Shadow Armies Eviscerate Campaign Disclosure and Pay-To-Play Rules

by: Bill Orr

Sun Feb 13, 2011 at 10:30:00 AM EST

New Jersey has at least two such Republican shadow groups: Reform Jersey Now, which says it ceased its operations after raising $624,000, and The Center for a Better New Jersey which is still operating.  Both hew close to Governor Christie's agenda, and the latter seems most active in influencing a favorable Republican outcome in the current redistricting process. Both groups gain the advantage of not having  to disclose their donors while they operate  at the margins of two IRS requirements and wreak havoc on our pay-to-play laws.

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As Senator Baucus pointed out in his letter, "IRS regulations prevent private individuals or organizations from using tax exempt organizations to benefit their private interests or profit from the tax exempt organization's activities." The belatedly released list of donors to Reform Jersey Now includes individuals and organizations doing business with the state - also known as "pay-to play." As the Center for a Better NJ has not released its donors, it is unknown whether there are conflicts of interest here as well. One donor recently discovered is U. S. Representative Rodney Frelinghuysen (R-11) who contributed $10,000.

As Sen. Baucus goes on to ask, "Is the tax code being used to eliminate transparency in the funding of our elections?" The answer is clearly "Yes." Groups which allow "political campaigning to be their primary activity" or which allow "contributors to benefit their private interests" can and should lose their tax exempt status. The IRS, has been slow to take action and needs to bring its enforcement arm to bear on this problem.

Senator Loretta Weinberg (D-37) has been leading efforts to investigate Reform Jersey Now, change NJ disclosure rules for 501(c)(4)'s, and close loopholes in our 6-year-old state law designed to limit pay-to-play. Both through the IRS and state law we need to create more campaign disclosure, reduce pay-to-play, and reform 501(c)(4)'s.