Regulating Political Contributions by State Contractors: The First Amendment and State Pay-to-Play Legislation

Abstract:     
In 2004, following Jim Rowland's resignation as Governor of Connecticut amidst political scandal, Connecticut passed one of the most comprehensive state ethics reform bills in recent years. Among other things, the new law flatly prohibits a wide range of individuals associated with state contractors from making political contributions to a wide range of state candidates. Connecticut's law is just one recent example of legislation aimed at eliminating so-called "pay-to-play" between state contractors and state political candidates. Several states have enacted such laws. This article focuses on pay-to-play laws enacted in Connecticut, Kentucky, New Jersey, Ohio, South Carolina, and West Virginia.

The article begins by providing a high level overview of state pay-to-play legislation, discussing the types of political contributors and candidate recipients affected by such laws. Then, the article discusses the First Amendment issues raised by these state laws. The Supreme Court has held that combating corruption, including quid pro quos, is a sufficient state interest. Nonetheless, the pay-to-play laws in force in some of the states surveyed do not appear to be closely drawn to this interest. Of the six states surveyed, the laws of Connecticut and New Jersey may be unconstitutionally overbroad because they prohibit contributions from individuals only marginally related to state contracts to recipients who may not be in a position to act on the award of a state contract. The article concludes that states passing pay-to-play laws should tailor the reach of such laws to focus on those contributors and recipients closely related to state contracts. States also can build additional safeguards into pay-to-play legislation by requiring open and competitive bidding of state contracts or by prohibiting earmarked contributions.

Keywords: political contributions, election law, First Amendment, state contractors, pay-to-play

JEL Classifications: K30

Accepted Paper Series