Elected officials have long been criticized for accepting large political contributions from state vendors. The Ohio General Assembly recently addressed these concerns with sweeping statutory changes. The General Assembly passed Amended Substitute House Bill 694, and the legislation was signed into law on January 2, 2007. Although the law impacts contributions from January 1, 2007 and beyond, it officially becomes effective 90 days from the date of signature. All current and potential vendors of government contracts should closely review the new limitations or risk eliminating their opportunity to obtain or retain state or local government contracts.
Amended Substitute House Bill 694 states that a state office OR political subdivision may not award any competitively bid or non-competitively bid contract over $500 to political contributors who have contributed over $2,000 to the elected official “ultimately responsible” for awarding the contract.
The $2,000 total contribution limit includes any combination of contributions made by owners, partners, members, specified shareholders, spouses, minor children, or the company’s political action committee (PAC). Further, owners, partners, shareholders, and their spouses and minor children are prohibited from individually giving more than $1,000 to the elected official with contracting authority. Companies must be aware that the new limitations impact all existing contracts or potential contracts with not only the State of Ohio, but all political subdivisions, including a city, county, township, or school district. The limits apply to any contributions made to a person both while holding public office and when a candidate for the office.
The governor’s office is considered to have ultimate responsibility for contracts awarded by the governor’s appointees. Likewise, the mayor or other elected chief executive of a municipality is considered to have ultimate responsibility for contracts awarded by appointees.
Business owners and PACs must closely review the full requirements of this new law. Because the law includes new restrictions on contributions made to public officials at all levels of state government who are responsible for bid and unbid contracts, political contributors have a high risk of unintentional mistakes that could result in rescission of those contracts and the imposition of fines.
