Loopholes in N.J. campaign finance laws benefit biggest government contractors

TRENTON -- New Jersey taxpayers don’t pay directly for the costly campaigns state politicians run, but public money regularly goes to government contractors who in turn make sure the candidates are well-funded.

Thanks to loopholes in campaign finance laws at the state and county levels, the biggest government contractors in New Jersey routinely get lucrative, taxpayer-funded work while simultaneously making huge contributions to the candidates who vote to approve their contracts.

New Jersey’s 566 municipalities, 616 school boards and 21 county governments all need lawyers, engineers and other professionals to handle government business and the politicians who control those contracts often award the work to firms that regularly contribute to their campaigns through a process known as "pay-to-play."

The pay-to-play system helped Democratic candidates running for freeholder seats this year in Bergen County, where the Democrats control the freeholder board, generate more than $1 million for the 2009 election - much of it from businesses that do work for the freeholders.

The Democratic candidates were able to raise money directly from county government contractors because the county contracting policy doesn’t prohibit it. The state’s "Local Unit Pay-to-Play Law" appears to address pay-to-play, but it includes a loophole that allows the practice to thrive.

The Bergen County policy, titled "Fair and Open," forces the Board of Freeholders to solicit public bids on most government projects, but price is only one factor and the freeholders are not compelled the board to select the lowest bidder.

That means county work can still go to regular contributors to the freeholders’ campaigns even if they don’t offer the best price.

WHEELING

The New Jersey political landscape is also full of candidates’ funds, political committees and other organizations that can raise money each time there is an election.

And savvy political operatives and organizations have figured out ways to use these numerous funds to get around donation restrictions that were put in place in an attempt to curb the influence special interests such as government contractors can have in an election.

The process of using political committees to get around the tight contribution limits that must be followed when making donations directly to a candidate is known in political circles as "wheeling."

In the Bergen County freeholder contest this year, several new political committees were used to "wheel" additional money into the race from county government contractors who had already donated directly to the two candidates up to the limit.

Since there are no rules in place prevent political committees such as those used in the 2009 contest from the accepting donations and then making subsequent donations to the freeholder candidates, the contractors were able to wheel funds totaling up to six times more than the contribution limits - and much of it at the last minute in an effort to save a campaign that was ultimately swept by the Republican candidates.

LEGISLATIVE ACTION

Some reforms that would address the pay-to-play and wheeling loopholes that exist in state campaign-finance laws remain stalled in the state Legislature. But lawmakers in leadership positions also control special legislative leadership funds that are among the most routinely used for wheeling money collected fdrom companies that receive lucrative government contracts.

And other legislators who hold key positions in the Assembly and Senate work for government contractors that are among the state’s most active contributors to political campaigns in New Jersey.