Gov. Phil Murphy signed into law on Monday requirements that dark-money groups report who is bankrolling them, as he promised to do last week to avoid facing an embarrassing veto override. But he also said he expects lawmakers to quickly roll back much of the new law, as he says they promised.
Assemblyman Andrew Zwicker (D-Middlesex), a prime sponsor of S-150, has started that rollback, saying he introduced a “cleanup” bill Monday to address Murphy’s concerns over the impact the new law would have on some nonprofit advocacy groups. At the same time, one of those groups — ACLU-NJ — announced it is preparing “legal action” if a legislative remedy is not passed.
Murphy chose to sign the bill on an otherwise busy day that included the introduction and passage out of an Assembly committee of the Legislature’s version of the budget and the release of the first report by the governor’s task force investigating the state’s economic development incentives. His office did not put out a press release announcing that he signed the bill until 6:15 p.m., after normal business hours.
The governor agreed to sign the bill after lawmakers vowed to override his 20-page conditional veto last month that sought substantial changes to a bill identical to the one he signed Monday. An override by his own party would have been an embarrassment to the governor, and the first legislative override in 22 years.
Politically active nonprofits affected
The new law requires, at least for the moment, politically active nonprofits or 501(c)(4) groups to disclose their high-dollar contributors — those giving at least $10,000 — when these groups spend at least $3,000 to influence an election, legislation, or regulations.
New Jersey’s election watchdog has been calling for some disclosure by dark-money groups, which currently are not required to report who is funding them. Almost half the states have enacted laws covering electioneering expenditures, according to the Campaign Finance Institute. New Jersey’s Election Law Enforcement Commission reported that dark-money groups spent close to $50 million to influence the state’s gubernatorial and legislative races in 2017.
But in a rare “signing message” to the bill, Murphy reiterated his concerns that requiring groups to report their advocacy regarding issues not on the ballot could run afoul of U.S. Constitutional protections.
“I am therefore signing this bill based on an express commitment from my colleagues in the Legislature, including legislative leadership and the bill’s prime sponsors, to introduce and swiftly pass legislation removing advocacy in connection with legislation and regulations from its parameters, thereby ensuring that the bill’s disclosure requirements apply to election-related advocacy, and making previously recommended technical revisions in order to ensure its consistent application,” the statement reads.
It is unclear exactly what that will entail as Zwicker’s bill is not yet available from the Office of Legislative Services. Sen. Troy Singleton (D-Burlington), a prime Senate sponsor of the dark-money bill, has not yet introduced a cleanup bill in the upper house. In fact, it’s uncertain whether Sen. President Steve Sweeney (D-Gloucester) would advance such a bill as he had said last week that he did not think there was an agreement for the Legislature to pass a cleanup bill, at least not as Murphy had described it. Assembly Speaker Craig Coughlin (D-Middlesex) reportedly had said there was some sort of commitment to resolve the issues.
The governor and the nonprofit
But Murphy’s call to exempt grassroots organizations that are not specifically advocating on election-related issues would seem to apply to New Direction New Jersey, a 501(c)(4) that backs the governor.
Ironically, or perhaps on purpose, New Direction released on Monday its latest ad on cable television and the internet, calling on lawmakers to put up for a vote the millionaires tax that the governor has proposed but legislative leaders have rejected. It was this nonprofit group’s pro-Murphy spending while reneging on a promise to voluntarily disclose its funders that prompted Sweeney to put the dark-money bill Murphy just signed on a fast track earlier this year, after it had previously languished without even a hearing.
The governor’s office and New Direction have asserted that the bill — now law — does not apply to the organization because it coordinates with Murphy. But Senate Democratic staff contend that it was the Legislature’s intent that New Direction should have to disclose its contributors and did not seek to create a loophole for the group because of its coordination with the governor. The law exempts groups that coordinate with a candidate from having to disclose donors or spending, but that’s because not coordinating is what makes an expenditure independent, according to Democratic staff.
After Murphy agreed to sign the bill, legislative leadership moved it to his desk with record speed. It was introduced and passed both houses of the Legislature in the span of a few hours last Monday.
In a statement, Singleton said the law “will make significant progress in delivering reforms that will lift the veil of secrecy that surrounds the activities of groups working to influence the political process. These dark money groups with benign sounding names have been operating in the shadows, spending large sums of money from undisclosed sources to influence the legislative, regulatory and election processes.”
ACLU threatens legal challenge
But ACLU executive director Amol Sinha issued a statement Monday night threatening a legal challenge to the bill if lawmakers do not exempt organizations like his that do not get involved in elections.
“The courts have made it clear time and again that the Constitution does not allow the government to target organizations simply for speaking on issues of public concern,” Sinha said. “While the ACLU of New Jersey will continue to advocate for a legislative remedy, signing this bill into law also forces us to prepare for legal action. Regardless of the law’s intent, in practice, it punishes people for expressing their values by aligning with issue-based social welfare organizations. It hinders the freedom of assembly, hampers the right to petition our government, and compromises our right to privacy.”
Proponent of the new law, David Goodman of Represent NJ, disagrees. In an email to members late last week, he said S-150 will “level the playing field between publicly accountable political committees and secret independent ‘dark money’ groups swamping our politics and elections. Disclosure and transparency would shine light and inform the electorate. That’s what makes it a good government bill — pure and simple!”
The law also increases the maximum amounts of all campaign contributions, which are reportable. It would raise the amount that an individual candidate can receive from $2,600 to $3,000 per election and increase the amounts that political committees and party committees can receive, as well. Singleton said these increased limits will encourage more support for the political parties, which must disclose their contributions and spending and help shift the disproportionate influence away from special-interest spending.