Lawsuit Against Hoboken Councilman Dismissed, Will Affect Campaign Donation Limits

HOBOKEN, NJ — A lawsuit filed in 2019 against 1st Ward Hoboken Councilman Michael DeFusco, regarding his campaign donations, was dismissed by a judge last week, DeFusco's lawyer confirmed Friday.

The dismissal will trigger a controversial Hoboken ordinance to go into effect that raises the amount that unions can donate to local candidates, officials said.

Hoboken City Clerk James Farina had filed a complaint in 2019 against DeFusco, a month before a City Council election, regarding DeFusco's campaign donations during his 2017 mayoral race.

DeFusco complained at the time that the timing seemed political.

According to a Hudson County View story in 2019, the lawsuit said DeFusco had accepted larger donations in 2017 than Hoboken's low campaign finance limits allowed. However, the state laws had allowed larger donations than Hoboken's laws did.

Hoboken's local limits were passed as part of local campaign finance reform, meant to reduce "pay for play," or people donating large amounts to get government contracts.

On Friday, DeFusco declined to comment on the outcome of the case.

But his attorney, Steve Kleinman, said, "Councilman DeFusco is extremely relieved to have this be over. It’s been a long journey to get to this point. But obviously, we’re both pleased with the judge’s decision, which speaks for itself."

Now, Unions Can Donate More

The dismissal now validates a recently passed City Council ordinance to allow Hoboken candidates to take larger donations from unions, $7,200 instead of $500.

This outcome was jeered by one councilwoman this week, but applauded by council members who support the administration of Mayor Ravi Bhalla.

A measure that was passed by a majority of council members in January 2022 — despite some opposition on the council and from activists — raises the limit on accepting donations from unions to $7,200.

The city's original limit of $500 was meant to limit outside influence on city business, but the state allows higher limits.

Some council members said they supported the increase because if DeFusco could take larger donations due to the state ordinance, it was only fair to codify the matter and allow everyone to do the same locally.

An outside attorney had also given the city a legal opinion in 2019 saying that the low local limit might be unenforceable, as the state limit is much higher.

However, Councilwoman Tiffanie Fisher, who was against increasing this limit, said it went against good-government reforms that curtailed union influence in local elections.

Council members Phil Cohen and Jim Doyle drafted a measure amending the ordinance to say
that the increase only would take effect if the DeFusco suit was dismissed by the judge, on the grounds that Hoboken’s local limits were unenforceable.

The suit's outcome indicated that state laws may supersede local limits. So now, unions may donate more, said city spokesperson Marilyn Baer on Friday.

Baer said, "As a result of the judge's ruling, labor unions will be permitted to contribute at the maximum permitted by the state."

She added, "The administration appreciates the due diligence of Judge Armando Hernandez in his review of Hoboken’s local campaign finance laws. While the city’s position has been to enforce these laws, as previously requested by Councilwoman Tiffanie Fisher, which includes fines for campaign contributions over Hoboken’s local permitted limit, the Court’s determination provides important legal clarity on how the city should move forward."

She said, "The ruling does not change Hoboken's strong pay-to-play laws which will continue to be enforced. The administration looks forward to putting this matter in the rearview mirror and continuing to work with all stakeholders on good government policies on behalf of the residents of Hoboken."

Fisher was disappointed. She said, "Team Bhalla got exactly what they wanted with this decision — which is to get outsized campaign contributions from unions."

She added, "This would not have been the case had the judge ruled against DeFusco or had the judge dismissed on merit which was expected. It’s as if a little birdie whispered into the ear of the judge with the exact words needed to trigger our ordinance.”

READ MORE: Bigger Campaign Donations? Council Flip Flops, May Have Faltered