CAMDEN, N.J. (CN) – Challenging a century-old law unique to New Jersey, a banking trade group brought a federal complaint Tuesday so that its members can make political contributions.
Represented by the Newark law firm Gibbons PC and by Williams & Connoly of Washington, the New Jersey Bankers Association filed the Election Day lawsuit against New Jersey Attorney General Gurbir Grewal.
“New Jersey’s ban on political contributions by banks was enacted not to combat actual ‘this for that’ corruption or its appearance but, in the opinion of New Jersey’s attorney general, to limit the effects of large aggregations of wealth by corporations and to reduce the ability of targeted corporations to influence, gain access to, or earn the gratitude of elected officials,” the complaint states.
Grewal “has invoked these interests repeatedly whenever he or she has been asked to interpret the ban,” but a landmark Supreme Court ruling should supersede that interpretation, according to the complaint.
“The United States Supreme Court has held as a matter of law that independent expenditures, regardless of source, do not corrupt or give rise to the appearance of corruption,” the complaint says, citing the 2010 ruling by the Supreme Court in Citizens United v. FEC.
A trade group with 88 banking members headquartered or having offices in New Jersey, the association asks the court to issue an injunction and find that the ban as codified in the state’s Corrupt Practice Act is unconstitutional.
Enacted in 1911 the statute otherwise known as N.J.S.A. 19:34–45 prohibits banks from making contributions or expenditures of any kind and in any amount in support of political parties or candidates for any state or local office.
But the plaintiff notes that nonbank corporations in New Jersey are not subject to any such prohibition.
“As a general matter, New Jersey allows corporations, labor organizations, associations, and groups to contribute to political candidates and party committees, subject to the same limits as individuals,” the complaint states.
This allegedly makes the Garden State much stricter than the rest of the country.
“New Jersey appears to be unique in singling out political activity by banks,” the complaint states. “Plaintiff is aware of no other state that currently allows corporations to make contributions as a general matter but completely bans banks from making contributions or expenditures.”
An interest in combatting quid pro quo corruption could be cited to justify the ban, but the suit claims that a ban on banks’ political contributions cannot withstand scrutiny without actual evidence that it prevents actual or perceived corruption by banks.
A representative for the New Jersey Office of the Attorney General declined to comment on the suit.