Making pay-to-play restrictions stick

New Jersey and Philadelphia share the distinction of being national leaders in having “pay-to-play” laws, which restrict political contributions among those who seek public contracts. Both laws passed in 2005, and we now see the first major prosecution for violating the New Jersey statute.

A large and influential engineering firm, Birdsall Services Group, has been indicted along with seven of its top executives for conspiring to make illegal campaign contributions.

The law essentially bans state contractors from giving more than $300 in political contributions to state officials.

There’s also an axiom of campaign finance reform that political money will find ways around restrictions, and New Jersey Attorney General Jeffrey Chiesa charges that for six years, Birdsall and its executives were directing employees to make political contributions within the $300 and repaying them with company bonuses.

“It was a very organized undertaking,” Chiesa told me in a phone interview. “You had many, many, many different contributions being made, then reimbursed by the firm in a very organized way over a long period of time.”

The indictment says the scheme managed to route $686,000 in contributions to politicians while flying under the pay-to-play radar.

“You know that’s the kind of money that’s going to get somebody’s attention,” Chiesa said.

Craig Holman of the Washington-based group Public Citizen said that because evading the law required so many small contributions, the scheme was bound to unravel.

“There are competitors in the whole business of trying to get the same government contracts,” Holman said. “The number of employees involved in rigging this scandal are so numerous that someone was going to talk at some time.”

Indeed, two Birdsall employees have pleaded guilty to taking part in the scheme and are presumably cooperating in the case.

And in November, Howard Birdsall retired as chief executive after 55 years with the firm. An attorney for Birdsall said it’s “regrettable” that charges were filed, since the company has made sweeping changes that will prevent it from happening again.

Heather Taylor of the New Jersey Citizens Campaign, which helped get the pay-to-play law passed, says it’s important to prosecute a case like this — not for Birdsall, but other companies tempted to cut corners.

“This sends a clear message that you can’t just go through a third party or skirt under the law, that you will be caught,” Taylor said. She also told me that plenty of business groups like the law, because they resented being fleeced for contributions by politicians.

Philadelphia’s law, drafted and sponsored by then-City Councilman Michael Nutter, has put a dent in the ability of special interests to get their way in City Hall. I’m sure it will be tested, too.