January 25, 2010
The Power of Refunds
Contribution and pay-to-play restrictions often allow for refunds to “correct” an over-the-limit contribution. The power of a refund varies by statute. Here are a few examples. New Jersey New Jersey law permits a state vendor to “cure” a contribution over the $300 limit set forth under P.L. 2005, c. 51 if the vendor requests and receives a refund within 30 days of making an excessive contribution. If a vendor fails to cure an excessive contribution, the vendor may be declared ineligible for New Jersey state government contracts for a period ranging from 18 months to 5 ½ years. A recent New Jersey Supreme Court case, In the Matter of the Appeal of Earle Asphalt Company, demonstrates just how stringently the 30 day refund period is enforced. In the Earle case, the New Jersey Supreme Court held that a refund requested within 30 days but not received until the 41st day was not sufficient to “cure” an excessive contribution. Under the scores of local pay-to-play ordinances, the refund provisions vary. For example, Mercer County allows a vendor to cure an excessive contribution if the vendor seeks and receives a refund within 30 days after the general election. The City of Newark allows a vendor to cure an inadvertent contribution if the vendor seeks and receives a refund within 60 days after the relevant ELEC report is filed. Jersey City allows a vendor to seek and receive a refund within 30 days after the relevant ELEC report is published. Under Edison’s local ordinance, a vendor may seek and receive a refund within 60 days of the date on which the contribution was made. Failure to cure a prohibited or excessive contribution within the stated refund period would result in ineligibility for contracts with local government. New York City At the other extreme are limitations on the receipt of contributions from persons defined as “doing business” with the City of New York. Under NYC law, the initial burden is on the Campaign Finance Board to provide notice to the candidate of an excessive contribution within 20 days or three business days of its reporting, depending on the proximity of the election. If the CFB fails to meet this deadline, the contribution may be retained. If timely notice is provided, the candidate’s committee has 20 days from the notice to refund the excessive amount in order to avoid a finding of violation. Compliance is shown by postmark or delivery within 20 day period. Connecticut Connecticut law prohibits state vendors from making and/or soliciting contributions in any amount to/for candidates seeking state elected office. Under Section 9-612(g)(1)(c) of Connecticut law, a vendor may cure an “improper” contribution by receiving a refund by the later of 30 days after the receipt of the contribution or the filing date that corresponds with the reporting period in which the “improper” contribution was made. In Connecticut, a company that makes an excessive contribution may be declared ineligible for state contracts for a period of 1 year after the election for which a prohibited contribution is made or solicited. Associate Bonnie Fire contributed to this post.