The Illinois State Legislature recently amended the Illinois Procurement Code to place new restrictions on political contributions by those that seek or secure state contracts. Under the new law, business entities and their affiliates who have or seek state contracts worth at least $50,000 are prohibited from contributing to any political committee established to promote the candidacy of any officeholder or any declared candidate for an office responsible for awarding state contracts. As defined in the statute, the governor, attorney general, secretary of state, comptroller and treasurer are the only state elected officials with authority for approving state contracts, creating substantial limits on contributions to most candidates for high office in Illinois. This new legislation does not amend the registration requirements for political contributions to other elected officials, including state legislative candidates.

For business entities with state contracts, the prohibition on political donations to an officeholder or candidate lasts for the duration of the term of office of the incumbent officeholder, or for two years following the expiration or termination of the contracts, whichever is longer. For business entities bidding on state contracts, the prohibition begins on the date the invitation for bids or request for proposals is issued, and ends on the day after the date the contract is awarded.

Registration:

Effective January 1, 2009, the business entities covered under the statute are required to register within 30 days with the State Board of Elections (“SBE”). The following are required to register:

  • Businesses and their affiliates whose aggregate bids and proposals on state contracts annually total more than $50,000;
  • Businesses and their affiliates whose aggregate bids and proposals on state contracts combined with their aggregate annual total value of state contracts exceed $50,000; and
  • Businesses and their affiliates whose contracts with state agencies, in the aggregate, annually total more than $50,000.

In addition to the initial registration, each business entity is under a continuing duty to maintain the accuracy of the registration up through the day after the contract is awarded. Furthermore, business entities with contracts in an aggregate annual amount exceeding $50,000 must maintain an accurate registration for the term of the incumbent officeholder awarding the contracts, or for two years following the expiration or termination of the contracts, whichever is longer. Changes, including changes of affiliated entities or affiliated persons, shall be reported within 10 days; however if a business entity has a pending bid or proposal, changes shall be reported within two business days.

Consequences:

Business entities, affiliated entities and affiliated persons must notify any political committee to which they make a contribution that they are registered with the SBE. Penalties exist for failure to register with the SBE, as well as failure to provide a copy of the registration certificate to affiliated entities and affiliated persons. Intentional, willful or material failure to disclose information required for registration shall render a contract, bid, proposal or other procurement relationship voidable at the discretion of the chief procurement officer.

Violating the political contribution provision shall render contracts held by that business entity voidable. Should a business entity violate this prohibition three or more times within three years, all contracts between state agencies and that business entity shall be void, and that business entity shall be prohibited from submitting new bids or proposals for three years from the date of the last violation.

Any political committee that has received a prohibited contribution shall be fined an amount equal to the contribution.