Lawmakers Get Cold Feet About Campaign Finance

Hank Kalet | May 9, 2013 | More Issues, Politics
Democrats worry that changing rules on financial disclosure this close to election could hurt grass-roots backing for Buono bid

Ironically, while there are several proposals to reform state campaign laws before the Legislature, the fact that this is an election year may actually hurt their chances.

Indeed, Assembly Democrats have already tabled their own proposal.

Senate Bill S-2748 was introduced April 29 “in title only,” the same day that Assembly bill A-3863 was scheduled for a vote. That vote was withheld for fear that the new disclosure rules would hurt Democratic groups like One New Jersey, which backs Buono for governor.

That tabling of the Assembly bill has some concerned, though advocates and those close to the issue said they expect reform legislation to move forward eventually, though possibly not until after the November election and possibly not without active citizen involvement.

“Financial disclosure is incredibly important,” said Heather Taylor, communications director for The Citizens Campaign. “It will take public pressure to get the Legislature to move forward and get them passed.”

The Assembly bill, sponsored by Reed Gusciora (D-Mercer) and Linda Stender (D-Union), would require disclosure of contributions of $2,500 to independent groups that spend $1,400 or more to advocate the election or defeat of a candidate or a public question. It would have taken effect 90 days after being signed into law.

The bill was reported out of the Assembly State Government Committee on March 14 by a 3-0 vote, with the committee’s two Republicans abstaining, and scheduled for a full floor vote.

Democrats close to the Buono campaign, however, scuttled the legislation. According to a report in The Star-Ledger on May 5, Assembly members Joe Cryan (D-Union) and Bonnie Watson Coleman (D-Mercer) were instrumental in pulling A3683 from the April 29 schedule, because they feared donors to third-party groups would stop contributing if their identities were known to Gov. Chris Christie.

Cryan and Watson Coleman, campaign manager for the Democratic gubernatorial candidate, did not respond to phone calls and emails seeking comment. The Buono campaign also did not respond.

Tom Hester, spokesman for the Assembly Democrats, did not respond to specific questions about the reported meeting.

“Rather than do a piecemeal approach, the Assembly hopes to move comprehensive campaign finance reform in tandem with the Senate,” he said in an email.

He did not respond to follow-up questions about the Senate bill, sponsored by Sens. Jim Beach (D-Camden) and Linda Greenstein (D-Middlesex), or about how the Assembly might proceed on campaign finance issues.

According to a release issued by Beach and Greenstein, Senate bill S-2748, would expand disclosure requirements for campaign donors and political committees; require disclosure from independent groups: standardize pay-to-play laws and expand them to include local and county governments; and close what the sponsors call “loopholes” in current law.

Specific wording of the bill, which is expected to include language similar to the Assembly measure, had not been released as of May 8. It does not appear that the bill will be approved by the Legislature in time for the 2013 election.

“Every one of these things is about better disclosure,” Greenstein said in an interview. “It is about making the pay-to-play system better and stronger and adding in the 501c4s and 527s — this is an omnibus bill.”

The legislation, according to its sponsors, has the support of the Democratic leadership, which has been involved in its drafting

Chris Donnelly, spokesman for Senate President Steve Sweeney (D-Gloucester), said Sweeney “has not seen final details,” and that “he supports the concepts that Sens. Beach and Greenstein are working on.”

Record Spending

Debate over campaign-finance rules comes at a time when the state Election Law Enforcement Commission expects there to be a record amount spent by independent groups.

Joe Donahue, deputy director of ELEC, said the commission estimates that $14 million was spent by outside groups during the 2009 gubernatorial race, most of which came from the Republican and Democratic governors associations. That means that for every dollar spent by a gubernatorial candidate during the primary or general election in 2009, another 25 cents came from outside groups.

ELEC estimates, however, that spending by outside groups could climb to at least $25 million in 2013. Donahue said several million have already been spent by groups close to Gov. Christie and Sen. Buono.

ELEC, he said, endorsed enhanced disclosure rules for outside groups in 2010, two days before the U.S. Supreme Court’s Citizens United ruling, which prohibits states and the federal government from limiting independent spending by political committees, corporations, and unions.

“Jeff Brindle [ELEC director] saw what was happening in the 2008 campaign,– that more money was being spent by independent groups and that more of it was going under cover,” Donahue said.

Dena Mottola Jaborska, director of organizing and strategic program development with NJ Citizen Action, said disclosure is important, but much more is needed.

“We support disclosure for everybody, so there is a fair playing field,” she said. “But it is not going to change the problem. There is too much special-interest money in politics. We need real campaign-finance reform that is going to do a better job of limiting special-interest money.”

Campaign-finance advocates are generally supportive of the concepts behind the Beach-Greenstein Senate bill, as a first step, though they will reserve final judgment until the details are released.

“The devil is in the details,” said Taylor of The Citizens Campaign, adding that, right now, “we’re working off of press releases and outlines.”

No Comment

Republicans, in the meantime, are withholding comment on the specifics of S-2748. But they are critical of what they call Democratic inaction on ethics issues since Gov. Chris Christie has taken office. The governor in September 2010 proposed an ethics reforms package that included a uniform pay-to-play standard that also covered public employee unions and a ban on “wheeling” (the transfer of political donations from committee to committee and from candidate to candidate).

Although the bill has yet to be formally introduced, Democrats outlined in a press release what they hope to accomplish with it:

  • require disclosure of every campaign contribution and expenditure to the Election Law Enforcement Commission within 48 hours once a candidate, committee, or organization has crossed a $3,000 contribution threshold. It also would require issue-advocacy groups — 501(c)(4)s, which are not required under current law to reveal their donors, and 527s, which are required only to make disclosure through the federal government — to disclose contributions and expenditures in New Jersey.
  • standardize pay-to-play rules, which control contributions from companies that do business with government, to cover all levels of government. Currently, local and county governments are not covered by the state law and can adopt their own rules, provided they follow a “fair and open process” in which contracts are publicly advertised or competitively bid.
  • lower the disclosure threshold that businesses with public contracts from an aggregate of $50,000 in public contracts to $17,500.
  • “This bill will go a long way to take bureaucracy out of campaigns, and make certain that all candidates, municipalities, and contractors are held accountable to the same set of standards,” Beach said in the press release.

    Matthew Boxer, the state comptroller, would not comment on the legislation until his office had a chance to review the bill, according to spokesman Peter McAleer. However, McAleer said the comptroller believes there is a need to fix elements of state contract and campaign finance laws.

    “As our audits and investigations have demonstrated, the current pay-to-play law that applies to New Jersey local governments is simply ineffectual,” he said. “While we haven’t yet seen the bill in question, we welcome any dialogue on improving the current system that is so flawed.”

    The comptroller issued a report in September 2011 that called for reforms, including extending pay-to-play rules to municipal and county governments.

    Gov. Chris Christie, according to his spokesman, will not comment on specific legislation before it comes to his desk. However, spokesman Michael Drewniak said in an email that “the timing of [the Beach-Greenstein bill] is curious and not just a little suspect.”

    Drewniak added that the governor’s September 2011 package would have addressed much of the campaign-finance and open-government issues facing the state, he said.

    “The Legislature didn’t move on a single one of those proposals,” Drewniak said. “Know why? Because, among other things, we wanted to extend reforms as well to the legislative branch and to public labor unions.”

    Senate Minority Leader Tom Kean Jr. (R-Union) said the Republican caucus is “interested” in the “details” of the Democratic proposal.

    “Hopefully, it’s a sign that legislative Democrats are ready to address all of New Jersey’s ethics and campaign-finance flaws that rob residents of a pure government,” he said in a written statement. “Despite our repeated calls for action, top Democrats have neglected several Senate Republican campaign-finance, pay-to-play, and transparency bills in order to continue benefiting from the status quo.”

    Wheeling and Dealing

    Greenstein said she is willing to discuss issues like wheeling, but she also is committed to getting S-2748 passed.

    “This adds to the public’s feeling of confidence in government,” she said. “This is something we need to do. There have been so many things that have taken their confidence away, Supreme Court decisions — we can set up certain things that make it all very transparent and let it all hang out.”

    Campaign-finance watchdogs agree that the laws needed fixing. However, they are concerned that the legislation raises contribution limits, both for contractors and for general contributors. Businesses, under the bill, would be able to contribute up to $1,000 and still be eligible for a no-bid government contract or $3,000 for a publicly bid contract, while individual and committee limits have been increased to $3,000 and $9,200, respectively.

    Current pay-to-play rules set contribution limits at $300 for both categories of contractors, while campaign finance rules allow individuals to contribute up to $2,600 and committees up to $8,200 for each election cycle.

    “We’re glad to see this is being put back on the table as an actual item in Trenton,” said Taylor, of Citizens Campaign. “It needs to be a discussion. But we don’t want to open a door to gut the current state law and lower the effectiveness of local laws unless we have real reform on the table.”

    Between 90 and 100 local governments have adopted pay-to-play rules based on the Citizens Campaign model, she said. There are another two to three dozen towns that have adopted other pay-to-play laws, most weaker than those proposed by the campaign.

    Taylor also said that provisions requiring outside groups to disclose their contributions are important, because those groups can be a “vehicle for contractor cash.”

    She would have liked a wheeling ban to be included, as well. Taylor said there is a concern among local activists that money can be shifted from counties and towns without pay-to-play bans to those with bans in place using wheeling.

    “You want to make sure that contributors are not circumventing state laws by other means,” she said. “You want to prevent the money from circulating through 501c3 groups or through PACs. And wheeling should be banned.”

    David Donnelly, director of the Public Campaign Action Fund in Washington, said the state’s history of “pay-to-play problems … warrants stronger guidelines.” The Beach-Greenstein bill, he said, is “a step in the right direction.”

    However, the legislation does not address the larger issue of who pays for campaigns and what that means for access to elected officials, said Donnelly, who lives in Monmouth County.

    “The problem is the search for private funds that rewards contributors for participating,” he said. “That system involves very few people unless you have a system of public financing that requires a lot of small donors.”

    He said he would have liked to see the state continue with and expand the clean elections systems it piloted in 2005 and 2007. The bills creating those pilots were co-sponsored by Greenstein, who also participated in the 2007 effort as a candidate. Under the system, candidates who chose to participate were required to collect a set amount of small donations — usually contributions of $5 and $10 — to qualify for state matching funds. The programs were not renewed, partly because its primary champion – Assembly Speaker Joe Roberts – retired, but also because of concerns about state finances, Greenstein said.

    “The goal should be to bring the money back in, but to make sure that elected officials and those who want to be elected have to seek the money from the people they are seeking to represent,” Donnelly said.

    “You can only clamp down on corruption so much,” he said “At some point, you have to admit that a bribe is a bribe, whether done legally through the campaign finance system or it’s done under the table.”

    Mottola Jaborska of N.J. Citizen Action, agrees.

    “Special interests still have a hold on the public policy agenda of the state,” she said. “Companies that have money to donate to candidates and elected officials, they set largely set the agenda.”

    Access is a central part of the problem, she said, and the current system rewards those with the money to contribute to campaigns. That is why Citizen Action has been advocating for a clean election system based on small donations.

    “It is very expensive to run for office in this state and if you are a serious candidate you have to have a pile of cash to do so,” she said. “As a candidate, you don’t build at the grassroots or look for small donations. That is why special-interest position on issues — those who finance the campaigns — will matter more because they are the financers of the campaign.”

    “We have to replace the kind of dependency on big donors that exists in the current system with new dependency on regular voters,” he said. “We will still need money to run for office. But we want those people who run to have to work for it. It is a more fundamental shift — to put participation at the core, rather than just having anti-corruption at the core of our funding laws.”