A task force appointed by Democratic Gov. Phil Murphy says it will investigate projects connected to the state’s top political boss.
by Nancy Solomon, WNYC, and Jeff Pillets, ProPublica
NEWARK, N.J. — A New Jersey gubernatorial task force examining possible irregularities in the awarding of state tax breaks zeroed in Thursday on a series of projects related to political boss George E. Norcross III that were intended to revitalize the Camden waterfront.
At a public hearing, members of the task force, named in January by Democratic Gov. Phil Murphy, said they will further scrutinize projects approved by the state Economic Development Authority under former Republican Gov. Chris Christie, including new buildings for Norcross’ insurance brokerage and a nonprofit hospital system where he is board chairman. Tax breaks for the projects totaled $285 million.
Companies related to Norcross, his charitable affiliations and the law and lobbying firms of his brother Philip received tax breaks worth at least $1.1 billion under the program, according to an investigation by WNYC and ProPublica.
A main issue, members said, involves claims made by the companies that they would leave New Jersey if they did not get tax grants. Norcross’ company, Conner Strong & Buckelew, said in its application that it was considering a move to Philadelphia without tax relief.
But Norcross said in an interview that the company did not have to show that it planned to move out of state, only that it wanted to locate jobs in distressed Camden. The task force intends to examine how the EDA administered the rules.
Task force members raised questions, for example, about the viability of competing offers made by landlords of office towers in Philadelphia. In some applications, letters of intent detailing offers had expired before applications were submitted to the state.
A spokesperson for Norcross’ company and its two partners in a new Camden office tower said the lease offers had expired because of the slow pace of government review and approval. “No private landlords would ever agree to hold open an offer for as long as government decides to take to review an application,” the spokesperson said.
Investigators also presented email evidence that Cooper University Health Care System officials were enthusiastic about moving to Camden after first telling the state they would move jobs to Philadelphia.
Cooper Health, which was approved for a $39.9 million tax break in 2014, has thus far collected more than $13 million in tax credits, investigators said.
A spokesperson for Cooper Health said in a statement the hearing confirmed that the nonprofit did not intend to move jobs out of state. It checked “no” on an application when asked if any jobs were “at risk” of leaving New Jersey, the spokesperson said.
Task force member Pablo Quinones said firms that misled the state on applications would have to pay back any credits already received.
The task force, however, was careful to emphasize that its investigation is still in its early stages.
“This is a hearing, not a trial,” the task force’s chairman, Ron Chen, said.
Chen, however, said that the task force had identified nine companies as “entities of concern,” and that some would be subpoenaed for more information.
About 40 companies from around New Jersey have agreed to submit new certifications about job creation and other promises made in their applications.
The tax break program has been under scrutiny since January, when the New Jersey comptroller’s office issued a report concluding that billions in tax breaks were approved without adequate state diligence. The investigators found that the state was unable to verify that firms that received tax breaks actually created jobs.
Murphy has called the program an “$11 billion black hole,” and his administration is considering reforms that would pare back awards and create more more benefits for host communities.
On Wednesday, Murphy cited the WNYC-ProPublica report and another in The New York Times detailing how political insiders may have influenced the program.
“Given the breadth of these findings and those so far reported by the task force, I believe anything short of a total revamp of the tax incentive program is a disservice to the hard working taxpayers of New Jersey,” Murphy said in a statement.
Christie, who expanded the tax break program and championed Camden projects, sharply criticized his successor, a former diplomat.
“While Governor Murphy was collecting his pay-to-play gift from President Obama entertaining the wealthy of Germany at embassy parties, we were back here doing the hard work to rebuild Camden from the most dangerous city in America to the most hopeful city in America,” Christie said in a statement.
The task force, without providing details, said in a press release it has already made a “criminal referral” to an unspecified agency regarding “unregistered lobbying on behalf of special interests.”
On Thursday, the task force raised questions about changes to the 2013 Economic Opportunity Act, which gave benefits to companies moving to Camden.
James Walden, the task force’s lead attorney, projected sections of the law that changed and revealed that metadata in the documents show the author was Kevin Sheehan, an attorney with Parker McCay, Philip Norcross’ law firm.
Walden walked through provisions in the bill that increased the tax breaks for several companies that were represented by Parker McCay, including Holtec International, which makes containers for spent nuclear fuel, and Conner Strong & Buckelew.
In a statement, the law firm told the Times that Sheehan’s work on the bill did not represent lobbying. The firm said in a statement, “It would be a reckless mischaracterization of Parker McCay’s activities to state that Parker McCay was engaged in unregistered lobbying in 2013.”
The former president and CEO of the Economic Development Authority testified about the changes, explaining in each case how the rewrite of the legislation resulted in a larger tax break for specific companies.
Image Credit: Wikipedia Commons
