http://www.northjersey.com/news/Christie_appointees_at_Port_Authority_led_a_secret_toll-hike_push.html
Top Christie Port Authority appointees devised toll-hike plan to bolster image of NJ, NY governors
THE RECORD
FILE PHOTO
A day before Port Authority commissioners were set to vote on an immediate $4 toll increase in 2011, the governors of New Jersey and New York said in a joint statement that they would support a lower toll hike.
Full coverage: Chris Christie and the GWB lane closure controversy
Years before they resigned amid a scandal over politically motivated lane closures at the George Washington Bridge, Governor Christie’s top two executives at the Port Authority led a secretive campaign to quickly push through controversial toll hikes on the Hudson River bridges and tunnels by drowning out criticism, limiting public input and portraying the governors of New York and New Jersey as fiscal hawks who reined in an out-of-control agency.
At its heart was a plan to have the Port Authority, an independent bi-state agency, propose an enormous toll hike — a $6 increase that would bring the E-ZPass toll to $14 by 2014 — so that the governors could then scale it back. The smaller increases that were ultimately approved in 2011 — $4.50 over four years — allowed both governors to claim credit while they set the stage for each state to claim hundreds of millions of dollars to fund pet projects not directly related to the Port Authority.
It was a sleight of hand that began with a campaign-style operation that, according to interviews with more than a half-dozen people familiar with the operation, was run out of a conference room on the southwest corner of the 15th floor of the Port Authority’s Manhattan headquarters.
It was referred to as the “war room.”
Running the campaign were former Deputy Executive Director Bill Baroni and his aide, David Wildstein, both central figures in the bridge scandal and its first political casualties.
Hanging from the door of the war room was a sheet of paper that warned: “Do Not Enter.” The room was accessible to very few of the agency’s senior staff, but not the New York-appointed executive director, who had fallen out of favor with Christie and New York Gov. Andrew Cuomo.
Some of the more than one dozen people regularly inside the room — mostly Christie loyalists placed at the agency — were instructed not to reveal its secrets.
One outsider was granted access.
Maggie Moran, then an employee of a large regional labor union led by a Port Authority commissioner, helped mobilize hundreds of union workers who flooded public hearings that were scheduled at times and places that made it difficult for the general public to attend. Drawing from scripted messages, laborers wearing orange T-shirts spoke favorably of the toll hikes at the hearings, providing Christie with a talking point.
“There were more people who spoke in favor of the toll hike than against it,” Christie said after the hearings, not mentioning the union workers.
Weeks earlier, Christie held a meeting in his office where he instructed his aides at the Port Authority to float the higher number, a knowledgeable source said. And Christie and Cuomo’s top Port Authority commissioners — David Samson for New Jersey and Scott Rechler and Jeffrey H. Lynford for New York — also discussed the toll-hike plan with Wildstein and Baroni before it was released.
The findings by The Record, based on detailed interviews with eight people familiar with the operation, cast doubt on claims that the governors had no prior knowledge of the toll-hike proposal and suggest that it was intentionally inflated. The sources were varied, each with independent knowledge of the events that took place and were interviewed separately, providing similar accounts. They included people involved with the Port Authority and politics in New Jersey and New York. Cuomo’s office didn’t return requests seeking comment. Christie’s office declined to comment.
Toll hikes have always been politically sensitive, especially in New Jersey and in Bergen County, which sends a large number of commuters across the George Washington Bridge. Because of this, making a proposal seem more palatable by first floating an extreme alternative is not new. But all of the people interviewed, some of whom were familiar with multiple toll increases going back decades, said they had never seen such a secretive campaign by the Port Authority, one that excluded many of the agency’s professional staff and manipulated the public hearing process.
A New Jersey legislative investigative committee has issued subpoenas for records related to the toll increases as it looks into whether the Port Authority, an independent regional transportation agency with a $8.2 billion annual budget, was used as a political tool. The committee is primarily focused on the lane closures that gridlocked Fort Lee for five mornings in September and led to the resignations of Baroni and Wildstein in December.
There are commonalities in the circumstances surrounding the lane closures and the toll-hike rollout: a culture of secrecy, rank-and-file employees who feared for their jobs and the sidelining of the agency’s executive director, who is supposed to run the day-to-day operations. In both cases, Christie has said he had no prior knowledge of the planning.
Before Baroni and Wildstein took charge of the secretive campaign, some senior Port Authority staff had made the case internally for toll increases that were closer to the amount ultimately approved by the governors. Instead, what emerged from the war room was a proposal that one senior executive said was “outrageous” — an immediate $4 hike that would have pushed tolls for E-ZPass users during rush hour from $8 to $12 in 2011, and a $2 increase in 2014 that would have brought them to $14. The governors ultimately decided on a $4.50 increase achieved with incremental increases through 2015. Tolls would increase immediately by a $1.50 increase with annual 75 cent jumps through 2015.
“This notion that the organization had come up with this outrageous toll-hike proposal that the governors had to reject was nonsense,” said one former senior official from the agency.
Debt over WTC
Debt over WTC
The Port Authority, taking on growing debt due largely to construction of the World Trade Center, had been asking Trenton and Albany for the go-ahead to propose toll hikes as far back as late 2010, sources said. It seemed to agency officials like an ideal time: New Jersey had a popular governor who could afford to absorb the political backlash and New York had an incoming governor who could claim no ownership of the agency’s financial troubles.
Top agency officials decided they would pitch a $2 increase followed by another $2 increase in 2014, one source said.
Despite briefings sent to both administrations, the source said, it was difficult to get the governors on board. The agency’s executive director at the time, Christopher Ward, also had trouble selling the idea to Cuomo’s staff, who blamed him for sinking too much money into construction at the World Trade Center site, two sources said. Ward was appointed by Cuomo’s predecessor, David Paterson.
Then, in March 2011, a Wall Street ratings agency downgraded the agency’s financial outlook, a development that had the potential of leading to higher borrowing costs. A report by Moody’s Investors Service noted that Christie had proposed taking $1.8 billion from the Port Authority that had been destined for a cross-Hudson rail tunnel plan that Christie had killed. “This request raises concerns,” analysts wrote. The Christie administration was also in the middle of a patronage hiring binge, placing about 50 Christie loyalists, campaign contributors and Republican operatives at the Port Authority.
By late spring, financial pressure was building at the Port Authority.
Its top appointees, Baroni and Samson, met with Christie advisers on April 12, 2011, to discuss toll and fare increases, according to a source. Baroni, Wildstein and Samson also met in the governor’s counsel’s office to discuss increases again on July 13 of that year, the source said.
That summer at the Port Authority offices, Baroni and Wildstein set up the war room.
The small conference room has a long table, ringed by black-and-white photos of old Port Authority facilities, including one of the New Jersey entrance to the Holland Tunnel during the Depression. It is a rarely used space next to Baroni’s office and across the hall from two color photos of the governors hanging from a wall. Its position in the corner of the 15th floor means there is little foot traffic outside its door. Two desktop computers were brought in, along with a handful of laptops.
Senior staff groused at the secrecy around the room.
“All the Port Authority regulars who would have been included in the preparation of a toll increase, based on having prior experience with the process and the legal requirements, were excluded until their inclusion was absolutely necessary, and even then, only for discrete tasks like running financial models,” one former official said.
Another longtime senior executive recalled asking a subordinate, who had been called to the room, what he was working on. The subordinate answered that he was instructed not to tell his boss or anyone else. And a longtime janitorial worker who tried to get into the war room over a weekend to reach a leaky pipe was so forcefully admonished that he told others that he feared he would lose his job as a result, the same senior executive said.
Cuomo’s two new commissioners, Rechler and Lynford, however, were dispatched to the 15th floor and charged with digging into the numbers, a source said. They met with Baroni and Wildstein and, in turn, briefed two of Cuomo’s top aides, Larry Schwartz and Howard Glaser. Ward, the executive director, was cut out completely, although his name would appear on press releases touting the proposal. One former longtime senior executive said that the exclusion of the top executive was unprecedented.
Records show the two governors met for dinner at the Beacon Restaurant in Manhattan on Friday, July 29, 2011, one week before the proposal’s release. Christie has said he didn’t know the magnitude of the Port Authority proposal until after the dinner.
Days later, on Aug. 3, a knowledgeable source said, Christie held a meeting in his office with about five top advisers and Samson, Baroni and Wildstein. The source said Christie instructed the Port Authority officials to float the immediate $4 hike, and that he and Cuomo would reduce it to $2. Baroni, Wildstein and Samson declined to provide comment for this article.
Additionally, multiple sources said the governors would typically have been told about a toll-hike proposal from the Port Authority prior to its release.
“You are going to get sign-off from the governors before you go public with a proposal,” said one former senior official who was familiar with multiple past toll hikes at the Port Authority. “Anything gets pre-cleared with Trenton and Albany.”
The proposal was released late in the afternoon on the following Friday. Days before, according to one senior Port Authority executive, Baroni told the person, “We know we’re going to take heat for it, but it’s what the governors want.”
Baroni, who made it clear to staff that he was leading the effort to build support for the toll hikes, told several agency officials that it would be run like a political campaign. Unlike past toll-hike proposals, which were proposed months before they were approved, the vote was set for two weeks later.
Three days after the release of the proposal, Christie described his reaction to it as surprise: “I said, ‘You’re kidding, right?’ and they said ‘no,’ ” he said. “This is, unfortunately, a testimony to the mismanagement of the Port for years. We shouldn’t have to be in this kind of situation.”
Orchestrated backing
An intensive campaign began at the Port Authority.
Among those allowed in the war room was Dominick Fiorilli, a political operative who was installed at the authority by the Christie administration and given the title director of new port initiatives. Fiorilli worked in Christie’s office, as of Dec. 31 of last year as an aide to the governor, according to payroll records. Hunter Pendarvis, a former Christie aide; Jamie Loftus, a former campaign aide to Sarah Palin; and Andy Hawthorne, a director of marketing, were also allowed in the room, sources said. All were among the 50 Christie loyalists placed at the agency by 2011.
Long-term agency employees, such as general counsel Darrell Buchbinder, deputy general counsel Christopher Hartwyk and chief financial officer Michael Fabiano, also appeared in the room from time to time.
They all either declined to comment or did not respond to messages.
For nearly two weeks, there were three meetings each day: one in the morning, one in midday and one in the evening, multiple sources said.
“They drafted press releases, endorsement and comments for blogs and comments sections of news websites,” said one source familiar with the operation. “They also orchestrated the public hearings, picked the most inconvenient times and locations for the hearings and prepared testimony outlines for various speakers for the public hearings.”
Moran, the director of business development for Laborers International Union of North America, attended most of the meetings. Port Authority Commissioner Ray Pocino is a vice president for the powerful union, which endorsed Christie for reelection at his first campaign event, and he signed off on Moran’s involvement. Moran was also former Gov. Jon Corzine’s chief of staff and served as an adviser for Cuomo’s 2010 campaign. The union did not deny its inside access.
“LIUNA Vice President Pocino has an entire staff dedicated to supporting infrastructure investment and economic growth, so supporting the Port Authority fare increase was a no-brainer,” a LIUNA spokesman said in a statement Friday. “Maggie [Moran], along with many other staff at the union, was involved in all aspects of building a coalition in support. We are proud of the role we played in the effort to finance infrastructure investment in our region.”
Their role was most evident at eight public hearings, all scheduled for one day. The hundreds of union workers, many of them organizers, showed up to hearings wearing orange T-shirts with the slogan “Port Authority = Jobs.” They were given talking points beforehand, and many repeated the same refrains, according to a review of transcripts posted on the Port Authority’s website. Dozens also attended multiple hearings in different venues and posted comments in an additional online hearing, making sure their voices were counted more than once.
The Port Authority commissioners didn’t attend the hearings, scheduled on Aug. 16. Instead some of the Port Authority executives who were shut out of internal deliberations were assigned to run the hearings in out-of-the-way venues.
One longtime executive assigned to one called them “a sham.”
At an evening hearing in Staten Island, where tolls are exceedingly unpopular, former Borough President James Molinaro started the proceedings by standing on the stage of the school auditorium and lambasting the Port Authority. A public-relations employee assigned to monitor the proceedings for the Port Authority waved to the hearing officer, chief operating officer Ernesto Butcher, and told him, “Bill Baroni is watching. He said to cut the guy off,” a person familiar with the exchange said. When Butcher refused to stop Molinaro from speaking, the public-relations employee approached Molinaro on the stage and asked him to end his comments, incensing the local politician.
“It was an example of the tight control, the electioneering, a campaign that did not speak to the real issues,” a person familiar with the episode said.
A report issued in September by the investigative arm of Congress, the Government Accountability Office, concluded that the Port Authority’s toll hearings “did not provide sufficient, convenient, accessible opportunities for the public to comment on the proposal.”
$942M kitty
On Aug. 18, two days after the hearings and a day before Port Authority commissioners were poised to vote, the governors released a second joint statement saying they would support a smaller toll hike: $1.50 immediately, with 75-cent increases through 2015 for E-ZPass users.
“This is a responsible alternative that balances the infrastructure needs of the region with toll and fare payers’ economic realities,” the joint letter said. There was a hitch: The agency had to agree to bring in outside auditors.
At the hearing, Pocino, the commissioner whose union flooded the hearings, said he had “never been as impressed with any elected officials as I am today with Governors Cuomo and Christie.” He and the other commissioners voted yes without reservation.
“There was absolutely no conflict of interest or appearance of impropriety in Ray Pocino’s vote,” said LIUNA spokesman Rob Lewandowski. “He has always been a steadfast supporter of infrastructure investment, especially to improve the safety and efficiency of the region’s aging transportation system.”
By October, Ward, the executive director was out. Christie said he was responsible for years of mismanagement. The audit described the Port Authority as “dysfunctional” and laid out a series of reforms that officials said would turn the agency around.
What neither Christie nor the Port Authority mentioned publicly at the time of the toll-hike approval was that part of the agreement was that each state would get its own project slush fund out of the future toll money. The agency’s $27.6 billion 10-year capital plan, approved last month, includes $942 million for what is called a “regional bank” for both states to dip into over the next decade.
The regional bank program, used in the past for transportation and economic development projects only loosely related to the Port Authority, had not been in effect since 2008. The specific projects that are to be funded have not yet been identified, according to the plan.
Meanwhile, a motorist advocacy group, AAA New York, is suing the Port Authority to try to overturn the toll hikes. In the early stages of the lawsuit, the motorist group has zeroed in on communications between the governors’ offices and the Port Authority to try to understand the reason for the toll increases.
The Port Authority is, according to court records, refusing to turn over 339 records, including communications between agency officials and the offices of both governors, that it says are protected from disclosure because they were part of discussions that led to a policy decision.
Last month, the state legislative committee investigating the bridge scandal joined the hunt for more information about the toll increases. A subpoena was issued to the Port Authority requesting all correspondence between Christie’s office and the Port Authority from Jan. 1, 2011, to Aug. 9 of that year.
Christie bridge scandal: Police tapes show scope of Fort Lee traffic problems
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on March 01, 2014 at 6:00 AM, updated March 01, 2014 at 6:14 AM
By Brent Johnson and Ryan Hutchins/The Star-Ledger
FORT LEE — It was just before 9 a.m. on Sept. 9 when paramedics left a nearby hospital and headed to Fort Lee on an emergency call.
A police dispatcher in the Bergen County borough offered a warning over the radio.
"Fort Lee traffic is a nightmare," the dispatcher said. "Come up through Palisades Park for that."
It was the first day of the controversial lane closures at the George Washington Bridge, and the traffic only got worse.
The conversation between the paramedics and dispatcher was one of more than a dozen frustrated exchanges that came to light Friday when Fort Lee released 28 hours of 911 and police radio tapes from the four days the town was covered in traffic gridlock because of the closings.
The ordeal has enmeshed Gov. Chris Christie’s office in scandal. Democrats have accused members of the Republican governor’s administration with orchestrating the closures as political payback because Fort Lee’s Democratic mayor declined to endorse Christie for re-election.
Allies to the governor have been linked to the plan, but Christie himself has denied any personal involvement.
The governor’s office declined comment Friday. Tim Donohue, the attorney for Fort Lee Mayor Mark Sokolich, said the mayor would have no comment. Neither Fort Lee Police Chief Keith Bendul nor EMS Coordinator Paul Favia could be reached for comment.
On the morning of Sept. 9, the Port Authority of New York and New Jersey unexpectedly shut down two of three local access lanes at the GWB in Fort Lee.
Bill Baroni, then Christie’s top appointee to the Port Authority, testified before an Assembly committee in November that the problems were the result of a traffic study.
But emails surfaced last month showing Bridget Anne Kelly, then Christie’s deputy chief of staff, appeared to have advance knowledge of the closures.
"Time for some traffic problems in Fort Lee," she wrote in one now infamous message.
Baroni has resigned. Christie fired Kelly and has apologized to New Jersey residents for the issue, though the governor said he did not know of the closures until after they were finished and reported in the media.
The 911 tapes released Friday reveal that as the closings took effect, Fort Lee police were also told a traffic study was to blame.
"They’re testing a new traffic pattern," a dispatcher told an officer at 7:30 a.m. on the first day of the closures. "It’s down to one lane."
"10-4," an officer responded, sounding exasperated.
Over the next few hours, multiple police officers relayed messages about traffic being clogged all the way to the edge of town.
At 9:02 a.m. Sept. 9, a police officer was trying to help an ambulance driver plot ways to avoid inbound traffic near the bridge.
"Do you have a medical unit dispatched?" the officer asked a dispatcher. "The GW Bridge is totally gridlocked."
Four minutes later, another officer complained of heavy traffic.
"It’s backed up all the way, probably into Cliffside (Park)," the officer said. "It’s all due to the new pattern."
"10-4," the dispatcher responded. "We’re getting calls from irate motorists."
At 9:44 a.m., a dispatcher gave an address to an EMS driver.
"You are aware the town is a total gridlock, correct?" the driver responded.
Similar calls continued over the next three days.
Around 7:30 a.m. Sept. 12, one officer said over the radio that he was "going to be denying turns from Lewis onto Linwood."
"You’re in denial," the dispatcher joked in response.
In the midst of the closures, Favia, Fort Lee’s EMS coordinator, complained in a letter to the mayor last September that the traffic was "causing unnecessary delays for emergency services to arrive on scene for medical emergencies within the borough."
Favia said the mess caused emergency responders to be delayed in reaching a 91-year-old woman who was found unconscious in her borough home.
She was later pronounced dead, but the family has said they don’t blame her death on the traffic.
American Bridge, a liberal research group that has criticized Christie’s office over the bridge scandal, quickly posted clips of the recordings Friday on a website.
"The audio from these tapes provides a window into the burden local law enforcement and emergency response workers shouldered while Christie’s administration sought to penalize a political foe of the governor," American Bridge spokeswoman Gwen Rocco said in a statement.
Star-Ledger staff writers Adya Beasley, Brian Donohue, David Giambusso, and Amy Ellis Nutt contributed to this report.
911 Tapes from Fort Lee: Calls 9-9-2013 from 0600 to 1300 hours
911 Tapes from Fort Lee: Calls 9-10-2013 from 0600 to 1300 hours
911 Tapes from Fort Lee: Calls 9-11-2013 from 0600 to 1300 hours
http://www.njspotlight.com/stories/14/02/27/bridgegate-gets-dirtier-air-quality-monitor-was-offline-during-traffic-jam/
BRIDGEGATE GETS DIRTIER: AIR-QUALITY MONITOR WAS OFFLINE DURING TRAFFIC JAM
Readings from other instruments reveal unhealthy levels of particulates from stalled cars, trucks, buses
Editor's note: The U.S. Region II office of the EPA yesterday released a letter saying its inquiry determined air-quality monitoring equipment was operated by the New Jersey Department of Environmental Protection in accordance with agency rules and air-quality concentration did not exceed health standards for pollutants.
Amid all the investigations into the lane closures on the George Washington Bridge last fall, yet another inquiry has been launched by a federal agency into what happened and why.
But this investigation has nothing to do with who ordered the shutdown. It focuses instead on why an air-quality monitor closest to the bridge was inoperative for a few days during the lane closures, when drivers were stuck in a massive traffic jam for hours on the busiest motor vehicle bridge in the world, spewing pollution into the air.
Why should people care? The monitor is used to measure the amount of fine particulates in the air, a dangerous pollutant from trucks, cars, and buses. The state only recently achieved compliance with federal air-quality standards that safeguard human health -- decades after the Clean Air Act was enacted.
At the request of the New Jersey branch of Public Employees for Environmental Responsibility (PEER), the U.S. Environmental Protection Agency’s Office of the Inspector General has opened an initial review of the issue.
“Public health safeguards, like pollution monitors, should be off-limits to political manipulation,’’ said Bill Wolfe, director of New Jersey PEER. “Perhaps there is an innocent explanation for marooning thousands in a pollution Twilight Zone, but no one in the Christie administration has yet to offer one.’’
The night before the lane closures on September 8 and continuing for the next two-and-half days, the air quality monitor, the closest to the bridge atop a Jersey City firehouse, operated by the state Department of Environmental Protection ceased reporting data about the level of particulates in the air. Previously, the monitor had experienced only very short outages.
According to NJ PEER, the air pollution monitoring devices are required under the federal Clean Air Act and their use by state agencies is overseen by the EPA. Their purpose is to measure the amount of diesel, oil, and other fuel particles in the air. These particles are so small that they penetrate the deepest recesses of the lungs and are linked to asthma, other respiratory diseases, and premature death -- although exposure must occur over a long time.
The readings from other monitors, as well as the inoperative monitor once it came back online, suggest that air quality reached unhealthy levels during the closure. Particulate readings on the out of service monitor were more than twice the level before it was shut off, according to NJ PEER.
“This extended outage masked the health effects on those stuck on the bridge enduring hours of exhaust from idling vehicles,’’ Wolfe said “This act literally added injury to insult.’’
The governor’s press office failed to respond to comment on the issue.
http://www.njspotlight.com/stories/14/02/27/new-bridgegate-emails-more-planning-more-cover-up-more-jokes-about-traffic-problems
NEW EMAILS: MORE SCHEMES, MORE COVER-UP, MORE JOKES ABOUT "TRAFFIC PROBLEMS"
Transcripts show Wildstein, Kelly texting about bridge-lane closings, joking about retaliating against Middlesex County rabbi
A new set of uncensored documents shows two key Bridgegate figures joked about causing traffic problems for a Middlesex County rabbi three weeks before the shutdown of access lanes to the George Washington Bridge. The early date of the text-message conversation shows David Wildstein and Bridget Ann Kelly giddy with the idea of using traffic problems as political retaliation.
The New Jersey Legislative Select Committee on Thursday released 21 pages of partially unredacted documents by central Bridgegate figure David Wildstein.
In them, Bridget Ann Kelly, then Governor Chris Christie's Deputy Chief of Staff, texted Wildstein on the evening of August 19: "We cannot cause traffic problems in front of his house, can we?"
Six days earlier, Kelly, who was later fired by Christie, wrote the now-infamous smoking-gun email to Wildstein: "Time for some traffic problems in Fort Lee."
The new emails show the two joking about creating traffic problems for Rabbi Mendy Carlebach, who, Wildstein said, for reasons that aren't clear: "He has officially pissed me off."
After Kelly responded with the joke about traffic in front of his house, Wildstein joked "Flights to Tel Aviv all mysteriously delayed." "Perfect," Kelly replied.
The documents show an unusual pre-occupation with race and ethnicity. The Rabbi is called the "Jewish Cid Wilson," referring to an African-American Democratic activist who likes to appear with political figures. There are numerous references to the Mayor of Fort Lee as "a Serbian" or "Serbia." (Mayor Mark Sokolich is of Croatian descent.)
The newly released-documents also show collusion over the testimony of then-Port Authority Deputy Director Bill Baroni before the Assembly in November, testimony which has since been shown to be false. The back-and-forth between Wildstein and Baroni show Baroni requesting documents and inquiring about his performance afterward the testimony.
"Good," Wildstein wrote, before noting that a statement by Senator Kevin O'Toole was ready. O'Toole, a Republican, issued a statement that day supporting Baroni.
The emails also contain joking about a Port Authority Board Meeting November 14. "Are we being fired? ""Baroni texted Wildstein, before adding "Wisniewski" -- Assemblyman John Wisniewski, who is now leading the NJ investigation into Bridgegate -- "coming to board."
Wisniewski and Senator Loretta Weinberg explained in a joint statement that some of the material that Wildstein withheld was appropriate -- but some of the previously withheld documents "should be made public."
http://www.njspotlight.com/stories/14/02/27/fired-sandy-aid-contractor-collected-32-7-million-and-demands-18-4m-more/
FIRED SANDY-AID CONTRACTOR COLLECTED $32.7 MILLION – AND DEMANDS $18.4M MORE
Contract dispute with firm accused by critics of botching housing-repair grants heads toward arbitration
The Superstorm Sandy housing grant manager quietly terminated by New Jersey last December billed the state for $51 million -- 75 percent of the total contract amount -- in just the first seven months of its work, according to new documents released yesterday.
Contractor Hammerman and Gainer Inc., which the state had hired to manage programs to provide nearly $800 million in federal grants to people with homes damaged by Sandy, is seeking another $18.4 million in payments plus interest from the state and has filed for arbitration to get it, according to public documents obtained from the state Department of Treasury and released by Fair Share Housing Center of Cherry Hill. So far, the documents indicate that the state has paid HGI about $32.7 million of the $51.2 million it billed beginning last May.
And that's just for work done through Dec. 6, when the parties agreed to terminate the three-year, $67.7 million contract. Because the state allowed HGI to keep working through Jan. 20, the company wrote in its request for arbitration that it "reserves the right to amend its demand to include claims for amounts" incurred during those six weeks. At the time of the termination, the state had agreed to pay HGI $10.5 million toward its unpaid balance for work already done and toward the work that would be done during the transition period.
Fair Share has charged that HGI botched the processing of applications, as evidenced by the fact that three-quarters of those who appealed the denial of an application for federal aid wound up winning an appeal. State officials still have not provided specifics about why New Jersey severed its relationship with HGI.
"As (Department of Community Affairs) Commissioner (Richard) Constable noted during his testimony before the Senate Legislative Oversight Committee earlier this week, the State severed its relationship with HGI due to performance-related concerns," Lisa Ryan, a DCA spokeswoman, said last night in response to the release of the HGI documents.
"New Jersey's unwillingness to be clear on what HGI did wrong makes it impossible for the public to be sure the problems have been resolved," said Adam Gordon, a Fair Share attorney monitoring Sandy aid and housing issues. "If a contractor has been fired, people impacted by Sandy are entitled to know what the contractor did wrong and how the state is addressing the resulting harm. We still don't know if, or how, the State is correcting these problems, and how much more it will cost in money that could be used to actually help people still out of their homes."
Gov. Chris Christie did not say much more last night during the “Ask the Governor” show on WKXW-FM and did not seem too concerned about the possible arbitration of the issue.
"I think that we had fundamental disagreements about how this should be done and because of those fundamental disagreements, which couldn't be resolved, we are moving on to another contractor," he said. "These things happen all the time. There's always going to be a dispute over monies owed on work that has already been done. And how much of that needs to be paid or not be paid ... if it ends earlier than was planned.
"A neutral arbitrator will work with the two parties to come to a resolution and that will be that," he added.
In papers filed Feb. 7 with the American Arbitration Association, HGI contends the state "made repeated demands that HGI perform work that extended beyond the scope of the services delineated in the Contract, and required completion within an accelerated timeframe not contemplated by the terms of the Contract, all of which far exceeded the manpower and services upon which the initial budget was estimated."
In an answer filed Feb. 11, Assistant Attorney General Beth Leigh Mitchell called the request for arbitration "premature" and sought its withdrawal. She wrote that as of Feb. 7, HGI still had not submitted its final invoice to the state and the parties had agreed they would allow for at least 16 days to "amicably resolve any outstanding issues" before seeking arbitration.
It is unclear where the matter stands now, but Christie's comments indicate that arbitration is likely.
Gordon said the documents raise other troubling questions beyond those involving payment. For instance, he said there appear to have been no written amendments to the contract to account for the additional costs. Nor did HGI submit to the state as it promised -- and as the state had demanded -- weekly progress reports on its work. He called on the administration to provide the public with answers to all these questions.
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