April 16, 2009

By: Laurence D. Laufer

Pay-to-Play Restrictions in Illinois

As the case against former governor Rod Blagojevich moves forward , we take note of legislation effective January 1, 2009 that prohibits political contributions by business entities whose contracts with Illinois state agencies, in the aggregate, total more than $50,000. The law covers contributions to political committees promoting the candidacy of: (i) the officeholder responsible for awarding the contract (Governor, Lieutenant Governor, Attorney General, Secretary of State, Comptroller or Treasurer), or (ii) any other declared candidate for that office.

In the case of a State contractor, the prohibition applies for the duration of the term of office or for two years following the expiration or termination of the contract, whichever is longer. For business entities with aggregate bids or proposals (combined with the annual total value of current State contracts, if any) that total more than $50,000, the prohibition applies from the date the invitation for bids or RFP is issued through the date the contract is awarded.

The contribution prohibition is enforced through a requirement that the business entity register with the State Board of Elections. The registration must include the name and address of the business entity, any affiliated entity, and any affiliated person. Affiliated persons and entities are subject to the same contribution prohibition. Affiliated persons include persons with an ownership interest in excess of 7.5%, executive employees, and the spouse and minor children of such persons. Affiliated entities include subsidiaries, members of the same unitary business group, 501(c) organizations established by the business entity, affiliated person, or affiliated entity, and political committees for which the business entity or such 501(c) organization is the sponsoring entity.

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