POLITICO: How JP Morgan and ‘friends’ got out of anti-Russian sanctions in New Jersey

JP Morgan has contracts with public sector clients across the country, including in New Jersey.
Photo: Getty Images

“We cannot have 50 different states with 50 different foreign policies,” stresses a former state Supreme Court Justice Barry Albin. But they have…

Nearly two years later, the state has halted enforcement of the Russian sanction law following a legal challenge — and after it became clear the effort could punish not just Russian oligarchs but also multinational companies, writes POLITICO.

Nearly two weeks after the invasion of Ukraine in 2022, New Jersey Gov. Phil Murphy stood alongside state lawmakers and signed a bill barring Russian-tied companies from government dealings — including state and local government contracts, economic subsidies and investment from the state’s pension fund. But New Jersey might have been too aggressive with its push.

But New Jersey’s aggressive sanctions law, as written, appears to have greater reach than any of the other state-level initiatives — until it went to court. It also offers an example of a public display of moral authority bumping up against constitutional protections, with the federal judge who issued the temporary restraining order saying there was a “strong, compelling probability of eventual success” from one of the companies challenging the law.

“The state of New Jersey is acting as though it has its own foreign policy,” former state Supreme Court Justice Barry Albin, who is representing the U.S. subsidiary of Kyocera, a Japan-based electronic company whose lawsuit led to the judge’s order, said during a court hearing this summer.

“We cannot have 50 different states with 50 different foreign policies,” he added. former state Supreme Court Justice Barry Albin

Usually, it is the federal government issuing sanctions. Since the 2022 invasion of Ukraine, the Biden administration has targeted about 3,000 businesses and people, according to the Atlantic Council think tank.

Treasury sent those companies “preliminary determinations” that they were engaged in prohibited activities with Russia — putting them on track to be blacklisted from government contracts and subsidies in New Jersey. If JP Morgan were to be blacklisted under the law, local governments would be barred from banking with the company.

JP Morgan, Xerox and Tarkett were ultimately not put on the state’s Russia blacklist, in part because the state temporarily stopped enforcing the law. It is unclear whether Treasury would move forward with adding the companies to its blacklist should the state enforce the law again. Treasury spokespeople declined to comment on the status of specific companies ensnared in the law.

There is no evidence that JP Morgan, Xerox or Tarkett asked the state to stop enforcing the law. State lobbying records show that Xerox and JP Morgan contacted Murphy’s office on the potential sanctions, although records do not indicate what they requested, if anything. A spokesperson for the governor declined to comment on the matter, citing the pending litigation.

…All companies and states are equal, but some are more equal than others. Orwellian reality?

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