New Jersey must redo campaign financing

New Jersey has an urgent need to re-examine its campaign finance laws in the wake of a U.S. Supreme Court decision that has put significant portions of those laws in constitutional jeopardy.

So says Sen. Bill Baroni, R-Hamilton, who calls the court’s 5-4 ruling in Citizens United vs. Federal Election Commission “the most profoundly destabilizing campaign finance decision ever.”

The court “rolled back nearly 100 years of law,” Baroni said, when it ruled that the First amendment allows corporations to spend unlimited amounts to independently support or oppose political candidates. The court also repealed part of the 2002 McCain-Feingold law that barred unions and corporations from buying issue ads in the closing days of an election.

The sweeping decision by the court’s conservative majority has endangered New Jersey’s long-standing ban on political contributions by regulated industries such as banks, insurance companies, utilities and casinos, Baroni said.

“I don’t know how you look at that law and square it with the Citizen United case,” he said. “The court said corporations have a right to expand corporate dollars on political speech. It didn’t say, ‘certain kinds of corporations;’ it said ‘corporations.’”

Baroni, a Seton Hall law professor and one of the Legislature’s leading experts on election funding, is calling for creation of a bipartisan commission to review the state’s campaign finance structure and recommend changes that could withstand a court challenge in the altered judicial environment. He has urged Gov. Chris Christie’s administration and the leaders of the Democratic-controlled Legislature to support the idea.

The senator sees a window of opportunity to do the job this year. New Jersey, unlike neighboring states, has no state elections in 2010, and in addition is enjoying what Baroni calls “a kind of Era of Good Feelings,” with a new governor and a new Legislature saying comforting- sounding things about bipartisanship.

“But imagine if we do nothing,” he said, “and in May 2011, in the middle of elections for the Assembly and the senate. With all new districts (that will result from the 2010 census), a federal court comes down and says our campaign finance structure is unconstitutional.

“Good luck trying to fix it then.”

The proposed commission could call on the Legislature to hold hearings on existing laws and regulations to build a record of findings that could be used to defend those laws in court, Baroni said. He cited as an example the ban on contributions by casinos, which “was purely based on fear of the mob.”

“If you go back to 1975, 1976, as I have, and look at why we created such a strict statutory scheme on casinos, you’ll find it was the fear of organized crime,” Baroni said. “The problem is that nobody argues today that organized crime runs the casinos. It’s multinational corporations. Our legislative history supporting the ban on casino political contributions is based on a false premise.

“So we may need to have new hearings to make the case that even corporate contributions from casinos create (ethical) problems that justify a ban. That’s legislative hard work. But we should do it.”

Eight of the nine justices in the Citizen United case agreed that corporations can be required to disclose their spending and run disclaimers with their election ads. Even so, Baroni isn’t confident that disclosure laws in New Jersey and elsewhere, covering the sources of campaign donations and other information, are safe.

He pointed out that the court, only days after its Citizens United ruling, accepted an appeal from Washington state seeking to prevent the public release of the names of people who signed a petition on grounds that the signers might be harassed. “What we no see is the clear direction the court, and therefore the law, is going,” he said.

Among New Jersey’s anti-corruption laws is one limitation “pay-to-play” contributions to state politicians by individuals and companies doing business with the state. A handful of towns and counties have similar local ordinances. Good-Government leader Harry Pozycki says legal experts have assured him that these laws are unaffected by the Supreme Court’s decision because they are “a public contracting regulation, not campaign finance reform.” The may be right about the state law, Baroni said, but the local ordinances, such as Trenton’s, differ in ways that could put some of them in jeopardy.

That’s another reason that a statewide pay-to-play law that covers all local governments is needed, he said. The Legislature, in enacting such a law, would create a record of debate that could be used to defend it in court. No such record now exists for most of the local bans. If a local law is challenged, “A judge could ask, ‘What’s the reason for this restriction (on political contributions)?’” Baroni said. “If there’s no legislative history providing the reason, there’s a problem.”