Law banning pay-to-play survives its first challenge

TRENTON - New Jersey's law banning pay-to-play bids has passed its first major legal test.

In a 7-0 ruling yesterday, the state Supreme Court affirmed an appellate court ruling that the limit on political contributions is necessary to prevent corruption and favoritism in awarding state contracts.

The law prohibits state agencies from awarding contracts worth more than $17,500 to companies that donated more than $300 to a gubernatorial campaign or any state or county political party committee within 18 months.

The ruling stemmed from a challenge filed by Earle Asphalt Co. and its president, Walter Earle, after the firm was disqualified for a contract to repair a 10-mile stretch of I-195.

Walter Earle had donated $1,500 to the Monmouth County Republican Committee in June 2007 to buy tickets to a cocktail party at the request of former State Sen. John Bennett. After another $2,500 donation to the event was made the following month, Earle learned that, under the campaign-finance law, the donations may have disqualified his firm from competing for state contracts.

He then asked Bennett for a refund on July 20, 2007, but he did not receive it until Aug. 10, 2007 - 21 days after he asked for it and 41 days after the initial contribution.

Earle then made a $6.2 million bid to repair a 10-mile stretch of I-195 from Howell to Jackson and was told by state officials that he was the low bidder. State Treasury officials, though, eventually ruled Earle had to be disqualified because the contributions were not returned within the 30-day limit, which would have earned him an exemption.

Earle said it deserved an exemption because it requested the refund within 30 days, but the appellate court ruling said that under the law, it had to receive the refund within 30 days, not just request it.

Steven E. Brawer, Earle's lawyer, said he was "disappointed" by the ruling.

Republican State Sen. Bill Baroni of Hamilton, the cosponsor of a proposal to ban pay-to-play at all levels of government, hailed the decision as a "profoundly important" step in ending New Jersey's culture of corruption.

"The court said today that it's constitutional to ban contributions to politicians from companies who do business with government, and the court is right," Baroni said. "The Legislature now has the clear legal authority to ban contributions on all levels of government."

The bill he proposed with Republican State Sen. Kevin O'Toole of Wayne would limit campaign contributions by anyone doing business with state, county or municipal governments and school districts.

Also praising the court's decision was the Citizens' Campaign, a nonprofit ethics-in-government advocacy group. It filed a brief in the case and participated in oral arguments.

"Now that the court has spoken so decisively, it is time to quickly expand the successful approach used at the state level to all levels of government," said Harry Pozycki, the group's chairman.