On Thursday, May 12, the House Committee on Oversight and Government Reform and the House Small Business Committee will hold a joint hearing to examine a proposed presidential executive order requiring disclosure of political contributions by governmental contractors.

The draft proposed executive order, which was leaked to the press, would require every entity submitting offers for federal contracts to disclose certain political contributions and expenditures made within the two years prior to submission of their offer. The disclosure requirement includes contributions made to federal candidates, parties, and committees, by the bidding entity, its officers, and any affiliates or subsidiaries within its control. Contributions made to parties for independent expenditures and electioneering communications would also have to be reported. These disclosures would be required whenever the aggregate amount of the contributions and expenditures by the bidding entity exceeds $5,000.

The hearing is scheduled to examine the proposed executive order, evaluate its impact and consequences on the federal acquisition system, and determine whether it introduces politics into the procurement process.

House Bill 139, a bill aimed at limiting pay-to-play activities in the state, began moving through committees last week.

The bill seeks to limit vendors who have a state contract of greater than $25,000 from contributing in excess of $500 per election to a candidate or candidate committee for a public servant if the public servant would have authority over the contract with the vendor.

House Bill 139 is similar to a bill introduced during the prior legislative session; however, that bill was left out of a series of ethics reforms eventually approved by the legislature.

Photo of the North Carolina State Legislative Building by Jayron32 on Wikipedia.

Assembly Bill 860 would prohibit corporations or labor unions from making contributions to a candidate for elected office. Additionally, this legislation would strengthen the state pay-to-play laws.

The bill would prohibit government contractors from making contributions to an official or candidate who is or would be elected to a position responsible for awarding a government contract to the contributor.

Finally, this bill would also prohibit any employer from using payroll deduction to fund any political activity.

Photo of the California State Capitol by Nikopoley on Wikipedia.

The City of Paterson has implemented a new pay-to-play ordinance which enhances the rules concerning contribution limits for entities doing business with the city. Ordinance 11-006 includes an absolute ban on contributions between the time of first communication regarding a specific agreement and the termination of negotiations, the rejection of a proposal, or the completion of a contract. The ordinance also outlines specific contribution limits, in the 12 months prior to a contract, to mayoral and governing body candidates and their committees, joint candidate committees, Passiac County political committees, and PACs.

In order to receive financial aid from the state, the City of Paterson’s passage of the legislation was required by an earlier agreement with the New Jersey Transitional Aid to Localities program, the state’s financial aid program for local municipalities and counties.

Map of Paterson in southern Passaic County, New Jersey by JimIrwin on Wikipedia.

The U.S. House of Representatives has passed the State Ethics Law Protection Act. H.R. 3427 would preclude the Federal Highway Administration from interpreting a state’s Pay-to-Play laws as conflicting with federal contract bidding requirements for federal-aid highway projects.

The measure has now passed to the Senate Committee on Environment and Public Works.

The proposal would end the “fair and open contract” exception for businesses which make reportable campaign contributions at the legislative, county, and municipal levels, yet are able to receive contract awards valued greater than $17,500 with local governments – a practice not permitted at the state or gubernatorial level. The new legislation would also restrict the practice of “wheeling” by imposing contribution limitations on county and municipal committees which transfer money between committees and transfer committee contributions to out-of-county or out-of-municipality candidates.

ELEC recommends four Pay-to-Play reform steps it would like to see passed into law. First, ELEC recommends any reform of Pay-to-Play regulations should address the patchwork quilt of local Pay-to-Play laws which have developed over time. Current state law allows municipalities and counties to adopt their own ordinances provided they are consistent with the theme of “Pay-to-Play”. The lack of a standardized Pay-to-Play theme across jurisdictions has led to a myriad collection of laws which vary from place to place throughout the state.

Second, ELEC would like to see the confusing “Fair and Open” loophole as it is known, closed at the local level. “Fair and Open” allows local governments to forego the Pay-to-Play rules where bids are publicly advertised. In such a case, the $300 campaign contribution limit imposed by state law does not apply if a local jurisdiction has its own procedures for bidding and awarding contracts.

Third, ELEC asks for every public contract over $17,500 to be subject to disclosure requirements which are now reserved for vendors whose contracts exceed $50,000 statewide. Finally, ELEC would like to see the campaign contribution limit raised above $300. Citing the high cost of media advertising in New Jersey, ELEC states that the present limits provided by law are comparatively low.

The commission explains it is mindful of public concerns regarding the presence of money in politics. That said, ELEC feels its recommendations regarding contribution limits would be offset by corresponding enhancements to disclosure requirements. The ELEC newsletter may be found at: www.elec.state.nj.us .