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The headquarters of the New Jersey Election Law Enforcement Commission in Trenton. (Photo: Joey Fox for the New Jersey Globe).

Here’s everything that the ‘Elections Transparency Act’ would do

Some provisions increase transparency – and some definitely don’t

By Joey Fox, February 24 2023 5:01 pm

Increasing campaign contribution limits. Ending local pay-to-play laws. Making the executive director of the Election Law Enforcement Commission (ELEC), New Jersey’s main campaign finance watchdog, a position nominated by the governor.

Those are just a few of the many provisions of the “Elections Transparency Act,” a behemoth of a bill that may pass the legislature as soon as next Monday. The bill cleared two committees yesterday, one in the Senate and another in the Assembly, despite concerns from both Republican legislators and voting-rights advocates that it would decrease transparency.

“This is called the Elections Transparency Act – I think we should call it the Public Corruption Authorization Act,” Assemblymen Brian Bergen (R-Denville) said yesterday about the bill. “This is the equivalent of taking us back to the 1980’s, and undoing all of the protections that have been put in place to limit corruption in the state of New Jersey.”

Bergen and nearly all of his Republican colleagues, both in the Senate and the Assembly, voted against the bill. That could mean legislative leaders will have trouble assembling the votes for passage, particularly if progressive Democrats start to balk as well.

Currently, the bill is scheduled for a vote in both the Senate and the Assembly on Monday. The Senate nearly voted on the bill last June, just a few weeks after it was first introduced, but it was pulled from the schedule at the last minute and has been amended significantly since then.

Before Monday’s vote arrives, here’s a look at what’s actually in the bill.

Doubling campaign contribution limits

One of the most important changes the bill makes is a major increase in the state’s baseline campaign contribution limits, from $2,600 to $5,200 per candidate per election. 

A number of other limits on contributions to candidates and political committees are either doubled or tripled under the bill, including for public financing in gubernatorial elections. ELEC would also be given the ability to adjust limits for non-gubernatorial campaigns every two years.

As legislators have noted, there are some genuinely good reasons for raising contribution limits. Independent expenditure groups and self-funding political candidates have no equivalent limits, so candidates’ own fundraising can often get drowned out.

In the 2021 gubernatorial election, for example, outside groups spent more than $41 million backing Gov. Phil Murphy or Republican gubernatorial nominee Jack Ciattarelli, nearly outspending the candidates themselves. The Elections Transparency Act could help level the playing field.

“I know that’s been a little controversial, because it’s been represented in the press and so forth as ‘doubling’ the contribution limits, which got a lot of people and a lot of groups upset,” ELEC executive director Jeff Brindle testified in yesterday’s Senate Judiciary Committee hearing. “However, what wasn’t mentioned is that it’s been 18 years since contribution limits have been increased, so we think that’s very important.”

But critics of the bill have said that the proposed increase is far too high, and that the answer to money in politics isn’t even more money in politics.

“[The] biggest donors would be able to contribute an even greater share of each candidate’s fundraising total, increasing the political system’s dependence on the wealthiest few,” said Philip Hensley, a democracy policy analyst with the League of Women Voters of New Jersey.

“The ten people sitting on this committee today, as of the last ELEC filings – we had a collective $1,806,498.27 in our bank accounts,” noted Bergen, referring to his colleagues on the Assembly Appropriations Committee. “Why do contribution limits need to be doubled? Should we have $3.6 million sitting up here? … It really baffles me, why you would want to increase those limits so high.”

Requiring outside groups to disclose certain expenditures and contributions

The piece of the bill that most directly applies to its transparency-focused name is a provision requiring independent expenditure groups, which have grown to become a dominant force in state elections, to disclose any contributions larger than $7,500 as well as all expenditures it makes on elections.

Specifically, the bill governs entities that spend on “electioneering communications,” a term defined as explicitly supporting or opposing a candidate or public question within 30 days of a primary election or 60 days of any other election. Reports on independent expenditures will be filed with ELEC either once or twice prior to an election (depending on the type of election) and once again after the election is concluded.

On its face, creating more transparency for independent expenditures is a laudable goal. But as both Bergen and Brindle noted, there’s the possibility that such provisions would be ruled unconstitutional.

In a 2019 federal court case, U.S. District Court Judge Brian Martinotti blocked a recently passed New Jersey law requiring outside groups to reveal their major contributors when they engage in elections. The Elections Transparency Act is designed to avoid a similar fate, but Bergen argued there’s good reason to believe that it won’t pass court muster either.

“You have an insatiable thirst to put up legislation that will get challenged in court, and we’ll have to spend more state money on defending something that’s indefensible, because it’s already been deemed unconstitutional,” he said.

Advocacy groups, meanwhile, have argued that the dark money components of the bill don’t go far enough. It governs the spending of 501(c)(4) organizations but not 501(c)(6) organizations, which are corporate and trade organizations that could also involve themselves in elections.

“Our concern with that is that any corporate industry contributions that are made to influence elections will remain hidden,” testified Allison McLeod, public policy director for the New Jersey League of Conservation Voters. “Corporations and trade organizations, as we know, represent powerful interests in Trenton, and we believe that they should be subject to the same disclosure requirements as 501(c)(4)s.”

Ending local pay-to-play laws and standardizing them statewide

Right now, New Jersey has a patchwork of state, county, and local pay-to-play laws regulating government contracts. The Elections Transparency Act would do away with that multi-tiered system, instead instituting uniform state laws that govern pay-to-play throughout New Jersey.

As Brindle and others have noted, there are some major upsides to standardizing such laws.

“It gets rid of that patchwork of pay-to-play laws, brings some uniformity to the process, brings transparency to the process,” State Sen. Paul Sarlo (D-Wood-Ridge) said during yesterday’s committee hearing.

But it would in many cases mean an overall weakening of pay-to-play restrictions, since many local laws are stronger than state laws. The bill also explicitly removes limitations on business contributions to state, county, and municipal political parties and legislative leadership committees.

Good-government advocates are particularly worried about the expansion of the so-called “fair and open” loophole, which allows for exemptions to pay-to-play laws if the bidding process takes place in a “fair and open” manner; under current law, that loophole only applies to local, county, and legislative branch contracts, but the Elections Transparency Act would make it apply to state government contracts as well.

“The fair and open loophole has been recognized for years and years as a big loophole that is, to quote a report by the former state comptroller, ‘a fatal flaw’ in our state pay-to-play rules,” Hensley testified. “This bill would expand the fair and open loophole, rather than dealing with it and closing it, and that’s of great concern to us.”

Putting ELEC more directly under the governor’s thumb

One change to the bill made truly at the last minute – as in, about 30 seconds before the Senate Judiciary Committee voted on it yesterday – is to change how the ELEC director is chosen for the position.

Currently, ELEC’s four commissioners, two Democrats and two Republicans, are tasked with appointing the body’s executive director. Under the bill, the position would instead be nominated by the governor and subject to confirmation by the State Senate.

As reported by Politico NJ’s Matt Friedman today, the impetus for the provision seems to be an effort by the Murphy administration to force Brindle, the current director, out over an insensitive remark Brindle made. The governor’s staff reportedly demanded Brindle resign last year, but he declined to do so.

The governor has the ability to appoint ELEC’s four commissioners, so the executive director is already indirectly subject to gubernatorial approval. (Ironically, one Republican commissioner seat has remained vacant for the entirety of Murphy’s term while the other three seats are on holdover, with no action from Murphy to fill any of them with his preferred nominees.)

But if approved, the Elections Transparency Act would put the commission more clearly under Murphy’s thumb – and, in this case, allow him to finally ditch Brindle.

Shortening the statute of limitations on ELEC enforcements

One seemingly small change that could have major ramifications for state election law is a provision shortening the statute of limitations for ELEC enforcement actions to two years. In theory, that should make ELEC more effective; ELEC deliberations often take years, meaning that by the time any enforcement decision comes out, the election it applied to is long over.

But in practice, it would mean the opposite. Without a guarantee of additional funding or staff, ELEC would struggle to adequately investigate every complaint in time to meet the new deadline, and many cases would inevitably fall through the cracks.

“It’s going to make it really difficult to enforce the law, particularly with regard to complicated cases,” Brindle testified.

If enacted, such a statute of limitations creates an incentive for New Jersey politicians to play fast and loose with election law, since they would stand a decent chance of avoiding any penalty. Don’t want to file a quarterly report on time? Eh, ELEC won’t get to it anyways.

The bill does dictate, however, that state funds will be directed towards ELEC for technical updates to its campaign finance database. It also requires ELEC to create a database concerning contributions made by business entities, which are already required to report contributions to ELEC under current law.

Creating state party “housekeeping accounts” with less stringent restrictions

In 2021, the New Jersey Democratic State Committee requested permission from ELEC to create a “housekeeping” account that avoided campaign contribution limits; they argued that money the party spends on rent, internet, legal fees, and so forth shouldn’t be subject to such strict restrictions. ELEC turned them down, writing in an advisory opinion that the “risk of undue influence” from unlimited donations would be too great.

In the Elections Transparency Act, the legislature is essentially circumventing that opinion, establishing the ability of the two major state parties to establish housekeeping accounts that can receive double the normal contribution limit – a limit that is itself already doubled by the bill.

Bergen, in yesterday’s committee hearing and in a minority statement co-written with Assemblyman Antwan McClellan (R-Ocean City), bashed the proposal and said it was ripe for abuse.

“The reason why housekeeping accounts were gotten rid of in the first place is because they were used for political kickbacks,” Bergen said. “That’s why they’re gone, because that money can be used arbitrarily, on something not campaign related, and people were paying people off with that money.”

Letting campaign money be used for legal costs

Campaigns and candidates are relatively restricted in what they’re allowed to spend campaign contributions on. The bill would add one new permitted use for campaign cash: “litigation or legal costs arising from campaign activities.”

The bill doesn’t go into detail on what that might entail, but it would presumably apply to the legal costs associated with petition challenges, recount requests, and election contests like the ones seen recently in Trenton and Mendham, among other places. If those costs could be paid for from campaign accounts, it seems likely that the number of election-related legal challenges would rise substantially.

Allowing candidates to avoid reporting contributions under $200

Right now, candidates have to report any and all contributions, of any amount. Under the bill, they would instead have to report individual contributions only when they’re in excess of $200, which may lessen the burden of campaign finance reporting for both candidates and ELEC.

The bill also changes the deadlines for reporting such contributions from 48 hours after receipt to 72 hours, though in the week before the election all contributions must be reported within 24 hours. Best of all, campaign treasurers will be henceforth banned from using telegrams to transmit reports about campaign contributions and expenditures.

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