Codey To Expand Law Banning Contingency Fees To Consultants Soliciting Bond Underwriting Business From State

Announces Executive Order to Help Remove “Influence of Money on Government”

TRENTON – Senate President Richard J. Codey announced today that he plans to enact an Executive Order to expand a law he sponsored banning contingency fees paid to lobbyists to also apply to consultants and consulting firms seeking bond underwriting contracts from the State, as part of his broader effort to reduce the influence of money on government and regain the public trust.

“I see a real conflict in the fact that some of these third-party consultants are receiving enormous commissions, and in some cases a percentage based on the state contract itself, when the same consultants are also able to provide campaign contributions,” said Senator Codey. “Expanding the law I sponsored banning lobbyist contingency fees to third-party brokerage consultants will close this gaping loophole and further reduce the influence of money on government.”

In a letter to Treasurer John McCormac, Senator Codey said he has been advised that “in recent years, it has been a practice of some bond underwriting firms to engage consultants, other than firm principles or registered lobbyists, to solicit underwriting business from the State of New Jersey.” The Senate President wrote “in some cases these consultants are politically active…and may receive, as compensation…a commission based on a percentage of fees paid by the State for underwriting services.”

The Senate leader, who will assume the role of Acting Governor on November 16, said he plans to issue an Executive Order to eliminate contingency fees paid to bond underwriting contract consultants and that it will be a policy under his administration for the Department of

the Treasury to deal directly with the principals of the underwriting firms, rather than with third-party consultants.

Additionally, until the Executive Order is enacted, Senator Codey said he is requesting that the Department “call upon all underwriting firms seeking to do business with the State to voluntarily comply” with the policies described in the letter.

“We need to make sure that each State contract awarded to an underwriting firm is rewarded on its merits, because the taxpayers are ultimately the ones paying for it,” said Senator Codey. “I intend to leave no rock unturned in trying to close these loopholes that potentially harm our system of government.”

Senator Codey’s action today is part of his broader effort to help regain public trust in government and remove the perceived or actual influence of money in politics. In addition to today’s action, the Senate President has sponsored a measure to freeze campaign contribution limits at their current levels and a bill to allow towns to enact the strongest pay-to-play bans possible.

Senator Codey is also working to codify into law the Governor’s executive order issued in September banning contributions from vendors doing business with State agencies, and has gone even further than state law requires in announcing he will voluntarily ban contributions from state vendors to his Senate leadership political action committee and individual campaign committee for the duration of his term as Acting Governor.