Annotate this Case




This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R.1:36-3.















February 9, 2017


Submitted October 26, 2016 Decided

Before Judges Alvarez and Accurso.

On appeal from the New Jersey Department of Treasury and the New Jersey Department of Transportation.

K&L Gates, LLP, attorneys for appellant (Brian S. Montag and Michael E. Waller, on the brief).

Christopher S. Porrino, Attorney General, attorney for respondents (Beth Leigh Mitchell, Assistant Attorney General, of counsel; Roza Dabaghyan and Keith P. Ronan, Deputy Attorneys General, on the brief).


In these consolidated appeals, Della Pello Paving, Inc. challenges final agency decisions by the Department of Transportation and the Treasurer rescinding two State contract awards to Della Pello and disqualifying it from receipt of any State contract for the remainder of Governor Christie's term under the 2005 amendment to the Campaign Contributions and Expenditure Reporting Act, L. 2005, c. 51 (Chapter 51), codified at N.J.S.A. 19:44A-20.13 to -20.25, and more commonly known as the "pay-to-play" law. Because the decisions are amply supported by the record and in accord with legislative policy, we affirm.

The essential facts are undisputed. Della Pello is a paving contractor whose "business is almost entirely dependent on [S]tate contracts." In April 2014, Al Gaburo, Chairman of the Somerset County Republican Organization, and the Somerset County Republican Executive Committee sent Della Pello an invitation to a cocktail party for which tickets were offered at $500 per person. The enclosed reply card instructed that checks were to be made payable to either the Somerset County Republican Organization or the Committee to Elect Palmer and Zaborowski.

Della Pello's office manager filled out the reply card stating that its president, Val Della Pello, Jr., would attend, underlined the option of the Somerset County Republican Organization and enclosed a $500 check from Della Pello Paving, Inc. dated April 9, 2014, and made out to "Somerset County Republican Org to Elect Provenzano."

Following the Commissioner of Transportation's award of a $2,954,176.01 paving contract to Della Pello in May 2015, Della Pello submitted the required "Two-year Chapter 51/Executive Order 117 Vendor Certification and Disclosure of Political Contributions" form disclosing the contribution. The Department of Transportation submitted the form to the Chapter 51 Review Unit in Treasury's Division of Purchase and Property, which requested a copy of the check.

The back of the check revealed it was endorsed by the sponsor of the cocktail party, the Somerset County Republican Executive Committee and deposited into its bank account. Based upon its review of the check, Purchase and Property determined Della Pello was ineligible for a contract award based on its reportable contribution to a county political committee. Transportation wrote to Della Pello on June 10, 2015, advising of the determination and Della Pello's right to seek reconsideration.

Della Pello's counsel wrote promptly to Purchase and Property seeking reconsideration. Counsel represented that "[t]he subject check was issued to support a cocktail reception as a 'fundraiser' for the pending election of Peter Palmer and Robert Zaborowski to the County Freeholder Board." Counsel pointed out that had the check "been made out to the Committee to elect Palmer and Zaborowski," one of the two options provided on the response card, "Della Pello Paving, Inc. would not be disqualified from bidding NJDOT projects." Counsel continued

By happenstance or just bad luck, Della Pello Paving, Inc.'s office manager filled out the check to the Somerset County Republican Org to Elect Provenzano (not to the Somerset County Republican Organization) because it was computer generated at the request of Elisa Hauk in the Della Pello Paving, Inc. . . . Ms. Hauk . . . also filled out the "Invitation Card" and underlined herself the payee for the check (Somerset County Republican Organization). Val Della Pello as President of that Company signed the check as a matter of office routine since he signs virtually all company checks every month. Notably, Val Della Pello did not attend the fund-raising event, and he arranged for the donation upon the express request for this financial support relating expressly to the re[-]election efforts for the two Freeholder candidates.

Della Pello's counsel wrote again to the Division on July 9, 2015, asserting it was "markedly in error" in claiming the check was made payable to the Somerset County Republican Committee. Counsel claimed "[t]hat is completely wrong as can be seen from the copy of Della Pello's check which was instead made payable to 'Somerset County Republican Org to Elect Provenzano.'" He asserted that

[i]t was only after receiving the . . . NJDOT letter of June 10, 2015 that Della Pello came to realize that its contribution check had been improperly endorsed and deposited into the Somerset County Republican Committee's own bank account rather than into the election fund for which the check had been made out.

Counsel represented that Della Pello immediately requested a refund of its $500 contribution from the county committee, which it received on July 8, 2015.

The Director of the Division of Purchase and Property denied Della Pello's request for reconsideration in a written decision dated August 12, 2015. The Director rejected Della Pello's contention that its contribution was intended to support the pending election of Palmer and Zaborowski, noting that nothing about Della Pello's response card or check supports any such intent. Although the Director found the check's reference to Provenzano "problematic," she noted the response card "reiterates that the event is sponsored and paid for by the Somerset County Republican Organization," and the check demonstrates that it was made payable to the Somerset County Republican Organization and deposited into the county committee's bank account. Finally, the Director noted that Sheriff Provenzano was not even on the ballot in 2014, making Della Pello's contention that the check was not intended for the county committee "unpersuasive."

Della Pello appealed to the Treasurer. In a supplemental submission submitted through new counsel, Della Pello asserted that the Division's disqualification decision "was based on a fundamental factual misunderstanding of the contribution at issue." New counsel argued that the political contribution made by Della Pello was not a disqualifying contribution because "Della Pello did not intend to and did not make any contribution to the Somerset County Republican Organization, a county political committee."

Instead, Della Pello intended to and did contribute to the fund for re[-]election of Sheriff Provenzano, as evidenced by the Payee information referenced on Della Pello's April 9, 2014 check, which read: "Somerset County Republican Organization to Elect Provenzano." Della Pello has for many years been a strong supporter of Sheriff Provenzano, and has made contributions to Sheriff Provenzano's election campaign with the same payee identifying information on contribution checks in the past. Della Pello determined to make this contribution to support Sheriff Provenzano's campaign efforts, which the company of course is entitled to do in its complete discretion.

Although noting that Sheriff Provenzano was not running for re-election at the time Della Pello wrote the check, counsel represented that "Della Pello became aware that [the Sheriff's] campaign continued to have expenses, and, in fact, Sheriff Provenzano's election committee maintained a bank account long after 2013" when the Sheriff last ran for re-election. He further contended that

Della Pello of course fully believed that the check to support Sheriff Provenzano's election effort was properly deposited in the appropriate bank account maintained by the Committee to Elect Provenzano. Della Pello had no reason to believe that its April 9, 2014 check would be improperly deposited into the Somerset County Republican Organization's completely separate bank account. Once Della Pello was advised that this had erroneously occurred, it immediately demanded corrective action and a return of the funds. Della Pello understands the Division's position that such a request may be out of time with respect to a contribution that had actually been intended for a county political committee; however, this is not what happened here. In this case, the Somerset County Republican Organization erroneously deposited a check that was clearly directed for Sheriff Provenzano's election campaign, and Della Pello sought to have the error corrected as soon as it was advised that the check had been misapplied through no fault of Della Pello.

Lastly, Della Pello sought a stay, arguing that if it were disqualified from public contracts it would likely have to shut its doors by the end of 2015, laying off fifty-five people, as State contracts accounted for eighty-five percent of the company's work.

In a final agency decision of October 26, 2015, the Treasurer denied the stay and upheld the decision of the director of Purchase and Property debarring Della Pello from any award of State contracts because of its violation of the provisions of Chapter 51. The Treasurer rejected Della Pello's contention that the Director of Purchase and Property had misunderstood the facts and found them "largely not in dispute."

Specifically, the Treasurer noted that Della Pello's Chapter 51 disclosure form reflected that it made a $500 contribution by check to the Somerset County Republican Organization. The Somerset County Republican Organization is the name used by the Somerset County Republican Executive Committee, a county political party committee registered with the New Jersey Election Law Enforcement Commission (ELEC). The Treasurer further noted Della Pello's contention that: (1) it had not intended to make a contribution to the county political committee, as evidenced by the payment line of the contribution check which reads: "Somerset County Republican Org to Elect Provenzano"; (2) the county committee's erroneous deposit of the check into its account should not disqualify Della Pello; and (3) the disqualifying contribution was cured by Della Pello's having requested a refund as soon as the alleged error was detected.

In response to Della Pello's new assertions that it had become aware that Sheriff Provenzano continued to have expenses in 2014 from his 2013 reelection efforts and maintained a bank account for the receipt of contributions, the Treasurer reviewed the Sheriff's ELEC filings between 2007 and 2014. The records revealed that Della Pello had never contributed over $300 to any of the Sheriff's campaigns and indeed that the Sheriff showed no contribution over $300 for all of 2014. The campaign's October 15, 2014 final report shows "the Provenzano campaign fund had no expenditures during 2014, no outstanding debts as of October 15, 201[4], and no remaining balance in its account after a disbursement of remaining funds to the Somerset County Republican Party on October 14, 201[4]."

The Treasurer noted that Della Pello's counsel's "factual assertions are, in essence, that the facts are other than those that have been or can be established by the [Rule 51] certification and allegedly supporting documents that Della Pello has provided and the publicly-filed ELEC documents." With the exception of the ELEC filing showing the existence of a campaign bank account for Sheriff Provenzano, which contrary to representation showed no expenses or debt at the time of Della Pello's contribution, the Treasurer noted that none of Della Pello's counsel representations "are supported by documentation or a certification from anyone at Della Pello or the Provenzano campaign."

Based on all the available documentary evidence, including the invitation and response card, the contribution check, Della Pello's Chapter 51 certification and the ELEC records of the Provenzano campaign, the Treasurer concluded the Director was plainly correct that N.J.S.A. 19:44A-20.14 precluded a contract award to Della Pello. He found that even assuming for purposes of argument that Della Pello did not "intend" to make the contribution to the County Committee, "does nothing more than make the contribution to the [County Committee] 'inadvertent' within the meaning of N.J.S.A. 19:44A-20.20." Because Della Pello failed to request and receive full reimbursement within thirty days of the contribution, the statute provides no remedy for such "inadvertence." Finding no probability of success on the merits and no equities in Della Pello's favor, the Treasurer likewise denied Della Pello's request for stay.

While Della Pello's request for reconsideration to the Treasurer was pending, the Department of Transportation awarded Della Pello another State contract, this one in the amount of $4,190,235.15.

Following a remand to the Director of the Division of Purchase and Property to consider Della Pello's additional evidence and arguments, including that any ban be limited to eighteen months, the Director again determined that Della Pello was barred by Chapter 51 from receiving any State contract.

The Director further explained that the length of the term of ineligibility resulting from a prohibited contribution "is determined by the identity of the [c]ontribution recipient and its timing." Because Della Pello's contribution was made during Governor Christie's second term to a county committee that had nominated Governor Christie in the last gubernatorial election in 2013, the Director concluded that N.J.S.A. 19:44A-20.14(ii) "requires that Della Pello Paving be disqualified for the remainder of Governor Christie's [second] term."

Following the Director's decision, the Department of Transportation rescinded the second contract award to Della Pello. Della Pello again appealed to the Treasurer, who on April 29, 2016 again adopted the Director's decision and endorsed that the ineligibility period continue until the end of Governor Christie's second term. The Treasurer wrote that

[w]hether Della Pello "intended" to contribute to elect Palmer and Zaborowski as originally stated and the [i]nvitation provided as an option or to elect Provenzano, who was not running that year, Della Pello's contribution was written payable to the Somerset County Republican Organization and deposited in the Organization's bank account. Therefore, Della Pello made a contribution that exceeded the legal amount in the law to a [county committee], arguably through inadvertence.

Finding that "Chapter 51 provides a single means to cure an inadvertent contribution" through the thirty-day safe harbor provision of N.J.S.A. 19:44A-20.20, and that Della Pello's contribution was not returned for more than a year, the Treasurer determined it could provide no relief to Della Pello.

Della Pello has appealed both adverse determinations, which we consolidated on consent. We denied Della Pello's request for a stay, finding no likelihood of success on the merits, but accelerated the appeal.

Reprising the arguments it made to Treasury, Della Pello argues that the "factually erroneous agency decisions were arbitrary, capricious and unreasonable because Della Pello's donation was indisputably directed to an individual local campaign" and "based on a legal misreading of Chapter 51 and directly contravene statutory intent." We reject those arguments and affirm, substantially for the reasons expressed by the Treasurer in his decisions of October 26, 2015 and April 29, 2016. See R. 2:11-3(e)(1)(D).

Our role in reviewing the decision of an administrative agency is limited. In re Carter, 191 N.J. 474, 482 (2007). We accord a strong presumption of reasonableness to an agency's exercise of its statutorily delegated responsibility, City of Newark v. Natural Res. Council, 82 N.J. 530, 539, cert. denied, 449 U.S. 983, 101 S. Ct. 400, 66 L. Ed. 2d 245 (1980), and defer to its fact finding, Utley v. Bd. of Review, 194 N.J. 534, 551 (2008). We will not upset the determination of an administrative agency absent a showing that it was arbitrary, capricious, or unreasonable, that it lacked fair support in the evidence or that it violated legislative policies. In re Musick, 143 N.J. 206, 216 (1996); Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562 (1963).

Chapter 51 bars any state agency from awarding a contract over $17,500 to a business entity that has contributed more than $300 during the preceding eighteen months to the Governor, a candidate for Governor or any State or county political party committee. N.J.S.A. 19:44A-20.14. The statute provides a safe harbor provision for "inadvertent" contributions, so long as the contributor both requests and receives full reimbursement for the contribution "within 30 days after the date on which the contribution was made." N.J.S.A. 19:44A-20.20. We have held, in accordance with the interpretations of both ELEC and Treasury, that the plain language of the statute requires "both the request for reimbursement and actual receipt of reimbursement to occur within thirty days of a disqualifying contribution." In re Earle Asphalt Co., 401 N.J. Super. 310, 328 (App. Div. 2008), aff d o.b., 198 N.J. 143 (2009).

The intent of the legislation is unmistakable, it is to "safeguard the integrity of State government procurement by imposing restrictions on State agencies and independent authorities to insulate the negotiation and award of State contracts from political contributions that pose the risk of improper influence, purchase of access, or the appearance thereof." N.J.S.A. 19:44A-20.13. In its findings, the Legislature spoke directly to its concerns

For the purposes of protecting the integrity of government contractual decisions and of improving the public's confidence in government, it is a compelling interest of this State to prohibit awarding government contracts to business entities which are also contributors to candidates, political parties and the holders of public office; and

There exists the perception that campaign contributions are often made to a State or county political party committee by an individual or business seeking favor with State elected officials, with the understanding that the money given to such a committee will be transmitted to other committees in other parts of the State, or is otherwise intended to circumvent legal restrictions on the making of political contributions or gifts directly to elected State officials, thus again making elected State officials beholden to those contributors; and

County political party committees, through their powers of endorsement, fundraising, ballot slogan or party line designation, and other means, exert significant influence over the gubernatorial primary and general election process; and

. . . .

It is essential that the public have confidence that the selection of State contractors is based on merit and not on political contributions made by such contractors and it is essential that the public have trust in the processes by which taxpayer dollars are spent.

[N.J.S.A. 19:44A-20.13.]

Applying our well-settled standard of review in light of the clear legislative intent, and mindful of "[t]he strong governmental interest in limiting political contributions by businesses that contract with the State," Earle Asphalt, supra, 401 N.J. Super. at 321, we are satisfied that all of Della Pello's arguments have been thoroughly considered and appropriately rejected based on the documents in the record, specifically the invitation and response card, the contribution check, Della Pello's Chapter 51 certification and the ELEC records.

Della Pello's argument that the agency misinterpreted N.J.S.A. 19:44A-20.14(ii) by finding it disqualified from receipt of State contracts for the remainder of Governor Christie's term is without sufficient merit to warrant extended discussion in a written opinion. See R. 2:11-3(e)(1)(E).

As the Director of the Division of Purchase and Property explained, the period of disqualification under N.J.S.A. 19:44A-20.14 is dependent on the recipient of the contribution and when it was made. Della Pello's contribution was to a county political party committee. The contribution was made in 2014, during the Governor's second term. It is undisputed that the Somerset county committee, the recipient of Della Pello's contribution, nominated the Governor in the 2013 gubernatorial election preceding that term. Accordingly, N.J.S.A. 19:44A-20.14(ii) applies, mandating Della Pello's ineligibility for any State contract through the end of the Governor's term in January 2018. Della Pello's reliance on In re Langan Engineering & Environmental Services, Inc., 425 N.J. Super. 577, 580 (App. Div. 2012), to support a shorter period of disqualification is misplaced, as Langan did not involve a contribution to a county political party committee.

As the Treasurer's findings are fully supported by substantial credible evidence in the record and in accord with Chapter 51, we affirm both final agency decisions, substantially for the reasons expressed therein.