Most states allow campaigns to keep secret only those donors who give $100, $50 or even less, according to a survey of election finance laws, and at least a half a dozen require them to make public the names of all donors. But in New Jersey, campaigns do not have to report any information about people who contribute $300 or less.
The state’s rule allowing campaigns to keep these donors anonymous is gaining new attention after one of the state’s most influential engineering firms, Birdsall Services Group, and seven former executives were recently indicted for allegedly funneling more than $686,000 through employees to elected officials in chunks of $300 or less.
Prosecutors say the company received millions in public contracts in return. But because of the rule, the officials awarding those contracts did not have to tell the public who gave them the money. The Attorney General’s Office has declined to say which campaigns got Birdsall money.
In response to The Star-Ledger’s findings, the executive director of the state Election Law Enforcement Commission, Jeffrey Brindle, said he would consider recommending the threshold for disclosing donors be reduced to bring New Jersey more in line with the rest of the country.
“I’m sure the commission will think about this really seriously,” Brindle said.
Campaign finance experts said changing the rules would make it tougher for companies, such as Birdsall, and their employees to give large sums of money in several smaller donations — and make it more difficult for elected officials to hide who is influencing them.
“The value of transparency, it’s like the value of a good highway,” said Edwin Bender, executive director of the National Institute on Money in State Politics. “It only works if you maintain it. So you fix potholes. And this is a really big pothole in transparency in New Jersey.”
In New York and Delaware, campaigns have to disclose their donors for contributions of more than $100, while those in Pennsylvania and Connecticut have to report at more than $50. Maryland, Ohio, Florida and several other states require disclosure regardless of the amount.
In New Jersey, campaigns have the option to voluntarily disclose the information of all donors. For example, campaign finance records show that in 2011, the Essex County Democratic Committee reported nearly all of its $21,852 in contributions of $300 or less.
“I just don’t know the reason for the $300 limit,” said Phil Thigpen, the committee’s chairman. “I don’t see any reason for not letting people know everything.”
But most county political committees chose to keep that information to themselves. The Morris County Republican Committee reported in 2011 that more than half of its $108,080 in total contributions came in at $300 or less, but it disclosed donors for only $8,050 of that amount.
RELIES ON CPA
“I hired a CPA, that’s all the guy does,” said John Sette, the committee’s chairman. “As far as I know, he just followed the law.”
The disclosure threshold in New Jersey was first proposed at $25 in the early 1970s, when work began in earnest on the state’s most significant campaign finance law, said Bill Schluter, a former Republican state senator who helped draft the measure.
But in order to get the law passed, Schluter said, the final amount was set at $100. It rose to as high as $400 before being frozen at $300 in 2004. Schluter said in light of the Birdsall case, the amount should be reduced.
“Disclosure is the first defense against contributions from bad people,” he said.
Historically, thresholds limiting disclosing donors were set for a practical reason: keeping paperwork filed with election officials at a manageable level, Bender said.
But most campaigns now keep electronic records, he said, making it easier and more efficient for them to disclose everything.
Alan Rosenthal, a public policy professor at Rutgers University, said contributors and campaigns alike generally prefer not to have information about donations made public.
He said some donors want their contributions secret for privacy reasons, while others who do public business may not want one political party to know they’re giving to the opposition.
“There are always going to be ways to hide some of this stuff,” Rosenthal said.
In Birdsall’s case, the contributions were made at $300 or less not only to evade reporting requirements, authorities said, but to avoid being disqualified from public contracts. State law limits companies with $17,500 or more in public contracts to $300 or less in contributions.
Authorities also claim Birdsall illegally reimbursed the employee contributions with bonuses.
MORE WOULD BE PUBLIC
If the reporting requirement was lower, the experts said, companies would still want to contribute the maximum $300, but a lot more of those contributions would be made public.
“Having a reporting threshold that is reasonable, $50 to $100, is the kind of policy that says, OK, we want people to feel comfortable participating at some level but we don’t want to necessarily create the subterfuge that you’re seeing now,” Bender said.