Explainer: NJ’s Complex Rules for Regulating Campaign Finances

Colleen O'Dea | November 26, 2013 | Explainer, More Issues, Politics
Detailed reporting requirements help keep tabs on millions of dollars spent and received at election times

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Regulations on campaign financing in New Jersey date back to 1973 and the enactment of The New Jersey Campaign Contributions and Expenditures Reporting Act.

What the law does

The law requires disclosure of fundraising and spending activities of political campaigns in the state and it created the New Jersey Election Law Enforcement Commission to oversee the rules, which are detailed and may differ for different elections.

Who has to comply

All candidates for public office at the state, county or municipal level have to comply with state election regulations — candidates for federal office follow federal election rules. Additionally, committees that get involved in elections are subject to regulation by NJELEC, as well, when they meet certain monetary thresholds. These include: political party committees, primarily the Democrats and Republicans, at the municipal, county and state levels; leadership committees, controlled by the two party leaders of each house of the Legislature; political action committees, also known as PACs, which are groups formed by businesses, unions or other special interests that raise and spend money on political campaigns. Some other organizations and businesses that spend money to support or oppose candidates also have some filing responsibilities.

What are the requirements?

At the very least, any candidates for state, county and municipal office who plans to spend little or no money on their campaign must file a form stating their intention to not spend more than $4,500. Those who spend more than $4,500 have to file more forms, including a statement of organization and detailed contribution and expenditure data at least twice before and once after the primary and general elections. Additional contributions received after the last pre-election report is submitted – 11 days prior to an election – must be reported within 48 hours through the day of the election.

Other groups have to file quarterly reports on their fundraising and spending activities. These include continuing political action committees or PACs, leadership committees, and political party committees at the state, county and municipal levels. Political party committees have to file when spending $2,400 or more, while the filing threshold for PACs is $5,500.

In some cases, grassroots or issue-oriented groups must file reports, as do corporations or groups that spend money independently to support or oppose a candidate or ballot question.

How it regulates money

All contributions in excess of $300 for any election, whether from an individual, corporation, committee or other entity, must be reported by name, address, employer and date. There are contribution limits, which vary based on the giver and the recipient. These are indexed based on inflation.

This year, the limits were:

From individuals, corporations and associations, $2,600 per election to candidates;

From candidate committees, PACs and national political party committees, $7,200 per election to candidates;

From all groups except legislative leadership and political party committees, $7,200 per year to PACs or municipal party committees; $25,000 per year to legislative leadership committees and state party committees; $37,000 per year to county party committees.

There are no limits on what legislative leadership and state and municipal party committees can give to any candidate or committee. County party committees have some limits for half the year.

A public-question political committees working for or against public questions faced no contribution limits.

There was a $3,800 maximum contribution per person, business or PAC per election to candidates for governor this year. The governor’s race is the only one in the state for which public financing for candidates is available. Candidates can receive $2 in public money for each $1 raised from private sources. This year, to be eligible, a candidate had to raise and spend a minimum of $380,000 (the first $122,000 is not eligible for the match), limit total expenditures to $5.6 million in the primary and $12.2 million in the general and agree to participate in two debates.

All money spent by campaigns must be disclosed according to who received the money and its purpose.

What about noncompliance?

NJELEC does some independent auditing of reports and investigates complaints made by others for violations of the reporting and filing rules. The commission can and often does impose fines, which differ based on the circumstances of each violation.

Any loopholes?

The biggest involves so-called independent spending by groups similar to federal level “SuperPACs.” The law requires that committees that directly work for the election or defeat of a candidate without coordinating their activities with the candidate have to disclose their expenditures. They do not, however, have to report any information on contributors. Groups that do not specifically urge a vote for or against a candidate or question while promoting or attacking candidates or issues do not have to do any reporting.

At last count, NJELEC estimated that independent groups spent more than $37.7 million on the legislative and gubernatorial elections and the ballot questions this year. The commission is urging legislators to strengthen reporting requirements for independent expenditures.