A level playing field: Use 2004 lessons to perfect election rules
Datona Beach Florida News-Journal, Sept. 18, 2004

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When the massive McCain-Feingold campaign finance reform bill passed, many experts warned Congress that the legislation left loopholes.
Those warnings soon proved true. In this election cycle, millions of dollars in contributions have poured into so-called "527" groups (named for the section of the tax code that authorized them.) Under the law, the groups can run ads, canvass, sponsor voter-registration drives and engage in other election-related activity as long as they don't coordinate directly with particular campaigns.

The 527 experience hasn't been all bad. Two of the biggest groups -- MoveOn and America Coming Together, or ACT -- are playing a central role in the re-emergence of grassroots politics in this country by linking thousands of volunteers through the Internet and person-to-person contacts.

Critics have concentrated their ire on a few big donors, like billionaire George Soros, who contributed heavily to America Coming Together and the Media Fund, another liberal 527, and Robert Perry, the Texas businessman who provided the initial stake for the Swift Boat group. But many of these groups are also turning fund-raising on its head by soliciting small donations over the Web, and letting donors track progress in real time.

The dark side of 527s is also emerging, with the proliferation of attack ads that smear a candidate while leaving his or her opponent with seemingly clean hands. Betty Castor ran afoul of a 527 during Florida's Democratic primary for U.S. Senate, and the group Swift Boat Veterans for Truth unleashed ads that deceptively attacked Sen. John Kerry's service in Vietnam.

The Federal Elections Commission was asked, months ago, to consider putting 527 groups under the same rules governing other campaign groups -- including contribution limits, restrictions on how and when ads run, and better disclosure laws. That would have been a smart thing to do -- then. Unfortunately, the FEC didn't act. With the election less than two months away, changing the ground rules now would be grossly unfair and chaotic. The commission appears to recognize that.

When it does finally address the issue, the commission should address the issue in a balanced way that curbs the abuses without stifling the excitement and sense of participation that draw so many people to 527s.

There are important lessons to be learned. One of the greatest is that few of these organizations have proven to be purely partisan. In fact, many 527 contributors say they're drawn to the groups because they're tired of traditional party-based politics, and want the opportunity to have a more direct influence. That's democracy at its best, and it deserves the chance to grow.

But the other lesson is that -- by serving as attack dogs -- these groups can become mechanisms that irresponsibly degrade political debate. The best way to block that hazard is to put 527s under the same kinds of disclosure and accountability rules that other campaign groups face. With the experience of the 2004 election behind it, the commission will have a clearer view of the best way to accomplish fair regulation.


An Order to Reclaim 'the Integrity of the Government'
NY TIMES, September 23, 2004

Following are excerpts from Gov. James E. McGreevey's statement yesterday announcing his order banning campaign contributions by vendors that do business with government agencies in New Jersey:

For better or worse, recent events have been a catalyst, providing me with a personal and political freedom that has enabled me to confront challenges I have avoided in the past. Time will afford plenty of opportunity for me as an individual citizen to process my own personal issues. However, my few remaining days as your governor require me, in fairness to you, the people I serve, to take quick action on governmental challenges. One of the issues which has caused me discomfort but with which I had avoided is the pay-to-play system in New Jersey.

Today, the relationship between political fund-raising and government operations has become corrosive and cancerous. Legitimate lines of behavior are blurred, ethical ambiguities are the norm and the need to sustain an all-consuming fund-raising effort has become almost as important as the function of government itself.

In county and state government, elected officials have become all too mindful as to who supports our political success through fund-raising efforts. The wall, the separation, between politics and government, between campaign finance and government operations, between state interest and personal interests, has disintegrated.

To be clear, most contractors and vendors who happen to be donors provide outstanding service and do not expect a quid pro quo. I have also seen, and believe, that most elected officials are honest, act with integrity and distinguish clearly between their elected office and their political roles. However, the existence of the pay-to-play system raises the possibility of line crossing.

Perhaps even more importantly, the existence of the system has eroded the public confidence in the integrity of the government.

The fault lies, not merely in the person, but in the system which now exists. The system, by definition, appeals to human weakness. It offers a temptation to elected officials and contractors to place their respective personal interests ahead of the interest of the state.

I am issuing an executive order today which will forbid a contractor doing business with the State of New Jersey from contributing to a gubernatorial candidate or any state or county political organization. The order also restricts contributions by certain 527 organizations and contains disclosure requirements.

To my colleagues in government, I know that this may cause consternation and anger. Change can be uncomfortable. The goal is to liberate those who seek to serve to do so unfettered by these possible conflicts, and it will reassure the people we serve that we do so honestly and decently. I take this action recognizing that cynics may say that I am doing this to create a legacy for myself - a Hail Mary pass of sorts to seek redemption. Critics will say what they will, but I tell you, I do not hold onto some hopeful notion that I will be known for much more than as the governor who resigned - and I am at peace with that. Others may say that I am hypocritical, in biting the hand that fed me. Believe me, I am more aware than ever of my own frailties, but that does not justify inaction.

Apart from judging or determining the moral framework of this action, this executive order itself will hopefully transcend all political carping and speculation about motives and will instead provide for a better New Jersey.

And finally, to the citizens of New Jersey, I have felt your goodness. I have felt your kindness. I now know that we are capable of doing great things. One may not be able to change the past, but we can learn from it and we certainly can change the future.

Today, finally, I am seeking to put an end to politics as usual in Trenton. God knows I wish that the circumstances were different, but they aren't. In a few minutes I will be signing executive order No. 1,000, which will provide the most sweeping campaign finance reform this state has ever seen.

And I know in my heart of hearts that this is the right thing to do. Thank you.


New Jersey Bars Contracts for Political Donors
By LAURA MANSNERUS, NY TIMES, September 23, 2004

TRENTON, Sept. 22 - With only weeks until he steps down, Gov. James E. McGreevey issued a broad order on Wednesday that attempts to break the link between political contributions and government contracts in a state rattled by one corruption scandal after another.

The executive order, which is to take effect on Oct. 15, prohibits the awarding of most state contracts to businesses that have contributed to state or county political committees or gubernatorial candidates. Last year, the two state party committees raised a total of $17.3 million from individuals, groups and businesses - $14.3 million alone by Mr. McGreevey's Democratic Party. County political committees raised nearly $30 million more.

Advocates of the changes said they were the strictest in the nation.

The order was signed by Mr. McGreevey, one of the most prolific fund-raisers in New Jersey history, at an emotional public event at which he cited the goodness and kindness of New Jerseyans, and said he finally could seek "to put an end to politics as usual in Trenton."

Mr. McGreevey said he took the action because the state's notorious "pay to play" system had become "corrosive and cancerous." His resignation and impending departure, he said, had given him "a personal and political freedom that has enabled me to confront challenges I have avoided in the past."

Mr. McGreevey's aides had said he would use his time remaining in office to address many of the issues he could not - or would not - resolve during his two and a half years in office. Mr. McGreevey announced on Aug. 12 that he was gay and had an affair outside his marriage, and that he would step down on Nov. 15.

His order will remain in effect unless a future governor revokes it. Richard J. Codey, the Senate president, who will serve out the last 14 months of Mr. McGreevey's term, pledged to keep the order in place "as long as the sun continues to rise in the East and set in the West while I am acting governor."

Under the executive order, state agencies and independent authorities will be prohibited from awarding contracts to businesses that have contributed to a gubernatorial candidate or a state- or county-level political committee. It will also apply to individuals who own or control more than 10 percent of a company or partnership. Advocacy groups known as 527's that are controlled by such businesses also fall under the order.

The measure applies to state contracts in excess of $17,500, but will not affect county and municipal contracts, unlike a bill earlier this year that failed to pass in the Legislature. Those contracts account for about half of all government spending in New Jersey. The restrictions also do not apply to legislative candidates or the powerful political action committees controlled by legislative leaders. Last year, those legislative leadership committees raised $12.6 million.

Still, the new rules are the strictest in the nation, according to Craig Holman, the campaign finance lobbyist for Public Citizen in Washington, who helped draft the first pay-to-play proposal in Trenton almost three years ago - a proposal that was not adopted. "I'm delighted," Mr. Holman said. "This is much more sweeping than what any other state has come up with."

Mr. Holman said only four states had adopted official pay-to-play policies, although he noted that many others had stricter campaign contribution limits and that others had not been so rife with pay-to-play scandals as New Jersey.

Mr. McGreevey's aides said they were confident that his order would withstand any legal challenge in what they acknowledged was a largely untested field of regulation.

One proponent of the restrictions, Harry S. Pozycki, the chairman of Common Cause New Jersey, said he was confident that "constitutionally, it's on all fours, and it's certainly within the authority of the governor to do this."

Mr. Pozycki noted that the state Chamber of Commerce had supported the strongest possible restrictions. "The chamber calls pay-to-play extortion," he said. "The only ones who liked this were the county and state bosses, and that's where the addiction is. The governor doesn't have that addiction anymore."

Mr. McGreevey called the pay-to-play phenomenon "an issue that has haunted us for years" and a system that, "by definition, appeals to human weakness."

Allowing that some "may say that I am hypocritical, in biting the hand that fed me," the governor said, "Believe me, I am more aware than ever of my own frailties, but that does not justify inaction."

Mr. McGreevey also said that "to my colleagues in government, I know that this may cause consternation and anger."

Legislators gave generally positive reviews to the initiative, many promising to take up legislative proposals to accomplish what the governor could not. Legislative Republicans, who had pushed hard for the measure barring contracts for campaign contributors at all levels of government, said they would try again.

The Assembly Republican leader, Alex DeCroce, and Assemblyman Kevin O'Toole, the sponsor of the comprehensive measure, said in a statement that they hoped "the Democrat-controlled legislature will take the not very subtle hint from Governor McGreevey" and agree to schedule another vote on it.

The Assembly speaker, Albio Sires, and the Assembly majority leader, Joseph J. Roberts Jr., both Democrats, said the executive order "constitutes another significant leap forward in the effort to curtail campaign spending and limit the impact that special interest money can have in the political process." They pledged to review the order carefully to see if it presented any constitutional problems.

In the spring, Mr. Sires and Mr. Roberts rejected the comprehensive measure as lacking the constitutionally required connection between the donor and the people responsible for awarding contracts. Without such a connection, they said, restricting a contributor's gifts might infringe on his right to free speech.

In place of the legislation supported by Common Cause and the Republicans and approved by the Senate last year, the Assembly Democrats adopted a much weaker version, as part of a larger package of new ethics regulations.

Mr. McGreevey, who publicly refused to take sides in that dispute, said Wednesday that while he might be criticized for doing too little, too late, "I ask, if not now, when?"

New Jersey politics at every level has been roiled by scandal in recent years. Last month, Charles Kushner, Mr. McGreevey's biggest fund-raiser, pleaded guilty to witness tampering in connection with a campaign finance investigation, and last week another Democratic fund-raiser, David D'Amiano, pleaded guilty to mail fraud. At least a dozen public officials, including the Essex and Hudson County executives, have also been prosecuted in the two and a half years since Mr. McGreevey took office.

In addition, United States Senator Robert G. Torricelli was forced to drop his re-election bid in 2002 after revelations about his relationship with a contributor.

Mr. McGreevey's executive order is expected to stem the flow of cash into the county political organizations, which are a major locus of fund-raising for races at all levels of government in New Jersey. At the same time, many in Trenton warned, campaign money is likely to find other routes.

The executive order addresses the possibility of circumvention by prohibiting businesses from making or soliciting contributions through intermediaries or with the agreement that it will be channeled elsewhere.

The order prohibits the awarding of contracts to any business entity that contributed to a party organization within 18 months of the beginning of contract negotiations. In the case of contributions to the governor, the prohibition would continue through the end of the term.

Mr. Codey, because he will retain his post as Senate president while he is acting governor, will be in a position to steer legislation through the Senate. He supported the proposals for restrictions at all levels of government last spring, which originally had some Democratic sponsors, but acceded to the Assembly leadership in the battle.

As he spoke, Mr. McGreevey returned to his decision to change "politics as usual in Trenton," he said, "God knows, I wish that the circumstances were different."