ELEC Issues Advisory Opinion on CPCs and Ch. 271 Disclosure

Members of a multi-member business or trade association PAC or CPC have been relieved of the requirement to report on their Chapter 271 Business Entity Annual Disclosure Statement the political contributions made by the trade association CPC, unless the business entity “directly or indirectly controls” the CPC.  Read more on NJ Election Law Enforcement Commission Advisory Opinion 2-2007. In Advisory Opinion No. 2-2007, ELEC held that a business entity merely “participating” in the governance of a multi-member CPC will not be required to report the CPC’s contributions on its Business Entity Annual Disclosure Statement, which is due in September.  The ruling holds that participation by a business entity in a multi-member CPC is not synonymous with “direct or indirect control” of that CPC. Before this ruling, many businesses feared, as suggested by a direct reading of ELEC’s regulations, that if the business entity and/or any of its officers, directors or employees merely participated in a CPC, the business entity would be required to disclose all of the CPC’s contributions as if those contributions were made by the business entity itself. Participation can include, for example, voting as one of several members on collective CPC policy-making decisions and/or serving on but not controlling a multi-seat CPC Board of Trustees. That interpretation would have led to over-disclosure and re-reporting so that multiple businesses “participating” in a CPC would each have been required to disclose all of the CPC’s “reportable” contributions on their Disclosure Statements.  Thus, ELEC’s new ruling brings some relief to businesses with government procurement contracts in the wake of increasingly stringent pay-to-play and campaign finance disclosure requirements.