New Jersey Bars Contracts for Political Donors
By LAURA MANSNERUS, NYTimes on the Web, September 23, 2004
TRENTON, Sept. 22 -- With only weeks until he steps down, Gov. James E. McGreevey issued a broad order on Wednesday that attempts to break the link between political contributions and government contracts in a state rattled by one corruption scandal after another.
The executive order, which is to take effect on Oct. 15, prohibits the awarding of most state contracts to businesses that have contributed to state or county political committees or gubernatorial candidates.
Last year, the two state party committees raised a total of $17.3 million from individuals, groups and businesses -- $14.3 million alone by Mr. McGreevey's Democratic Party.
County political committees raised nearly $30 million more.
Advocates of the changes said they were the strictest in the nation.
The order was signed by Mr. McGreevey, one of the most prolific fund-raisers in New Jersey history, at an emotional public event at which he cited the goodness and kindness of New Jerseyans, and said he finally could seek "to put an end to politics as usual in Trenton."
Mr. McGreevey said he took the action because the state's notorious "pay to play" system had become "corrosive and cancerous."
His resignation and impending departure, he said, had given him "a personal and political freedom that has enabled me to confront challenges I have avoided in the past."
Mr. McGreevey's aides had said he would use his time remaining in office to address many of the issues he could not -- or would not
-- resolve during his two and a half years in office. Mr. McGreevey announced on Aug. 12 that he was gay and had an affair outside his marriage, and that he would step down on Nov. 15.
His order will remain in effect unless a future governor revokes it. Richard J. Codey, the Senate president, who will serve out the last 14 months of Mr. McGreevey's term, pledged to keep the order in place "as long as the sun continues to rise in the East and set in the West while I am acting governor."
Under the executive order, state agencies and independent authorities will be prohibited from awarding contracts to businesses that have contributed to a gubernatorial candidate or a state- or county-level political committee.
It will also apply to individuals who own or control more than 10 percent of a company or partnership.
Advocacy groups known as 527's that are controlled by such businesses also fall under the order.
The measure applies to state contracts in excess of $17,500, but will not affect county and municipal contracts, unlike a bill earlier this year that failed to pass in the Legislature.
Those contracts account for about half of all government spending in New Jersey.
The restrictions also do not apply to legislative candidates or the powerful political action committees controlled by legislative leaders.
Last year, those legislative leadership committees raised $12.6 million.
Still, the new rules are the strictest in the nation, according to Craig Holman, the campaign finance lobbyist for Public Citizen in Washington, who helped draft the first pay-to-play proposal in Trenton almost three years ago -- a proposal that was not adopted.
"I'm delighted," Mr. Holman said. "This is much more sweeping than what any other state has come up with."
Mr. Holman said only four states had adopted official pay-to-play policies, although he noted that many others had stricter campaign contribution limits and that others had not been so rife with pay-to-play scandals as New Jersey.
Mr. McGreevey's aides said they were confident that his order would withstand any legal challenge in what they acknowledged was a largely untested field of regulation.
One proponent of the restrictions, Harry S. Pozycki, the chairman of Common Cause New Jersey, said he was confident that "constitutionally, it's on all fours, and it's certainly within the authority of the governor to do this."
Mr. Pozycki noted that the state Chamber of Commerce had supported the strongest possible restrictions.
"The chamber calls pay-to-play extortion," he said. "The only ones who liked this were the county and state bosses, and that's where the addiction is.
The governor doesn't have that addiction anymore."
Mr. McGreevey called the pay-to-play phenomenon "an issue that has haunted us for years" and a system that, "by definition, appeals to human weakness."
Allowing that some "may say that I am hypocritical, in biting the hand that fed me," the governor said, "Believe me, I am more aware than ever of my own frailties, but that does not justify inaction."
Mr. McGreevey also said that "to my colleagues in government, I know that this may cause consternation and anger."
Legislators gave generally positive reviews to the initiative, many promising to take up legislative proposals to accomplish what the governor could not.
Legislative Republicans, who had pushed hard for the measure barring contracts for campaign contributors at all levels of government, said they would try again.
The Assembly Republican leader, Alex DeCroce, and Assemblyman Kevin O'Toole, the sponsor of the comprehensive measure, said in a statement that they hoped "the Democrat-controlled legislature will take the not very subtle hint from Governor McGreevey" and agree to schedule another vote on it.
The Assembly speaker, Albio Sires, and the Assembly majority leader, Joseph J. Roberts Jr., both Democrats, said the executive order "constitutes another significant leap forward in the effort to curtail campaign spending and limit the impact that special interest money can have in the political process."
They pledged to review the order carefully to see if it presented any constitutional problems.
In the spring, Mr. Sires and Mr. Roberts rejected the comprehensive measure as lacking the constitutionally required connection between the donor and the people responsible for awarding contracts.
Without such a connection, they said, restricting a contributor's gifts might infringe on his right to free speech.
In place of the legislation supported by Common Cause and the Republicans and approved by the Senate last year, the Assembly Democrats adopted a much weaker version, as part of a larger package of new ethics regulations.
Mr. McGreevey, who publicly refused to take sides in that dispute, said Wednesday that while he might be criticized for doing too little, too late, "I ask, if not now, when?"
New Jersey politics at every level has been roiled by scandal in recent years.
Last month, Charles Kushner, Mr. McGreevey's biggest fund-raiser, pleaded guilty to witness tampering in connection with a campaign finance investigation, and last week another Democratic fund-raiser, David D'Amiano, pleaded guilty to mail fraud.
At least a dozen public officials, including the Essex and Hudson County executives, have also been prosecuted in the two and a half years since Mr. McGreevey took office.
In addition, United States Senator Robert G. Torricelli was forced to drop his re-election bid in 2002 after revelations about his relationship with a contributor.
Mr. McGreevey's executive order is expected to stem the flow of cash into the county political organizations, which are a major locus of fund-raising for races at all levels of government in New Jersey.
At the same time, many in Trenton warned, campaign money is likely to find other routes.
The executive order addresses the possibility of circumvention by prohibiting businesses from making or soliciting contributions through intermediaries or with the agreement that it will be channeled elsewhere.
The order prohibits the awarding of contracts to any business entity that contributed to a party organization within 18 months of the beginning of contract
negotiations. In the case of contributions to the governor, the prohibition would continue through the end of the term.
Mr. Codey, because he will retain his post as Senate president while he is acting governor, will be in a position to steer legislation through the Senate.
He supported the proposals for restrictions at all levels of government last spring, which originally had some Democratic sponsors, but acceded to the Assembly leadership in the battle.
As he spoke, Mr. McGreevey returned to his decision to change "politics as usual in Trenton," he said, "God knows, I wish that the circumstances were different."
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