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A federal district court judge ruled last month that New Jersey’s ban on political spending by certain regulated industries is unconstitutional with respect to independent expenditures. At the same time, the ruling upheld the ban for direct contributions to candidates and political parties. The ruling, which was issued in response to a challenge brought by the New Jersey Bankers Association (NJBA), raises two important questions: one for similar bans (including so-called “pay-to-play” laws) in other jurisdictions, and one for corporate PACs in New Jersey specifically.
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Election Law News has reported on previously, a number of states purport to ban political spending from persons and entities involved in certain regulated industries, such as marijuana and gambling. Since 1911, New Jersey has banned companies involved in banking, insurance, railroads, telephone service, public utilities, and other functions from “pay[ing] or contribut[ing] money” in connection with state elections. The state Attorney General’s office has interpreted the provision very broadly to cover, for example, a car manufacturer with an auto financing division as “banking.” The office also has applied the ban to corporate parents and affiliates of regulated entities.