Perfect Storm Against Campaign Contributions


A perfect storm ravages the Garden State.  The month began with the approval to publish Schroeder v. County of Atlantic, Doc.L-2291-14.  Shortly thereafter, Senator Menendez was indicted over his longtime friendship with a millionaire contributor.  Then, just last week, a jury actually convicted Joe Ferriero for using relationships he developed as a County Democratic Chairman to make a living.

Make no mistake.  This is all new law for NJ.

The Menendez indictment means that campaign contributions can be considered a “bribe.”  Exactly when they can be called a “bribe” is at the discretion of the U.S. Attorney.  What matters now, at least as to an indictment, is how THEY see the contribution and not how the giver or receiver see the contribution.

The Ferriero conviction sent another shock wave through the political community—at least for those who aren’t so blinded by their hatred for the man that they can understand the implications of it.  Unless the judge overturns the conviction, expect that the U.S. Attorney will use it to as a weapon to indict whoever else they think might be a “bad guy.”  The Ferriero conviction extends restrictions to earn a living previously thought applicable only to elected officials to political party officials as well.

The Ferriero case did not get any news coverage in South Jersey.  The Schroeder case, emanating from Atlantic County got little coverage in North Jersey.  Both cases, together with the Menendez indictment, should compel a re-examination of local pay to play ordinances in the over 100 towns and counties that have them.

In Schroeder v. County of Atlantic, the accounting firm of Ford-Scott & Associates lost their county contract because they contributed to County Sheriff Balles campaign for state senate.  Pursuant to the county’s pay to play ordinance, the accounting firm was precluded from contributing to Balles campaign account for Sheriff.  However, the accounting firm made a campaign contribution to Balles campaign account for State Senate, the office he is seeking.  The Court ruled that the accounting firm could not contribute to the County Sheriff even though it was for a State Senate position not covered by the county ordinance.

Unless overturned, it is now the law that a local pay to play ordinance bans contributions to a local elected official regardless of the nature of the campaign account he forms.

The ramifications of this case are very broad.  Contributions to an elected official for any office they hold or seek will violate a local pay to play ordinance.  For the grandfathered dual office holders the Schroeder case could be catastrophic.

For example, in Passaic City Gary Schaer, one of the most prolific fundraisers in New Jersey, is both an Assemblyman and a Councilman.  Many, if not all of the vendors who do business with the City of Passaic and the Passaic Board of Education contribute to Gary Schaer’s Assembly campaign account.  The local pay to play ordinance bars those same contributors from giving to his City Council candidate account.  Applying the reasoning in Schroeder, all contributors to Gary Schaer’s Assembly account who are city vendors could now be subject to forfeiture of their city contracts.

Gary Schaer is not alone, as a dual office holder he is just the most obvious collateral damage from the Schroeder case and one of many coming attractions for the entertainment of the news reading public and prosecutors who generally think that all politicians are “bad guys.”

Unless Schroeder is overturned, all counties and municipalities that have adopted local pay to play laws should consider amending their ordinance to include language that narrows the law to candidate committees for office only in that municipality or county.

Unless New Jersey’s elected officials want to continue to endanger themselves with political indictments and subject their contributors to economic harm, the New Jersey State Legislature must address April’s perfect storm with strong and clear amendments to state pay to play laws and the criminal code.  Otherwise they are entirely at the mercy of aggressive prosecutors.

Donald Scarinci is a managing partner at Lyndhurst, N.J. based law firm Scarinci Hollenbeck.  He is also the editor of the Constitutional Law Reporter and Government and Law blogs.

Perfect Storm Against Campaign Contributions