Year End Review: NJ Pay-to-Play Developments and Non-Developments

In April 2012 the New Jersey Election Law Enforcement Commission’s annual report, made seven priority recommendations for changes in pay-to-play laws.  These proposals included: (1) increased disclosure for Super PAC 527 and 501(c) organization activity; (2) simplifying and standardizing the numerous local pay-to-play laws by prohibiting business entities from entering county or municipal contracts above $17,500 if they make certain political contributions; and (3) discouraging the proliferation of affiliated PACs. To date, none of these proposals have been adopted into law.  Instead, the active efforts to achieve pay-to-play refinements are currently local. In one instance, the failure to adopt amendments to a local ordinance is instructive.  In early October, Bergen County Executive Kathleen Donovan vetoed the Bergen County Freeholders’ attempt at scaling back the current pay-to-play ordinance, which took effect January 1, 2012.  See here for our previous discussion on Bergen County’s ordinance. The vetoed amendments would have reduced the classes of covered recipients and permitted suspension of the ordinance at the Freeholders’ discretion. Success is also instructive.  On November 6, voters in Gloucester Township (Camden County) voted by an overwhelming majority (over 75% in favor) to approve a pay-to-play ordinance for the Township. Because the ordinance was approved as a ballot question, municipal law statute requires that it remain in effect for three years unless overturned by voters in a subsequent election.  Similar to the City of Camden pay-to-play ordinance (which is a transitional aid ordinance), the Gloucester Township ordinance covers contributions by employees of the business entity who were paid over  $100,000 in the twelve months prior to the contract award. It additionally bars a business entity from using a subcontractor who is not in compliance with the reduced limits specified in the ordinance.  In contrast, subcontractors are not covered by New Jersey’s statewide pay-to-play restrictions. The Gloucester Township ordinance may be the first of its kind in that it limits contributions to and requires disclosure of contributions to “SuperPACs.” But the ordinance does not define SuperPACs.    Finally, last week, the Township of Upper Committee approved a new pay-to-play ordinance that prohibits all contributions—in any amount—by municipal contractors to municipal candidates.  This revision to the Township of Upper pay-to-play ordinance is more stringent than restrictions under New Jersey State pay-to-play law and the previous version of the Township of Upper pay-to-play ordinance as it does not allow municipal contractors to make small contributions—a feature of many other local pay-to-play ordinances. If the future of pay-to-play in New Jersey will be the product of a tug of war between local innovation and state-imposed uniform standards, it would appear that currently only one side is holding the rope.