NJ Lawmakers Look To Close 'Dark Money' Disclosure Loopholes As Top Democrats Face Flak

The legislation, dormant since 2016 but revived in recent weeks amid questions over “dark money” groups associated with top Democrats, would require so-called “independent expenditure committees” to publicly report their backers and expenditures to the state.

Included in that category are super PACs and traditional 527 groups, which already disclose their donors in federal filings, and 501(c)4 “social welfare” organizations, which do not.

Spending by groups not required to disclose their donors — hence the label “dark money” — has increased dramatically at the state and national levels since the U.S. Supreme Court’s 2010 Citizens United decision, which allowed 501(c)4s and similar organizations to spend unlimited corporate and union money on political activities.

Such groups have operated in New Jersey for years without policymakers jumping to strengthen disclosure rules. But last month, a social welfare group run by some of Gov. Phil Murphy’s closest allies reversed its earlier pledge to disclose its donors. That group, New Direction New Jersey, has run ads promoting the Democratic governor’s budget and calling for a $15 minimum wage.

Then, earlier this month, a 501(c)4 aligned with Democratic power broker George Norcross, called General Growth Fund, came under scrutiny after the parent company of Public Service Electric & Gas mistakenly sent a $55,000 check to another Norcross-affiliated group, a super PAC called General Majority that does disclose its donors. Norcross is a key ally of Senate President Stephen Sweeney, D-Gloucester.

Those events came amid a long-simmering feud between Murphy and Sweeney and inspired both men to call for legislation to increase transparency around special-interest spending. Several other states, including California and New York, have already taken similar steps.

As currently written, the bill backed by Sweeney and scheduled for a Thursday vote in the Senate budget committee, S-1500, would require any group that raises or spends more than $3,000 to influence an election or ballot question to file new financial reports with the state.

The bill sponsor, Sen. Troy Singleton, D-Burlington, said the measure would be revised at Sweeney’s request to also force disclosure for advocacy about legislation or regulations — a definition that would cover the type of ads paid for by New Direction New Jersey. 

Sweeney has said he wants the bill to be retroactive to the start of 2018. Singleton said he’s still waiting for an opinion from the nonpartisan Office of Legislative Services as to whether such a provision would be legal. 

Regardless of the motivation for starting to move the bill through the Legislature, Singleton said the measure would help add accountability to special-interest spending and help rebuild public trust in government.

“There’s this continued growing cynicism that happens between the public and those who are represented to elect them pretty much on all levels of government,” Singleton said. “So this idea of seeking transparency through greater disclosure, I think it empowers voters to hold all of us, all of as elected officials, accountable.” 

The measure would also marginally increase contribution limits for donations to candidates and political parties. Joseph Donohue, deputy director at the state Election Law Enforcement Commission, said increasing those limits accounts for inflation since the last time they were raised in 2005 and would help redirect money from special-interest groups.

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