In NJ, Large Campaign Contributors Have a Conflicted Relationship

Good news:  Westminster is not alone. No, I am not referring to the British Parliament or the New York dog show. I am referring to the Westminster, CO law that says that a campaign contributor has a relationship with the recipient of a sizeable campaign contribution that gives rise to a conflict of interest and requires the recipient's withdrawal from participation in any matter involving the contributor (see my blog post on what I call the Westminster Approach).

It has been pointed out to me that New Jersey has a similar rule. In fact, it is not a law, but a rule of the state ethics commission, and it only applies to state officials. §19:61-7.4(c) states that:

A State official is required to recuse himself or herself from an official matter that involves any individual, association, corporation or other entity from which the State official received a campaign contribution, individually or in the aggregate, in an amount required to be reported by N.J.A.C. 19:25-10 [that is, $300]. Recusal is required regardless of whether the State official is elected to the office or position associated with the campaign contribution. The recusal shall remain in effect until the expiration of the term of office which the State official was seeking when the contribution was made.

The directness of the Westminster-Jersey approach is admirable. It goes straight to why campaign finance is part of government ethics:  it's really about conflicts of interest. Beyond disclosure, campaign finance laws tend to focus on restricting campaign contributions, an indirect approach that is becoming increasingly problematic every day.

The Westminster-Jersey approach does not stand in the way of the First Amendment, at least if you don't subscribe to the idea that it was meant to protect officials' right to appear corrupt when they vote. This approach allows citizens, even corporations, to give whatever they want to whomever they want, they just can't have their cake and eat it, too (that expression, in its correct, reverse form, long predates our founding fathers, but I'm sure they embraced it).

How It Works
How does this rule work? When a matter comes before an elected official that might benefit, directly or indirectly, an individual or entity that recently gave that official one or more sizeable campaign contributions, then the elected official must withdraw from participation in that matter.

If the official does not recognize or disclose the conflict, anyone can point out that the official received the contribution(s) and, if the official refuses to withdraw, a complaint could be filed (a complaint could even be filed without first pointing this out, but an official might argue that he was not aware of the contribution(s)). In a board situation, the other board members could vote that the official withdraw; in other situations, a supervisor could require withdrawal.

Limitations of This Approach
The approach does have its limitations. For example, there would be no conflict if a contribution were made to the official the day after the vote.

In addition, an individual or entity that knows it will have business before a council could give large contributions to all council members, if they run at the same time, and then, according to the Rule of Necessity, they all would be able to vote. Or contributions could be made to enough candidates that oppose a contract or project, so that the contract or project goes through.

In other words, like almost any government ethics law, this one too can be gamed. But I think it would backfire on the contractor, developer, or whatever when the ruse came out. And it would be hard to hide. So although it seems like a serious loophole, one use of it would probably create a scandal and make it hard for anyone else to try.

Seek Advice
There's another rule in §19:61-7.4 that I was happy to see:

An incompatible financial or personal interest may exist in other situations which are not clearly within the provisions of (d) and (e) above, depending on the totality of the circumstances. A State official should contact his or her agency ethics liaison officer or the Commission for guidance in such cases.

This is the kind of rule that does not generally appear in ethics codes, but should appear somewhere. It acknowledges the limitations of ethics rules, and the fact that ethics and officials' obligations go beyond the words in a law. And it makes it clear how important ethics advice is. Actually, seeking ethics advice should be Rule No. 1.

Robert Wechsler
Director of Research-Retired, City Ethics

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