Posts Tagged ‘Pay to Play’

Christie Announces Contracts Review: Will Boxer Finally Investigate Lumberyard?

Monday, January 23rd, 2012

New Jersey Comptroller Matthew Boxer Promised To Clean Up Pay To Play

 

Chris Christie ran for Governor on a platform of reforming Trenton, draining the swamp if you will. Christie appointed Matthew Boxer as his Comptroller. Comptroller Boxer put on a grand show in September regarding the problems with the pay to play reforms New Jersey has enacted, namely that they do not do anything substantial to curb corruption.

Now Governor Christie has ordered a complete review of the public contracting process on the state and local level, from the Star Ledger:

Gov. Chris Christie has ordered a complete review of state purchasing laws and the public contracting processes, prompted by a report that showed one in five multimillion dollar purchases made by governments in New Jersey broke the law…

Towns, where many professional services contracts are not subject to the same stringent rules as state departments thanks to the “fair and open” exemption, are under increased pressure to voluntarily improve the transparency of their bid processes.

Interesting claim, but where is the evidence for that pressure?

While Comptroller Boxer was busy posing for the cameras to decry the sorry state of affairs in New Jersey the town of Collingswood was watching its Bond rating go to Junk and become a national joke being labeled by Reuters as the Absurdity of the Year for such gross financial mismanagement. But was it mismanagement or corruption, or both?

It would later be revealed that the developer which bankrupted the project, and subsequently the town, had received a no-bid contract at the Mayor’s urging, from Collingswood’s local paper the Retrospect:

[Collingswood Mayor] Maley said that the borough is currently finalizing an agreement with Costanza Residential LLC, to redevelop the Peter Lumber site. Costanza was awarded a no-bid professional service contract in Jan. 2004 to act as development manager to oversee the project. Costanza receives $5,000 a month from the borough, plus expenses.

This same developer, John Costanza, paid to play, donating money to Mayor Maley’s campaigns:

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[Source: NJELEC]

If Governor Christie is serious about honest public services its time for his administration – of which he has designated Comptroller Boxer to represent – to get to the bottom of the Lumberyard Boondoggle.


No-Bid Contracts and Campaign Contributions Surround Bankrupt Project in Collingswood

Thursday, November 17th, 2011

 

One of the hallmarks of New Jersey’s traditional no-bid contracting system was the nearly unlimited discretion of the agency awarding the contract in selecting a politically favored vendor. In practice, fair-and-open requirements do not materially change that substantial discretion.

- Matthew Boxer, New Jersey Comptroller

 

Studying the history behind  The Lumberyards boondoggle  can only lead to more questions.

The first being what was the relationship between the public officials and the now reportedly “bankrupt” developer? Did this relationship in any way effect the performance of the contract and/or lead to the failure?

One aspect of the relationship between the developer, John Costanza (pictured above) of Costanza Builders as well as Lumberyard Redevelopment LLC, and the public officials, Mayor Jim Maley, Commissioner Joan Leonard and Commissioner Michael Hall was campaign contributor:

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[Source: NJELEC]

There is some ambiguity in the ELEC electronic entry of when precisely Costanza Builders made each donation – one appears to be in 2006 and one is apparently later – both went to the 2009 Join Candidates Committee.

The contract for developing the property, despite the now quite apparent difficulty of the project, was handed to Costanza and not put out for competitive bid, from the Retrospect:

Maley said that the borough is currently finalizing an agreement with Costanza Residential LLC, to redevelop the Peter Lumber site. Costanza was awarded a no-bid professional service contract in Jan. 2004 to act as development manager to oversee the project. Costanza receives $5,000 a month from the borough, plus expenses.

The project would stay with John Costanza but be transferred from Costanza Residential LLC to Lumberyard Redevelopment LLC – why? It is not clear. From the New Jersey Treasurer’s office:

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More to come.

“Pay to Play” A Primer

Saturday, October 8th, 2011

 

 

  Corruption is like a ball of snow, once it’s set a rolling it must increase.
   – Charles Caleb Colton

 

 

 

Bribery is legal in New Jersey. Those outside New Jersey may find this shocking, those within merely annoying, but indeed it is legal in the state of New Jersey for businessmen (and women) that are seeking to receive benefits from public officials to give those same public officials money – provided the bribes meet certain specifications.

Wouldn’t that cause lots of conflicts of interest and compromise honest government services leading to inefficiency and higher costs for taxpayers? Wouldn’t a state that allowed such obvious corruption face a lack of trust in government as a result? Yes and yes.

 History

As anyone who has watched Boardwalk Empire knows, corruption is not particularly new to New Jersey.

New Jersey was corrupt even before it was part of America having  possibly the most disgraceful British Governor in the American colonies, Lord Cornbury. Lord Cornbury was notorious for taking bribes and stealing from the treasury, partly to pay for a cross-dressing habit. Pay to Play Dress Up.

One of the most notorious post-independence powers-that-be, also featured in Boardwalk Empire, was Hudson County boss Frank Hague.  Hague was the very definition of a Jersey machine boss once even declaring “I am the law” during his 30+ year tenure as Mayor of Jersey City. Pay to Play was so institutionalized in Jersey City that Hague’s desk had a specially designed lap drawer which could be pushed outward towards the person with whom he was meeting to collect bribes in the form of envelopes full of cash.

And let’s not forget those friends of ours, whose main concern is wetting their beak in construction and other public works projects. Pay to Play is their Bread and Butter.

 Today

In 2004, before resigning over corruption relating to a real estate developer (being gay is not illegal), Governor McGreevey signed a law (P.L. 2004, c. 19) and issued Executive Order 134 which somewhat reformed Pay to Play – most notably adding additional transparency to no-bid contracts, where a good deal of nepotism and cronyism goes on. If there is no bidding process by definition the contract is given to someone already known by the public officials usually those known persons know how to return a favor. In 2005 McGreevey’s Executive Order was essentially codified into law (P.L. 2005, Chapter 51). All these laws culminated in the New Jersey Campaign Contributions and Expenditures Reporting Act (N.J.S.A. 19:44A-1 et seq).

Despite these reforms, as recently as September 15th a report was released by the State Comptroller claiming the Pay to Play reforms were basically meaningless on the local level. Let’s pretend this was not released in September as part of a Republican election strategy (which it totally was), what is the substance of Comptroller Boxer’s argument?

Boxer claims an exception added in the previous reform laws, namely the “fair and open exception”, is so weak and easily bypassed it leaves the old Pay to Play system unchanged.

One of the hallmarks of New Jersey’s traditional no-bid contracting system was the nearly unlimited discretion of the agency awarding the contract in selecting a politically favored vendor. In practice, fair-and-open requirements do not materially change that substantial discretion. (pg 6)

In other words the law did not stop the corruption in any meaningful way. Boxer concludes:

In practice, the system of fair-and-open has multiple weaknesses. As a result, it presents few, if any, real obstacles to a government entity seeking to award a contract to a politically favored vendor. As long as the contract opportunity is minimally advertised and selection parameters of any kind are drafted, the ultimate award is within the entity’s discretion and immune from outside review. In effect, no-bid contracts may be awarded to favored local vendors much as they had been prior to the passage of the pay-to-play law, and without regard to issues such as vendor cost. While no legislation can eliminate all risk associated with political corruption and donor influence in the government procurement setting, it is apparent nearly six years into its implementation that the fair-and-open system offers notably few hurdles for wrongdoers to overcome. (pg 14)

So Pay to Play continues, fully. The law, according to Boxer, is merely a speed bump on the way to hog highway. But before you think Boxer has some solutions here comes the next sentence:

In arriving at that conclusion, we acknowledge that campaign contributions are an appropriate and necessary part of a robust democratic process.36

What? Says who? Boxer’s footnote is quite revealing:

 36 See, e.g., N.J.S.A. 19:44A-20.13; Citizens United v. Federal Election Comm’n, 130 S. Ct. 876, 898 (2010); Melanie D. Reed, Election Law: Regulating Political Contributions by State Contractors: The First Amendment and State Pay to Play Legislation, 34 Wm. Mitchell L. Rev. 635, 645 (2008).

The Citizens United decision was a corporate license to steal (elections). It seems Boxer’s actual objection is not corruption but the size of the businesses engaging in it. Beware of politicians baring righteous indignation.

In any case, Pay to Play is alive and well in New Jersey. And why not? It’s tradition.