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By Bill Wichert October 30, 2011

Jim McGreevey claims he prohibited pay-to-play for state, county contractors

Less than two months before leaving office in the wake of a sex scandal, former Gov. Jim McGreevey did more than just talk about the practice of political donors making contributions in exchange for government contracts.

The way he tells it, McGreevey eliminated so-called "pay-to-play" on the state and county levels.

"After I had resigned or announced my resignation, I abolished -- I prohibited pay-to-play for people that had county or state contracts," McGreevey said during an Oct. 10 interview with Allan Wolper on WBGO.

McGreevey needs to refresh his memory on this one. PolitiFact New Jersey found that the former governor issued an executive order restricting pay-to-play for certain state contracts, but not county contracts.

But even for state contracts, McGreevey’s actions didn’t "prohibit" all such donations. Donors could still donate up to $300, and a future governor would address some loopholes in the regulations laid out by McGreevey.

McGreevey told us in an email: "The Executive Order was, like my radio comment, all too far from perfect. Hopefully, it began to change the terms of the debate in New Jersey. Thanks are due to the efforts of many, who labored for reform and substantially improved the measure."

First, let’s talk more about this executive order.

In June 2004, McGreevey signed a pay-to-play bill, criticized at the time for its loopholes. After announcing his resignation that August, McGreevey issued an executive order the following month that imposed tougher restrictions on political donors doing business with the state.

That executive order prohibited awarding state contracts of more than $17,500 to business entities that had made certain donations to various political organizations. The order exempted contracts in response to a public emergency.

Before McGreevey left office in November 2004, the state’s nonpartisan Office of Legislative Services questioned the legality of the executive order, saying it unconstitutionally usurped the Legislature’s authority.

The Legislature and acting Gov. Richard Codey then later turned McGreevey’s pay-to-play reform into a law enacted in March 2005.

But that executive order and the subsequent law did not deal with county contracts, as McGreevey claimed in the radio interview. So he’s wrong on that point.

OK, now McGreevey initiated pay-to-play regulations for state contracts under certain circumstances, but did he "prohibit" the practice entirely?

Jeff Brindle, executive director of the New Jersey Election Law Enforcement Commission, told us that wasn’t the case, pointing out how entities with contracts exceeding $17,500 can still donate $300.

"There’s no prohibition," Brindle said. "To prohibit, would be, in my opinion, unconstitutional."

Heather Taylor, communications director for the Citizens Campaign, an ethics group, said McGreevey prohibited certain contributions, marking "a real strike at the pay-to-play system."

But, she added, "It’s not zero tolerance."

The law signed by Codey also still had its share of loopholes.

Soon after its enactment, the Star-Ledger reported that a lawyer had drafted a memo explaining how state contractors could get around the law by donating up to $10,000 annually to the Democratic State Committee’s federal campaign fund.

Gov. Jon Corzine closed other loopholes through an executive order in September 2008, which expanded both the definition of a "business entity" as well as the list of political organizations receiving contributions.

Still, New Jersey is leading the nation in terms of pay-to-play regulations, according to Craig Holman, a campaign finance lobbyist with Washington, D.C.-based Public Citizen.

"It is one of the strongest pay-to-play laws on the books," Holman said. "It’s quite a good law."

Our ruling

In a radio interview, McGreevey claimed he "prohibited pay-to-play for people that had county or state contracts" after announcing his resignation in August 2004.

McGreevey did issue an executive order, but that only dealt with state contracts. Also, the regulations did not represent a complete prohibition on such political donations, and some loopholes were left in place.

However, since McGreevey put in motion what is considered one of the strongest laws in the nation, we rate the statement Half True.

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Our Sources

WBGO 88.3 FM, Conversations with Allan Wolper: James McGreevey, Oct. 10, 2011

Executive Order No. 134, signed by former Gov. Jim McGreevey
, Sept. 22, 2004

Seton Hall Law Review, Unsuccessful Campaign Finance Reform: The Failure of New Jersey’s 2004-2005 Pay-To-Play Reforms To Curb Corruption And The Appearance of Corruption, December 2008

Assembly Bill A1500: Prohibits campaign contributions by business entities seeking or holding State contracts in certain circumstances, signed into law March 22, 2005               

The Star-Ledger, 'Pay-play' ban offers Democrats loophole, March 24, 2005

The Star-Ledger, NJ public contractors give less in campaign donations since pay-to-play ban, April 6, 2010

The Star-Ledger, N.J. Democrats propose bill that seals pay-to-play loopholes, Dec. 6, 2010

Phone and email interviews with Craig Holman, Public Citizen, Oct. 24, 2011

Interview with Heather Taylor, The Citizens Campaign, Oct. 24, 2011

Senate Bill S-2: Prohibits campaign contributions by certain business entities performing State, county and local contracts; prohibits certain contributions by county committee of political party, signed into law June 16, 2004

Executive Order No. 117, signed by former Gov. Jon Corzine, Sept. 24, 2008

Executive Order No. 118, signed by former Gov. Jon Corzine
, Sept. 24, 2008

New Jersey Department of the Treasury, Impact of Executive Order No. 117 on Chapter 51, accessed Oct. 24, 2011

Interview with Jeff Brindle, New Jersey Election Law Enforcement Commission, Oct. 24, 2011

New Jersey Election Law Enforcement Commission, Power-Point Presentation on Pay-to-Play, June 2011

New Jersey Election Law Enforcement Commission regulations, April 2010

Phone and email interviews with former Gov. Jim McGreevey, Oct. 25, 2011

The Confession, autobiography of former Gov. Jim McGreevey

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Jim McGreevey claims he prohibited pay-to-play for state, county contractors

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