Will school board election be affected by change in Paterson's insurance broker contract?

PATERSON — School district officials recently snubbed a politically connected insurance company by picking another firm as their broker, a move that has fueled speculation about a possible backlash in the city's upcoming Board of Education election.

The decision to replace Fairview Insurance as Paterson Public Schools’ broker, a position the company held for the past five years, happened without any public discussion at the time of the June 7 vote.

But about two months later, the district’s change in insurance brokers became a topic of widespread discussion in Passaic County political circles after two prominent local officials — Flavio Rivera and Joel Ramirez — filed last-minute petitions to run for the school board, catching many insiders by surprise.

Six people involved in city politics — including some former and current school board members — told Paterson Press they believe Rivera and Ramirez will be backed in the November election by a federal super PAC connected to Fairview Insurance.

Assemblyman Benjie Wimberly already has predicted that the 2023 school election may turn out to be the most competitive that Paterson has seen.

The school district’s broker contract with Fairview put the annual price at $140,000. But officials said the district did not pay Fairview directly for its work. Instead, the broker was paid by the insurance carriers, based on a percentage of the premium for each policy, the district said.

Officials said the district does not know exactly how much Fairview was paid by the various insurance carriers for its work involving Paterson schools.

Fairview’s chief executive, John F.X. Graham, is a member of the Democratic National Committee and has served as a super delegate at the party’s national presidential convention. He also served as a campaign adviser or campaign finance committee member to two governors, Jon Corzine and Phil Murphy; two U.S. senators, Cory Booker and Bob Menendez; and three House members, including Bill Pascrell Jr.

One of Fairview’s insurance consultants is Keith Furlong, a spokesman for Passaic County government and a close associate of John Currie, who is the powerful former state Democratic Party chairman and current head of the party in Passaic County. Furlong also has worked on election campaigns for numerous Democrats in Passaic County, including Paterson Mayor Andre Sayegh.

The pay-to-play report that Fairview filed with the New Jersey Election Law Enforcement Commission said the company in 2020 had insurance contracts with about 50 different government entities in the state, including the county of Passaic, the city of Passaic, the Paterson school board, the Passaic school board, the Passaic Valley Sewerage Commission, Passaic Valley Regional High School, the Passaic Valley Water Commission and the Passaic County Board of Social Services.

The pay-to-play report put the total value of those contracts at $951,552. But that amount reflects only a portion of the money Fairview made through its government work. The ELEC report listed the value of about half the contracts at zero because of arrangements like the one Fairview had with the Paterson school district, in which payments were made by insurance carriers, not the government entities.

Furlong declined to comment for this story.

Whatever happens in Paterson's November school election, it seems unlikely Fairview would be in a position to regain its broker’s role with the district anytime soon. The new firm, Alamo Insurance Group of Secaucus, has a contract that runs through the end of June 2026. Alamo also has an arrangement in which it will not be paid directly by the district, but by the insurance carriers.

Alamo won the Paterson district’s broker contract through a competitive process in which five firms’ proposals were evaluated and scored by school officials. Alamo came in first and Fairview second in the rankings, according to the score sheets.

Alamo is no stranger to government contracts. Its pay-to-play report showed that it handled insurance work in 2022 for about 40 government entities, many of them in Hudson County. The report listed values for all those contracts, for a total of $2.76 million.

Fairview is connected to a federal super PAC, America’s Future First, that twice provided financial backing for candidates in Paterson school board races. Political insiders said they will be keeping their eyes on the PAC again in this year’s school election.

Ramirez and Rivera are among nine candidates — including all three incumbents — vying for the three board seats up for grabs in November.

Ramirez, a former school board member who served as Sayegh’s health and human services director in Paterson, could not be reached for comment for this story. Rivera, Ramirez’s running mate, previously served on the school board and the Paterson City Council, opting not to run for reelection last year. He has one of the top jobs at the Passaic County Board of Social Services.

Paterson Press asked Rivera on Friday if he expected to get support from America’s Future First.

“I’m always open for anyone to help,” Rivera said.

State election law prohibits candidates from coordinating their campaigns with PACs.

“PACs can do whatever they want,” he added. “I can’t control what PACs do. I don’t need to know any of that stuff. It’s none of my business.”

Rivera said he did not have any conversations with Furlong about his candidacy. He said his decision to run had nothing to do with the Fairview contract.

Rivera said he was running for the Board of Education because he was upset over the recent streak of four years with double-digit-percentage school tax increases. Rivera said his surprise last-minute entry into the school election stemmed from his independent mindset.

“I never tell anybody beforehand,” he said. “I just make my decision and that’s it.”

Rivera chuckled at the speculation that his candidacy was prompted by Fairview’s loss of the broker contract.

“I don’t know why people start with these theories,” he said. "Why is it bothering them so much that I’m running for the school board?”

Joe Malinconico is editor of Paterson Press.

Email: editor@patersonpress.com

This article originally appeared on NorthJersey.com: Paterson NJ school board election could be affected by broker change