Pay to Play, Part 1 - the corruption tax

We all read the headlines with great anticipation when US Attorney Chris Christie indicts yet another public official for breaking the law. Yet the cost to the public for fraud and other illegal activities in actual dollars is very small compared to the total cost of government. A much more significant cost to the taxpayers comes from legal and "necessary" campaign contributions from the companies and individuals that do business with state, county and local government. This is true all over New Jersey.
Common Cause estimates the cost to New Jersey taxpayers to be close to $1 billion a year. One needs to go no further than Plainfield to illustrate the costs of pay to play.

But first, for the uninitiated, a little q & a:

1. Is pay to play "necessary"? - from the perspective of vendors, it is a necessary evil. Many government contracts do not require competitive bids and donations to the party in power can lead to lucrative business deals. A prominent New Jersey business cut back on pay to play donations a few years ago and lost significant business. They had to get back in this game to keep their business afloat (I did not have permission to use their name).

2. I thought that there are limits to campaign donations that level the playing field in the struggle for influence? - there are loopholes that allow companies to donate through each business partner, spouses and other family members. Donations can also be maximized by giving money to many campaign committees that are affiliated. Last but not least, there are a few campaign committees that have no limits for donations - these are the state Democratic and Republican Committees and the committees for the legislative leaders of each party.

3. What is wheeling? - that is how money, coming through the loopholes mentioned above can be funnelled from all over the state into select election campaigns. Big money was wheeled into Plainfield from south jersey Democrats to defeat Mayor Al McWilliams 3 years ago. I heard estimates of $100,000 to $200,000 but its hard to confirm facts given the convoluted paths this money follows.

4. What does this money get spent on in election campaigns? Mailings, robo-calls, lawn signs, television commercials, political polling, campaign consultants and much more.

Ok - so how does pay to play work in Plainfield?

In a mostly one party town, the primary, especially a contested primary, is where the action is. The Plainfield 2008 primary was a battle between the Regular Democrats, with pay to play money, and the challengers who got mostly local donations from residents. Why did the Regular Dems get all the pay to play money? Very simple. The Mayor and Plainfield Democratic City Committee chairman are Regular Democrats. The Mayor signs city contracts. If you want to get elected in Plainfield, it really helps to have support from the City Committee chair. That person decides your fate in the primary election: he or she decides who gets the party line on the ballot, a huge advantage in Plainfield.

The vendors know this and of course they want to back the winners. So when they have to choose between attending the Jerry Green fundraiser for the Regular Democratic candidates or the challengers event, its a no brainer. So if you were wondering why the incumbents could run numerous tv commercials and the challengers could not, wonder no more. In my 6 City Council campaigns, I've been on both sides of this situation. Feast or famine. But I was very careful not to take money from the party for anything more than lawn signs. Didn't want to owe too much to people whose agenda was not clear to me.

This kind of political fundraising is part of the American landscape. Why should we care? Because cost are high and guess who pays?

We taxpayers do in several ways. First, the vendors must build their donations into the cost of doing business with government. That road project includes the cost of engineering, a profession well known to make big pay to play donations regularly. Attorneys and auditors get no bid contracts so they have to play this game, like it or not.

The second way taxpayers/citizens are affected has to do reduced value for the services we pay for. If a business can get the contract through donations rather than offering the best price and value, there is less incentive for high performance to get and keep Plainfield's business.

To sum up, pay to play results in paying more and getting less. This is the corruption tax and it is perfectly legal.

In my next blog I will provide some details on local pay to play. If you like internet research, google NJ ELEC for a search engine that will locate the money and you can start to understand how it flows. Warning - you may get the feeling you are only scratching the surface by doing this.