influences are coming to bear, particularly on the 
single source contracting, which is something that has been 
jumped over constantly here today. That's contractors that 
receive--you know, they are a single source, there's no 
competition. And I think the public and small business has a 
right to know just why these single source contracts are being 
let the way they are. And obviously current disclosure rules 
are not giving us enough sunshine on that.
    Mrs. Ellmers. Mr. Chairman, will you indulge me for just--
--
    Chairman Issa. One minute.
    Mrs. Ellmers. OK. Wonderful. Mr. Smith, I have a question 
for you. My understanding is that the order requires 
information to be retroactive for the past 2 years. Would you--
could this be--I mean could this information not be used 
politically in a campaign? For instance, we have the 2012 
election coming up. Could this information not be used against 
those running for office as to who is contributing to their 
campaigns and possible affiliations?
    Mr. Smith. I think of course it could. And to some extent 
that's what I meant when I said earlier that we call this junk 
disclosure. That is in some ways it's more misleading to the 
public than leading. They're going to say, you know, here's the 
contract, here's the donation, they're going to assume a 
connection there. And that leads us to what seems to be the 
purpose here. We can't have this discussion today without 
ignoring it.
    I mean, the question has been answered already. Is this 
going to politicize the process, right? It already has 
politicized the process. I mean, look at this hearing, look at 
what's being said, look at what people are doing. And why would 
the American people think that the purpose of this is to maybe 
chill speech or to get people to give to the right side? They 
might think that, because rightly or wrongly, correctly or 
incorrectly, the President of the United States has been out 
repeatedly saying, we need to do something about all this 
secret hidden money that is going to come out after Citizens 
United. And he has specifically identified groups that he wants 
to silence; big oil, banks he calls them. We might think that 
because last Congress on a straight party line vote with two 
exceptions in this Chamber, this Chamber passed and the other 
Chamber did not pass the DISCLOSE bill. We might think that 
because then when the FEC attempted to issue new regulations 
complying with Citizens United the three Democratic 
commissioners insisted that the regulations go further and 
include the kind of disclosure that's being asked for here. 
People might think that because on a straight party line vote 
the SEC recently put new restrictions on reporting.
    And so is it true or not? I won't try to answer that. I'll 
leave that for others to say whether this is politically 
motivated. But people certainly might think it's politically 
motivated, and I think there's a pretty good trail that might 
lead them to that conclusion.
    Chairman Issa. Ms. Velazquez.
    Mr. Velazquez. I'm sorry that I wasn't here for your 
testimony, but I was in a full committee markup on Financial 
Services and I had an amendment.
    Mr. Cummings. It was brilliant.
    Mr. Velazquez. Thank you. Yeah. I can imagine. But I would 
like to ask some questions if I may.
    Ms. Hollingsworth, as a small business owner, do you have 
concerns that undisclosed political spending could disadvantage 
your firm in the contracting marketplace.
    Ms. Hollingsworth. I am very concerned about that, 
Congresswoman.
    Mr. Velazquez. The Executive order will require your 
business to report the political spending of yourself as the 
owner and also that of your officers. Do you have any concerns 
that asking colleagues about their political spending could 
complicate your business relationships?
    Ms. Hollingsworth. Congresswoman, I think one remedy to 
that would be to use either third-party or in the case of a 
very small business the bookkeeper-accountant who is already 
privy to such things as compensation, you know perhaps special 
medical issues, etc., insurance. I would designate a person 
with the competence to as a third-party or entity, if you will, 
to take that information and pass it along without it ever 
coming to my eyes. And I would think that small, even much 
larger, but still small business in mind, could easily 
implement something like that.
    Mr. Velazquez. Ms. Blakey, if a contractor spent millions 
of dollars to influence fair elections in a congressional 
district where it also conducts $1 billion defense contract 
with taxpayer funds, doesn't the public have a right to know?
    Ms. Blakey. The contractor of course does disclose all 
contributions, so that information is out there in front of the 
public. At any point people can access it. Our concern is we 
are making a link between the procurement process and political 
contributions. There is an inference there that really we 
believe is fundamentally wrong. And we also look at the fact 
that we're very supportive of the administration in terms of 
strengthening the acquisition work force, trying to improve the 
acquisition process. But at the same time you put this 
information in front of contracting officers over and over and 
over again in the procurement process, and it's looking to make 
a connection that should never be there.
    Mr. Velazquez. But my question is, taxpayers, do they have 
a right to know since it's taxpayers' money that is given, is 
awarded through Federal contracting?
    Ms. Blakey. Taxpayers can go any time they choose to and go 
to the information that is publicly available, and they can 
choose to look up anything they want.
    Mr. Velazquez. Is that a yes or no answer?
    Ms. Blakey. The information is there.
    Mr. Velazquez. That the public should know.
    Ms. Blakey. Yes, the public can no and should know.
    Mr. Velazquez. Thank you.
    Mr. Smith, you have noted that this Executive order will 
chill free speech. Could you explain how this order will 
legally limit the amount of contributions that Federal 
contractors could give to any political campaign or 
organization at any time.
    Mr. Smith. Sure. This illustrates one of the problems here 
and one of the issues of vagueness and chilling. For example, 
right now Federal contractors do not make any contributions to 
political campaigns. It is illegal for them to do that. If 
they're doing that, they're violating the law and they can be 
prosecuted. What we're talking about here is Federal 
contractors who might give money to a trade association which 
then might spend money on independent expenditures down the 
road. And we're going to say that should be held responsible 
and the company has to report that kind of information. Now, 
how would that chill companies?
    Mr. Velazquez. But there is nothing that legally will 
prohibit them from writing contributions to----
    Mr. Smith. That's right. But the question you asked then 
was how it would chill them from doing that. And it will chill 
them because if people feel they are likely to be retaliated 
against, that is government has tremendous power, somebody who 
is bidding on contracts----
    Mr. Velazquez. Mr. Smith, you're changing my question. My 
question is, if legally they cannot.
    Mr. Smith. My answer is legally they already cannot make 
contributions, which was your question. And legally they will 
still be able to do independent spending through others. But 
your question was how will it chill them, which is different 
from what they can legally do.
    Mr. Velazquez. Mr. Smith, I don't think you understand my 
question. How would it limit the freedom of an organization to 
give how much it wants, to whom it wants, when it wants. It 
wouldn't, would it, legally?
    Mr. Smith. Legally the answer is no.
    Chairman Issa. I thank the gentleman, thank the gentlelady. 
You've all been very generous with your time. I realize the 
hour is late. What I would ask, since we had so many members 
who had questions and had other obligations, would each of you 
be willing to answer additional questions put by both sides? 
OK. We're going to leave----
    Mr. Smith. Mr. Chairman, if I may say so, I will be leaving 
the country in 2 days for a month. I would be delighted to 
answer questions if I could have----
    Chairman Issa. Are you fleeing the country to get away from 
our questions?
    Mr. Smith. I would be delighted to answer questions if I 
could have an extension.
    Chairman Issa. This committee has a long history working on 
people fleeing the country not to answer our questions. But we 
will try to get the questions to you immediately. But I 
appreciate that. We're going to leave the record open for 7 
days. If we see a need for an extension, the ranking member and 
I can extend. But I think it's important. Your testimony was 
very good and the questions were good, but I don't think we got 
enough of them. So with your indulgence we'll do that.
    And with that, we stand adjourned.
    [Whereupon, at 5:53 p.m., the committees were adjourned.]

                                 
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