The legislation hopes to end "pay to play," the practice of giving professional services contracts to campaign contributors. Such practices can result in politicians approving overly expensive or unnecessary projects in exchange for campaign support.
Giving someone a government contract in exchange for a political donation is illegal, but often, it is difficult to prove that that was the reason. "Pay to play" laws cut out the possibility of that happening by saying that a business that gave a certain amount cannot get a contract.
As Codey signed the bill into law a week ago Tuesday, the chambers in Trenton erupted into applause. Codey called the bill one of the nation's strongest statewide pay-to-play bans.
Codey's signature had made permanent an executive order that then-Gov. James McGreevey signed last year after he announced his resignation.
"For the past couple of years," Codey said, "people have been talking about ethics in government, about the need to bring back accountability, the need to ban pay-to-play and the need to restore the public's trust. Some people complained about it. Some people tried to get it done. Today, we are getting it done. Today we have backed up our words with action."
Now, companies that gave money to gubernatorial candidates or county and state political parties in the previous 18 months can't get a state contract worth more than $17,500.
Many good government activists said that the signing was the start of new era in New Jersey politics, but the afterglow was short-lived.
That very night, state Democrats held a fund-raiser. According to a story in the Star-Ledger, a Feb. 1 memo written by Angelo Genova, who is the Democractic Party's top lawyer and major fund-raiser, had been distributed among state contractors, many of whom were in attendance at the gala fund-raiser.
According to press reports, Genova also helped write the original executive order that was put forth by McGreevey.
The memo advised that state contractors can still contribute up to $10,000 per year to the Democratic State Committee's federal campaign fund. Because it is a federal fund, it's out of the purview of state campaign finance laws.
And while it is a federal fund, there are few restrictions on how the money can be spent. If the Democrats wanted to spend the money on a gubernatorial or Assembly campaign, they could legally.
The Republicans immediately cried foul. They said it is particularly suspicious that a major figure within the Democratic party, especially someone who helped write the law, would be handing out "cheat sheets" to contractors.
But in an interview with the Bergen Record, Genova said that there is a significant difference between advising potential contributors and purposely helping them find loopholes in the law.
"The law evolves," she said in the story. "It is not black and white. There is absolutely nothing untoward about advising clients about a law; lawyers do it every day. This is a new law and this is a very complicated regulatory environment."
Council candidate in the firm
There is a Hoboken connection with this story. Attorney Peter Cammarano, who is running for Hoboken City Council on Mayor David Roberts' ticket, is member of the law firm of Genova, Burns and Vernoia.
Cammarano said Thursday morning that he did not, in any way, help write or draft the memo. He added he has always supported campaign finance reform and will continue to do so if elected.
"I support the executive order, I support the legislation, and I've been on the record for some time that I support campaign finance reform," Cammarano said.
He added that about three years ago, he authored a law review article that advocated reform.
"I pushed for change even before this was the issue du jour," he said.
But as the election season is in full bloom, it's likely that his opposition will try to connect Cammarano with Genova's memo.
Corzine and Codey won't use loophole
In the days since this controversy hit the press, both Codey and Democratic Gubernatorial candidate (and Hoboken resident) Jon Corzine have distanced themselves from the issue and said that they will not accept contributions that come via this loophole.
"I understand the way this looks," said Codey in the Star-Ledger. "But I had no knowledge of this. I have no idea what prompted the memo or how it came about."
There might be several other gaping problems with the new pay-to-play ban, argue good government advocates. State contractors can still contribute at the municipal level.
Forty municipalities have enacted tougher rules to limit pay-to-play, including Hoboken. Last November, Hoboken voters, by a 9 to 1 margin, voted to limit contributions on a city level.
But that bill might be voided at the start of 2006, because the weaker state law might pre-empt stronger local ones.
Senator Joseph F. Vitale, D-Middlesex, and Republican Senator Peter Inverso, R-Mercer, are currently sponsoring legislation that would allow local governments to enact their own versions of pay-to-play reform. Codey said that he will eventually send the bill to the floor.
In a press release, Codey recently expressed concern that it might be difficult for local and county officials to raise money if there were tighter restrictions in place.
In any case, right now, the state budget is the Senate's major issue, so it's unlikely that the new bill will reach the floor until at least June.