The New Jersey Legislature is on the verge of changing the state’s campaign finance restrictions, despite opposition from good government groups.
The Elections Transparency Act would double the amount individuals or groups could give to non-gubernatorial candidates, parties and county party organizations — commonly referred to as political machines. Contributions to candidates would go from $2,600 to $5,200 in a given election cycle. Contributions to political committees would double to $14,400. Those limits would also increase annually under a formula in the bill.
It also would dismantle local laws that prohibit campaign donations from people who do business directly with government, and regulate all those donations through state law instead.
“While we're all in support of improving transparency to reduce and eliminate the influence of dark money and politics, this bill somehow manages to gut New Jersey's anticorruption laws,” said Sheila Reynertson, a senior policy analyst with think tank New Jersey Policy Perspective. “It guts local pay-to-play provisions in the name of simplicity and strengthening enforcement, and it blows the lid off of political contributions by doubling contribution limits and removing most provisions on business contributions to parties.”
But the bill's chief sponsor, Assemblyman Louis Greenwald, a Democrat whose district includes portions of Burlington and Camden counties, says the contribution limits haven’t been changed in 17 years and are out of date. And the U.S. Supreme Court decision in Citizens United v. Federal Elections Committee opened the floodgate of political donations that are shielded from public view.
“We don't see what those contributions are. This bill lifts that and creates a mechanism where all of those contributions are now transparent,” Greenwald said.
The bill would require 501(c)4 organizations and political action committees to report any contributions more than $7,500 — instead of the current $10,000. They’d also have to report all of their expenditures, not just those over $3,000, as required by current law.
Campaigns would have to report individual donor contributions of at least $200, instead of the current $300. In the final 11 days of a race, a campaign would have to report contributions of $1,900 or more within one day, instead of the currently allowed two days.
The bill would also lower the threshold for barring contractors from being eligible for no-bid contracts. They’d be disqualified from those contracts if they’ve given $200 or more to a campaign, instead of $300. But it would create a loophole in the current pay-to-play restrictions by allowing party organizations to accept donations from government contractors.
The names and addresses of donors who give $200 to a campaign would have to be listed on disclosures, down from $300.
Currently, local governments pass their own pay-to-play rules that restrict people who do business with their municipality or county from donating to the officials who decide on those contracts. Under the new proposal, all local ordinances would be repealed and the state would replace them with one state regulation.
But state law regarding government contracts has what advocates describe as another large loophole. If a contract is awarded through an open bidding process, then campaign contributions by the winner of that contract are allowed.
Greenwald defends that system.
“The public has a right to know what those campaign contributions were. And then the contracts themselves should be judged on merit based on cost and quality,” Greenwald said. “And if all of that is made public, that's a very transparent system. And that provides the purest system and the best system for people to make those evaluations.”
When a version of the bill was first introduced and then tabled last summer, the architect of the state’s pay-to-play rules wrote an op-ed for NJ Spotlight arguing against it.
“The explosion of super PACs and independent expenditure efforts have made increased enforcement of New Jersey’s pay-to-play protections more critical than ever,” wrote Harry Pozycki, founder of the Citizens Campaign, which authored and promoted model versions of the anti-pay-to-play resolutions and ordinances many governments use. “The answer is not to throw out smart contracting protections under the cover of a broad campaign finance overhaul.”
Philip Hensley, a democracy policy analyst for the nonpartisan League of Women Voters of New Jersey, said many of the local pay-to-play laws are stronger than what is proposed for the whole state.
“It's a bill that promises one thing and it really takes us in the wrong direction,” Hensley said. “We're really concerned that even though it's billed as a transparency law, it would fail to make election spending truly transparent, which is desperately needed for sure.”
Hensley said state pay-to-play law has loopholes that many local ordinances do not. A member of the Legislature can accept a donation from a contractor who does business in their district, because technically, the legislator doesn’t vote on a local contract.
“There are a bunch of loopholes in state law. This does nothing to close them, and this just opens up lots of more loopholes to apply literally everywhere because towns and counties won't have any recourse anymore,” Hensley said.
The version of the bill introduced this summer would have also required large donations to be reported within 96 hours, instead of just in quarterly reports. That provision has since been stripped out, over the objections of transparency advocates.
Gov. Phil Murphy hasn’t said yet if he supports the bill, telling NJ.com earlier this month that, while he’s generally on board with increasing government transparency, he didn’t have any comments to share on the bill’s specifics.
Hensley and other good government advocates acknowledge that the patchwork of local pay-to-play laws aren’t working, but they say this proposal makes the situation worse. And they’re not happy about the bill being quickly moved through the process during the holiday season.
“That's not an accident – the people who set those committee agendas know that this is a safe time,” said Micah Rasmussen, director of the Rebovich Institute for New Jersey Politics at Rider University.
Before taking his academic position, Rasmussen worked in the state Assembly, was press secretary for former Gov. Jim McGreevey and managed several campaigns.
“When it's before the election, they say, ‘No, we're not moving those [bills] right now. Wait until December, right?” Rasmussen said. “Wait until lame duck, or wait until the period when people aren't really paying attention. It's not quite nefarious, but it's also very intentional. It is somewhere between the two.”