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Just Call It The “Pay-to-Play” Corridor

 

 When one hears about state pay-to-play reform efforts underway along the “Northeastern Corridor”, it’s only natural to look first to the news wires in New Jersey, Connecticut and New York. After all, those jurisdictions have proven themselves to be the leaders of the pack when it comes to pay-to-play advancements, or at least reformist, pay-to-play rhetoric. In recent weeks, however, we have begun to see momentum building behind new pay-to-play legislation in the neighboring jurisdictions of Pennsylvania and Rhode Island. Depending on the outcome of these new efforts, perhaps it’s time that we drop the directional nomenclature and simply start calling the entire region the “Pay-to-Play Corridor”.

Pennsylvania Legislative Activity

Given the steady stream of “perp walks” seen in the Keystone state over the past month, one could have anticipated significant legislative action on the pay-to-play front. For those of our readers who missed the reports because they were busy “Spring Breaking” or watching their March Madness brackets go down in flames, here’s the long and short of it. In mid March, Pennsylvania Attorney General Kathleen Kane brought a collection of criminal charges against eight Pennsylvania lawmakers and government officials in connection with a wide-ranging bid-rigging and bribery scheme associated with the Pennsylvania Turnpike Commission. Included among those charged were former State Senator Robert Mellow, former Turnpike CEO Joseph Brimmeier, and former Turnpike Chairman Mitchell Rubin, who allegedly directed Turnpike contracts to favored vendors and campaign supporters, and misused millions of dollars in public funds.

With the discovery of this textbook pay-to-play scandal, Pennsylvania lawmakers have been scurrying to distance themselves from the parties involved and position themselves on the right side of pay-to-play reform. The result has been a flurry of legislative ideas and proposals from members in both the state House of Representatives and state Senate. Among the more heavily publicized bills under consideration are SB 750 through SB 758, a collection of pay-to-play and ethics bills sponsored by the bi-partisan tandem of State Senator Mike Stack (D-Philadelphia) and State Senator John Eichelberger, Jr. (R-Blair). As one might expect, the range of issues addressed by these nine bills is quite broad.

Although the specific language in the draft bills has not yet been made publicly available, SB 753, SB 754 and SB 755 appear to focus on contracting issues, requiring the public disclosure of vendor scoring on state RFP bids, the reporting of any payments made to state vendors by registered state PACs or candidate committees, and the disclosure of all subcontractors by state vendors. Meanwhile, SB 750, SB 756 and SB 758 purport to tackle gift and contribution issues by calling for a decrease in the state gift reporting threshold from $250 to $50, requiring the public disclosure of certain campaign contributions by executive branch advisory commission and task force members, and installing an outright ban on gifts to executive branch officials and employees by all companies that do business with, or are regulated by, the Commonwealth.

As of this blog’s publication, none of these proposals have been taken up for consideration in the Pennsylvania State Senate. Their introduction, however, does indicate one direction that the Keystone State’s legislature is looking to go in the wake of the Turnpike scandal.

>Another potential pathway to reform in Pennsylvania was launched earlier this week in the state House of Representatives by Representative George Dunbar (R-Westmoreland). His bill, HB 201, attempts to bring increased transparency and accountability to the state procurement process by incorporating a two-year “revolving-door” provision into Pennsylvania laws governing the competitive sealed bidding process. The legislation passed the House unanimously on Tuesday, but failed to include several amendments proposed by Rep. Brandon Neuman (D-Washington) and others, which would have implemented pay-to-play contribution reporting provisions akin to those seen at the state level in New Jersey.

Perhaps Keystone legislators were scared off by the recent words of New Jersey Election Law Enforcement Commissioner Jeff Brindle, which highlight the unwieldy nature of the Garden State’s pay-to-play framework? Or perhaps it was a pure political dodge? Their true motivations may never be known, but we will continue to keep our readers posted as the aforementioned bills make their way through the state legislative process and new proposals are introduced.

Rhode Island Legislative Activity

Further north on the Pay-to-Play Corridor, we are also beginning to see Rhode Island officials join the push for reform. At present, Rhode Island’s pay-to-play laws place limited, disclosure-only reporting obligations on state contractors. Under these obligations, vendors with contracts for goods or services valued at $5,000 or more are required to disclose on an affidavit all contributions to state officers, general assembly candidates and political parties in excess of $250 made within two years of the beginning of a state contract. These provisions do not, however, place any inherent limitations on the political giving of potential or actual state vendors.

Hoping to rectify this shortcoming, State Attorney General Peter Kilmartin and State Representative Michael Marcello have worked together to draft and introduce legislation that would prohibit state vendors, their owners, their executive officers, and the spouses and minor children of those owners and officers from making political contributions to state officials and state candidates who are or could be generally responsible for awarding state contracts. This ban would apply to all vendors with existing state contracts valued at over $5,000 (or aggregating to over $25,000), and would be effective for the duration of the officeholder’s term or for two years following the termination or expiration of the contract, whichever is longer.

The bill, H 5490, also places a similar restriction on the executives and family members of companies with pending bids for state contracts. This ban on contributions by vendors with pending bids or contracts would likewise apply in all situations where contract value exceeds $5,000 on any one bid or contract, or $25,000 on aggregate bids or contracts.

The language of the Kilmartin/Marcello bill is broadly drafted to cover contributions made to a wide range of state officials, including the Governor, and includes a low value threshold to ensure nearly universal application to all state contracts. Whether those particular elements survive the legislative process moving forward, however, is yet to be seen. So far, the bill remains in its introduced form and has been held over for further study by the Rhode Island House Judiciary Committee. As additional news on its progress becomes available, we here at Pay to Play Law Blog will keep everyone updated.

Just Call It The “Pay-to-Play” Corridor