Archives: State Pay-to-Play

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The Top Three Political Law Risks for Hedge Funds, Private Equity Funds, and Investment Firms

Perhaps no industry faces more scrutiny and regulation of its political activities than the financial services industry.   Even though these rules are often not intuitive, failure to comply with them can result in big penalties, loss of business, and debilitating reputational consequences.  In this advisory, we describe three sometimes overlooked political law related risks for hedge funds, … Continue Reading

Expanded March 30 Filing Enhances Pay-to-Play Disclosure, Highlights Penalties for New Jersey Government Contractors

New Jersey is well-known for having strict, comprehensive, and complex pay-to-play laws.  Two new changes to an annual pay-to-play filing required of some government contractors will only enhance that reputation. State law requires a company that receives $50,000 annually through government contracts in New Jersey to file a report by March 30 of the following … Continue Reading

Highlights from Wagner; D.C. Circuit Upholds Contributions Restrictions But Limits Ruling

The Wagner case, decided today by the D.C. Circuit, is important because of its analysis of the constitutionality of federal campaign contribution restrictions and, by extension, of pay-to-play laws generally. Covington has been monitoring this case since the district court decision in 2012, to the argument before the D.C. Circuit in 2013, and the decision … Continue Reading

Hawaii Pay-To-Play Law Survives Legal Challenge

Despite potential vulnerabilities, Hawaii’s pay-to-play law survived a significant challenge in the Ninth Circuit last week.  The matter involved an electrical-construction company, its CEO and a second individual who challenged several sections of Hawaii’s campaign finance law, including a requirement that the company register and report its activities once it crossed a $1,000 threshold, and … Continue Reading

Christie Vetoes Controversial New Jersey Pay-to-Play Provision

Earlier this week, New Jersey Governor Chris Christie vetoed key aspects of a bill that would have imposed new restrictions on the ability of national and federal political party committees to raise money from Wall Street and financial executives.  The bill, as we have previously discussed, sought to apply the state’s notoriously stringent pay-to-play rules … Continue Reading

Pay-to-Play Law on Gov. Christie’s Desk Poses Potential Threat to National Parties

A little-noticed sentence in a bill sitting on New Jersey Governor Chris Christie’s desk could, if it becomes law, threaten to curtail the ability of national party committees to raise money from Wall Street and financial industry executives.  The Republican and Democratic Governors Associations, the Republican National Committee, the Democratic National Committee, and the federal … Continue Reading

New Jersey Considering Aggressive Expansion of Pay-to-Play Legislation

New Jersey, already home to some of the most complex and restrictive pay-to-play laws in the nation, is considering an aggressive new expansion of those laws.  A bill under consideration that recently passed through a senate committee would prohibit certain individuals and entities involved in managing state employee retirement funds from making contributions to national, … Continue Reading

Connecticut Pay-to-Play Law Does Not Bar Giving to a State Party’s Federal Account

Connecticut’s campaign finance regulator, the State Elections Enforcement Commission (“SEEC”) recently released an important advisory opinion that made clear that a state contractor that is otherwise barred from giving to a state political party under Connecticut’s pay-to-play law can give to the party’s federal account, a point SEEC staff had previously addressed.  However, the state … Continue Reading

Major Criminal Penalties Assessed In New Jersey Pay-to-Play Case

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 … Continue Reading

DuPage County (Illinois) Board Repeals Self-Imposed Pay-to-Play Restrictions

The Daily Herald reported that last Tuesday suburban Chicago DuPage County repealed previously adopted county-specific pay-to-play rules.  In 2010, DuPage County enacted a county ordinance prohibiting any “officer,” including county board members, from soliciting or accepting campaign contributions in excess of $1,000 from any person or entity seeking an official action or doing business with … Continue Reading

Tough Pay-To-Play Bill Under Consideration in Rhode Island

Rhode Island — currently a “disclosure only” pay-to-play state — is considering adding a political contributions ban to its pay-to-play repertoire.  In February, Rhode Island Attorney General Peter Kilmartin proposed legislation to prohibit state vendors, their ten-percent owners, their executive officers, and the spouses and minor children of those officers and owners from making political … Continue Reading

Paying to Play in the Name of Another (Allegedly)

Recently, we noted a pay-to-play scandal in Pennsylvania that resulted in multiple arrests.  This week, New Jersey’s Attorney General charged seven executives or shareholders of Birdsall Services Group, an engineering firm.  The alleged Birdsall scheme illustrates the ease with which pay-to-play violations and campaign finance violations can mix. Pay-to-play laws typically restrict or prohibit public … Continue Reading

Lessons from the Pennsylvania Turnpike Pay to Play Scandal

We can learn two important lessons from the recent Pennsylvania Turnpike pay to play scandal.  The first of these lessons is straightforward, but important:  beware of providing benefits to public officials who can influence contracting or regulatory decisions impacting your company.  The second—and less intuitive—lesson, which has been lost amidst the furor over the scandal, … Continue Reading

Another New Jersey Pay-to-Play Law

As part of a continuing trend of New Jersey municipalities adopting local pay-to-play laws, Jersey City, NJ, has enacted an ordinance that “restricts city vendors that win no-bid contracts from donating more than $200 to the campaigns of school-board candidates and to some state Senate and Assembly candidates.”  According to NJ.com, the ordinance also restricts … Continue Reading

New Frontiers for Pay-to-Play Laws in the Next Election Cycle

Pay-to-play laws, which now exist at the federal, state, and local levels, generally restrict or require disclosure of political contributions by firms seeking to do business with the government.  Hedge funds, private equity funds, and asset management firms are particularly sensitive to such restrictions because of their reliance on investments from state and local government … Continue Reading

New Jersey Township Move Highlights Dynamic Nature of Pay-to-Play Laws

Lesson one for any student of state and local pay-to-play laws: just when you think you have a handle on them, they change.  Recent developments in a small New Jersey township provide a case-in-point. Last month, Upper Township, New Jersey, adopted an ordinance that forbids the township from entering into certain kinds of contracts if, … Continue Reading

Corporate Contributions in the District of Columbia — The “Pay-to-Play” Provisions

Following up on last week’s post, we wanted to highlight the “pay-to-play” provisions in D.C. Mayor Vincent Gray’s proposal to amend the District’s campaign finance laws.  The legislation is undergoing a public comment period until September 17th, and will then be sent to the D.C. Council.  In its simplest form, the proposal is hard to … Continue Reading

Is the Tide Turning on Corporate Contributions in the District?

In the wake of several highly-publicized corruption scandals, last week D.C. Mayor Vincent Gray released a draft campaign finance reform proposal.  The proposed legislation, which is currently undergoing a public comment period before it is sent to the D.C. Council in a few weeks’ time, can be found here.  Among other reforms, the wide-ranging package … Continue Reading

Contribution Bans and Pay-to-Play Laws—The Next Frontier of Litigation?

Last Friday in a precedential opinion, the Sixth Circuit struck down an Ohio pay-to-play law that made it a crime for Attorney-General or county-prosecutor candidates to accept campaign contributions from Medicaid providers or any person with an ownership interest in a Medicaid provider on the theory that the successful candidates might be reluctant to prosecute … Continue Reading
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