No Room for Refunds: Pay-to-Play Limits and New Jersey’s Upcoming Gubernatorial Election

With summer vacations over and the New Jersey political world focused on the November gubernatorial election, Friday, September 8, 2017 marks an important milestone under New Jersey’s pay-to-play laws.

Under the law, a business entity can find itself ineligible for New Jersey Executive Branch contracts if the business entity or its covered individuals have made a reportable political contribution (a contribution greater than $300) to a gubernatorial candidate, political party committee, or legislative leadership committee. As previously discussed here, a contribution in excess of pay-to-play limits can have a devastating effect on a company.

The good news is that, generally, if a company or a covered individual makes a contribution in excess of the applicable pay-to-play limit, the contributor can request and receive a refund within 30 days of the contribution without jeopardizing eligibility for New Jersey Executive Branch contracts. The bad news is that, for contributions made within 60 days of a gubernatorial election, a refund will not cure a violation.

As New Jersey draws closer to electing its next Governor and companies and individuals are increasingly engaged in the political process, government contractors (and prospective government contractors) must understand pay-to-play limits. Smart companies know that each contribution must be reviewed and approved in advance and that relying upon obtaining a refund is not a prudent strategy for compliance.

For more information on how you or your company may safely participate in the political process, please contact Rebecca Moll Freed, Esq., Chair of the Corporate Political Activity Law Group, at rfreed@genovaburns.com or 973-230-2075