We have previously used our little corner of "The Cloud" to blog about the unintended consequences that often present themselves when local governments respond to (already illegal) bribery scandals with increased pay-to-play legislation. What can appear at first blush to be a thoughtful means of preventing undue influence and increasing transparency frequently becomes stymied in legal loopholes and legislation impossible both for the regulated community to comply with and for regulators to enforce.Continue Reading...
New Jersey engineering firm Birdsall Services Group realized the full consequences of violating state pay-to-play laws on August 30th after a state court judge ordered that the contractor pay $1M in criminal penalties, the maximum allowable by law.
Under the state’s pay-to-play law, which many agree requires an overhaul, business entities are prohibited from making reportable contributions (in excess of $300) to elected officials prior to the award of certain government contracts and during their pendency. See N.J.S.A. 19:44A-20.3 through 20.25. In a scheme designed to work around these restrictions, Birdsall bundled several non-reportable $300 contributions written by individual employees, sent them to elected officials as one contribution, and reimbursed the employees with bonuses. The scheme stretched over six years, during which Birdsall contributed over $1M to various campaigns and netted millions of dollars in revenue on public contracts subject to the restrictions – contracts for which Birdsall was technically ineligible under state law.Continue Reading...
Jeff Brindle, the Executive Director of the New Jersey Election Law Enforcement Commission has made a sensible proposal on pay-to-play reform which deserves both our attention and state action.
One could populate an entire pay-to-play blog with entries culled from the Garden State. We have pointed out here and here that New Jersey enjoys the most complex, and challenging, web of pay-to-play compliance schemes in the country. We’ve even gone out on a limb and editorialized to a large degree that “Until Governor Christie (or someone at the state level) succeeds in implementing a uniform statewide protocol for procurement efforts such as the one proposed here, New Jersey will extend its dubious distinction of having more varieties of pay-to-play legislation than its Turnpike has exits”Continue Reading...
Dollars to Donuts...Federal and State Pay-to-Play Rules Make 2013 New Jersey Political Engagement a Veritable Minefield for Current and Prospective Government Contractors, Investment Advisers, Municipal Securities Professionals and Swap Dealers
While 2013 may be a quiet year on the federal election front, there will still be plenty of political noise made this fall in the Garden State as New Jersey’s state and local elections take center stage. The ardent politicos among our readers are probably disappointed that we won’t be seeing the “rising star” gubernatorial showdown between incumbent Chris Christie and Newark Mayor Cory Booker, but there will still be high-stakes drama along the Turnpike as both parties tussle over important state and local offices this November. These races will present ample opportunity for political participation throughout the year by individuals, corporations, unions, trade associations, PACs and organizations from around the country. After all, Governor Christie and other state candidates can’t win reelection with only donuts in their pockets… they might need some financial resources as well.Continue Reading...
Another Episode of Jersey
And here you were feeling empty because MTV has taken “Jersey Shore” off the air . . .
Last night, the New Jersey City Council agreed unanimously to pass a revised pay-to-play ordinance restricting vendor contributions to Board of Education candidates. No real news there. The story, as they say, is in the story that got them there.Continue Reading...
Local Pay-to-Play Provision To Be Put Before the Voters In South Jersey, While DC Mayor Vincent Gray Makes A Push for New Pay-to-Play Rules in the Nation's Capitol
With Labor Day weekend at hand and the Republican and Democratic National Conventions upon us, much of the American electorate is finally beginning to tune back into politics and prepare themselves for what will certainly be a very interesting close to the 2012 campaign season. News regarding the race for The White House will certainly dominate the media over the coming months, and rightfully so, but Pay-to-Play Law Blog is here to offer our readers, particularly those residing in swing states, a brief respite from the 24-7 presidential election coverage. We know our readers love Super PAC advertisements, political campaign internet pop-ups, and robo-calls as much as (if not more than) anyone, but we also know that they like to stay up to date on the important state and local pay-to-play news that might otherwise be slipping through the cracks between now and November 6th. With that in mind, we offer up a few recent items of interest from the Garden State and D.C.Continue Reading...
If you have ever had the occasion – as I have – to exchange pleasantries with a representative of New Jersey’s Highway Patrol while idling on the shoulder of the New Jersey Turnpike, you know that the Garden State takes its law enforcement seriously and is not much inclined to entertain excuses. The same can certainly be said for the strict scrutiny the State’s Department of the Treasury accords to enforcement of New Jersey’s pay-to-play laws.Continue Reading...
We’ve noted before that New Jersey remains the hands-down leader in pay-to-play ordinance proliferation. Until Governor Christie (or someone at the state level) succeeds in implementing a uniform statewide protocol for procurement efforts such as the one proposed here, New Jersey will extend its dubious distinction of having more varieties of pay-to-play legislation than its Turnpike has exits. (Think I’m kidding? Read on. It’s not even close).Continue Reading...
Following our coverage here and here about Trenton Mayor Tony Mack’s unsuccessful efforts to countermand a pay-to-play bar imposed by his City Law Director, anonymous sources are leaking that Mayor Mack himself is now under Justice Department investigation for pay-to-play and election law disclosure violations.
The Trentonian is reporting that its sources have confirmed that Trenton Mayor Tony Mack is being identified as a “person of interest” in an FBI probe “focused on alleged pay-to-play violations, fraudulent Election Law Enforcement Commission reports, and even a June 2010 event held by Atlantic City political insider Joseph Jacobs at his Linwood shore home.”
At present, the main players in this drama are not speaking. Bloomberg News is similarly following this story and to date has been unable to get anyone at the Mayor’s office or at the FBI to comment on the leak.
CHEAP SHOT ALERT. The following embed is a gratuitous cheap shot that I lack the self-discipline or willpower to omit.
We brought Trenton to your attention here just a few days ago to highlight the potential pitfalls of “ban first, inquire later” pay-to-play enforcement. At the time, we observed that Trenton Mayor Tony Mack’s effort to rescind a pay-to-play ban was “procedurally murky”. The Trentonian apparently agreed and reported on the issue complete with a YouTube embed of Elvis singing “Suspicious Minds” as a musical accompaniment to its call that “[t]here is no reason for the City of Trenton to continue with another embarrassing decision made by a city council that lacks backbone.”
This call precipitated two immediate effects. First, it instilled great personal shame in myself for having failed to this point to accompany my entries with Elvis embeds. I resolve to remedy that.
Second, public pressure such as that brought to bear by The Trentonian has caused the law firm in question, Cooper Levenson, to terminate its contract with the city over the issue. A copy of the termination letter can be found here. Whether this result was warranted or appropriate, one should bear this little tune in mind before contributing in Trenton.
Critics of "pay-to-play" restrictions have long come from throughout the political spectrum, raising concerns ranging from free speech to ballot access. But the recent "pay-to-play" proposals in Newark, NJ have been criticized by some public officials for a rather novel reason: they can't pick up the phone and call Oprah for a contribution like their popular Mayor, Corey Booker, can.
While the proposed legislation in Newark is in its infancy and is likely to change, it appears to be aimed at limiting contributions from local redevelopment companies. Specifically, the Star Ledger reports that the legislation's current language, "would bar contributions to city candidates from redevelopers, their subcontractors and their consultants starting the moment there is interest in an area for redevelopment."
This concept is not a novel one, particularly in New Jersey, which has arguably the toughest "pay-to-play" laws in the country. In fact, numerous localities in New Jersey have similar laws on the books. And as we detailed previously, Governor Chris Christie has proposed a wave of robust reforms that would further regulate the political law environment in the Garden State.
What is unique here, however, are claims such as the ones contained in the Star Ledger article:
As "pay-to-play" legislation limiting campaign donations from local redevelopers wends its way through City Hall, some city leaders are saying the proposed fundraising restrictions would create an unfair playing field for candidates who don’t have Oprah Winfrey on speed dial.
"I am not a rock star councilwoman," said at large council member Mildred Crump this week. "We have a rock star mayor."
Indeed, candidates without nationwide networks would be more directly impacted by the current Newark "pay-to-play" proposals than a national figure like Mayor Booker. Yet another reason for some to dislike this sort of piecemeal "pay-to-play" regulation. Nonetheless, reports on the ground indicate that passage of some form of this legislation is likely.
In any case, New Jersey continues to be a focal point for developments in the "pay-to-play" arena. We will monitor such developments closely as the end of 2010 nears.
NJ Governor Christie Proposes Sweeping Ethics Reform Package; Robust New "Pay-to-Play" Provisions On the Horizon
New Jersey Governor Chris Christie recently announced an ambitious proposal to overhaul New Jersey's ethics regulations which takes aim at perceived campaign finance loopholes and conflicts of interest, while also significantly increasing disclosure requirements for legislators. Importantly, the proposals by Christie, who campaigned vigorously on ethics reform, also contain several new "pay-to-play" regulations.
Specifically, an announcement from the Governor's office announced three proposals which would directly address New Jersey's current "pay-to-play" regime.
First, Christie has stated that he will "impose a uniform set of contract award standards on all levels of government and all branches of state government" by ending the “fair and open contract” exception for businesses that make reportable campaign contributions at the legislative, county and municipal levels, but are currently still able to receive contract awards valued greater than $17,500 with local governments. As Christie correctly notes, this practice is not currently permitted at the state/gubernatorial level.Continue Reading...
Several efforts are underway at the state and local levels to re-examine New Jersey’s stringent pay-to-play laws. This is probably a good development. Without question, New Jersey’s pay-to-play laws, put into effect in 2006, are considered by most in the regulated community to be among the most intrusive and confusing in the country. That is not a good combination for those doing business in the state or the lawyers seeking to advise them. Fortunately, it appears that the New Jersey Election Law Enforcement Commission (ELEC) agrees with that assessment and has announced its intention to support revisions to the law.
In its July newsletter, ELEC’s Commission Chair Jerry Fitzgerald English announced ELEC’s plans “to prioritize proposals for legislative reforms that are designed to improve the regulation of campaign financing, lobbying, and pay-to-play.” While recognizing that legal challenges pending nationally will have an influence on New Jersey’s actions, ELEC proposes significant changes to the State’s pay-to-play law.
ELEC’s first proposal, which almost makes too much sense to originate from government, is to revise the state’s pay-to-play laws to ensure that a single law applies at both the State and municipal level. Currently, local municipalities are free to pass a quilt-like patchwork of ordinances; all most none of which bear any relationship to the others. As ELEC points out, in addition to state law, over 50 local ordinances and executive orders also control local contracting and contribution rules. Such a regulatory scheme not only makes compliance exceedingly difficult for major vendors, but fosters costly and discouraging legal challenges with the passage of each new ordinance (this reaction to the Borough of Dumont’s new pay-to-play ordinance being only the most recent example).
Of the various changes proposed, probably the most significant is ELEC’s proposal is to remove the authority of county and municipal governments to circumvent state procurement laws by publicly advertising bids (referred to as the State’s “Fair and Open” provision). These changes, in addition to the ubiquitous calls for increased “transparency” through lower filing thresholds combined with a sensible call for increased contribution limits to provide defense against inevitable First Amendment challenge, appear to indicate that New Jersey is on the road toward common sense reforms.
Consider this blog among those supporting ELEC’s proposals.
Recent developments have served to transform this blog into something more of a “crime report” than originally intended as state and federal regulators have increasingly turned to highly publicized criminal prosecutions as a means of limiting pay to play activities. Most recently, New York’s Attorney General felt compelled to file legal pleadings in Manhattan State Court rebutting the assertion that there is nothing inherently wrong with using political connections and favors to secure state contracts because “everybody does it”.
In the public corruption case against Hank Morris, former advisor to State Comptroller Alan Hevesi, the State of New York observed :
“Business as usual” is not a defense to fraud, and “everybody does it” is not a defense to public corruption. It is true that fraud and corruption in politics have existed from the beginning of time. That is not, however, a reason to ignore them; to the contrary, we must zealously root them out. The fact that fraud and corruption may be rampant dies not cloak wrongdoers with impunity."
(Affirmation and Memorandum of Law in response to Defendant’s Omnibus Motion, p.2)Continue Reading...
A new report issued by the New Jersey Election Law Enforcement Commission (ELEC) is being cited as evidence that New Jersey's pay-to-play laws, which are undoubtedly amongst the most robust in the nation, are reducing the amount of money entering New Jersey politics.
Specifically, ELEC's analysis of contributions to candidates participating in the upcoming May 11 municipal elections in New Jersey indicate that total contributions are down 19% from fundraising totals at the same point four years ago. While current economic conditions would undoubtedly seem to have had some impact on these figures, a close examination of all campaign contributions in New Jersey indicates that pay-to-play laws are playing a significant factor in the reduced fundraising totals.Continue Reading...
As we mentioned in our previous blog entry, New Jersey is giving even further attention to its pay-to-play laws. Yesterday, to show the seriousness of his promises of reform, Governor Chris Christie issued an executive order that curbs political donations by labor unions and is intended to prevent pay-to-play politics from this donor group. Specifically, unions are now included in the group of donors who are barred from having state contracts worth more than $17,500 if they had donated more than $300 to a campaign for Governor or county political committee in the previous 18 months.
Democrats are voicing their opposition saying it is "over the top", as an important portion of their base is made up of labor unions. They do not believe the order will stay in place, denouncing it as an unconstitutional violation of free speech. Governor Christie claims that this simply applies the same rules as other similar types of businesses must comply with such as law and engineering firms.
For those that interact with this area of the law, it is well known that New Jersey has some of the most robust pay-to-play laws in the nation, at both the state and local levels. Perhaps not surprisingly, due to the numerous recent political scandals in New Jersey, the pay-to-play heat in the Garden State has been turned up even further.
At the state level, newly elected Governor Chris Christie made strengthening pay-to-play laws a central issue in his November 2009 campaign against John Corzine. Additional pay-to-play legislation at the state level seems likely, and the issue has already come up for the Governor personally during the short time after his victory.
Despite the fact that New Jersey's statewide pay-to-play statute applies in part to municipalities, local jurisdictions have joined in the rush to act. With the coming of the new year, New Jersey's media has been abuzz about pay-to-play in recent weeks in towns and cities across the state:
We at the Pay to Play Law Blog will continue to monitor the developments in New Jersey closely, as 2010 is sure to bring more complexity to an already difficult procurement environment. Stay tuned.