|
Navigating the Pay to Play Morass
by Paul J. Josephson and Lauren E. Bucksner
With the recent launch of New
Jersey’s website tracking
political contributions by public
contractors, the focus on so-called
“pay to play” practices has never been
sharper. Over one hundred municipalities
and counties have jumped
aboard the pay to play bandwagon,
one-upping state law by adopting their
own restrictions and penalties for
contributors who seek public contracts.
The predictable result: a baffling
assortment of state and local pay to
play enactments. Chaos has resulted
from the pursuit of this feel good
approach to politics. Local pay to
play’s lack of uniformity, coupled with
severe economic penalties, has led to
a marked decline in overall political
contributions by citizens and corporations,
and amplified the clout of unions,
which are unconstrained by these laws.
The inevitable chilling of political
speech resulting from fear of violating
the cumbersome and voluminous
regulations will undoubtedly worsen
if more local governments enact their
own restrictions on business and
redevelopment entities.
Since 2005, New Jersey municipalities,
counties and their agencies have
been vested with the authority to adopt
their own local pay to play policies
with respect to public contracts. We
have comprehensively surveyed the
various local pay to play ordinances
throughout the state, highlighting the
areas in which various restrictions
contrast with one another. Thus far,
over one hundred and thirty pay to
play ordinances have been enacted;
approximately eighteen of those
ordinances specifically restrict entities
seeking redevelopment contracts and
their professionals. Although some
local entities have used the Center for
Civic Responsibility’s (CCR) Model
Ordinance as a template document,
most towns have modified their
ordinances to reflect local political
tastes. The need for uniform and
predictable provisions has been
disregarded, leaving New Jersey
speckled with inconsistencies and
would-be contributors befuddled.
While local policies must not
contradict state requirements, many
local ordinances cover additional
businesses and impose additional
disclosure requirements well beyond
those proscribed by the state. Local
pay to play often regulates business
entities that are not necessarily restricted
by state pay to play laws. This includes
redevelopers and professionals serving
redevelopers, an area municipalities
have not specifically been authorized
to regulate.
Moreover, locally enacted requirements
usually affect a broader range of
businesses and contracts than the state
rules. Pursuant to the state’s pay to
play law, applicable in all 566 municipalities
and 21 counties, only businesses
who seek or perform “non fair and
openly bid” municipal contracts for
municipalities valued in excess of
$17,500 are restricted from giving to
municipal officials and their political
parties. But many of these local
ordinances restrict contributions and
require disclosure of contributions by
any entity seeking a new contract in
excess of $17,500, even if the contract
is awarded pursuant to a “fair and open
process”. Businesses and their owners
must be aware of applicable local pay
to play policies, as ignorance can lead
to especially harsh financial sanctions
including contract termination and
debarment.
Likewise, the types and amounts of
contributions prohibited by these local
enactments vary widely. Every local
pay to play ordinance details specifically
what types of contributions are prohibited,
to whom a contribution may or
may not be made, the permissible
amount of contributions, and for what
time period the restriction lasts. Some
municipalities allow vendors and their
owners to contribute up to $300, while
others allow only $250 or less still.
Some outright prohibit any contribution
whatsoever, in clear violation of constitutional
safeguards that allow for at least
some symbolic, if de minimis, contribution
as a demonstration of political
support for a candidate or party.
Don’t Try This At Home
Attempting to comply with local pay
to play laws on your own can leave you
and even your attorney feeling trapped
in a web of impenetrable restrictions,
disclosure requirements, and penalties.
If you take an unintentional wrong
turn, violations may or may not be
curable. All is not lost however, and
you need not retire from the crucial
act of participating in politics simply
because you wish to do business with
government. At Hill Wallack LLP,
we recognize the importance of your
participation and are poised to help.
But with the wildly inconsistent local
rules now in place, there is no onesize-
fits-all approach. With our vast
knowledge of all pay to play rules, we
can advise you on your particular
circumstances and help you avoid pay
to play problems.
Paul P. Josephson
is partner-incharge
of the firm’s Regulatory and
Government Affairs Practice
Group and former member of the New
Jersey Executive Commission on Ethical
Standards. He has counseled public and
private companies, and political candidates
and committees, on legal compliance,
government ethics and campaign finance
issues for over fifteen years.
Lauren E. Bucksner is an associate
in the firm’s General Litigation and
Regulatory & Government Affairs
Practice Groups. |
