Risky Business - Developers and Political Contributions

In-Sites
(Peter J. Carton)
March 18, 2009
There are extensive Pay to Play restrictions now which impact re-developers. The most specific one is Governor Corzine’s Executive Order 118 (effective November 15, 2008), which extends the pre-existing reportable contribution ban to re-developers and their lobbyists and consultants. It broadly defines banned political contributions and provides that no re-development Agreements may be entered into by state entities if the re-developer has violated the contribution ban.

The banned political contributions are those made by the business entity, its subsidiaries, various third party intermediaries, including partners, members, officers and their spouses and civil union partners, or resident children, excluding therefrom certain contributions made by those entitled to vote for the particular candidate to whom the contribution is made.

To appreciate the breadth of the ban, it has been interpreted to prohibit contributions made to a candidate committee or election fund of a candidate, a holder of the office of Governor or Lieutenant Governor, a state, county or municipal political party committee or legislative leadership committee as well as a state, legislative, county or municipal candidate or office holder in the legislative district, county, or municipality where the re-development agreement is situated. The executive order appears to include re-development agreements required to secure state financing from the New Jersey economic development authority, re-development authority, and environmental infrastructure trust and similarly situated entities.

If you are a re-developer seeking to do governmental work, a specific analysis of any proposed contribution should be made, in order to judge its impact upon existing or proposed re-development work.