(Bloomberg) -- A New Jersey political boss and some of his allies shaped a law to grant tax breaks for redevelopment in one of America’s most distressed cities, then benefited from a state agency’s sloppy oversight, an investigative panel declared in its first public report.
The panel identified Democratic power broker George Norcross as a common link to hundreds of millions of dollars of incentives awarded on companies’ promises to boost jobs. Norcross and five entities linked to him -- his insurance company and two of its partners, a hospital where he is board chairman and his brother’s law firm -- lost a court bid on Monday to keep the 79-page report from public release.
The panel’s findings added weight to Governor Phil Murphy’s assertion that he owed taxpayers a full accounting of the $11 billion tax-incentives program. He appointed the task force in January, after a state comptroller’s report identified potential abuse of the funding, particularly in Camden, a chronically poor and dangerous city.
The program was “a rigged system,” manipulated by insiders for insiders, Murphy said at a Trenton news conference. In a rare pronouncement on pending legislation, he said he would veto any bill that extends two parts of the program beyond their expiration date.
“This system cannot be allowed to continue for one day past June 30,” Murphy said. “To do so would be to ignore both the facts presented by the task force and the facts presented by the communities left struggling in the shadows of the buildings this system built.”
Norcross, Camden’s biggest cheerleader, holds no public elective office but influences a bloc of lawmakers often at odds with Murphy, their fellow Democrat. Norcross and his allies claimed that the panel was Murphy’s personal political weapon against him and lacked authority to operate. But Superior Court Judge Mary Jacobson said its appointees, plus media reports, had raised questions about several deals, and the public had a right to know.
In one instance, the panel found, a Cooper University Hospital executive sought to create a paper trail indicating that the hospital intended to move to Philadelphia, across the Delaware River from Camden, unless it was awarded $40 million in incentives. In another case, Holtec International Inc., a Camden-based nuclear-fuel technology company where Norcross serves on the board, failed to disclose that it had been banned temporarily from federal contracting. Holtec’s $260 million award was among the biggest in state history.
Five years after then-Republican Governor Chris Christie signed a 2013 law expanding the tax breaks, the Economic Development Authority “had virtually no written policies or procedures regarding its process for reviewing and approving applications,” according to the report. Employees weren’t trained to analyze companies’ applications and “seemed completely unaware” of records that back up a business’ claims that it was considering leaving the state, it found.
The development authority has said it’s cooperating with the task force and has tightened operations.
The task force also documented changes to the draft of the 2013 incentives law suggested by Kevin Sheehan, an attorney at Parker McCay, the law firm run by Philip Norcross, one of George’s brothers. Philip Norcross represented some companies that won awards.
The plaintiffs in the lawsuit against Murphy said their legal fight was not an attempt to shut down the task force’s work, but to afford them a chance to tell their side of the story during the panel’s public hearings. They will continue litigating, they said in an emailed statement, and will push the legislature to appear at hearings to lift the “suspicion that has settled around all 31 firms that have moved to Camden under the same set of rules.”
(Updates with Murphy quote starting in fourth paragraph.)
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