From Reuters

NJ Ban on Political Donors Toughest in U.S.


9/23/2004
NJ Ban on Political Donors Toughest in U.S.
Thu Sep 23, 2004 04:57 PM ET
By Jon Hurdle
PHILADELPHIA (Reuters) - New Jersey's new ban on political campaign contributions by companies doing business with the state is the strictest in the nation and will force businesses to compete for state contracts on merit rather than favor, analysts said on Thursday.
Democratic Gov. James McGreevey issued an executive order on Wednesday that, as of Oct. 15 will prohibit financial contributions to state or county political parties, or gubernatorial candidates, by any company that has a contract for state business.
Such contributions are known as "pay to play" and are often criticized for corrupting politicians and eroding competition.
"This catapults New Jersey to the leader of the pack with its state regulation of pay-to-play," said Craig Holman, campaign finance lobbyist for Public Citizen, a Washington- based advocacy group.
Holman said he was "floored" by the announcement, which followed McGreevey's own rejection of earlier pay-to-play legislation.
The order is stronger than other state pay-to-play regulations because it requires companies doing business with the state to submit a legally binding statement that they have not made political contributions, Holman said.
It also closes a loophole in other such laws by applying 18 months before contract negotiations. Businesses that have made political contributions during that 18-month period and then decide to pitch for state business can ask for the money back.
McGreevey's surprise order comes ahead of his scheduled resignation on Nov. 15, an event triggered by his announcement on Aug. 12 that he was gay and had had an extramarital affair with a man.
He said Wednesday that his impending departure had given him the freedom to take actions he had avoided in the past.
Although the status of the new regulations as an executive order leaves them vulnerable to termination by future governors, the rules will increase the pressure for them to become enshrined in law, Holman said.
The regulations will lead to more cost-effective government procurement, said Harry Pozycki, chairman of Common Cause New Jersey, an advocacy group.
Numerous government contracts have been awarded to political contributors at well above the competitive market rate, costing taxpayers dearly and sometimes leading to sub- standard services by companies whose main qualification was that they had made political donations, he said.
Despite the significant proportion of campaign funds -- 20 percent according to some estimates -- that come from state contractors, politicians will not be scrambling for alternative sources of cash because they have gotten far more than they need and now can deal more honestly with contractors, Pozycki said.
"Pay-to-play is the crack cocaine of career politicians," he said.
With the new order, "legislators will feel better that they are not having to deal in the murky world of quid pro quo where they are selling the government for cash."
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