In 2006 and again in 2007, the Ohio General Assembly amended Ohio’s pay-to-play laws regulating political contributions from contractors. House Bill 694 (“H.B. 694”) and House Bill 119 (“H.B. 119”) enacted major revisions to Ohio campaign finance laws, but both bills were the subject of protracted litigation, which has now ended. H.B. 694 and H.B. 119 were both stricken as unconstitutional in United Auto Workers, et al. v. Brunner, 2009-Ohio-1750. That decision was appealed and affirmed. No further appeal was taken.
As a result, the version of R.C. Sections 3517.13 and 3519.992 that was in effect in 2006 remains Ohio law. These laws generally prohibit the award of unbid contracts to certain vendors if those vendors, their spouses, or their business partners contribute to certain political candidates in excess of $1,000 during the two previous calendar years prior to contract award. As a general rule, the law is designed to prohibit campaign contributors from getting unbid contracts from the public official to whom they contributed. The current version of the law can be summarized as follows:
Under R.C. 3517.13(I), contributions made by the following individuals may trigger the unbid contract ban: partners of a partnership; shareholders of an association or professional association; administrators or executors of estates; trustees of associations or trusts; and spouses of the above named individuals. Any contribution or series of contributions by an individual business owner or spouse over a two year period that total more than $1,000 trigger the contract ban.
R.C. 3517.13 (J) contains a similar prohibition as to a “corporation or business trust, except a professional association organized under Chapter 1785 of the Revised Code.” However, for corporations, R.C. 3517.13(J) prohibits award of an unbid contract to a corporation only if “an owner of more than 20 percent of the corporation or business trust or the spouse of that person has made, as an individual, within the two previous calendar years, taking into consideration only owners for all of that period, one or more contributions totaling in excess of one thousand dollars to the holder of a public office having ultimate responsibility for the award of the contract or to the public officer’s campaign committee.”
Contributions made before or after becoming a partner, shareholder, 20 percent owner or otherwise holding a designated ownership position of the company are not counted toward the $1,000 threshold. Nor is R.C. 3517.13 triggered where an individual’s spouse makes contributions before the two were married or after they are divorced.
Provisions limiting contributions made by all business owners cumulatively have been stricken. In other words, the contributions of all owners are not added together for purposes of determining if the contract ban applies. The limitations on contributions from a corporate political action committee are also stricken.
Holders of a Public Office
Only contributions made “to the holder of public office having ultimate responsibility for the award of the contract or to the public officer’s campaign committee” trigger R.C. 3517.13 (I) and (J). For purposes of determining which public officer is responsible for awarding a contract, contributions to the governor, the chief elected officer of a municipality, or the chief elected officer of a county alternative form of government, are considered to be responsible for contracts awarded by public officials or employees appointed by them.
A contribution to an officeholder’s campaign committee for a different elected office will not prohibit the awards of unbid contracts from that candidate’s current office. If a candidate is elected to a position for which such a contribution is made, the candidate’s new office might be prohibited from awarding contracts to contributors. Contributions to candidates for county commissioner, city council, school board, and similar legislative bodies are no longer governed by this provision in the law.
R.C. 3517.13 (I) and (J) apply when contracts, which are not competitively bid, are awarded for goods or services costing more than $500. Contracts which are competitively bid are exempted from R.C. 3517.13 (I) and (J).
Two Calendar Years
R.C. 3517.13 (I) and (J) apply where an individual makes one or more contributions, which aggregated exceed $1,000, in the “two previous calendar years” prior to when the contract is awarded. The Ohio Elections Commission, in Ohio Elections Commission Advisory Opinion 87-05, has defined “two previous calendar years” as “the two periods of January 1 through December 31 preceding the year in which the contract is awarded.”
Therefore, if a contract is awarded in June 2008, the public officeholder must aggregate all contributions made to him or her, or the officeholder who appointed him or her, by a potential contractor in the calendar years 2006 and 2007. If those contributions aggregated exceed $1,000, R.C. 3517.13 (I) and (J) are triggered and the contract cannot be awarded.