Another contractor scrutinized for giving to John James super PAC

Melissa Nann Burke
The Detroit News
Republican John James of Farmington Hills

Washington — A watchdog group filed a complaint with the Federal Election Commission on Thursday against a Grand Rapids-based company for allegedly violating the longstanding prohibition on political contributions by federal contractors. 

Skytron LLC of Grand Rapids gave $10,000 to former U.S. Senate candidate John James’ super political action committee last fall, according to federal disclosure reports. 

James, a Farmington Hills Republican who lost a challenge to Democratic U.S. Sen. Debbie Stabenow of Lansing, is under consideration by President Donald Trump to be the next U.S. ambassador to the United Nations

As a government contractor, Skytron LLC is prohibited from donating to candidates and political committees during a period when a federal contract is negotiated or performed, according to the complaint by the nonpartisan Campaign Legal Center.

Federal law has long banned such contributions to guard against pay-to-play schemes in government contracting. 

The Campaign Legal Center noted in its complaint that Skytron, a privately owned health care equipment distributor, has received multiple federal contracts, including a two-year contract with the U.S. Department of Veterans Affairs that runs through Nov. 1, 2019.

Representatives for Skytron did not respond Thursday to calls or emails for comment. 

This is the second complaint by the Campaign Legal Center against a federal contractor for contributing to the pro-James Outsider PAC, which in August said it would return a $10,000 contribution to contractor Haworth Co., headquartered in Holland. 

A Haworth representative said at the time it never intentionally breached any laws or regulations, and that the donation was being refunded "until more clarity can be obtained surrounding this matter."

The matter is still pending before the FEC.

CLC's latest complaint focuses on a Nov. 1 contribution by Skytron to Outsider PAC, as reported in Outsider's post-election disclosure.

"What’s notable is the contribution was made after the Haworth contribution was publicized and after that contribution was returned, so Skytron should have been on notice that this was illegal, and Outsider PAC certainly was on notice that they can’t accept contributions from federal contractors," said Brendan Fischer, director of the CLC's Federal Reform Program.

"Like Haworth, we don’t really see any legitimate argument for how this can be permissible."

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. 

Fischer said one of the reasons the law been on the books for 75 years and survived judicial review is the goals of the contractor contribution ban are so apparent. 

"A company is not giving $10,000 to a super PAC on some charitable impulse. They’re doing it to buy influence," Fischer said.

"The concerns about the influence buying are heightened when it comes from a federal contractor because there arises an obvious opportunity for pay-to-play, were the beneficiary of this contribution to then enter office and hand out taxpayer money to their big contributors."

The Campaign Legal Center is asking the FEC to open an investigation into Skytron and seek "appropriate sanctions" for any violations, including civil penalties.

Fischer noted the commission took action to enforce the contractor contribution ban as recently as 2017.

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 Democratic presidential campaign in 2016. 

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

Outsider PAC was formed in 2018 to make independent expenditures in support of James' Senate campaign. 

Fischer suggested the PAC should have more carefully reviewed its donations, though the complaint filed Thursday does not allege any violations by Outsider PAC. 

"Outsider PAC complies with all relevant campaign finance laws, including not soliciting contributions from federal contractors," said Derek H. Ross, counsel for Outsider PAC.

"While the PAC does not comment on specific donors, it has no reason to believe that this contribution was not permissible."

Outsider PAC has largely been funded by a $200,000 donation from GOP megadonor Richard Uihlein; $100,000 from former Credit Acceptance Corp. Chairman Donald A. Foss of Southfield; and $100,000 from Sean Cotton of Caidan Management Company. 

Outsider PAC also received $100,000 from the DeVos-owned Alticor Inc., and $100,000 total from individual members of the DeVos family, according to the Center for Responsive Politics.

Outsider PAC reported $857,874 in independent expenditures in the U.S. Senate race to support James or attack his opponents, according to federal disclosures.