Measure to Illuminate Dark Money in NJ Politics Is Ready for Next Hurdle

Colleen O'Dea | February 25, 2019 | Politics
Assemblyman Zwicker is ‘optimistic’ bill requiring greater disclosure of donors will get a hearing next month

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Dark money
A strong law to shed light on “dark-money” groups could soon result from the political feud between Gov. Phil Murphy and Senate President Steve Sweeney if the sponsor of a bill that would require greater disclosure of who is behind these groups is successful in moving the measure through the Assembly next month.

Assemblyman Andrew Zwicker (D-Middlesex), a prime sponsor of the bill, said he is “optimistic” the measure will get a hearing in the Assembly State and Local Government Committee sometime in March and head to the floor of the house soon after.

The Senate easily passed S-1500, which would expand the state’s election-reporting laws to require that politically active nonprofit groups report those who make big contributions to them. That leaves the measure headed to the Assembly, which will have to decide whether to pursue its version of the bill (A-1524); the Assembly version differs in some of the details and timing concerning disclosure. Currently, dark-money groups do not have to report contribution information.

The Senate passed the measure with bipartisan support by a 31-0 vote last Thursday. The Assembly version has bipartisan sponsorship and could move relatively quickly to final passage.

“My ultimate goal is that this gets signed into law,” Zwicker said, adding that he has some concern over just one of the amendments by the Senate — one that would make disclosure retroactive to January 1, 2018.

Years of inaction

After receiving little legislative interest in the first 2½ years it was pending, the measure moved through the Senate with relative speed after Sen. President Stephen Sweeney (D-Gloucester) championed it, although he is not one of its sponsors. Sweeney announced his support after an organization with ties to Gov. Phil Murphy reversed course earlier this year and said it would not voluntarily disclose its donors. It was after Sweeney announced his support for the bill that it began moving through the Legislature. (Although they are of the same party, Sweeney and Murphy have been feuding openly.)

As approved by the Senate, the bill would require 501(c)(4) groups and other independent groups not currently covered by contribution-reporting requirements to report to the state Election Law Enforcement Commission all contributions of at least $10,000 and expenditures of $3,000 or more. Currently, candidates must report all contributions over $300 and all spending, regardless of the amount.

Making disclosure retroactive to January 1 would ensure that New Direction New Jersey, the group that has backed Murphy’s agenda with ads — and for which the governor has raised money — would have to disclose its funders. Sweeney was annoyed over New Direction’s first ad, which ran last June during negotiations over the state budget. A second ad supporting a $15 minimum wage ran more recently. Murphy has since signed the higher wage into law.

New Direction reportedly spent more than $500,000 on lobbying last year. But the report it has filed with ELEC, which will not become public until next month, does not list who paid for the expenses.

Sen. Nia Gill (D-Essex) said last week that she was abstaining on the bill because of concern that it would make disclosure of funders retroactive to January 1, 2018 and that might subject it to a constitutional challenge.

“At the time it was lawful to do so, and people relied on the law,” Gill said during the debate on the bill. “People have a right to depend on the legality of the law when they participated in the process.”

Corrections can be made

Sen. Troy Singleton (D-Burlington), the main sponsor of the bill, said that if the provision in the legislation making disclosure retroactive proves problematic, the Legislature can go back and correct that. In the meantime, it is important to deal with the issue of dark money.

“Each of us has been affected in some way by these outside groups with benign sounding names that are trying to influence the political process,” Singleton said last week. “This is trying to shed a little light, a little transparency, on the process.”

Zwicker said he is still looking into the possible requirement of retroactive disclosure and whether that might lead to a legal challenge to the law.

“I am not interested in putting up something that is going to end up in the courts,” he said.

He said he is willing to agree to the higher threshold before the mandatory reporting of contributions to these groups. His bill currently would require disclosure of all contributions over $300, which is the same as for candidates currently.

Some nonprofits are worried

A number of nonprofit organizations that do genuine advocacy in addition to some political activities, including the American Civil Liberties Union and the New Jersey Right to Life committee, complained that some of their donors might balk at making contributions if their identities are going to be disclosed. The Senate bill was amended with the higher $10,000 contribution threshold as a way to capture the identities of only large donors.

“If you are giving that amount of money, you are a very serious donor,” Zwicker said. “I haven’t gotten pushback from anybody about it.”

For years the state’s campaign-watchdog and good-government activists have been calling in vain for rules to make dark-money organizations report who funds them. At the same time, these groups have increased their election-related spending exponentially. In 2017, they spent nearly $50 million to influence gubernatorial and legislative races.

The main problem with dark money is that voters do not know who is paying for ads meant to influence their votes. This makes it more difficult to evaluate those ads when deciding which candidates and public questions to support. Dark money’s influence over campaigns has also been a problem at the national level, particularly in the wake of two U.S. Supreme Court decisions this century. This legislation would affect only groups active in state elections.

Another Senate amendment would prevent elected officials from establishing or managing dark-money groups. This is largely seen as a swipe at Brendan Gill, current president of both the Essex County Freeholder Board and the New Jersey Association of Counties and founder of New Direction.

Opposition to the bill

Despite its support from citizens’ groups, a number of organizations are still balking at the bill.

Ed Potosnak, executive director of the New Jersey League of Conservation Voters, called the measure a sham, particularly since it would also raise the limits on the amounts of money candidates and political committees could receive. Candidates would be able to get $3,000 per election from individual donors — $6,000 in an election year from someone who contributes to a primary and general campaign — while individual contributions to state committees would rise to $28,000 from $25,000 and to county committees from $37,000 to $42,000 a year.

“The problem with this bill is it forces onerous requirements on civil rights, environmental, and other nonprofit groups, resulting in the marginalization of the voices of everyday New Jerseyans,” Potosnak said in a statement. “It would clear the way for corporate interests, government contractors, and others to go unchecked without the same disclosure requirements. It will further tilt the public policy playing field in favor of billionaires and corporate insiders.”

But David Goodman, team leader of the citizens group Represent New Jersey, wrote in an Op-Ed last week that his organization and others strongly support disclosure for dark-money groups.

“We need to end secret money in New Jersey!” Goodman wrote. “The time to act is now.”

Joseph Donohue, deputy director of ELEC, said the increases in contribution limits would make up only partly for inflation since 2005, the last time the limits were increased.

ELEC has had some luck in the past getting independent groups to report their election-related activities but has been urging lawmakers to require disclosure by independent groups for years. Currently, only those political nonprofits formed by a gubernatorial candidate who accepts public funding have to file disclosure reports with the state’s election watchdog. Murphy, for instance, had to report financial details for the two independent groups he formed before running for office — New Way for New Jersey and New Start NJ.

The governor has said that he supports disclosure requirements for dark-money groups, although he has not said whether he would sign S-1500 in its current form into law.

Assembly Speaker Craig Coughlin (D-Middlesex) has not yet weighed in publicly on the bill. His spokeswoman Liza Acevedo said only that Coughlin “is continuing to meet with stakeholders and will continue to review and discuss the legislation with members of his caucus.”