On appeal from Superior Court of New Jersey, Law Division, Camden County.
Approved for Publication October 8, 1997. As corrected October 30, 1997.
Before Judges Baime, Brochin and Braithwaite. The opinion of the court was delivered by Baime, J.A.D.
The opinion of the court was delivered by: Baime
The opinion of the court was delivered by
This appeal presents novel questions under the New Jersey Campaign Contribution and Expenditure Reporting Act (N.J.S.A. 19:44A-1 to -47). We will describe the Act in detail later in this opinion. Suffice it to say, the Act contains stringent disclosure requirements and restricts the amounts individuals, corporations, businesses, and continuing political committees may contribute in primary, general, and special elections. The New Jersey Election Law Enforcement Commission (ELEC) is charged with administering the provisions of the Act and imposing sanctions for violations. However, a candidate may bring a summary action in the Superior Court and obtain injunctive relief against a continuing political committee that has made contributions in violation of the Act's requirements in order to defeat the complainant's candidacy. At issue is the nature and extent of the court's jurisdiction under the Act. Also in question is the interpretation of the Act's prohibition against agreements to control the contributions of continuing political committees.
We hold that a candidate in a general election may institute a summary action in the Superior Court challenging the legality of campaign contributions received by an opponent in a primary election, at least where the challenged contributions have been transferred for use in the general election. We also conclude that individuals, corporations, businesses and continuing political committees may not evade the Act's restrictions on the amounts of contributions that can be donated by entering into agreements to funnel monies to a candidate or to his or her campaign committee.
Plaintiffs are members of the Voorhees Independent Party and were candidates in the 1996 general election for two seats on the Voorhees Township Committee. On September 12, 1996, plaintiffs brought a summary action in the Law Division in which they claimed that Remington and Vernick, Inc. (R & V), a company that served as engineer for the Township Planning Board since the Democratic Party assumed control of the Township Committee, had violated the Act's restrictions on campaign contributions by funneling monies through New Horizons and New Beginnings, two continuing political committees it created and controlled, to the joint campaign committee of their opponents, Pamela Hammer and Darryl Beckman. The unlawful scheme depicted by plaintiffs in their complaint and their proofs consisted of a contorted labyrinth of continuing political committees designed to serve as conduits for the flow of campaign contributions to Hammer and Beckman. Among the protagonists were New Horizons, New Beginnings, the Voorhees 2000 Committee, the Voorhees Democratic Club, and the Good Government in Voorhees Election Fund of Pamela Hammer and Darryl Beckman. The evidence presented at the hearing was both complex and confusing. We recount only the essential facts.
The general election for the Voorhees Township Committee was to be held on November 5, 1996. Plaintiffs' opponents, who were uncontested in the Democratic primary election, included Hammer and Beckman. Hammer formed the Good Government in Voorhees Election Fund of Pamela Hammer and Darryl Beckman (Good Government Fund), a joint candidate committee, for the purposes of obtaining contributions and disbursing campaign expenses.
In 1989, R & V created New Horizons and New Beginnings, two continuing political committees, for the articulated purpose of making contributions to candidates who "believed in good government," and who "would help the engineering profession." As we noted, R & V was the engineer to the Township Planning Board, and derived a "sizable amount of money" from contracts awarded without public bidding from the Township Committee. It is undisputed that New Horizons and New Beginnings were fully funded by R & V and that R & V made all the decisions as to which candidates would receive contributions from those entities as well as the amounts and dates of the contributions.
The record clearly discloses that New Horizons and New Beginnings served as R & V's alter ego. For example, the treasurer of New Horizons was Louis Doggett, Jr. Doggett was a former R & V employee and also Craig Remington's uncle. Debra Fenton, also a former R & V employee, was appointed as the treasurer of New Beginnings. Neither Fenton, nor Dogget, exercised any control over the amounts of money contributed by New Horizons or New Beginnings and neither made any decisions regarding the disbursement of funds.
At a court-ordered deposition, Fenton testified that she never prepared the quarterly financial forms required by ELEC. Instead, R & V would ask Fenton to sign the ELEC forms in blank and then return them to R & V to be completed and sent to the Commission. Fenton admitted that she was not aware of any legal limitations on the amount of money that a continuing political committee could contribute to a campaign committee or to another continuing political committee, or that limitations existed as to the amount of money that a business or individual could contribute to a campaign committee. Fenton also testified that R & V mailed checks to her and directed her to sign them with the payee line already completed. Fenton never reconciled the checking ledger and did not maintain any financial statements. The only deposit Fenton ever made on behalf of New Beginnings was when she opened a bank account for the organization.
Similarly, Doggett never made any deposits on behalf of New Horizons and never examined any of that organization's bank statements. Doggett would merely forward everything he received on behalf of New Horizons to R & V. Doggett never filled out an ELEC form, or a check, and never attempted to reconcile the checking ledger. Indeed, evidence was presented indicating that R & V personnel commonly "forged" Doggett's signature. Like Fenton, Doggett had no knowledge of the campaign contribution limits under the Act.
Craig Remington, one of the two principal owners of R & V, was deposed regarding the activities of New Horizons and New Beginnings. Remington stated that the committees were created by R & V's attorneys in 1989 for the purpose of contributing to candidates who would promote the goals of the engineering profession. Remington stated that either he or Vernick, his partner, made all decisions pertaining to political contributions. Remington admitted that R & V's business department handled the finances for both New Horizons and New ...