Legalizing recreational cannabis, sports wagering, alternative energy, and a raft of workplace rules that impact businesses’ bottom lines made for robust activity among lawyer-lobbyists in Trenton last year, according to data from the New Jersey Election Law Enforcement Commission.
A new Democratic governor and Democratic speaker of the Assembly, as well as changes in leadership with legislative committees that impact appointments, nominations and regulations, also fueled receipts at top lawyer-lobbying firms.
The revenue total was not quite what it was the prior year for the Law Journal’s group of top 10 firms—which includes both lobbying firms tied to law firms and lobbying firms staffed by lawyers. The top 10 saw a 2 percent revenue decrease year over year, to $11.93 million last year from $12.18 million in 2017, according to ELEC, which regulates lobbying, campaign fundraising and spending.
For all lobbying firms in New Jersey, total revenue increased year over year: to $59.35 million in 2018 from $57.32 million the year before, a 3.4 percent gain.
And there was a 2.5 percent dip in total lobbying expenditures for all lobbying firms, to $89.4 million last year from $91.7 million the year before.
Despite the overall decrease in revenue among lawyer-lobbyist firms, the very top firms saw record individual revenues last year.
The top three lawyer-lobbyist firms were Gibbons, raking in $2.44 million for 2018; followed by Optimus Partners, at $2.21 million; and Komjathy & Kean, with $1.37 million.
As for expenditures, that same group of 10 spent a total of $7.38 million. Top spenders were Gibbons, at $1.8 million; Optimus Partners, $1.5 million, and River Crossing Strategy Group, $1.2 million.
“The governor has a very aggressive, progressive agenda, and much of it is supported by the Legislature, so there is pent-up demand from the former administration,” said David Pascrell, co-chairman of the government and regulatory department and a partner at Gibbons. “Bills that were never signed under [former Gov. Chris] Christie … or were not even pursued because Christie was not supportive, are now getting renewed attention.
“There are a lot of bills like that, such as the expansion of paid family leave and minimum wage that never saw the light of day under a Republican administration and Democratic Legislature and had no ability to move,” added Pascrell, son of U.S. Rep. William Pascrell, D-New Jersey. “It created a rush the last 14 to 16 months.”
The lobbying arm of Newark-based law firm Gibbons saw an increase in revenue to $2.4 million last year from $2.1 million in 2017. Co-chairman Kevin Walsh and Paul St. Onge, son-in-law of former U.S. Sen. Bill Bradley, D-New Jersey, led the lobbying unit with Pascrell.
“With any new administration, there is a desire to get as much done as possible early on, in the first term if the governor is seeking to run for re-election, that involve the environment, minimum wage, energy and equity for working individuals on the state level,” Pascrell said. “There is a rush of activity to accomplish them.”
On Jan. 9, 2018, Craig Coughlin, D-Middlesex, became speaker of the General Assembly, joining Democratic Senate President Stephen Sweeney, D-Gloucester, in legislative leadership. A week later, Phil Murphy was sworn in as the Garden State’s 56th governor—giving Democrats a triumvirate of power in state government.
Pascrell said Gibbons saw a spike in private businesses clients and trade organizations last year, as potentially costly issues at the state level, such as new taxes or mandates, arose, and there was a lot more at stake.
While the overall numbers were down slightly, Jeff Brindle, executive director of ELEC, said that wasn’t unusual as revenue and spending ebb and flow year to year, depending on the issues.
Also, the firms occupying the Law Journal’s top 10 are not static, and turnover makes for imperfect year-over-year comparisons.
The numbers over the last four years reflect the ebbing-and-flowing nature.
For example, total spending by all lobbyists in New Jersey was down 5.9 percent in 2014 from 2013; in 2015, it bumped up 9.6 percent; it went down slightly 1.2 percent in 2016, only to rebound and go up 1.5 percent in 2017. The $91.7 million in expenditures for 2017 was the highest ever in the state.
Among all lobbying firms, for the 16th year in a row, Princeton Public Affairs Group Inc. finished No. 1 with revenue of $9.1 million. Another Trenton-based firm, Public Strategies Impact, came in second at $7.2 million, while Cammarano Layton & Bombardieri Partners came in third at $3.2 million.
“Any time you have a new administration, especially one inclined to spend money, there are interests looking for a chance to make a case for funding or some other initiative,” said Dale Florio, head of Princeton Public Affairs, considered by many to be Trenton’s top lobbyist. “Since it’s a brand-new administration, they want to get their fair share of opportunity since they all come out of the woodwork and then settle in when the administration gets a rhythm or cadence.”
A new cast of characters can work the other way as well, he said.
“It also presents challenges when the new administration wants to do things differently and upsets the status quo, or is not in the best interest of the business community, such as [increased] minimum wage, expansion of paid family leave and paid time off—and this created opportunities for firms like ours,” Florio said.
Brindle at ELEC said it was difficult to gauge which bills will ultimately set the agenda.
“Basically, we can never tell year to year,” he said in a phone interview. “It really depends on the issues in a particular year. That typically drives the numbers. The administration usually has certain priorities that they push, which obviously has been the case with Gov. Murphy.
“Certainly, with wind power and marijuana, it [lobbying] started last year and really took off with the recreational use of marijuana. That’s where the bulk of the money was spent,” added Brindle.
In May 2018, Murphy signed into law S-3723, which set new goals in alternative energy production for New Jersey, including generating 3,500 megawatts of electricity from floating, ocean-based wind turbines by 2030.
Firms hoping to install wind turbines off the New Jersey coast flocked to Trenton to make their case. With their hired guns, they increased lobbying spending 234 percent, to $874,679 last year from $261,664 in 2017. Among them were Orsted North America Inc., which ranked at the top in terms of lobbying in connection with offshore wind production, forking over double what it spent the previous year. Orsted’s lobbying tab was $330,206 in 2018, up from $158,164. Coming in second was NextEra Energy Resources at $199.379, nearly triple the $72,000 it spent in 2017.
Another big issue that drew heavy lobbying was S-2313, enacted last May. It gives the state Board of Public Utilities the authority to impose a special surcharge on electricity consumers of up to $300 million annually in total to help keep the state’s three nuclear power plants operating. The new law could reportedly cost average ratepayers an extra $25 to $30 annually.
As it was coursing its way through Trenton last year, the legislation pitted two sides against each other. The state’s two largest electric utilities, PSE&G and JCP&L, spent about $5 million combined in lobbying in favor of the bill, and to fight off opposition from groups such as NJ Petroleum Council, Chemistry Council of NJ, AARP and others representing electricity consumers, according to ELEC reports.
“Any time something new like that happens, those involved with that particular industry spend a lot of money on lobbying,” Brindle said. “Each administration has priorities in terms of the policies they are pushing, [and] that can also have an impact on which interest groups get most active for a period of time.
“With the marijuana issue, it’s still very prevalent, and we can see the numbers [going] up again next year,” he said.
New Jersey legalized medical marijuana in January 2010, and that program was expanded last year under Murphy.
A bill to legalize marijuana for recreational use for those 21 and over—with a focus on social equity reforms, including expunging past marijuana offenses for certain individuals—sputtered last month due to lack of support in both the Senate and Assembly.
However, those close to the legislative process say there is an ongoing flurry of activity to tweak S-2703, the “New Jersey Cannabis Regulatory and Expungement Aid Modernization Act,” and its Assembly counterpart, A-4497, to win over needed votes in both houses.
Some expect new legislation—legislation that peels off the expungement piece into a separate bill—by May or June of this year.
Senate Budget Committee Chairman Paul Sarlo, D-Bergen, alluded to that possibility at a recent budget hearing for the state judiciary, when he said, “we can expect to see an expungement bill” before summer recess, which traditionally starts July 1 for the Legislature.
“We want to see recreational marijuana get done,” Sarlo said. “A lot of people are working hard right now to make that happen.”
So do a lot of firms with a stake in the new industry, as evidenced by the fleet of lobbyists they hired to represent their interests last year, generating revenue totaling $1.39 million.
Topping the list was Eaze Solutions Inc.—sometimes likened to the Uber of marijuana delivery, with operations in Colorado and California—which spent $130,000 on lobbying in Trenton, followed by Acreage Holdings which spent $120,000, according to ELEC. Rounding out the top three on marijuana issue spending was Compassionate Care Research Institute Inc., which spent $97,500.
Brindle at ELEC said he was seeing more lawyer-lobbyists today than in the past, as laws become more complicated. He referred to their role as “shadow lobbying.”
“When seeing some of the legislation being introduced, law firms want to hire lobbyists for that purpose, to help interpret them,” he said. “It’s not unusual they set aside a portion of their firm to do nothing but lobbying. The issues are more complicated. so the laws are becoming more complicated that are written.”
Brindle said there were other factors driving growth for the lawyer-lobbyist group.
On the national level, he said, one of the approaches in trying to influence policy is through lawsuits.
“That is increasing, and why more and more lawyers are getting involved in lobbying,” Brindle said. “They [lobbyists] hire PR people and pollsters, so I can’t imagine they don’t hire lawyers to assist them as well.”
For Barbara DeMarco, one of the few seasoned, female contract lobbyists in Trenton, sports betting last year was the top client issue.
Her firm, Porzio Governmental Affairs, is a subsidiary of Porzio, Bromberg & Newman of Morristown.
Porzio generated $1.2 million in lobbying revenue last year, up from $1.1 million in 2017, making it fifth among lawyer-lobbying firms, up from sixth.
“The change of administration and Legislature, and new initiatives, such as sports wagering and legalization of marijuana, have driven the business of lobbying,” DeMarco said. “Increased taxes and mandates for businesses of all sizes are the other driver of lobbying activity.”
Among DeMarco’s clients is Isle of Man-based Continent 8 Technologies, the largest utility provider in the gambling world, which seeks to provide the infrastructure and technology for international companies to offer sports betting in the state.
After a yearslong fight in the courts, New Jersey legalized wagering on professional and collegiate sports at its racetracks and casinos last year. Sports betting debuted in Atlantic City over Fourth of July weekend.
But Continent 8 isn’t the firm’s biggest client. It’s Penn National Gaming/Parx Racing, which paid the firm $96,000 last year in lobbying fees; followed by the NJ Council of County Colleges, $95,000; and MasterCard, $90,000.
Eaze Solutions was the firm’s top client on the marijuana issue. Eaze paid Porzio $40,311 last year to get its position heard in Trenton.
Or as attorney William Caruso of Archer Public Affairs puts it, “to find a solution.”
Archer finished 2018 in the sixth spot among the Top 10 lawyer lobbying firms with $1.15 million in revenue.
“This is going to people and telling them their hair is on fire, and I know how to put it out, and I know people that can help them,” said Caruso, who also is a partner at parent law firm Archer & Greiner of Haddonfield, chairing its government affairs department. He began its cannabis practice in 2014 and has nearly 25 years of state government experience, including 11 years as chief of staff to U.S. Rep. Rob Andrews, D-Camden.
“You have a problem, and this is how we can fix it,” Caruso said. “We position ourselves as problem solvers.”