Public Integrity Watch Seeks to End “Pay-to-Play” Politics With New Greensboro and Guilford County Contribution Restrictions

The ordinance would prohibit candidates from accepting contributions from developers, contractors, lobbyists and other entities seeking or receiving city funds.

Public Integrity Watch proposes the following ordinance for the City of Greensboro and Guilford County North Carolina (Greensboro first);

AN ORDINANCE ESTABLISHING RESTRICTIONS ON CAMPAIGN CONTRIBUTIONS FROM PERSONS AND ENTITIES DOING BUSINESS WITH THE CITY OF GREENSBORO

Section 1. Purpose and Legislative Findings

The Greensboro City Council makes the following findings;

A. Compelling Public Interest in Preventing Actual or Apparent Corruption

Preventing corruption and the appearance of corruption in municipal decision-making is a compelling governmental interest recognized by federal courts. See Wagner v. FEC, 793 F.3d 1 (D.C. Cir. 2015) (en banc).

B. Heightened Vulnerability in Public Contracting

Campaign contributions from persons or entities seeking, holding or performing City Business pose a heightened risk of improper influence over governmental decisions. Federal and state courts have recognized this unique vulnerability. See Green Party v. Garfield, 616 F.3d 189, 203–05 (2d Cir. 2010); Ognibene v. Parkes, 671 F.3d 174 (2d Cir. 2011).

C. Municipal Authority to Regulate Ethics and Contracting Integrity

The State of North Carolina grants municipalities broad authority to enact ordinances to protect public welfare and government integrity, including authority under;

Whereas, pursuant to N.C. Gen. Stat. § 160A-174, the City possesses general police power to enact ordinances for the better government of the City and for the protection and promotion of public welfare, including measures designed to prevent corruption and the appearance of corruption in municipal contracting and decision-making.

Whereas, pursuant to N.C. Gen. Stat. § 160A-20.1, the City is granted broad authority to enter into contracts and to establish terms and safeguards that protect the integrity, impartiality, and fairness of its contracting processes, and the City Council finds that prohibiting campaign contributions from persons or entities seeking or receiving City contracts is a reasonable and necessary measure to ensure contracts are awarded solely on merit and in the best interest of the City.

Whereas, N.C. Gen. Stat. § 160A-11 requires municipalities to adopt codes of ethics promoting integrity, impartiality, and the avoidance of both impropriety and the appearance of impropriety, and the City Council therefore finds that restricting campaign contributions from persons and entities seeking or receiving City business is necessary to advance these mandated ethical standards.

D. Narrow Tailoring to Protect Municipal Decision-Making

Pay-to-play restrictions tied to contracting integrity, not general campaign finance, have been repeatedly upheld as narrowly tailored protections against corruption. See Wagner, Garfield, Ognibene.

E. Exclusive Applicability to Municipal Offices

This ordinance applies only to contributions to municipal candidates, offices with direct oversight, approval or influence over City Business, and does not regulate contributions to state or federal candidates, thereby avoiding preemption under Chapter 163.

F. No Regulation of Public Political Speech

This ordinance imposes no contribution limits on the general public, no restrictions on issue advocacy and no limits on volunteering. It solely regulates conduct by those with a direct financial stake in municipal decisions.

G. Consistency with National Practice

Municipalities and states across the nation, including New York City, Los Angeles, Chicago, Philadelphia and Connecticut, have enacted similar pay-to-play restrictions, and courts have consistently upheld them.

H. Public Confidence Requires Clear and Enforceable Rules

Public confidence in Greensboro’s contracting, development and procurement processes requires clear, enforceable prohibitions on campaign contributions by individuals or entities with pending or active financial relationships with the City.

Section 2. Definitions

For purposes of this ordinance;

A. “City Business” means any contract, grant, procurement, development agreement, incentive agreement, franchise, lease of City property, or other financial or regulatory arrangement requiring approval, oversight or administration by the City of Greensboro.

B. “Doing Business with the City” means;

Having an active contract or agreement with the City;

Submitting a bid, proposal, or application for City Business; or

Being a subcontractor, consultant or affiliate expected to receive compensation through a City contract.

C. “Covered Contributor” means;

Any individual or entity doing business with the City;

Any owner, officer, director, principal, partner, or senior manager of an entity doing business with the City;

The spouses and domestic partners of the above; and

Political action committees or entities substantially funded, directed, or controlled by any of the above.

D. “Candidate” means any individual who has filed a notice of candidacy or organizational paperwork for Mayor or City Council.

E. “Contribution” has the meaning assigned by N.C. Gen. Stat. § 163-278.6.

Section 3. Prohibited Contributions

A. No Covered Contributor may make a campaign contribution to any Candidate for Mayor or City Council during either of the following periods;

1. The 12-month period preceding any City election in which the candidate appears on the ballot; and

2. The 12-month period following the date of the election, regardless of whether the candidate is elected.

B. This prohibition applies whether the contribution is direct, indirect, in-kind or made through an intermediary.

Section 4. Prohibition on Solicitation

No Candidate or the Candidate’s committee shall knowingly solicit or knowingly accept a campaign contribution from a Covered Contributor within the prohibited periods set forth in Section 3.

Section 5. Disclosure Requirement

A. Any entity submitting a bid, application, or proposal for City Business must certify under oath whether it, or any Covered Contributor associated with it, has made a contribution to a Candidate within the preceding 12 months.

B. The City Manager or designee shall maintain a publicly accessible list of entities currently “doing business with the City.”

Section 6. Penalties and Enforcement

A. Any contribution made in violation of this ordinance shall be forfeited to the City of Greensboro and deposited into the City’s General Fund.

B. A contract, bid or application may be voided or rejected if the City determines that a knowing violation occurred.

C. Willful violations by a Candidate shall constitute an ethics violation subject to referral to the Guilford County Board of Elections and the City Council for appropriate action.

Section 7. Exceptions

This ordinance does not prohibit;

A. Uncompensated volunteer activity by individuals for a campaign;

B. Contributions of $10 or less per election cycle, consistent with nominal-value exceptions recognized under state law;

C. Contributions made before the individual or entity became a Covered Contributor.

Section 8. Severability and Interpretation

A. Severability

If any provision of this ordinance, or the application of any provision to any person or circumstance, is held invalid, unconstitutional, or beyond the authority of the City, such invalidity shall not affect other provisions or applications of this ordinance that can be given effect without the invalid portion. All provisions are severable for this purpose.

B. Legislative Intent Regarding Narrow Tailoring

The City Council declares that every section of this ordinance is intended to be narrowly tailored to prevent corruption and the appearance of corruption in municipal contracting and municipal decision-making, consistent with Wagner v. FEC, Green Party v. Garfield, and Ognibene v. Parkes.

C. Construction Consistent with State Law

This ordinance shall be interpreted to avoid conflict with Chapter 163 of the North Carolina General Statutes and shall not be construed as regulating campaign finance for state or federal candidates.

D. Construction Consistent with Municipal Authority

To the extent permissible, this ordinance shall be construed as an exercise of the City’s authority under N.C. Gen. Stat. §§ 160A-174, 160A-20.1, and 160A-11 governing municipal welfare, ethics, and contracting integrity.

Section 9. Effective Date

This ordinance shall become effective upon adoption and shall apply to all elections occurring after its effective date.

LEGAL ANALYSIS

1. North Carolina municipalities cannot regulate campaign finance generally…

Under N.C. law, campaign finance is a state-controlled field (regulated by Chapter 163). Local governments cannot create an alternative campaign finance system, create contribution limits, or regulate state-level campaigns.

However…

2. Cities can regulate their own contracting relationships and can impose ethics-based restrictions on businesses seeking City contracts.

Cities have broad authority under;

N.C. Gen. Stat. § 160A-11 (ethics and transparency)

§ 160A-20.1 (contracting authority)

§ 160A-174 (general police powers)

Home rule authority (to protect integrity in City operations)

Courts consistently uphold “pay-to-play” restrictions that protect government contracting from corruption as long as the rule is tied to procurement, not general campaign regulation.

This is why the ordinance is framed around entities doing business with the City, not every donor.

3. Federal courts have upheld nearly identical rules.

Cases upholding 12-month and 24-month bans:

Wagner v. FEC (D.C. Cir. 2015)

Upheld a federal ban on contributions from federal contractors.

Green Party v. Garfield (2d Cir. 2010)

Upheld Connecticut’s ban on contractor contributions.

Ognibene v. Parkes (2d Cir. 2011)

Upheld New York City’s “doing business” restrictions.

Pay-to-play bans used by;

• New Jersey

• Chicago

• Los Angeles

• Philadelphia

• Many counties and cities nationwide

A 12-month buffer is well within what courts allow.

4. The ordinance avoids the unconstitutional parts.

Intentionally drafted to comply with Supreme Court doctrine;

Avoids these unconstitutional elements;

• No global contribution caps (cities cannot do that in NC)

• No restrictions on political speech

• No restriction on volunteering

• No broad ban on donations by all residents

Includes legally required elements;

• A government interest in preventing corruption

• Narrow tailoring

• Applies only to contractors and bidders

• Uses disclosure and certification

• Applies equally regardless of political viewpoint

5. NC-specific legality check

North Carolina does not prohibit municipalities from adopting ethics rules relating to procurement. Greensboro already has;

• Ethical contracting rules

• Pay-to-play-adjacent disclosure rules

• Conflict of interest rules for staff and vendors

Cities cannot regulate for state or federal candidates, but they can regulate contributions to their own municipal candidates when tied to City contracting integrity.

The ordinance regulates only;

• Donations to Mayor/Council candidates

• By people doing business with the City

• For a limited window

This is in the safe zone.

6. Bottom Lines;

• This ordinance is legally defensible.

• Cities across the U.S. pass identical rules, and courts uphold them.

• It must be framed as a contracting-ethics rule, not a campaign-finance law, which it is.

The ordinance is designed to prevent “pay-to-play” politics by separating campaign fundraising from City contracting, development approvals, incentives and major financial decisions.

The new rules apply only to candidates for municipal office, and only to contributors with a direct financial stake in City Business, ensuring strong protections without burdening the general public’s political participation.