Posted on September 9, 2011 by Stefan Passantino

New Jersey Has a Busy Week

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).

This week saw two such ordinances seek admission to New Jersey’s growing family. First, Montclair, New Jersey proposed an ordinance, which would, if passed, debar contractors and their companies, which have made local political contributions in excess of $300 (and in some instances $500) within the preceding year from contracting with the township. The provision further provides for two relatively punitive provisions for its violation. First, the proposed law makes clear that a violation “shall be a material breach of the terms of a Montclair agreement or contract for Professional Services or Extraordinary Unspecified Services”, which virtually ensures that discovery of inadvertent violations of the ordinance shall be the first order of business for any losing bidder contemplating a bid protest. Second, making matters worse for the intentional or unintentional violator, contractors discovered to have transgressed (by a disgruntled bid protestor or others) would be barred from bidding on township contracts for four years. Ouch.

A second pay-to-play ordinance is being contemplated by the Bergen County, New Jersey Board of Chosen Freeholders. This ordinance has drawn criticism not for the penalties it imposes but rather for the exemptions it contains (one payer’s “exemption” is another player’s “loophole”). At issue in the Bergen County ordinance is a provision that its penalties and restrictions do not apply to contracts procured via open, competitive bidding (the so-called “fair and open process” exception). While it might strike some (such as myself) that contracts awarded through a transparent and open bidding process do not require the same, strict level of safeguards in the form of complex, and often punitive, restrictions on campaign activity, the “fair and open process” exception has drawn fire in the township. This clause has drawn the ire of Jersey residents before and shows no sign of abating any time in the near future.

Until New Jersey finds a way to adopt a common regulatory standard throughout the state, it will remain safely ensconced as the clear national leader in multiple, contradictory political procurement regulatory schemes.

While you’re holding your breath for that development, I strongly recommend that any entities or individuals seeking to navigate New Jersey pay-to-play or doing business with the State’s numerous townships to bookmark this extremely handy reference to the State’s numerous (literally over 100) current pay-to-play provisions. I further recommend that anyone seeking to navigate the State’s famous turnpike be on the lookout for these signs.

 
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Posted on July 16, 2010 by Stefan Passantino

New Jersey Continues to Examine and Refine its Pay-to-Play Laws

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.

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Posted on April 19, 2010 by Amol Naik

Pay-to-Play Laws Stifling Campaign Contributions in New Jersey

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.

For example, ELEC is reporting that gross receipts for New Jersey state political parties, and House and Senate Leadership PACs, are down 36% from 2006 levels. Similarly, ELEC states that county party committees have reported 28% reductions in gross receipts over the same period.

Though municipal pay-to-play limits in New Jersey are generally very stringent by national standards, municipal candidates generally have more flexibility to accept contributions from municipal contractors than New Jersey state candidates do from state contractors. As the ELEC's Executive Director states, this flexibility may be a significant factor as to why the reductions in municipal contributions are less dramatic than those that are being seen statewide.

In any case, pay-to-play laws are clearly having an impact on the political playing field in New Jersey. Click here for more insight on this trend.

We at the pay-to-play law blog will continue to monitor such developments nationwide.
 
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