Contractor scrutinized for giving $10K to James super PAC

Melissa Nann Burke
The Detroit News
John James, Michigan Republican candidate for the U.S. Senate, campaigns at the Johnstone Supply Picnic at Addison OaksCounty Park Monday in Leonard, Michigan.

Washington — A campaign finance watchdog group has filed a complaint with the Federal Election Commission against the Holland-based Haworth Co. for contributing $10,000 to U.S. Senate hopeful John James’ super political action committee. 

The nonpartisan Campaign Legal Center says that, as a federal government contractor, Haworth is prohibited from donating to candidates and super PACs under a federal law in force for more than 75 years meant to guard against pay-to-play in government contracting. 

The Washington-based Campaign Legal Center filed its complaint Thursday, noting that Haworth's contribution listed the address of its corporate headquarters at 1 Haworth Center in Holland, Michigan. 

The privately held company, which is in the contract furnishings industry, has received numerous federal contracts dating to at least 2001, including contracts active this year, according to the complaint. 

Federal law prohibits contractors from making any "contribution to any political party, committee or candidate for public office" and bans the knowing solicitation of such a contribution from a federal contractor. 

The complaint says the FEC has "made clear" since 2011 that the government-contractor prohibition extends to super PACs. 

"I don’t see any legitimate argument that this is contribution came from a non-contracting entity," said Brendan Fischer, director of the CLC's Federal Reform Program.

Julie Smith, a spokeswoman for Haworth, said Thursday that "at the time of the donation, it was communicated to Haworth that a donation by the company was permitted."

"As a result of the news article published today, the donation is being refunded until more clarity can be obtained surrounding this matter," Smith said by email.

"Haworth takes great pride in its history of strong corporate values and abiding by the laws of the U.S. and other areas of the world in which we operate. We would never intentionally breach any laws or regulations and will ensure this matter is also appropriately addressed."

Fischer said the federal ban adopted decades ago was intended to end the "long record of government contracts effectively being for sale."

"The contracting process presents the most obvious opportunity for the politically well-connected to reward their friends and political donors with taxpayer-funded contracts," Fischer said. 

"The federal government spends billions of dollars every year on taxpayer-funded contracts, and those contracting decisions are supposed to be made in what’s in the public interest, not in the interests of particular politicians' top political donors." 

Fischer's group has noticed an uptick in contractor contributions this election cycle, he said.

"One possibility is contractors think they can get away with it. That the FEC is viewed as so dysfunctional, that political operatives and donors think that they can push the legal envelope with little fear of recourse from the FEC," Fischer said. 

He noted that super PACs and corporate contributions in elections are still relatively new, dating to the Supreme Court's Citizens United decision in 2010.

"It's possible that some corporations still may not be entirely aware of the law, but I think it’s also possible that corporations and political donors are also becoming more aggressive and willing to push the legal envelope," Fischer said.

He noted that the FEC took action to enforce the ban on contractor contributions as recently as last year.

Following a complaint by the Campaign Legal Center, the FEC fined Boston-based Suffolk Construction Co., a federal contractor, for giving $200,000 to Priorities USA, a super PAC that supported Hillary Clinton’s presidential campaign in 2016. 

That fine was imposed even though Priorities USA had refunded the contribution, Fischer said. 

CLC's latest complaint focuses on a July 18 contribution by Haworth to Outsider PAC, which, like Haworth, has a Holland address.

Outsider PAC was formed earlier this year to make independent expenditures in support of James, who last week won the Republican nomination for U.S. Senate in Michigan. He faces U.S. Sen. Debbie Stabenow in the fall general election.  

Outsider PAC spokesman Jamie Roe said Thursday that the group had done "proper due diligence by providing information on its donor form of limitations on acceptance of funds from federal contractors." 

"At present it is unclear whether the contribution in question is in violation of FEC rules, but out of an abundance of caution that contribution will be returned today," Roe said in a statement.

"The complaint filed by Campaign Legal Center does not allege a violation by Outsider PAC because Outsider PAC did not violate the law. It is not a violation to receive a contribution from a federal contractor.”

Outsider PAC has largely been funded by a $200,000 donation from GOP megadonor Richard Uihlein, who has spent $29 million to fund outside groups in support of conservative congressional candidates this election cycle, according to the Center for Responsive Politics.  

Outsider PAC also received $50,000 from the DeVos-owned Alticor Inc., and $25,000 from Jerry Tubergen, president of RDV Corp., which has ties to the DeVos family.

Outsider PAC has so far reported $346,500 in independent expenditures in the U.S. Senate primary — mostly for media production and ad buys to support James or oppose the other GOP candidate, Sandy Pensler, according to federal disclosure reports.

The complaint notes that Haworth Chairman Matthew Haworth and his wife, Jennifer, each contributed the maximum $5,400 to James' campaign in December, as did Haworth Chairman Emeritus Richard Haworth and his wife, Ethelyn. 

The family also hosted a reception for James at Haworth's headquarters in mid-May, according to the complaint