Outside Interest Groups Infiltrate Political Process, Parties Losing Grip

Chase Brush | October 20, 2016 | Elections 2016, Politics
The latest figures for election spending in New Jersey show major parties have been weakened and special-interest groups continue to increase their influence

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The strength and influence of New Jersey’s major political parties is on the wane, they are impeded by federal and local campaign finance laws, and they are being replaced by outside special-interest groups whose involvement in the political process is increasing.

That’s the takeaway from an analysis released yesterday by the New Jersey Election Law Enforcement Commission, ELEC, the state’s elections’ watchdog. It found financial activity by state party committees — including the two state parties and four legislative leadership committees — continuing a decade-long decline. As of the latest third quarter reports for 2016, the six committees raised $2.2 million and spent $2 million on campaigns in the state.

That’s compared to $4.5 raised and $3.5 million spent in 2008, a similar year when there were no statewide elections, ELEC said. It represents a 51 percent decrease in funding and 43 percent decrease in spending over the same eight-year period.

“These statistics demonstrate the weakened state of parties in New Jersey and the glaring need to do something about it,” said Jeff Brindle, ELEC’s executive director.

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The new numbers underscore the changing landscape of political spending in the 21st century. Campaign finance laws enacted on both the federal and state levels over the last couple of decade have placed new regulations on the way money finds its way into elections — restricting in some cases the amount political groups can raise and spend, and unshackling them in other cases to engage more freely in the process.

On the federal level, 2010’s Citizens United Supreme Court ruling has made it easier for outside groups — including those sponsored by large corporations and unions — to engage in the political process by allowing them to raise huge sums for media and other tools in support of or opposition to candidates of their choosing. Super PACs and other independent expenditure-only organizations can’t give money directly to candidates, but they can spend unlimited amounts in an effort to influence an election.

According to the Center for Responsive Politics, the amount of outside spending in presidential elections rose to record levels over the last several cycles, and House elections across the country have also seen a jump in outside spending, from about $29 million by this point in the 2012 election cycle to $43 million at the same point in 2014.

At the same time, campaign finance reform efforts within New Jersey have made it more difficult for traditional political groups — such as regular political action and party committees — to have the same impact. Political action committees can only contribute up $5,000 to a candidate or candidate committee per each election, and the state’s own complex pay-to-play laws, as of a 2006 interpretation, prohibit government entities from awarding a contract worth more than $17,500 to a business that has made a “reportable” contribution to an elected official or party committee.

Both efforts have had the effect — unintended, perhaps — of diverting money away from traditional party organizations and toward those outside groups that can spend more cash, and thus wield greater clout, in elections. According to ELEC, over $41 million was spent by independent groups in the state’s 2013 gubernatorial and legislative elections, compared to $14 million by the political parties.

New Jersey’s “Big Six” committees, as they’re called, include the fundraising arms of both the Democratic and Republican parties, as well as two legislative leadership committees in both the Assembly and Senate.

“What’s more, public contractor contributions are increasingly going to special interest PACs, and independent groups, thus legally circumventing the pay-to-play law,” Brindle said.

Perhaps the biggest example of outside spending in the state is this year’s controversial casino expansion amendment, which if approved by voters next month would allow gaming halls to be built in north Jersey. ELEC announced earlier this week that spending by the two major players backing and opposing that amendment — Our Turn NJ on the one hand, and Trenton’s Bad Bet on the other — had shattered the state’s previously-held record for most money ever spent on a New Jersey ballot question by special interest groups.

Trenton’s Bad Bet, a group funded in part by Genting New York, which operates Resorts World Casino in New York City and is a subsidiary of Malaysia-based Genting Malyasia Berhad, has spent $11.3 million on its campaign so far. Our Turn NJ, headed by former Reebok chairman Paul Fireman and Meadowlands Racetrack owner Jeff Gural, who both want casinos on their properties, has spent about $8.5 million.

Though Our Turn NJ has since halted its campaign in the face of mounting voter opposition to the measure, Brindle said the $20 million spent by the two groups could bloom to twice as much by election day.

But the trend also extends to federal and legislative races in the state. Last year, ELEC tallied the total cost of the 2015 legislative general election at more than $30 million, with more than a third of that coming from special-interest political action committees. The biggest spenders were General Majority PAC, a Democratic super PAC that spent almost $5.9 million, and Garden State Forward, a super PAC funded by the state’s largest teachers’ union and others, which spent almost $4 million.

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This year, similar activity is shaking up congressional races in New Jersey. Several national PACs, such as New Jersey Right to Life, have spent on conservative candidates in the northern and southern ends of the state. But easily the most expensive battle is taking place in the 5th Congressional District, where seven-term Republican incumbent Scott Garrett finds himself under pressure from former Microsoft executive and well-moneyed Democratic hopeful Josh Gottheimer.

Outside special interest groups have spent more than $3.5 million on the race to date, according to the Center for Responsive Politics. A disproportionate amount of that money, used to launch ad attacks and other media by such groups as the Democratic Congressional Campaign Committee and the House Majority PAC, has benefitted Gottheimer, whose own campaign has raised $4 million since January last year, making him the top fundraiser of any House candidate from New Jersey since 1980.

Brindle said the proliferation of outside spending is not only bad for party committees, but for the state’s voters as well. He said ELEC has been pushing for legislation to strengthen those committees, including measures to make independent groups abide by the same disclosure rules as parties and candidates, reforming pay-to-play laws to allow parties to accept larger contractor contributions, and adjusting general contribution limits to offset inflation and boost party reserves. “Parties are accountable, disclose their activities, serve as the people’s link to the government, and represent a broad coalition of people,” he said.

According to ELEC’s analysis, the New Jersey Republican State Committee has led the way in terms of fundraising and spending during the first nine months of 2016, raising $616,675 and dispersing $704,621. Among the legislative leadership committees, the Democratic Assembly Campaign Committee raised and spent the most money, with $409,263 raised and $424,000 spent.

In the third quarter alone, the “Big Six” committees reported raising $533,737, with Republicans raising $405,941 and Democrats $127,796.