10 months ago
An obscure provision of New Jersey’s campaign finance law that enabled a South Jersey Democratic super PAC to operate in secrecy until after the November election was pushed by that region’s Democratic legislative delegation, according to three officials with knowledge of the closed-door negotiations.
The early amendments to the Elections Transparency Act enabled the shadowy PAC, Jersey Freedom, to hide the source of its funding until late November, three weeks after the election. That appears to have been by design, said a Republican senator who was attacked by the group.
“I don’t think it’s a coincidence. Clearly they wrote the loopholes in the Elections Transparency Act and exploited them in the 2023 election,” said state Sen. Vince Polistina (R-Atlantic).
Weeks before the Nov. 7 election, Jersey Freedom sought to confuse voters and draw votes from Republican candidates with mailers and cable television ads promoting “conservative” independent candidates who, aside from holding a place on the ballot, did not engage in any campaigning.
Republicans and other critics of South Jersey Democrats alleged the independents in the 4th Legislative District, Giuseppe Costanzo and Maureen Dukes-Penrose, were “phantom candidates” designed to draw votes from Republican candidate Chris Del Borrello, who unsuccessfully ran against then-Assemblymember Paul Moriarty (D-Gloucester) for an open Senate seat. In the 2nd Legislative District, which Polistina represents, the group promoted Libertarian candidate Shawn Peck, who disavowed the group, dropped his candidacy and endorsed Polistina.
South Jersey Democrats have been credibly accused of employing phantom candidates to manipulate ballots or confuse voters in previous elections.
But while political insiders assumed South Jersey Democrats were behind Jersey Freedom, there was no hard evidence of it until the organization filed its 20-day post-election report with the Election Law Enforcement Commission. That report showed a single $225,000 contribution from a Democratic super PAC called Brighter Future Forward, which is affiliated with and partly funded by another super PAC called American Representative Majority. That PAC, in turn, got the majority of its funding from $1.9 million in loans from power broker George Norcross.
When Senate President Nick Scutari first introduced the “Elections Transparency Act” in June of 2022, “independent expenditure committees,” a new type of organization, were held to the same filing requirements as other types of PACs. They would have been required to file quarterly reports and, in the closing days of elections, disclose major contributions and expenditures every 48 hours (That later was changed to every 72 hours starting 13 days before the election, and 24 hours in the final week).
But the bill was changed at its first committee hearing to exempt independent expenditure groups from those requirements. Instead, they were only required to file three reports disclosing their finances and expenditures: 29 days before the election, 11 days before the election and 20 days following the election.
That change was, according to the officials, a top priority of the South Jersey Democratic delegation. Two of its members were prime sponsors of the bill in the Assembly: Lou Greenwald (D-Camden) and Carol Murphy (D-Burlington).
Asked for comment about the South Jersey delegation’s role in creating the loophole, Greenwald referred POLITICO to a general statement from the Assembly Majority Office.
In the statement, spokesperson Rhonda Schaffler said the Elections Transparency Act “increased reporting requirements and transparency for independent expenditure committees and so-called ‘dark money’ groups.”
“… Thanks to the new law, voters have more information to help them make informed decisions about which candidates will represent them the best,” Schaffler said.
Murphy did not respond to a request for comment.
The change went unnoticed by the press and advocates until months after Gov. Phil Murphy, who is not related to Carol Murphy, quietly signed the Elections Transparency Act in April of 2023. The massive bill was already controversial for a number of other reasons, including vastly expanding campaign contribution limits, giving the governor the power to unilaterally reshape the Election Law Enforcement Commission and gutting state and local pay-to-play laws.
Despite the loophole, Polistina, Del Borrello and the Republican State Committee in a lawsuit against Jersey Freedom allege the group still violated the law by purposefully obscuring the source of its funding. They argue that the group was too sophisticated a political operation to not incur any expenses until 11 days before the election, when it reported only debt to a printer.
Jersey Freedom insisted in a November statement that it complied with the law and its attorney, Bill Tambussi, in court last month specifically referred to the lack of 24- and 72-hour reporting requirements for independent expenditure groups.
“If they enact a nonsensical law that doesn’t give transparency until after the election occurred, then your remedy is to amend the law,” Tambussi said at the Dec. 11 hearing.
In its statement, the group said "at all stages, Jersey Freedom acted under the advice of counsel given by attorneys from the law firms of Covington & Burling LLP and Brown & Connery, LLP." But its reports show no payments to either firm. Asked why there's no records of payments to the law firms, Tambussi, a partner at Brown & Connery, said in an email to POLITICO his firm's work is "privileged and cannot be disclosed." A spokesperson for Covington & Burling declined to comment.
Also little discussed during the run-up to the Elections Transparency Act's passage was the fact that independent expenditure groups, even if they remain active, are not required to continue disclosing their finances after filing their 20-day post-election reports.
The Election Law Enforcement Commission has said it’s investigating Jersey Freedom and New Jersey Globe reported that the state Attorney General’s Office has opened a criminal investigation into the PAC.
Polistina, the Republican senator attacked by the group, said he’s considering legislation to close loopholes in the law but he wants to hold hearings first.
“I have suggested to some people that we have some hearings and bring some of the people in that exploited some of the loopholes in the Elections Transparency Act,” Polistina said. “I’d like to see some hearings held and get some insight into what they did and why they did it first, and then go back and make some changes.”
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