Medford, New Jersey recently disqualified five would-be city contractors from receiving municipal contracts until 2017 for allegedly making political contributions in violation of the Township’s pay-to-play ordinance. The ordinance, adopted in 2012, imposes an automatic four-year bar on contracting with a company that contributes to candidates or committees in excess of the law’s per-recipient or … Continue Reading
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
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
The Daily Herald reported that last Tuesday suburban Chicago DuPage County repealed previously adopted county-specific pay-to-play rules.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
The New York Times, in a recent article, called attention to the “paltry” sums contributed by the hedge fund industry to New York City mayoral candidates. The article explains that hedge fund political contributions are limited—noting that some of the hedge fund industry’s “biggest personalities” are absent from the donor list, while others have contributed as … Continue Reading
Obscure pay-to-play rules are having a big impact on U.S. elections. In an article in today’s The Hill, we examine how these little understood rules provide institutional fundraising advantages for certain candidates at the expense of others. We also point out how these laws are changing the operational rules of the road, forcing candidates to … Continue Reading
During the 2012 election cycle, we cautioned that campaign finance problems can haunt candidates long after the election is over. Case in point: As the New York Daily News reports, the New York City Campaign Finance Board recently voted to impose $72,402 in penalties for violations of 15 different campaign finance restrictions, including accepting contributions … Continue Reading
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
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
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
Upper Township, New Jersey, just added another mine to the minefield that is New Jersey pay-to-play law. We noted in October that Upper Township (1) had adopted a new pay-to-play law and (2) was poised to do so again. According to the Upper Township Gazette, on Monday the Upper Township Committee voted to adopt a new … Continue Reading
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
Some politically-active corporations are breathing a sigh of relief following last night’s defeat of California’s Proposition 32. Although the media focused on the ballot initiative’s proposal to bar unions from using payroll deductions to collect PAC contributions, the initiative would have also had three equally far-reaching effects for corporations. First, it would have prohibited corporations … Continue Reading
Last Friday, a district court upheld a long-standing ban on federal political contributions made by federal contractors. In practice, the universe of those directly affected by this ban, and the opinion upholding it, is relatively small. Corporations are already prohibited from contributing to candidates and parties. The prohibition therefore generally applies only when the federal … Continue Reading
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
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
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
In an unusual development, the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations has issued a “National Examination Risk Alert” summarizing its findings after pay-to-play compliance examinations conducted by the SEC staff. The examinations focused on municipal securities dealers that are subject to the Municipal Securities Rulemaking Board’s pay-to-play rule, which is referred … Continue Reading
While Super PACs and million dollar contributions have dominated the campaign finance headlines this election year, as with every election, there are trends developing just below the surface that the media have yet to focus on clearly. This year, one of those emerging trends is the increasing bite of so-called “pay to play” laws. These … Continue Reading
Many state and local jurisdictions allow voters to decide whether the jurisdiction should issue bonds to fund municipal projects. The Municipal Securities Rulemaking Board (MSRB) is concerned that municipal securities dealers are using political contributions to these bond ballot campaigns to secure business by the issuer of the bonds on the ballot. Yesterday, the MSRB … Continue Reading
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
More investment firms are adopting policies to address compliance with the SEC pay-to-play rule, according to a recent survey conducted by the Investment Adviser Association, the ACA Compliance Group, and Old Mutual Asset Management. The survey of 555 firms found that 43% of firms reported adopting pay-to-play policies as part of larger compliance policies, and … Continue Reading
