Governor Murphy Issues Conditional Veto to S1500 “Dark Money” Bill

For the past several months, those active in New Jersey politics have been following the trajectory of the so-called “Dark Money” bill (S1500). As previously discussed here and here, the bill went through several iterations as it worked its way through the New Jersey Legislature. Yesterday, Governor Murphy conditionally vetoed the bill. If the Governor had signed the bill as it was presented to him, the bill would have expanded disclosure requirements for politically-active non-profit organizations. One of the major implications of the bill would be to require 501(c)(4) social-welfare organizations that are active in New Jersey elections or lobbying efforts to register with ELEC and disclose donors and expenditures that meet certain reporting thresholds.

Although the Governor found the bill “laudable in its intentions,” he noted that he could not “support this bill as drafted because of the numerous legal issues it raises, its potential to stifle nonpartisan activity, and the presence of troubling loopholes.” With the stroke of his pen, the Governor sent the bill back to the Senate with recommendations to:

• more closely define the “lobbying” activity that would require registration under the bill
• focus on electioneering communications within 60 days of an election
• bring independent expenditure committees within the scope of state pay-to-play laws
• impose reporting requirements on business entities that participate in tax-credit subsidies

While the ultimate fate of the bill is now up in the air, politically active individuals, organizations and entities and businesses that participate in government contracting or tax-credit programs should stay tuned for further updates on this legislation. Government contractors should also make sure that that they are familiar with current pay-to-play restrictions and do not blindly write checks to political recipients without knowing the status, name and purpose of the organization.