Stretching the Rules on Campaign Finance Reform

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Somerset Maugham once wrote: “You can’t learn too soon that the most useful thing about a principle is that it can always be sacrificed to expediency.”

This appears to be the case in regard to pay to play laws which in the past were implemented by reformers to limit the ability of people in power to leverage political donations from professionals doing business with government.

The idea was to shed a light on just who had influence on those public officials making decisions.

But some groups that hope to influence legislators on state and local level apparently do not like some of the requirements and want to modify them.

Pay to play laws and stricter reporting of donors came into fashion when reformers in Hudson County and around the state sought to even the financial playing field and reduce the ability of incumbents to leverage government contracts to build political war chests. Reformers wanted to the public to know just who really owned government by exposing donors and limiting the ability to trade in government business.

But apparently many of the forces aligned with the “good guys” are finding it difficult to live by the same rules reformers imposed in the past.

In Hoboken, the city council recently received legal advice that its pay to play laws are too strict, and that the city should adopt the less stringent state pay to play laws.

This legal opinion the city council is reviewing claims that local law sets campaign limits that are too low and prohibits a local union from advocating for its membership effectively. Local government has the ability to set up stricter regulations than the state’s.

While state pay to play laws limit union contributions for a candidate at $2,600 or to a political slate at $7,200, Hoboken restricts the unions to $500 to an individual candidate.

This proposed change strongly resembles a lawsuit filed in 1969 that helped unravel the state’s campaign finance laws, seen as the strongest in the nation to that point.

The state at that time set specific amounts that could be spent on each office. These laws put caps on what a candidate could raise or spend, sometimes based on voter turn out in previous elections. These restrictions not only regulated what could be spent by a candidate directly but also what was spent on his or her behalf. Campaign reports needed to be detailed and up to date. Violators could be removed from office.

Unfortunately, these campaign laws were poorly enforced, and politicians found ways to get around them, often skirting the provisions of the law that including outside or dummy organizations spending on behalf of their favorite candidates.

A lawsuit filed in 1969 challenged the state’s campaign restrictions, claiming the campaign limits were unrealistically low – especially for candidates running for federal office.

The suit gutted New Jersey’s campaign regulations and sent the state into an unregulated tailspin, where almost anything went. Partly due to revelations of dirty tricks uncovered as a result of Watergate, and partly in an effort to bring the state back into some ethical balance, the state enacted new regulations including the state’s first public financing law and established the Election Law Enforcement Commission (ELEC) to oversee campaign finance and reports.

ELEC is seen by many as relatively weak, lacking the teeth to actually curb abuse. Political Action committees became a popular tool for politicians to circumvent some of the reporting laws — Although even these became subject to public scrutiny.

There are ways to get around pay to play laws – which set specific rules for awarding of contracts to political donors. Some politicians in one part of the state, of course, can still make deals with other politicians to exchange donors – this allows donors from say Cape May County to contribute to politicians in Hudson County and reverse, making it difficult or impossible to know who is actually paying for contracts.

As flawed as ELEC reporting rules are, they provide a valuable tool for scrutinizing who seeks to influence politicians keep politicians from selling their offices to the highest bidder.

One area that has long been problematic is the influence of advocacy groups. In the past, these were truly grass roots organizations with noble intentions. But over the last few decades, they have become as powerful at lobbying as the corporate interests they oppose. A recent state law seeks to hold these groups to the same standard by requiring them to disclose their donors the way politicians and other lobby groups must. But a lawsuit filed by The American Civil Liberties Union of New Jersey hopes to have the courts toss out the law, creating a loophole for these organizations and keeping voters and others from knowing just what powerful funders actually influence them.

The bill pushed through by State Senate President Stephen Sweeney (D-3) and signed into law last June by Gov. Phil Murphy, required social welfare organizations to reveal information about donors contributing more than $10,000 and for these organizations to report expenditures of more than $3,000. The law also puts restrictions on who can be put into leadership positions.

Murphy didn’t do this willingly but got embarrassed into doing so when it became clear that dark money was being raised to promote his agenda. The group raising money refused to reveal their donors – ultimately doing so after the law was signed. The usual suspects came up, including a number of unions – most prominent of which was the New Jersey Education Association.

Many grass roots organizations fear that if forced to reveal their supporters, powerful corporate interests might find a way to intimidate them. The problem is these laws are designed to provide public disclosure as to what forces actually influence their elected officials. In Hoboken, well-funded unions want to increase their influence by increasing the amount of their donations. On a state level, grass root organizations want to keep secret from the public just who pulls their strings.

One concern is that many of these grass roots lobbying organizations are hiding their efforts behind not-for-profit status, which raises questions about thin line between advocacy and political influence.

In an old saying, what’s good for the goose is good for the gander, and so if other lobbyists are required to reveal their donors, so should grass roots organizations – to let the public know just who actually operates in the background.

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