As local campaign donation reforms continue to work their way through the municipal government, the City Council was busy at its last meeting approving a number of contracts for politically-connected firms.
“Pay to play” is a term used when campaign contributors get government contracts or jobs. If the hiring is a direct result of their campaign contributions, it’s illegal, but often, it’s hard to prove whether there’s a correlation.
But there is a perception by some that the problem exists locally, and a citizen watchdog group called the People For Open Government (POG) turned in approximately 1,000 signatures of registered voters to City Hall a week ago Thursday. The petitions are meant to prompt the city to either approve pay-to-play reforms at the City Council level or put the issue on the ballot for the November general election.
Big contracts
As the fiscal year ends (July 1), it’s a common practice in Hoboken to hand out no-bid professional service contracts to lawyers, accountants, architects, public relations firms, and engineers.
At the last City Council meeting held July 14, a number of contracts were approved for some of the area’s most politically connected and generously contributing firms. Currently, certain “professional service contracts” can be exempt from open bidding laws. This allows the governing body to hire companies that can not be easily evaluated by price alone, such as experienced engineering firms, or attorneys with significant accomplishments.
It can also leave a board to hire anyone they wish no matter what their bid, as long as the contract is made public.
An example of such a no-bid contract was the one given the law firm Scarinci and Hollenbeck at the last City Council meeting. The Secaucus-based firm received a $355,000 contract to be special legal counsel. Scarinci and Hollenbeck is one of the most powerful legal firms in Hudson County. The 14-year old firm is well known for its political connections and gives heavily at the local, state and county level.
One of its partners is Donald Scarinci, a close personal friend and political ally of Rep. Robert Menendez (D-13th Dist.) Menendez is also a close political ally of Mayor David Roberts and state Sen. Bernard Kenny (D-Hoboken), the state senate’s Democratic majority leader.
According to state ELEC reports, Scarinci in 2004 personally contributed a total of $15,800 to the Roberts campaign and the Hoboken Democratic Organization, the latter being a political group that usually contributes to Hoboken’s incumbent administration. The Hoboken Democratic Organization is chaired by Mayor David Roberts, and city Business Administrator Robert Drasheff is its treasurer.
Sarkisian, Florio & Kenny received a contract for $300,000 to be special legal counsel. A partner in the firm is state Sen. Bernard Kenny. In 2003 and the beginning of 2004, the law partners at the firm contributed a total of more than $27,000 to Hoboken United and the Hoboken Democratic Organization.
The firm of Schoor DePalma was given a $75,000 contract to be the city’s municipal engineer. The firm is also the Zoning Board’s engineer. William Kersey of Schoor DePalma gave $12,500 in 2003 to Roberts’ political organization and the Hoboken Democratic Organization.
Supporter of pay-to-play reform say that with the current system, it’s it difficult to know whether these firms were given these contracts because of their past performance or because of the fact that they fill campaign war chests. Or possibly, they just like the direction in which the city is going and want to be a part of it.
But they may also feel pressured to donate to re-election campaigns to keep their contracts.
Pay-to-pay legislation would establish controls to discourage this.
They are proposing three separate ordinances. The first would prohibit large contributions from professionals for two years after getting a contract.
“[If passed], citizens will know that their government contracts are awarded based on merit and cost-effectiveness rather than large political contributions,” said POG member Alice Crozier.
The second ordinance would require open competitive negotiations for professional services contracts. The proposed pay-to-play reform would require competitive bidding, most likely through the Request for Proposal process. Politically connected firms, such as Scarinci and Hollenbeck, very well might be the best firm for the contract, but they would have to be compared to other firms in some sort of bidding process.
A 1992 New Jersey State Commission of Investigation report on municipal corruption recommended that the state legislature do away with the law that permits no-bid contracts for professional services. “This exception to bidding leaves too much room for abuses involving the awarding of engineering, accounting, legal, architectural, public relations, and a host of consulting contracts,” the report states.
The third ordinance proposed by POG would require applicants before the Zoning and Planning boards to disclose their contributions. This, the POG members believes, would cut down on the appearance that large developers use campaign donations as a tool to get their projects approved.
The next step
Now that the petitions are turned in, a few things could happen. The Hoboken City Council could introduce the three pieces of legislation at the next council meeting. If that happens and the reforms are passed, they could become law by the end of September.
“It’s very possible that these might be on the August 11 meeting agenda,” said city Business Administrator Robert Drasheff.
If the council does not introduce the ordinances or doesn’t approve them, then the items will be placed on the ballot during the next general election in November. If approved in by voter referendum in November, the ordinance would go into effect on Jan. 1, 2005.
The state also recently passed its own pay-to-play reform. It passed the Senate and Assembly and has been signed by the governor. It will restrict businesses and professionals holding no-bid contracts of over $17,500 from donating to the candidates and party committees associated with the specific government that hired them. The state legislation will take effect in 2006.