The order allows Appellants to file a supplemental brief specifically addressing the “importance” of Citizens United and gives the City the opportunity to respond.

The NYC Campaign Finance Board made its position clear in a press release issued on the day that Citizens United was decided.

In light of the Supreme Court’s rationale in Citizens United that “restrictions distinguishing among different speakers, allowing speech by some but not others” are prohibited, this case may test whether Citizens United has any applicability to speaker-based contribution limits.

The general consensus was that New Jersey’s existing campaign finance laws are not directly affected by the Supreme Court holding unconstitutional campaign expenditure limitations for corporations.    Mr. Genova cautioned, however, that the logic underpinning the decision could ultimately impact current restrictions on political participation that are keyed to the identity of the speaker, such as the ban on contributions from regulated industries and pay-to-play restrictions.  At this early stage, in the wake of Citizens United, it remains to be seen whether the presumptive corrupting influence of money will stand as a justification for such identity-based restrictions.

Associate Bonnie B. Fire contributed to this post.

Theoretically, the Commission would be an independent City agency. As a practical matter, especially in recent years, mayors have taken a dominant role in shaping past commissions’ agendas and proposals. Indeed, like the mayor, various officials and employees of the City of New York have potentially enormous stakes in the changes Charter revision may make in the City’s government for years to come. Government officials and employees can therefore be expected to advocate for their institutional interests.

Lobbying regulation is intended to shed light on attempts to influence the actions of public officials. Will City and State lobbying laws facilitate public scrutiny of City officials’ and employees’ efforts to influence the actions of a Charter Revision Commission?

The brief answer is No.

The lobbying laws generally require persons meeting certain thresholds of compensation or expenditures for lobbying activity to register with the applicable monitoring agency and submit periodic reports. But neither City nor State lobbying law, in their current form, mandates registration and reporting by City officials and employees who lobby a Charter Commission.

Under City law, attempts to influence the “determination of a … commission” are defined as lobbying, but the term “lobbyist” expressly excludes officers and employees of the City of New York when discharging their official duties.

State lobbying law is more complex. Lobbying includes attempts to influence “passage or defeat of any local law … by a municipality.” There is no express exception for municipal officers and employees. Indeed, municipal corporations are required to register and report their lobbying, an obligation which does not distinguish between lobbying at the State or NYC level.

There has, however, been a longstanding unwritten exception for “government-to-government” contacts that has allowed municipal corporations to avoid registration. In any event, because a Charter Commission is not a legislative body, it only proposes local law(s) for public referendum. Attempts to influence the Commission’s proposals are legally distinct from attempts to influence the “passage or defeat” of the local law itself.

Are these gaps in City and State lobbying regulation loopholes? Given the likelihood that some NYC officials and employees will try to influence the Charter Commission’s proposals, should existing lobbying regulations be extended to promote transparency and public scrutiny of their Charter lobbying efforts?

And even if these laws are not amended, should officials be encouraged to voluntarily submit their lobbying on Charter revision to the current State and City registration and reporting regimes, and to direct their employees to do likewise?

The answer may depend on how highly the public values the independence of a Charter Commission. If Commission independence is seen as critical to the credibility of its proposals, an expanded lobbying law could be useful as a means of fostering that independence. On the other hand, if independence is not a prime value, there would be little public benefit in burdening “government-to-government” communications with compliance obligations under the overlapping and detailed regimes that regulate private sector lobbyists.

Likewise, looking to the future, this week at the 2010 annual meeting of the New York State Bar Association, the Committee on Attorneys in Public Service sponsored panel discussions on The State Legislature and the State Constitution: The Path Forward.  My presentation addressed recent proposals to reform campaign financing, and included consideration of the Citizens United decision.

Currently, New York imposes no disclaimer or public disclosure requirements on corporations or unions making independent expenditures in State and local elections.  That would change under the Ethics Bill, which passed the Assembly and Senate last week (A.9544/S.6457).

Among other reforms, the bill would require disclaimers to indicate when a political communication was not authorized by a candidate and to identify who paid for it.  The makers of independent expenditures would be required to disclose to the State Board of Elections: the person making the independent expenditure; persons giving money to fund the independent expenditure; the amount and date of each independent expenditure; and the election and candidate to whom the independent expenditure pertains.  These provisions are analogous to the federal requirements upheld in Citizens United.

As of this writing, the future of the Ethics Bill is uncertain.  Governor Paterson seeks a broader set of ethics reforms and has threatened a veto.

On February 2, 2010, the Governor vetoed the bill.  The Legislature failed to override the veto.

The law requires a business entity to disclose the details of all of its New Jersey government contracts (state, county, municipal, school board and fire district) where a business entity or any covered person or entity has made a “reportable” contribution (i.e. $300 or more) to a New Jersey political recipient during the 2009 calendar year.

Covered persons and entities include: shareholders, principals, partners, officers, directors and their spouses and resident children. Covered entities include the vendor itself, the vendor’s parent company and any subsidiaries and/or CPCs/PACs “directly or indirectly” controlled by the vendor.

Not-for-profits are not currently required to file a Business Entity Annual Disclosure Form. In light of Governor Christie’s Executive Order No. 7 will labor unions be required to file this form in the future?

The Business Entity Annual Statement Form can be downloaded from the New Jersey Election Law Enforcement Commission’s website.

New Jersey

New Jersey law permits a state vendor to “cure” a contribution over the $300 limit set forth under P.L. 2005, c. 51 if the vendor requests and receives a refund within 30 days of making an excessive contribution. If a vendor fails to cure an excessive contribution, the vendor may be declared ineligible for New Jersey state government contracts for a period ranging from 18 months to 5 ½ years.

A recent New Jersey Supreme Court case, In the Matter of the Appeal of Earle Asphalt Company, demonstrates just how stringently the 30 day refund period is enforced. In the Earle case, the New Jersey Supreme Court held that a refund requested within 30 days but not received until the 41st day was not sufficient to “cure” an excessive contribution.

Under the scores of local pay-to-play ordinances, the refund provisions vary. For example, Mercer County allows a vendor to cure an excessive contribution if the vendor seeks and receives a refund within 30 days after the general election. The City of Newark allows a vendor to cure an inadvertent contribution if the vendor seeks and receives a refund within 60 days after the relevant ELEC report is filed. Jersey City allows a vendor to seek and receive a refund within 30 days after the relevant ELEC report is published. Under Edison’s local ordinance, a vendor may seek and receive a refund within 60 days of the date on which the contribution was made. Failure to cure a prohibited or excessive contribution within the stated refund period would result in ineligibility for contracts with local government.

New York City

At the other extreme are limitations on the receipt of contributions from persons defined as “doing business” with the City of New York. Under NYC law, the initial burden is on the Campaign Finance Board to provide notice to the candidate of an excessive contribution within 20 days or three business days of its reporting, depending on the proximity of the election. If the CFB fails to meet this deadline, the contribution may be retained. If timely notice is provided, the candidate’s committee has 20 days from the notice to refund the excessive amount in order to avoid a finding of violation. Compliance is shown by postmark or delivery within 20 day period.

Connecticut

Connecticut law prohibits  state vendors from making and/or soliciting contributions in any amount to/for candidates seeking state elected office. Under Section 9-612(g)(1)(c) of Connecticut law, a vendor may cure an “improper” contribution by receiving a refund by the later of 30 days after the receipt of the contribution or the filing date that corresponds with the reporting period in which the “improper” contribution was made.

In Connecticut, a company that makes an excessive contribution may be declared ineligible for state contracts for a period of 1 year after the election for which a prohibited contribution is made or solicited.

Associate Bonnie Fire contributed to this post.

The Court lifted the ban on independent expenditures concluding that corporate and union issue ads do not give rise to corruption or the appearance thereof – thus, there is no longer a justification for the ban. The Court further explained that the Government may not impose restrictions on certain “disfavored” speakers. Although corporations and unions can now spend freely on federal elections, they are still subject to disclosure and disclaimer requirements on the issue ads that they run. The Court upheld the disclaimer and disclosure requirements because they help avoid confusion and “insure that voters are fully informed about who is speaking.”

The Citizens United decision will have an immediate and huge impact on upcoming federal elections. Corporations and unions may now spend freely to support or oppose the candidates of their choice. The decision will also affect state campaign finance laws in those states which currently restrict corporate and union expenditures.

The Citizens United decision does not directly affect the federal prohibition on direct contributions by corporations and unions. Corporations and unions still may not make direct contributions in connection with federal elections. They may, however, establish PACs.

Stay tuned for additional analysis in coming days.

It remains to be seen how the Order will be implemented. Initially, several issues merit attention.

It is unclear how EO 7 affects the scope of EO 117 and 118, both of which limit the definition of “business entity” to for-profit entities. Since labor unions typically are tax exempt under IRC 501(c)(5), and thus are not for-profit entities, unions would either become the only not for-profit entities subject to EO 117 and 118 or otherwise remain exempt from coverage. And, if covered, would the pay-to-play contribution limitation extend to officers of the union, their spouses, civil union partners, and resident children?

The inclusion of political committees “formed” by labor organizations may be a relatively significant change in the coverage of political committees. Previous executive orders have covered political committees “directly or indirectly controlled” by the business entity.

Another open issue is whether the Order is meant to cover collective negotiations agreements with the State. This issue appears to depend on the scope of contracts and agreements covered by the state pay-to-play legislation, Chapter 51 (which codified and superseded the original Executive Order on pay-to-play, No. 134 issued by Governor McGreevey in 2004).

Similarly, Executive Order 7 states it applies to labor organizations which enter into contracts with the State, its instrumentalities “or with other New Jersey public entities.” Is EO 7 intended to cover contracts with county and municipal government entities? Neither Chapter 51 nor the prior executive orders on pay-to-play reached beyond State government contracts.

Finally, EO 7 states that prior executive orders are modified to include legislative leadership committees in the list of covered recipients. But legislative leadership committees were already covered by Executive Orders 117 and 118.

Executive Order 7 takes effect immediately.