Earlier this year, a number of New Jersey municipalities were required to begin the process of adopting stringent pay-to-play ordinances because they accepted transitional aid from the State of New Jersey.
Over the past two months, several ordinances have gone into effect. Most recently, on March 6, 2011, the City of Paterson’s transitional aid pay-to-play ordinance went into effect. Like most of the transitional aid ordinances, the City of Paterson’s Ordinance covers no-bid contracts with the City. No exception exists for contracts awarded pursuant to a “fair and open process”. The ordinance contains reduced limits during the 12 months prior to a contract award and an absolute ban on contributions (in any amount) during the term of a no-bid contract with the City.
In addition to covering contributions to Paterson recipients, the ordinance also covers contributions to Passaic County party committees and PACs/CPCs that regularly engage in the support of Paterson and/or County of Passaic elections. The ordinance covers contributions by the vendor itself and certain individuals associated with the vendor. Contributions by a vendor’s affiliates, subcontractors and consultants may also be covered. Paterson’s new transitional aid ordinance is more stringent than the pay-to-play ordinance which the City enacted last spring. Unlike the North Arlington transitional aid pay-to-play ordinance, the Paterson ordinance does not contain a Sunset provision.
As transitional aid pay-to-play ordinances, like the one enacted in the City of Paterson, begin to roll out across the state, vendors that contract with and/or wish to contract with covered municipalities should become familiar with the ordinances to preserve their eligibility for municipal contracts.
Last November, New York City voters adopted a Charter revision proposal to require public disclosure of independent expenditures in City elections. Now comes the hard part: adopting rules to flesh out just what these new disclosure and disclaimer requirements will really mean for individuals, organizations, corporations, political committees, labor unions, and others who want to speak out about elected officials and candidates in the days and months before an election.
The City Campaign Finance Board wants to know what you think. On Tuesday, March 10, from 11 a.m. to 2 p.m., it will hold a public hearing to gather information to inform its future rulemaking. The CFB recommends consideration of the following issues in preparing testimony:
• Scope of regulated activity. Should the requirements apply to communications containing express advocacy, or also to those that refer to a clearly identified candidate (or ballot measure) shortly before an election?
• Required information. What information should an independent spender be required to disclose about itself, its funding sources, and its vendors? Within what timeframe should this information be reported to the Board?
• Exemptions. Should certain communications or actors be exempt from the disclosure rules? Should certain contributions, such as those earmarked for a specific non-political purpose, be exempted from source disclosure rules?
• Enforcement. How should the Board uncover potential violations of the disclosure rules? Should it rely on complaints only, or initiate investigations of unreported activity?
• Disclaimer requirements. Should the disclaimer/identifier on the face of the communication be subject to language, font size and placement requirements? Should certain communications be exempt from such requirements?
• Outreach. How can the Board best conduct outreach and training to potential independent spenders once the independent expenditure rules are approved?
Earlier this month, the Federal Election Commission (“FEC”) released new limits for the 2011-2012 federal election cycle. Federal contribution limits are indexed for inflation in odd-numbered years. The increases for the 2011-2012 election cycle demonstrate a modest increase from the previous cycle.
For example, individuals may now give up to $2,500 per election to a federal candidate committee and up to $30,800 per calendar year to a national political party committee. The aggregate biennial limit for individuals has also increased to $117,000 to all federal recipients. Out o f this $117,000, an individual may contribute up to $46,200 in the aggregate to all federal candidates and up to $70,800 in the aggregate to all federal party committees and political action committees.
The increases for the 2011-2012 cycle do not include an increase in permissible contributions to federal PACs. Like the previous cycle(s), the limit is still $5,000 per calendar year.
Perhaps the biggest change, however, and a change not reflected on the FEC‘s contribution limits chart is that pursuant to Advisory Opinions issued over the summer, individuals may now make unlimited contributions to independent expenditure PACs. As previously discussed here, these opinions open the door for Independent Expenditure Only PACs to receive unlimited contributions from individuals, corporations and labor unions. Federal campaign finance law still prohibits corporations and labor unions from making contributions to candidate committees, party committees and federal PACs that are not organized as Independent Expenditure Only PACs.
According to the NY Times, Judge Jonathan Lippman will announce the adoption of a new rule at his State of the Judiciary address tomorrow, which will purportedly bar attorneys who have contributed $2,500 or more and firms that have donated $3,500 or more to a judicial candidate from appearing before that judge for two years.
New Jersey’s Pay-to-Play Annual Disclosure filing deadline is less than two months away. By March 30, 2011, all businesses that have received aggregate payments of $50,000 or more during the 2010 calendar year must file Form BE electronically with the New Jersey Election Law Enforcement Commission.
This filing requirement has been in effect since 2006. All businesses that meet the $50,000 threshold should be following a compliance plan that accurately tracks covered contracts and contributions and facilitates reporting. Now is the time to move from tracking into full filing preparation mode. It is also a good time for conducting an annual audit to ensure that all contributions are in full compliance with applicable law and that no contributions jeopardize eligibility for any government contract.
It has been a little over a year since the United States Supreme Court held that it was unconstitutional to limit corporate spending in federal elections. When the decision was first issued in Citizens United v. FEC, many thought corporations would be reluctant to engage in unlimited corporate spending. A year later, the numbers tell a different story.
A recent report issued by Public Citizen reveals a dramatic increase in corporate spending in the 2010 mid-term elections from $68.9 million in the 2006 cycle to $294.2 million in the 2010 cycle. Another study by OpenSecrets.Org reveals that the 2010 election marks the rise of a new political committee, dubbed “super PACs,” and officially known as “independent-expenditure only committees,” which can raise unlimited sums from corporations, unions and other groups, as well as wealthy individuals.
As the role of corporate funds increased in 2010, other developments loom this year that may diminish the role of public campaign financing. First was the U.S. Supreme Court’s decision to accept certiorari in a challenge to the “trigger” provisions of Arizona’s public financing law. Now, an effort moves forward in Congress to repeal outright the system of public financing in Presidential elections, in effect since the 1976 election cycle. This week House Republicans are taking up a bill, H.R. 359, which if passed would terminate taxpayer funding of Presidential elections.
Much as the New York Times urged, the Obama Administration’s position is that Congress should “mend it, not end it.” House Republicans, however, counter that repeal would save taxpayers over $520 million in the course of a decade.
One thing is clear: America’s campaign financing systems remain in a volatile process of transformation. The pace of change may now be accelerating. Which components will remain when the dust settles?
In November of 2010, the New Jersey Department of Community Affairs (“DCA”) announced that it will provide transitional aid for nine (9) New Jersey municipalities operating on a fiscal year budget. The program is implemented by the DCA’s Division of Local Government Services.
According to a press release on the DCA’s website, the State of New Jersey will be providing transitional aid to: Bridgeton City (Cumberland), Camden City (Camden), East Orange City (Essex), Irvington Township (Essex), Lawnside Borough (Camden), Passaic City (Passaic), Paterson City (Passaic), Trenton City (Mercer) and Union City (Hudson).
The program , which replaces the Extraordinary Aid, Special Municipal Aid and Capital Cities Aid programs of previous years, places more stringent requirements on aid recipients, which for the first time must sign a Memorandum of Understanding (MOU) agreeing to certain State oversight, reform and reporting requirements in order to receive the aid dollars.
Although the MOU will vary from municipality to municipality, at least one requirement will remain the same for all municipalities accepting the transitional aid – the adoption of a stringent local pay-to-play ordinance. The DCA has made it clear that any such ordinance must cover contributions by all vendors and must apply to “fair and open process” contracts. The DCA has instructed municipalities to look to the Jersey City Pay-to-Play Ordinance as a model.
Vendors doing business and/or wishing to do business with any of the municipalities listed above should expect changes in local pay-to-play requirements to be adopted in upcoming months. Changes could include: elimination of a “fair and open process” exception, coverage of contributions to county party committees and coverage of contributions by subcontractors and consultants.
In his State of the State address this week, Governor Andrew Cuomo advocated public financing of campaigns, an element of his campaign’s reform platform. As with most advocacy of campaign finance and government ethics reform in New York, one hears echoes of the past.
For example, four years ago, in his first State of the State address, then Governor Elliot Spitzer indicated that the ultimate goal of reform should be “full” public financing. The omission of that quoted word signals the new governor’s preference for a matching funds program, like New York City’s, rather than a full public funding program like Arizona’s, which is now under judicial stress.
Will New York City’s campaign finance law, so often cited as a model for the nation prove, after more than two decades in operation, to also be a model for the state? If so, what version of the NYC model will prevail – e.g., the 4:1 matching funds program (c. 1998) v. the 6:1 matching funds program (c. 2007)?
Indeed, the details of NYC’s law have been and continue to be a moving target. For example, the City’s Campaign Finance Board is about to propose rules to implement the new Charter revision disclosure requirements for independent expenditures. Will the state follow suit or take a different path, presupposing, of course, that after three-plus decades of stasis there is actual movement this year.
This article by Professors Ellen P. Aprill and Richard L. Hasen suggests that room for government regulation of lobbying may be constitutionally constrained by the narrow view of corruption adopted in Citizens United.
We recently reported that the US Supreme Court had issued certiorari on the Arizona public finance case. Today, the NY Times issued an editorial on the case.