The Pay-to-Play Effect in New Jersey’s 2015 Statewide Elections

2015 is a unique year in New Jersey politics, as the New Jersey Assembly races are the only set of elections scheduled for this year that extend beyond county and municipal lines. Even the Assembly Members’ colleagues in the Senate are not up for re-election until 2017.

With the State’s attention turned to the Assembly, this is an opportune time to examine how pay-to-play laws in effect at the State, county, and municipal level may affect this year’s Assembly campaigns.

Contributions to Assembly candidates will not generally affect a vendor’s eligibility for most government contracts in New Jersey. There are, though, two limited scenarios in which contributions to Assembly candidates may impact a vendor’s eligibility for government contracts. The first is when the member of the Legislature represents a district that is part of a State redevelopment entity and the second is when a vendor seeks a non-fair-and-open contract with the Legislative Branch itself.

Although we cannot discount the possibility that one of New Jersey’s hundreds of local pay-to-play ordinances may cover contributions to legislative candidate committees, most local ordinances do not extend to legislative recipients, as pay-to-play restrictions must be narrowly tailored to withstand constitutional scrutiny. For example, even some of the most stringent pay-to-play ordinances in the State (such as the ordinances in effect in Jersey City, Paterson, and Camden) do not cover contributions to legislative candidate committees.

So, to return to our 2015 example, if an Assembly member does not represent a district that is part of a State redevelopment entity and does not serve as the Speaker of the Assembly, a vendor likely may contribute more than $300 per election to that candidate without negative pay-to-play implications. Before writing a check, however, vendors should keep mind that there is a distinction between contributing to a legislative candidate committee and to a legislative leadership committee (contributions greater than $300 to the latter will impact eligibility for contracts with the State of New Jersey and its departments and agencies).

FEC Roundup

The Federal Election Commission (FEC) had a busy fall season, beginning with the announcement of two new appointments, and culminating in the consideration of several important matters. The following summary represents a few highlights:

New FEC Membership Announced

Lee E. Goodman and Ann M. Ravel assumed roles as Commissioners of the Federal Election Commission. President Obama nominated Commissioners Ravel and Goodman on June 21, 2013, and the United States Senate confirmed their nominations on September 23, 2013. Commissioner Goodman was also elected as Vice Chairman of the FEC.

No Opinion Issued on Whether Bitcoins are Considered a New Form of Political Campaign Currency

Following a request by the Conservative Action Fund (CAF) to issue guidance on the permissibility of using Bitcoins for political campaign contributions and expenditures, the FEC considered four separate draft Advisory Opinions but was unable to garner the requisite four affirmative votes to issue a final opinion.

Bitcoins are a form of virtual, peer-to-peer currency that can be exchanged online for goods and services anywhere in the world without using a bank or third party financial institution to host the transaction. Once a merchant or individual has received a transfer, the value is calculated by a constantly fluctuating currency conversion rate. Bitcoins differ from traditional online payments because they are regulated by software and user agreements and cannot be regulated by governments, banks or any other central authority. Instead, the transactions are managed collectively by the community of Bitcoin users.

While the Commissioners were unable to agree on official guidance, the Commission did discuss the possibility of developing an interim policy and commencing a rulemaking to address the issues raised in the Advisory Opinion request.

Draft Interpretive Rule on NY Primary Elections Announced

The Commission introduced a draft Interpretive Rule that clarifies the Commission’s interpretation of its rule for determining the date of a special primary election as the rules apply to nominations for federal office conducted under New York Election Law. Consistent with state law, which vests the power in party committees, the Commission clarified that the date of a special primary election is the date of the party committee’s nomination vote. The Commission directed the Office of General Counsel to make the draft available for solicitation of public comments before a vote by the Commission.

FEC Fails to Rule on Tea Party Request

The Commission considered two drafts responding to an Advisory Opinion request from the Tea Party Leadership Fund (TPLF), but it was unable to reach agreement by four affirmative votes in order to issue a formal Advisory Opinion. In its request, TPLF sought an exemption from the regulations requiring reporting to the Commission of contributors to the TPLF and of recipients of TPLF disbursements.

Important Reminder Regarding Holiday Greetings

The same disclaimer rules that apply to campaign-related mailings also apply to all holiday greeting cards, even if the communication does not solicit funds or contain express advocacy. If a federal campaign sends out more than 500 holiday greetings, (which constitutes a mass mailing) it must include a box on the card to inform recipients that it was paid for by the campaign committee. A PAC or party committee that sends a holiday mass mailing must also include a box on the card that lets recipients know the committee paid for it, identifies the committee’s full name and street address, phone number or web address, and states that the communication is not authorized by any candidate or candidate’s committee. For additional information, see the Commission’s brochure: Special Notices on Political Ads and Solicitations.

 

New State Board of Elections Opinion Clarifies Political Committee Registration Requirement

In a rare formal opinion, the NY State Board of Elections (SBOE) explains that a person or entity must register and file disclosure statements as a political committee when it expends funds to communicate its endorsement of candidate(s) to the general public. Unlike federal law, the SBOE opinion does not treat the “major purpose” of the entity as a factor in determining whether registration is required.

Although not expressly discussed in the opinion, exceptions to the registration requirement presumably remain in effect for labor organizations communicating with their members and newspapers and other publications in respect to the ordinary conduct of such business.

Another open question concerns the Internet, which came into being long after the current Election Law statutes were adopted.  For example, must bloggers and tweeters register as political committees if they similarly expend funds to expressly advocate for or against a candidate?