City of Newark Amends Pay-to-Play Ordinance: What Government Contractors Need to Know

New Jersey is known as the pay-to-play state, as the Garden State is home to an overlapping series of restrictions and requirements for the political contributions made by government contractors. In addition to several statewide laws, New Jersey has also seen the adoption of local pay-to-play ordinances and policies in more than 150 counties and municipalities.

Now, an early example of local pay-to-play restrictions, in the biggest municipality in New Jersey, has been amended.

The City of Newark originally imposed pay-to-play restrictions via executive order in 2007, an approach that was later formalized into ordinance in 2012.

On May 20, 2020, the Newark City Council amended its longstanding ordinance in a significant way. Based on the amendments to the ordinance, government contractors need to keep the following in mind:

• Essex County political party committees and Newark-focused PACs (also known as CPCs) are no longer covered recipients under the amended ordinance.
• Maximum permitted contributions of $300 per calendar year and the annual aggregate limit of $2,500 for all business-entity contributions to covered Newark political recipients have been stricken—based on the amended ordinance, all contributions, in any amount, are prohibited during the relevant time periods.
• Language noting that there is no exemption for fair-and-open contracts has been removed.

Note that this amendment does not change the existing regulations and restrictions that apply to developers under the Newark redevelopment pay-to-play ordinance.

For assistance with compliance in connection to this amendment, please contact Rebecca Moll Freed or Avi D. Kelin of Genova Burns' Corporate Political Activity Law Practice.