COLLEEN O'DEA | MAY 10, 2019

NJ Spotlight


Campaign-finance reform advocates launched an 11th-hour effort Thursday to try to persuade Gov. Phil Murphy not to conditionally veto a bill that would require politically active nonprofits to reveal their funders and give New Jersey among the broadest disclosure requirements in the nation.

Murphy has said he backs requiring disclosure by so-called dark money organizations. But sources within the administration say that the governor plans to conditionally veto the legislation (S-1500). Monday is his deadline for taking action on the bill.

Jeffrey Brindle, executive director of the New Jersey Election Law Enforcement Commission, has been asking lawmakers for years to require issue-advocacy organizations that engage in electioneering to report who gave them money. He hopes a CV does not derail that effort.

“I’m still holding out hope the governor will come down on the side of disclosure and transparency and sign the bill,” Brindle said.

Tackling sway of dark money in elections

Popular among citizen groups pushing for greater transparency in election-related ads and other spending, the measure would impact nonprofits known as 501(c)(4)s that engage in electioneering and lobbying but are not currently covered by state contribution-reporting requirements. Under the bill, such groups that spend $3,000 or more on political or lobbying purposes would have to reveal the source of contributions of $10,000 or more.

A number of organizations, both liberal and conservative, oppose the bill. The opponents say it should apply only for electioneering and not to advocacy actions for or against legislation and rules. They also complain that, while many of the groups that would be affected are grassroots nonprofits, 501(c)(6)s or trade organizations would not have to reveal their funders.

“I think the way it was written, it is really a sham bill,” said Ed Potosnak, executive director of the state League of Conservation Voters. He noted that the Assembly Appropriations Committee had expanded the bill to include such trade organizations as the New Jersey Chamber of Commerce and the Fuel Merchants Association, but a week later, these groups were removed when both houses passed the measure.

“They are such powerful lobbying groups, they could get themselves removed,” he said. “But groups like us remained. That gives uneven disclosure requirements.”

Details of Murphy’s concerns remain unknown

A conditional veto allows the governor to object to parts of a bill and propose amendments. While the specific language is not available yet, one administration official said the CV will address flaws in the legislation.

Sinha said the bill is too broad and would impact some 15,000 organizations in the state, most of which — like the ACLU — are nonpartisan and do not endorse or work for or against candidates. The bill defines political communication “in broader terms than any other law at the federal level or state level in the nation,” he said, adding that would include even stating a fact about how a lawmaker voted.

Disclosure would make some donors leery about making contributions, Sinha added.

“Organizations that do important work holding government accountable would have to choose not to do that, or get less money, which could make it harder to do that important work,” he said.

Disclosure for all

Assemblyman Andrew Zwicker (D-Middlesex), prime sponsor of the bill in the Assembly, was not convinced by opponents’ arguments. He said the $10,000 threshold for donor disclosures would not impact groups’ ability to raise funds. And it is not up to lawmakers to try to figure out whether organizations’ intentions are good or bad, but to require disclosure for all.

The bill, first introduced in mid-2016 as an effort to deal with concerns over the increasing influence of dark money in elections, gained traction earlier this year after an organization with ties to Murphy changed its mind about voluntarily disclosing its donors. New Direction New Jersey, which has run ads backing the governor’s agenda, reported to the state Election Law Enforcement Commission that it spent $500,000 on lobbying last year but by law does not have to say where that money came from and it did not do so.

State Sen. President Steve Sweeney (D-Gloucester), whose on-again-off-again feud with Murphy seems to have grown into a battle, earlier this year fast-tracked an amended version of the bill that sought to require disclosure retroactively to January 1, 2018, which would have covered New Direction’s first year. It would not, however, have covered any activities that may have been undertaken by the General Growth Fund — a 501(c)(4) with ties to Sweeney and South Jersey political boss George Norcross — to help Sweeney win re-election in 2017, when the New Jersey Education Association spent millions trying to unseat him.

That retroactivity provision was removed from the bill before its final passage in late March, when the measure got broad bipartisan support, passing 66-2 in the Assembly and 33-0 in the Senate. Those numbers suggest potential success for an effort to override Murphy’s conditional veto, depending on what changes he suggests.

Pressure on the governor to sign

A number of progressive organizations active in the state mobilized yesterday in a last-ditch effort to derail a conditional veto and urged members to call Murphy and ask him to sign the bill.

David Goodman, team leader of the citizens group Represent New Jersey, was disheartened and said a conditional veto “will effectively kill common-sense, dark-money reform” in the state.

"Governor Murphy is turning his back on the New Jersey Legislature, where both chambers voted nearly unanimously to end dark money," he said, “He's turning his back on scores of New Jersey residents who urged him to sign S-1500.”

ELEC reported that dark money groups spent $50 million to influence gubernatorial and legislative races in the state in 2017.

The main problem with dark money is that voters do not know who is paying for ads meant to influence their votes. This makes it more difficult to evaluate those ads when deciding which candidates and public questions to support. Dark money’s influence over campaigns has also been a problem at the national level, particularly in the wake of two U.S. Supreme Court decisions this century. This legislation would affect only groups active in state elections.

At the national level, such well-known groups as the conservative Americans for Prosperity and the liberal Majority Forward are considered dark-money groups; they would not be covered by the state law unless they operate within New Jersey.

ELEC has had some luck in the past getting independent groups to report their election-related activities but has been urging lawmakers to require disclosure by independent groups for years. Currently, only those political nonprofits formed by a gubernatorial candidate who accepts public funding have to file disclosure reports with ELEC, the state’s election watchdog. Murphy, for instance, had to report financial details for the two independent groups he formed before running for office — New Way for New Jersey and New Start NJ.

Zwicker said he has not yet heard from Murphy’s office about the bill and does not want to see a potentially strong disclosure law derailed.

“I can’t comment on rumors,” the Middlesex Democrat said. “I have to wait and see if he actually conditionally vetoes it before deciding what to do next. I can say this: I will be very disappointed if he does.”

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