Top Ten New Jersey Pay-to-Play Myths

Now that David Letterman has hosted his last show, the universe is experiencing a distinct lack of top-ten lists. We are happy to take on this awe-inspiring responsibility in the best way we know how: with a list of the top ten New Jersey pay-to-play myths.

1. MYTH: Contributions of $300 or less are always permissible.
   • FACT: Some stringent local pay-to-play ordinances do not allow contributions in any amount once a business entity has entered a contract (or even started negotiations for a contract) with the government entity.
2. MYTH: Reduced contribution limits are the same before and during a contract.
   • FACT: As mentioned above, some local ordinances do not allow contributions, in any amount, to be made once a business entity starts negotiations for a contract even though they allow for reduced contributions prior to the negotiation period.
3. MYTH: Contributions to New Jersey PACs are not subject to pay-to-play restrictions.
   • FACT: There are some local pay-to-play ordinances that cover contributions to PACs that were either “formed for the primary purpose of” or “that regularly engage in the support of” the jurisdiction’s candidates or elections. This is different than the treatment of PACs under statewide Executive Branch pay-to-play restrictions.
4. MYTH: It is always permissible to contribute $300 to a candidate for the primary election and an additional $300 for the general election.
   • FACT: Some municipalities hold municipal elections once every four years and do not hold separate primary and general elections. So, in these jurisdictions, a contributor may only be permitted to contribute $300 over the course of four years. Also, some local ordinances impose a per-election-cycle limit, treating the primary and general elections as one unit.
5. MYTH: Pay-to-play limits are the same for candidates, political party committees, and New Jersey PACs.
   • FACT: Pay-to-play limits are often based on reportable periods. A reporting period generally runs on a per-election basis for a candidate committee and a per-calendar-year basis for party committees and PACs.
6. MYTH: Contributions to legislative candidate committees are not subject to pay-to-play.
   • FACT: Contributions to legislative candidate committees may have pay-to-play implications if the legislator serves as the presiding officer of either house or represents a legislative district that includes part of a State redevelopment area.
7. MYTH: If a county or municipality has its own local ordinance in effect, there is no reason to worry about the State laws.
   • FACT: Local ordinances and the State laws can sometimes offer divergent limits. For example, some local ordinances impose a per-calendar-year contribution limit for a candidate, while the State laws work on a per-election basis for candidates. The best approach is for a business entity to comply with both the State laws and any local ordinance in effect.
8. MYTH: Only shareholders and officers of a business entity are covered by pay-to-play.
   • FACT: Some local ordinances extend the definition of a business entity to include any employee who earns more than $100,000 in a calendar year. Spouses and children of a covered individual may also be subject to pay-to-play limits.
9. MYTH: Contributions to federal PACs and candidates are subject to New Jersey pay-to-play restrictions.
   • FACT: Federal elections are outside of ELEC’s jurisdiction and thus contributions to federal committees are not subject to New Jersey pay-to-play laws.
10. MYTH: Only procurement contracts are subject to pay-to-play restrictions.
    • FACT: Some municipalities have redevelopment or land-use ordinances, which set reduced contribution limits for a business entity that enters redevelopment agreements or seeks certain land-use approvals.