ELEC rejects NJDSC request to avoid contribution limits on housekeeping account

In an advisory opinion issued yesterday, the New Jersey Election Law Enforcement Commission (ELEC) denied a request from the New Jersey Democratic State Committee (NJDSC) to avoid campaign contribution limits on a non-political “housekeeping account” maintained by the party.

NJDSC counsel Raj Parikh, on behalf of the state party, submitted the request for an advisory opinion last month, arguing that money used purely for non-political purposes should not be subject to the same strict regulations as direct political contributions.

“The NJDSC now seeks to confirm that the [Campaign Contributions and Expenditure Reporting Act] permits funds to be transferred by permitted third-party individuals and entities to a segregated account (the “housekeeping account”) opened by the NJDSC to be used solely for non-political purposes … and that such transfers are not “contributions” as defined under the Act, and thus not subject to the contribution limits under the act,” Parikh wrote.

Parikh separately noted that such “housekeeping accounts,” which fund basic needs like rent payments, internet service, and legal fees, are allowed for federal campaigns.

But ELEC didn’t agree that such an account would be suitably non-political, and wrote in their advisory opinion that the NJDSC’s housekeeping account should be subject to the same contribution limits as their regular campaign account.

“The Commission believes that allowing the NJDSC to receive unlimited amounts of funds from a single source/contributor undermines the purpose of contribution limits, even if those funds are transferred to a segregated account used solely for non-political purposes,” wrote ELEC Legal Director Demery Roberts. “The risk of undue influence over the party is related to the amount of money contributed, not how those particular funds are spent.”

The verdict may not be the end of NJDSC’s attempts to work around the campaign contribution limit, however. In a statement today, the NJDSC opined that ELEC’s advisory opinion is out of sync with modern campaigns, and said that they are considering further actions.

“It is unfortunate that [ELEC] does not recognize – as other states have – that campaigns have evolved,” they wrote. “The advisory opinion by ELEC flies in the face of that reality and, in effect, prevents committees like the NJDSC from handling its non-political and non-campaign related operations like any other entity in our state. We are analyzing ELEC’s opinion and will evaluate our next steps.”