The New Jersey Education Association, the state’s largest and most powerful teachers union, contributed $2.5 million to a “dark money” organization with close ties to Gov. Phil Murphy, POLITICO has learned.
The donation to the political nonprofit New Direction New Jersey was discovered by Mike Lilley, a longtime opponent of the NJEA. Lilley has begun his own organization called the Sunlight Policy Center that seeks to expose what he calls the NJEA’s transformation from “a sort of teachers professional association to a political machine.”
illey brought the donation to POLITICO’s attention after finding it in the meeting minutes of the NJEA’s Delegate Assembly in January 2018.
In a statement, the union acknowledged it contributed to New Direction New Jersey, which was founded in late 2017 by four former campaign aides to Murphy, including his former campaign manager, Brendan Gill. It has run advertisements that support Murphy’s agenda on television and other media.
“NJEA members endorsed Gov. Murphy and are working hard to help advance his agenda on public education, workers’ rights and the well being of children and families,” union spokesperson Steve Baker said. “NJEA members choose to support New Direction New Jersey because we want to help bring that agenda to fruition. It is important that progressive voices are heard when these important issues are being discussed in New Jersey.”
Murphy and the NJEA forged a close alliance early on that has been one of Trenton’s defining political relationships. Acknowledgment that the union contributed to New Direction New Jersey confirms suspicions of most New Jersey political insiders that much of the organization’s funding comes from the NJEA.
But confirmation of the donation also provides a rare bit of transparency in an increasingly opaque political atmosphere, where close aides to top politicians run so-called “issue advocacy” nonprofits that can accept unlimited campaign cash without ever having to publicly disclose their donors.
In a statement, New Direction New Jersey spokesperson Phil Swibinski said his organization “is proud to have received support from the New Jersey Education Association because we share many of the same goals, from increasing funding for public schools to making sure teachers receive the respect and financial support they deserve and were all too often denied under the Christie administration.“
Lilley is a former bond trader and former executive director of Better Education for Kids, a group co-founded by conservative hedge funder David Tepper that advocates for school voucher-like programs and other policies that are anathema to the NJEA. He has also worked for the conservative think tank American Enterprise Institute, where he wrote a series of papers on the NJEA. Lilley said Tepper has nothing to do with his current organization.
The Sunlight Policy Center is entirely self-funded, Lilley said. The group is organized under Section 501(c)(3) of the Internal Revenue Service tax code, which means it is not required to publicly disclose its donors. Lilley said that if the group eventually does accept donations, it’s unlikely he’ll publicly disclose them. He said his organization is not engaging in political advocacy.
Lilley said he discovered the donation to New Direction New Jersey when NJEA Executive Director Ed Richardson submitted a report to the union’s Delegate Assembly in January 2018 concerning its “participation in an independent expenditure issue advocacy effort to support the governor’s policy agenda,” according to minutes of the meeting provided by Lilley.
The union transferred $1.6 million to a fund that already had $900,000 in it “for spending, as needed, on independent expenditures that advocates in support of the governor’s agenda,” according to the minutes.
While the minutes did not specifically mention New Direction New Jersey, the description and timing of the donation could not match any other group. It was announced a couple of weeks after Murphy won the November 2017 gubernatorial election and two months before Richardson made the report to the union.
“This New Direction New Jersey money is not a one-off occurrence,” Lilley said. “It’s particular in its own details, but it is emblematic of a modus operandi.”
The NJEA, which has more than 200,000 members, is consistently one of, if not the biggest, political spenders in New Jersey.
Its last big battle came in 2017, after Senate President Steve Sweeney (D-Gloucester) refused to put a proposed constitutional amendment on the ballot to require regular payments into New Jersey’s deeply underfunded public workers pension system. The union then backed a Republican state Senate candidate against Sweeney, who had the help of a super PAC and dark money group with close ties to his political patron, South Jersey Democratic power broker George Norcross.
The New Jersey Election Law Enforcement Commission said the race in the 3rd District between Sweeney and Fran Grenier was likely the most expensive state legislative campaign in U.S. history. Sweeney easily won reelection.
The election’s legacy remained, however, and helped poison the relationship between Sweeney and Murphy. The Senate president had wanted Murphy, who was running for governor at the time, to tell the NJEA to let up on its spending. But even though Murphy endorsed Sweeney’s reelection, he did not attempt to rein in the union.
Now, Sweeney is pushing a sweeping package of bills, which he introduced Thursday, that would cut down on public employee retirement benefits.
The NJEA strongly opposes Sweeney’s efforts.
According to ELEC, the union spent $6.6 million on state legislative elections in 2017. But Lilley argues its actual spending is much higher.
In a 2017 paper for the American Enterprise Institute, Lilley wrote that the NJEA spends millions on efforts characterized as local grassroots lobbying, which doesn’t have to be reported as political spending. But, he wrote, “this local versus state-level distinction appears blurred to the point of meaninglessness.”
Neither Swibinski nor Baker would say if the NJEA has given more than $2.5 million to New Direction New Jersey. But it’s clear there’s been no break in the relationship since then between the union and Murphy.
“I’m not surprised that Mike and his billionaire corporate funders are terrified of the power of working people united. They want all the political power for themselves” Baker said in a statement. “Our organizing and action threaten their efforts to monopolize politics and twist it for their selfish purposes. Unions exist to counter that power and to advocate for working people. NJEA members are proud to stand up, fight back and demand that their voices be heard, no matter how hard corporate interests and their hired hands work to silence them.“