On Monday, Governor Chris Christie conditionally vetoed Senate Bill No. 2430, which sought to expand New Jersey’s pay-to-play laws governing State investments. The current law requires external investment managers of State funds to disclose political contributions made to New Jersey candidates and committees. The now-vetoed bill would have required disclosure of political contributions to federal and non-New Jersey candidates and committees.

As the law currently stands, external investment advisors may contribute to federal groups such as the Republican Governors Associations, the Democratic Governors Association, and federal political action committees without having to disclose those contributions in connection with an investment by the State of New Jersey. If the bill had become law, managers of New Jersey investments would not only have been required to disclose contributions to these federal recipients if they wanted to remain eligible for State-investment opportunities, but their contributions to those federal recipients could have impacted the State’s inability to invest in their funds.

To illustrate the potential for a conflict of interests in the current state of the law, the press has pointed to the example of the State’s decision to invest $100 million with a firm whose managing director contributed $2.5 million to the Republican Governors Association, which was chaired by Governor Christie in 2014. But even if the bill had been signed into law, questions of its legality may have persisted. Under principles of federal preemption, the states may not impose limits on contributions to federal candidates and committees, as federal law was intended to occupy the field of federal elections. With the Governor’s conditional veto, the federal-preemption question will likely have to wait for another day.