Executive Director Jeff Brindle of the Election Law Enforcement Commission is calling for comprehensive pay-to-play reform after critics revealed a loophole in Trenton’s laws. The loophole became apparent after a South Jersey law firm was awarded a contract with the city worth up to $20,000.

One of the firm’s founding partners was serving as the treasurer of a PAC when the PAC donated $8,200 to the election campaign of Trenton Mayor Eric Jackson. Because neither the law firm nor any of its partners made a donation to the PAC, the contract award was not deemed a violation of the city’s pay-to-play law.

Critics, however, want the law revised to include such contract awards. Part of Brindle’s recommendations for reform include simplifying complex laws, creating a single pay-to-play law to apply to all governments at the state, county, and local levels, and prohibiting the pay-to-play loophole for publicly bid contracts.

On July 30, the Chicago City Council enacted amendments to the Governmental Ethics Ordinance, chapter 2-156 of the Municipal Code of Chicago.

Changes include granting the Board of Ethics authority to review campaign finance filings and to refer potential violations to the appropriate investigating authority. Pay-to-play provisions have also been amended, affecting vendors, lobbyists, and any other person seeking to do business with the city.

Penalties are currently imposed only on the candidate, official, or employee accepting a prohibited contribution. Under the revised ordinance, however, the penalty provisions will also apply to persons making such contributions.

The amendments take effect September 10.

The Republican parties of New York and Tennessee have filed suit in U.S. District Court for the District of Columbia challenging Securities and Exchange Commission (SEC) Rule 206(4)-5. The plaintiffs allege the rule, which imposes restrictions upon investment advisors and their covered associates making contributions to officials of state and local government entities, violates the freedom of speech protections of the First Amendment.

The suit also takes the position that the SEC does not have the authority to regulate campaign contributions.

If struck down, the elimination of the rule would make it easier for any state governor making a run for president to raise money from the financial sector.

For the first time, the U.S. Securities and Exchange Commission (SEC) has charged a firm with violations of its pay-to-play rules. On June 20, the SEC charged TL Ventures Inc., a private equity firm, with receiving advisory fees from the pension funds of both Philadelphia and Pennsylvania after an associate of the firm had made campaign contributions in 2011 to the governor and a candidate for mayor.

Federal regulations prohibit investment advisers and their covered associates who make contributions to officials of state and local government entities from providing compensatory advisory services for two years following a campaign contribution. TL Ventures Inc. has agreed to settle the charges by paying nearly $300,000.

By a vote of 6-1, the Bergen County Board of Freeholders has, for the second time in less than a year, reformed the county’s pay-to-play laws.

Essentially reversing the May 2013 bill, Monday’s resolution lowers the allowed contribution from no-bid county contractors from $5,200 to $2,000.

Freeholder John Felice, the only individual to vote against the bill, worries it may result in only wealthy citizens running for office.

Phil Mendelson, the chairman of the Council of the District of Columbia, introduced a bill that would bar people who made political contributions from obtaining contracts or doing other business with the city.

Mendelson said the motivation behind his bill was to end the perception of pay-to-play in Washington, D.C.

By a vote of 6-1, the Bergen County Board of Freeholders introduced a resolution to reverse last year’s pay-to-play ordinance.

The resolution would lower the allowed campaign contribution from no-bid contractors from $5,200 to $2,000.

County Executive Kathleen Donovan vetoed last year’s limits but is said to support the latest introduced changes.

The Ethics Commission has approved a regulation providing a method for candidates and campaign committees to comply with due diligence requirements of the pay-to-play restrictions.

Code section 1.126 prohibits a city or county contractor from contributing to a candidate who can determine whether a contract is awarded.

Regulation 1.126-7 will require the contributor to certify he or she is not an not an owner, director, officer, or named subcontractor of any entity currently negotiating or recently awarded a contract with the city, county, or other covered agency.

The regulation is effective January 24, 2014.

The DuPage County Board repealed its pay-to-play provisions after learning from the state’s attorney’s office the provisions were unenforceable. As a non-home rule county, the county did not have the power to act on limiting campaign contributions because it was not specifically granted that power by the state legislature.

The changes were enacted as part of an otherwise minor update to the county’s ethics code. Provisions requiring disclosure of campaign contributions by contractors remain in place.

Treasurer Mark J. Saladino announced his office will no longer do business with securities brokers making political contributions to school bond campaigns. The pay-to-play policy is an attempt to prevent campaign donations from influencing the hiring of underwriters by school districts. The policy is also expected to increase competition between dealers and save taxpayer dollars.

Under the new policy, underwriters must not donate to school bond measures if they want to qualify for the treasurer’s list of investment banks and securities dealers eligible to sell county bonds. The restriction applies to monetary donations, non-monetary contributions, and pre-election services.

In statewide surveys, virtually every securities broker hired by a school district contributed to the district’s bond campaign and was retained without competitive bidding. A recent study focusing on California school bond issues found post-election fees paid to underwriters making contributions were on average $27,576 more than those paid to brokers not contributing.

Lobbying

“August recess now high season for interests lobbying lawmakers” by Matea Gold in The Washington Post.

Massachusetts: “Mass. casino lobbying tapering off on Beacon Hill as firms train money on host communities” by Steve LeBlanc (Associated Press) in The Republic.

Oklahoma: “Freshman Oklahoma lawmaker top recipient of lobbyist attention” by Michael McNutt in The Oklahoman.

Wisconsin: “Lobbying spending by public unions drops sharply” by The Associated Press in the Miami Herald.

Campaign Finance

“Report: Dead donors gave $586K” by Tal Kopan in Politico.

Texas: “New Open-Source Tool Gives Texans Faster Access to Campaign Finance Data” by Miranda Neubauer in TechPresident.

Ethics

“Congressional Pressure on FEC Criticized” by Kent Cooper in Roll Call.

Maryland: “Ethics complaint questions Vallario’s dual roles as legislator and lawyer” by John Wagner in The Washington Post.

Oklahoma: “Outdated software plagues Oklahoma Ethics Commission” by Michael McNutt in The Oklahoman.

Pay-to-Play

New Jersey: “Bill would close loophole in N.J. pay-to-play law” by Claudia Vargas in the Philadelphia Inquirer.

Government Tech and Social Media

“Georgia Saving Millions with Open Source Technology” by Brian Heaton in Government Technology.

From the State Legislatures

“The rise of one-party rule in the states” by Craig Gilbert in the Journal Sentinel.

California: “Lawmakers make final push” by Melody Gutierrez in The Sacramento Bee.

California: “Crunch time: Deals loom as clock ticks” by Greg Lucas in Capitol Weekly.

California: “Assembly returns without supermajority” by Christopher Arns in the Sacramento Business Journal.

The Alabama Legislature adjourned just before midnight on Monday, May 20, 2013, but not before passing major changes to the state’s Fair Campaign Practices Act.

The most significant change is the elimination of limits on corporate contributions to candidates and political action committees. Under the new law, corporations will be permitted to contribute in the same manner as individuals, who are not subject to any contribution limits, with the exception of retaining the state’s pay-to-play prohibition on contributions to the Public Service Commission by utilities the commission regulates. The bill also makes 527 organizations subject to the ban on PAC-to-PAC transfers and adds enforcement and penalty provisions.

The Secretary of State’s Office will release information regarding the effective date of these provisions since the law must first receive Department of Justice preclearance before it becomes enforceable.

On May 15, the Bergen County, New Jersey Board of Chosen Freeholders voted to override County Executive Kathleen A. Donovan’s veto of the new pay-to-play ordinance that passed on May 1.

This is the second pay-to-play ordinance vetoed by the county executive in the last eight months. On October 5, 2012, Donovan had vetoed a prior pay-to-play measure passed by the Board.

Freeholder Ordinance 13-06 changes the code to include lowering the debarment period for future county contracts from four years to one year. Under the new ordinance, contractors will also be able to make political contributions up to $5,200 to county political parties.

According to NorthJersey.com, another vote on the ordinance is required because the public notice for the legislation was not properly published. The board next meets on Wednesday, May 22.

Bergen County, New Jersey County Executive Kathleen A. Donovan has vetoed the Board of Chosen Freeholders’ new pay-to-play ordinance that passed on May 1.

This is the second pay-to-play ordinance vetoed by the county executive in the last eight months. On October 5, 2012, Donovan had vetoed a prior pay-to-play measure passed by the Board.

In her press release, the county executive called the newer legislation “an ill-conceived attempt to weaken what has been described as one of the strongest ordinances banning pay-to-play in the State of New Jersey.” Among the reasons cited by Donovan for the veto of Freeholder Ordinance 13-06 are the increase in contribution limits and the weakening of penalties for those found in violation of the pay-to-play law.

Because the new ordinance initially passed by a 6-1 vote, the veto could be overridden by the Board in a future vote.