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Pay-to-play Filings for 2018 Show Dip in Contributions by Contractors

Report shows more than 1,900 companies that did business with state, county, municipal and other public entities in 2018 made $9M+ in political contributions

money stack

Firms with public contracts in New Jersey gave more than $9 million to political candidates and committees at all levels of government last year, a drop from 2017 that was to be expected in a year without many statewide offices on the ballot, according to the state’s campaign watchdog.

The New Jersey Election Law Enforcement Commission analyzed reports filed by more than 1,900 companies that did business with state, county, municipal and other public entities in 2018 and made political contributions to candidates or committees, including those to independent-expenditure — or so-called dark money — groups. These reports have been required by state law for more than a decade to try to prevent or expose instances of “pay-to-play,” in which a firm gets a contract after giving money to a candidate responsible for awarding that contract.

In a year in which congressional seats topped the ballot, NJ ELEC’s analysis encompassed $763,000 in contributions made by the firms to federal candidates and committees. While both parties got money, the largest share, almost three-quarters, went to Democrats and, in particular, an independent expenditure group backing more progressive candidates.

The dark-money group, Majority Forward — which the Center for Responsive Politics reports spent more than $40 million last year, most of it on ads opposing Republican U.S. Senate candidates — got $500,000 from Hartz Mountain Industries, a major commercial real-estate owner. (While Majority Forward does not have to report its donors under federal law, the contribution was disclosed by a Hartz Mountain affiliate, 153 Halsey Street Partnership of Secaucus, to comply with the state Pay to Play law.)

Under that law, which took effect in 2006, businesses with $50,000 or more in public contracts that have made contributions to candidates or committees must disclose the amounts of both their contracts and contributions to ELEC each year. In making those contributions, they are bound by state or federal limits when applicable. The law also bars most firms with state contracts of more than $17,500 from giving more than $300 to gubernatorial candidates and some other candidates, state political parties, legislative leadership committees, county political parties and municipal political party committees.

Totals down with no big state race topping ballot

ELEC’s analysis of business entity reports filed through April 5 indicates the total of slightly more than $9 million in contributions last year is the second lowest in the history of the reports, and falls $1.4 million or 13 percent below the figure for 2017. These figures are still preliminary, however, as some businesses file their reports late or file amended reports.

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Jeff Brindle, executive director of ELEC, attributed the drop to the differences at the top of the ballot. In 2017, both the governor and the entire Legislature were up for election, while last year’s balloting featured federal races. Businesses with state or local contracts tend to contribute less in total during federal election years.

“Contractors and other donors typically are stingier the year after a gubernatorial election,” Brindle said, noting that contributions also fell after the gubernatorial elections of 2013 and 2009. “From a contributor’s standpoint, the gubernatorial election is the political equivalent of the Super Bowl.”

Reported contributions by contractors peaked in 2007, the second year of reporting, at $16.4 million, then dropped precipitously. In 2012, the year in which contractors gave the smallest amounts, contributions totaled just under $8 million.

The purpose of the law is twofold. Contribution limits imposed on contractors are designed to prevent businesses from being able to influence the awarding of public contracts by making political donations to public officials, something that appeared to have been happening in the state prior to the law. Secondly, the reporting of contributions is also meant to give the public the ability to see the amounts given by businesses and report any that might be inappropriate.

Response to past issues

One impetus of the law was a June 2000 report by the State Commission of Investigation that questioned the awarding of a $500-million motor-vehicle inspection contract to Parsons Infrastructure and Technology Group, which along with affiliates had contributed more than $500,000 to state candidates and committees.

Problems have continued to arise though.

Two years ago, Keyport barred former Assemblyman John Wisniewski, who at the time was a special tax defense counsel for the borough, from doing business with Keyport for four years due to a violation of its local pay-to-play law. According to a report by Politico NJ, Wisniewski’s firm gave $1,000 to the Monmouth County Democratic Party in 2014 at the same time his firm received $14,751 from Keyport for legal services, which violated the borough’s law.

And Birdsall Services Group officials got caught trying to circumvent the law. In 2013, the now defunct engineering firm admitted in court to making illegal contributions to candidates by filtering the money through employees: The workers gave candidates contributions of less than $300 so they did not have to be reported and then the firm reimbursed the employees by giving them bonuses. An analysis by the Star-Ledger found the company made more than 1,000 contributions worth more than $1 million between 2008 and 2012, while it received more than $84 million in public contracts. At least six executives of the firm were sentenced as part of the scheme.

Breaking down the figures

Including its $500,000 to Majority Forward, the dark-money group, Hartz Mountain’s contributions totaled more than $528,000 in 2018, making it the most generous public contractor, according to ELEC.

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Engineering firms typically hold the top spot and last year, the Remington & Vernick engineering firm was the second largest contributor, giving more than $515,000.

In 2017, Hartz’s contributions had totaled just $29,710. Hartz has one $6.3 million contract with the state treasurer for office-space rental. Remington & Vernick, which was the top contributor in five of the last 10 years, had more than 200 contracts with state, county and local governments totaling close to $40 million.

Hartz’s contribution made Majority Forward the largest recipient of funds from a public contractor in 2018. Five of the top 10 recipients were independent, or dark-money, committees or more traditional political action committees, while the rest were county freeholder committees.

The second biggest recipient of contractor contributions was General Majority PAC, which supports Democratic legislative candidates and is believed to be tied to South Jersey political power broker George Norcross.

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Nearly 20 percent of all contributions by contractors — $1.7 million — were to PACs and independent-expenditure groups, equaling the previous high from 2014.

The 1,947 contractors who so far have reported 2018 contributions represent an 8 percent drop from the year before. At the peak, more than 2,300 contractors gave to political candidates and committees in 2006. Last year, the contractors who made contributions received nearly 18,700 contracts worth more than $9.8 billion, about 5 percent less than a year earlier.

More than three-quarters of the value of the contracts, worth some $7.6 billion, was with state departments and agencies. The Department of Human Services was the biggest contracts awarder, at more than $6.6 billion, according to ELEC. The nearly $5.2 billion contract for Medicaid managed services with Horizon Healthcare of NJ Inc. was the single largest contract in 2018. Horizon Blue Cross Blue Shield of NJ affiliates reported a total $20,400 in contributions to BluePac, Horizon’s political committee.

The average contribution by contractors in 2018 was $1,215, 3 percent higher than in 2017.

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