NJ 'Dark Money' Law Dead: Secret Donors To Remain Secret From The Public

New Jersey voters will likely not be able to see which secret special interests poured thousands into state and local elections anytime soon. A federal judge made permanent a ban on a "dark money" law in a court filing Wednesday, bringing to an end two out of three lawsuits that challenged the law as unconstitutional. 

Gov. Phil Murphy signed a bill last June that would require social welfare 501(c)(4) nonprofits and so-called 527 political organizations to publicly report their donors that contribute more than $10,000, as well as spending of more than $3,000 on elections and political activity.

The liberal American Civil Liberties Union and the libertarian groups Americans for Prosperity and the Illinois Opportunity Project all sued weeks later. They took issue with the broadness of the law, which goes further than similar laws in other states and federal law. It required information published about ads that mention regulations, bills and ballot measures, and not just candidates and elections. 

A federal judge in the 3rd Circuit temporarily halted the law in October, which stopped groups from having to tell the public about their donors and spending right before the Assembly and local elections in November 2019.

It's unclear what shadowy groups are trying to sway voters' minds. Nonprofits, high-spending political groups and secret "astroturf" organizations that push messages pretending to come from grassroots support can pump thousands into internet and Facebook ads without having to tell the public anything about their true backers as voters try to make informed political decisions. 

The state came to an agreement with the ACLU and the Illinois Opportunity Project not to enforce the statute, though noted in the consent agreement that the Legislature or the state ethics watchdog could still enact or enforce future legislation or rules along the same lines. Judge Brian Martinotti signed off on the deal Wednesday.

“Today’s order stopping New Jersey’s egregious intrusion into the privacy of donors, members and volunteers for issue-advocacy groups is a clear victory for free speech,” said Patrick Hughes, president and co-founder of the Liberty Justice Center, which represented the Illinois Opportunity Project. “Adopted under the guise of transparency, these laws are designed to allow opponents of advocacy groups to intimidate and harass the organizations’ supporters.”

“This court-approved agreement halts the enforcement of a law that hindered the freedom of assembly, hampered the right to petition government, and compromised privacy rights,” said ACLU-NJ Legal Director Jeanne LoCicero. 

New Jersey is still negotiating with Americans for Prosperity. The nonprofit was the first to file a lawsuit and argued the case before a federal judge, so it is trying to determine who will pay the legal fees. 

The dark money bill's sponsors said they "are working with legislative leadership on the next steps."

“The attorney general's action brings closure to the lawsuits that had kept us in limbo for too long," sponsors Sen. Troy Singleton, D-Burlington, and Assemblyman Andrew Zwicker, D-Middlesex, said in a joint statement. "With the presidential and congressional elections later this year, we expect tens of millions of 'dark money' dollars to be spent in an attempt to influence the outcomes. We must shine a light on who is working secretly to change the course of our elections."

Senate President Stephen Sweeney, D-Gloucester, said lawmakers are working on new legislation that would hold up in court and hope to have a bill enacted in time to cover the next election.

"I am disappointed that the administration did not work more vigorously in the legal effort to enforce the law approved by the Legislature and signed by the governor, but we will not abandon the fight to bring transparency to the dark money interests who influence the political process," Sweeney said. 

The journey of the dark money law was fraught from the start. 

Sweeney quickly shepherded the bill through the Legislature after a nonprofit linked to Murphy reneged on its promise to disclose its donors. 

Murphy vetoed the bill, but after legislators appeared to have enough votes to override the veto, he signed the exact same bill into law despite calling it "unconstitutional." He said he agreed to sign a "cleanup bill" from legislative leaders, but the bill has not been considered by legislative committees. 

Unlike under federal law, New Jersey super PACs that can accept and spend unlimited amounts of money are not required to file public reports that detail their donors and spending.  

Independent groups have skyrocketed since the Supreme Court case Citizens United v. the Federal Election Commission, which gave the go-ahead to corporations and unions to spend as much as they want in elections. 

At least two independent groups spent thousands during the 2019 Assembly races. NJ United, a political nonprofit tied to Assembly Speaker Craig Coughlin, D-Middlesex, released a list of its donors weeks after New Jerseyans went to the ballot box. It received a majority of its funds from the New Jersey Education Association's political group, Garden State Forward. 

A second group, Monday Morning New Jersey, sent out mailers linking Assembly Republican Leader Jon Bramnick and Assemblywoman Nancy Munoz, R-Union, to President Donald Trump and Chris Christie. The nonprofit is run by Democratic fundraiser Raymond Ferraioli and used to be called NJ 4Ward.

The group reported receiving two checks of $2,000 from accountant Steve Wielkotz from Ferraioli, Wielkotz, Cerullo & Cuva and consulting firm CLB Partners in May and June 2019, according to the latest form filed with the Internal Revenue Service in October. Any donors who wrote checks in the months before the election are not yet public, four months after voters went to the polls. 

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