Last spring, we reported that the New Jersey Attorney General charged seven executives and shareholders of Birdsall Services Group, an engineering firm, with participating in a massive pay-to-play scheme.  The scheme allegedly involved a multi-year attempt by company executives and major shareholders to evade state level pay-to-play restrictions by making and then reimbursing political contributions that fell under the state’s $300 reporting threshold.  At the time, we noted that the case was “one of the more serious pay-to-play cases to have come down the pike.”

True to that prediction, last Friday, a New Jersey state judge ordered Birdsall to pay $1 million in criminal penalties.  But that development is just one of many more recent developments in the Birdsall matter that highlight the potentially devastating consequences of significant pay-to-play violations:

  • Two former Birdsall marketing employees have pled guilty to charges arising out of the pay-to-play scheme but have not yet been sentenced.
  • Cases against individual Birdsall defendants continue with some facing as much as 20 years in prison and individual penalties of up to $1 million.
  • In addition to last week’s criminal penalties, Birdsall previously agreed to forfeit $2.6 million in civil fines and attorneys’ fees.

The end result of all this is that Birdsall—which in 2012 was ranked as one of the top 200 environmental firms in the country—was driven to file for bankruptcy.  Although the case is different from the ordinary pay-to-play case in that it pairs pay-to-play allegations with campaign finance reimbursement allegations, it nonetheless provides a vivid example of the importance of taking pay-to-play laws—including state and local laws—seriously.

Tags: New Jersey, pay-to-play, reimbursement
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Photo of Zachary G. Parks Zachary G. Parks

Zachary Parks advises corporations, trade associations, campaigns, and high-net worth individuals on their most important and challenging political law problems.

Chambers USA describes Zachary as “highly regarded by his clients in the political law arena,” noting that clients praised him as their “go-to…

Zachary Parks advises corporations, trade associations, campaigns, and high-net worth individuals on their most important and challenging political law problems.

Chambers USA describes Zachary as “highly regarded by his clients in the political law arena,” noting that clients praised him as their “go-to outside attorney for election law, campaign finance, pay-to-play and PAC issues.” Zachary is also a leading lawyer in the emerging corporate political disclosure field, regularly advising corporations on these issues.

Zachary’s expertise includes the Federal Election Campaign Act, the Lobbying Disclosure Act, the Ethics in Government Act, the Foreign Agents Registration Act, and the Securities and Exchange Commission’s pay-to-play rules. He has also helped clients comply with the election and political laws of all 50 states. Zachary also frequently leads political law due diligence for investment firms and corporations during mergers and acquisitions.

He routinely advises corporations and corporate executives on instituting political law compliance programs and conducts compliance training for senior corporate executives and lobbyists. He also has extensive experience conducting corporate internal investigations concerning campaign finance and lobbying law compliance and has defended his political law clients in investigations by the Federal Election Commission, the U.S. Department of Justice, Congressional committees, and in litigation.

Zachary is also the founder and chair of the J. Reuben Clark Law Society’s Political and Election Law Section.

Zachary also has extensive complex litigation experience, having litigated major environmental claims, class actions, and multi-district proceedings for financial institutions, corporations, and public entities.

From 2005 to 2006, Zachary was a law clerk for Judge Thomas B. Griffith on the United States Court of Appeals for the District of Columbia.

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