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By Sean Gorman December 17, 2012

Gift ban passed with large loopholes

Bob McDonnell assured voters during his 2009 gubernatorial campaign that state government contracts would be awarded solely on the basis of "price, quality and experience."

He promised to ban political contributions during the procurement process through which the state awards contracts.

"This ban will be placed on gifts to the executive branch and be limited to contracts over a certain amount," McDonnell said in a September 2009 news release. "This prohibition would go into effect during the post-bid submission decision-making process."

McDonnell said the executive branch ban would parallel "the prohibitions placed on the legislative branch during the General Assembly session."

Those limits are contained in a law that bars campaign contributions to legislators, the governor, lieutenant governor and attorney general during the General Assembly's regular session.

In April 2010, McDonnell signed a bill that prohibits companies and individuals bidding on state contracts from giving political contributions and gifts worth more than $50 to the governor, his political action committee or the relevant cabinet secretaries in charge of the departments that are awarding the contracts in play.

The ban runs from the time a bid is submitted to the moment the state awards the contract. The penalty for violating the law is $500 or double the amount of contribution -- whichever is greater.

The bill, introduced by Sen. Ralph Smith, R-Roanoke, originally sought to impose the gift ban on state contracts worth $1 million or more. McDonnell wound up signing an amended version that tied the prohibition to contracts of $5 million or more. That's still in keeping with McDonnell's unspecific pledge that the ban would be "limited to contracts over a certain amount."

Exempted from the law are contracts awarded by "competitive sealed bidding," in which the state solicits proposals and then awards contracts to the vendor deemed the lowest responsible bidder. Joe Damico, deputy director of the Department of General Services, said there's no subjectivity in awarding such bids; they are submitted in a sealed envelope, opened publicly and awarded to the lowest bidder.

The law does not include two prominent members of the executive branch: the lieutenant governor and the attorney general. That may be a moot point, however, because the lieutenant governor and attorney general never have a need to award contracts of $5 million or more, according to spokesmen from the offices.

During the signing ceremony for the bill on April 15, 2010, McDonnell noted that only a small number of state contracts are worth $5 million or more. Damico said the Department of General Services does not keep statistics on how many contracts meet the law's threshold.

Virginia is one of 15 states that limit gift-giving from contractors, according to Craig Holman, a lobbyist at Public Citizen who co-authored a study on such laws earlier this year.  Virginia's $5 million threshold is "the highest" of those states, Holman told us. "Most have no minimum threshold," he said.

So McDonnell has approved a gift ban during the bidding process that affects the governor and his cabinet. But contrary to his loosely worded promise, it does not include all members of the executive branch; the lieutenant governor and attorney general are excluded.  

The gift ban kicks in only when contracts of $5 million or more are under consideration -- a level set so high that exempts most of the state contracts. The threshold is the highest among 15 states that limit gift giving from contractors.

We rate the result of this promise a Compromise.

Our Sources

McDonnell for Governor, "Government reform,"  September 29, 2009.

Governor Bob McDonnell "On Tax Day, Governor McDonnell signs government reform legislation," April 15, 2010.

Governor Bob McDonnell, "Governor Bob McDonnell's legislative initiatives move forward," February 20, 2010.

Legislative Information System, "S.B. 506,"accessed November 13, 2012.

Interviews with Joe Damico, deputy director of the Virginia Department of General Services, Nov. 20.

E-mail from Craig Holman, government affairs lobbyist at Public Citizen, Dec. 7, 2012.

Division of Legislative Services, "A legislator's guide to conflicts of interests and rules of conduct," 2009.

Virginia state code, "Campaign fundraising; legislative sessions; penalties," accessed Dec. 4, 2012.

Code of Virginia, "Definitions,"accessed November 13, 2012.

YouTube, "Governor Bob McDonnell signs government reform legislation,"  April 15, 2010.

E-mail from Caroline Gibson, deputy director of communication at the Virginia Attorney General's office, Dec. 4, 2012.

Interview with Randy Marcus, chief of staff to Lt. Gov. Bill Bolling, Dec. 4, 2012.

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