What Regulated-Industry Companies and Non-Profits Need to Know About New Jersey Political Communication Contributions

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Not all political activity is the same. A political contribution is different than lobbying, which is itself different than issue advocacy. And the rules of the road differ for each category of activity.

Under New Jersey law, there are two scenarios in which a public communication becomes a political contribution, subject to the restrictions and requirements of a contribution. The first arises when a communication contains an explicit appeal for the election or defeat of a candidate that is publicly communicated to an audience substantially comprised of persons eligible to vote for the candidate. Explicit appeals include the use of such words as “Vote for Smith,” “Vote against Smith,” “Elect Smith,” “Support Smith,” and “Defeat Smith.”

However, by eliminating any “Vote for” or “Vote against” language, it is easy enough for a communication to fall outside the category of a political contribution.

But there is another section of the regulation that, during certain time periods, expands the definition of what types of communications qualify as political contributions.

If a communication is circulated or broadcast within 90 days of the election and is made with the cooperation or prior consent of the candidate, the communication will be treated as a contribution (even without the explicit-appeal language) so long as there is a statement or reference concerning the governmental or political objectives or achievements of the candidate. Crucially, this period begins on January 1 of a New Jersey gubernatorial election year when the candidate who is the subject of the public communication is running for Governor.

This means that, starting January 1, 2021, any reference in a public communication to a New Jersey gubernatorial candidate and his or her political achievements or objectives could be viewed as a political contribution, depending on whether the candidate had prior knowledge of the communication.

While individuals and most corporations are permitted to make political contributions in New Jersey, these permitted contributors must simply be aware that their political communications during these pre-election periods may be political contributions and would therefore be subject to campaign-finance limits and pay-to-play restrictions.

But there are also many businesses and organizations that are not permitted to make any political contributions. For example, the banks, insurance companies, and communications companies that are subject to the New Jersey regulated-industry prohibition on political contributions need to ensure that their communications don’t become political contributions in violation of New Jersey statute. The same is true for 501(c)(3) charitable organizations that are prohibited under IRS rules from making any political contributions.

Especially in 2021, when there is an incumbent governor and many incumbent legislative candidates on the ballot in New Jersey, businesses and charitable organizations need to understand that a public advertisement, within the relevant pre-elections periods, thanking any candidate for any political action could be viewed as a political contribution that may be subject to limits or that may be in violation of applicable law.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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