NJ moves to ban public spending on Russian companies, developers
TRENTON – New Jersey lawmakers intend to pass a bill within the next week prohibiting the state and local governments from doing business with companies or banks with Russian interests.
The bill, S1889/A3090, is a state-level bid to add to the economic sanctions and isolation being imposed on Russia for its invasion of Ukraine. It would also apply to Belarus, the small neighbor and ally that has been a staging area for Russia’s military offensive.
Sen. Declan O’Scanlon, R-Monmouth, believes it ultimately will be a collective effort – and that if so, “a potentially significant message” will be sent.
“New Jersey’s the first one to do this but hopefully, and I would be willing to suggest very likely, a batch more states will do so,” O’Scanlon said.
The proposal covers government contracts for professional services, investments by the state’s pension funds, and development projects that get economic incentives through the state Economic Development Authority or local governments.
Sen. Paul Sarlo, D-Bergen, said many high-rise development projects are bankrolled by on Russian investors, a trend identified by the building trades because the projects don’t use union labor. But they sometimes enjoy tax breaks from the state or municipalities – so could run afoul of the proposed new law.
“We do know from what’s happening in New York City and Miami and parts of Jersey, a lot of the vertical construction, a lot of development is being done by Russian developers with ties to oligarchs,” Sarlo said.
Sarlo said “dirty money” from Russia gets into the banking system through such development projects and that the proposed law could help put an end to that.
“I really believe when you start to peel the cover off of this, you’re going to find out it’s a lot more widespread, some of the investments and ties to Russian developers, oligarchs and others,” he said. “Not symbolic at all. We feel there will be some severe consequences here.”
“This will make their lives much harder, over time,” O’Scanlon said. “And these are the people that will drive policy in Russia.”
O’Scanlon said the pension and contracting divestments wouldn’t happen instantly, as the state attempts to avoid having to shed retirement fund investments in multinational American companies like McDonald’s or ExxonMobil.
The Senate Budget and Appropriations Committee unanimously passed the bill Monday, and the full Senate is scheduled to take it up Thursday.
The full Assembly planned to vote on the bill Monday, skipping a committee hearing, but senators and Gov. Phil Murphy’s office were still negotiating over the details well into the afternoon. Speaker Craig Coughlin, D-Middlesex, said it will be voted on next Tuesday shortly before Murphy’s budget speech.