A new law to prevent political donations by corporations that receive multimillion-dollar public subsidies in New Jersey, proposed following disclosures about awards made by Governor Chris Christie’s administration, took an important step towards implementation on Thursday.
The bill, which would make it a fourth-degree crime punishable by a fine of up to $500,000 to give contributions to political campaigns after receiving a state development subsidy, emerged from a state senate committee and will now move to the full chamber.
Democratic state senators Loretta Weinberg and Raymond Lesniak said they proposed the law after the Guardian disclosed that subsidies totalling $1.25bn had been awarded by Christie’s Economic Development Authority in less than two years to ventures involving firms that made significant donations to Republicans, or had senior executives who did.
Among these were a $106m tax break for the property venture of Christie’s close friend and chief campaign fundraiser, Jon Hanson, and a $223m award to a retail development by Prudential, a major contributor to the Republican Governors Association, a national committee chaired by Christie, and the biggest corporate funder of Christie’s official mansion.
Other politically connected subsidies by Christie’s administration – including an $82m tax credit to the Philadelphia 76ers – have been reported by the journalist David Sirota.
Lesniak called on his colleagues to “get this on to Governor Christie’s desk” in an interview on Thursday. “It’s become very clear to us that Governor Christie has used these tax incentives for fundraising purposes to an extent unparalleled in our state’s history,” he said. “The system is being abused and that needs to stop. We hope this legislation will move quickly through the legislature.”
The bill was reported out of the senate’s state government, wagering, tourism and historic preservation committee on Thursday. It will now receive a second reading in the state senate, where it could be amended.
It currently states that businesses that receive of a public subsidy of $25,000 or more – or any “officer, director, key employee, or principal employee” of those businesses – may not “directly or indirectly, pay or contribute any money or thing of value” to a political candidate or political party in the state.
It goes on to outlaw subsidy recipients from making financial contributions to “any group, committee, or association organized in support of that candidate or political party”, indicating that donations to national campaign groups that give external funds to candidates in New Jersey would also be covered by the plan.
Under the bill, any business caught breaking the proposed legislation could receive a fine of the same value as the subsidy that it received from the state. It could also be barred from receiving future public subsidies and state contracts for goods or services for up to five years.
Political candidates are banned under the bill from soliciting campaign contributions from businesses that are in receipt of state subsidies, or their executives. They would face the same penalties as contributors themselves if they were to be caught doing so.
However, companies or people who have made political contributions in the past would not be blocked from seeking subsidies under the new law. An existing law against so-called “pay to play” bars companies from being awarded state contracts for goods or services worth $17,500 or more if they have made political contributions in the preceding four years.
