Illinois Governor Pat Quinn rescinded controversial Executive Order No. 3 (2008), issued by former Governor Rod R. Blagojevich. This relieves entities that conduct business with the State of Illinois from the ambiguous and broad campaign contribution restrictions of the Executive Order that went into effect on January 1, 2009.

Executive Order No. 3 became effective concurrent with the enactment of Illinois P.A. 95-971 (the “Ethics Act”). The Ethics Act and the Executive Order each imposed regulations on the political contributions of certain state contractors, entities that bid on state contracts, and certain of their corporate affiliates, owners, and officers. However, Executive Order No. 3 applied to all state contracts for goods or services, while the Ethics Act applied only to state contracts entered into pursuant to the Procurement Code. Additionally, Executive Order No. 3 imposed prohibitions on contributions to a broader range of state executive and legislative officials, candidates, and state political parties, while the Ethics Act imposed prohibitions on contributions only to certain state executive officeholders and candidates for such offices.

On April 3, 2009, Governor Quinn issued Executive Order No. 9 (2009), which rescinds Executive Order No. 3. He recognized that “there has been uncertainty and confusion regarding the scope of Executive Order [No.] 3 and its relationship to [the Ethics Act].”

As a practical result, entities that were subject to Executive Order No. 3 will no longer be required to comply with its provisions, which were described in greater detail in our January 26, 2009, Client Update, “Registration Deadline Nears for Illinois State Contractors and Bidders Subject to Strict New Campaign Contribution and Registration Requirements” and our January 30, 2009, Client Alert, “New Illinois Campaign Contribution and Registration Requirements May Affect Investment Funds and Managers.”

Business entities should continue to monitor carefully their political activity in Illinois. Entities doing business, or seeking to do business, in Illinois may be subject to the requirements of the Ethics Act, which were also described in the January Client Updates, and which remain in effect. Furthermore, business entities that entered into procurements with the State of Illinois since January 1, 2009, may continue to be subject to contractual requirements based on Executive Order No. 3 and should review their contracts carefully to assess the on-going applicability of those requirements. Finally, additional campaign contribution limitations may be enacted in Illinois in the next year.

For more information about the laws and regulations pertaining to state contractors and bidders, please contact the authors of this alert, John A. Janicik at +1 312 701 7323, Joseph Seliga at +1 312 701 8818, or Mitchell Holzrichter at +1 312 701 8212.

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