Norcross files suit against Gov. Murphy challenging the legitimacy of EDA Incentive Task Force

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In the latest move in the ever-increasing battle between Gov. Phil Murphy and South Jersey powerbroker George Norcross, the team of lawyers representing Norcross’ interests field a lawsuit Tuesday, challenging the legality of the state’s Task Force on EDA Incentives.

The lawsuit, filed in Mercer County Superior Court, represents South Jersey political power broker George Norcross, his interests and his brother, Phillip Norcross.

In the lawsuit, the team of lawyers claims that the governor’s task force is operating unlawfully, with unauthorized powers, and that it is soliciting counsel from a New York lawyer, Jim Walden, who they say is not licensed to practice in New Jersey.

“Governor Murphy unlawfully empowered the Task Force with powers he did not possess and authorized the retention and payment of New York lawyers who proceeded to commence and conduct an investigation in violation of multiple provisions of New Jersey law,” the lawsuit said.

In the suit, the team of lawyers denied any accusations of misconduct when Camden companies tied to George Norcross applied for tax EDA credits. Those accusations were raised at a task force earlier this month.

In the May 3 hearing, the task force alleged that Cooper University Health Care, Conner Strong & Buckelew, NFI and The Michaels Company applied for tax incentives that they may not have properly qualified for, or falsified information in order to qualify for, the Grow New Jersey incentives.

In the lawsuit, the lawyers said the companies with ties to Norcross have followed the rules and qualify for tax incentives.

“Several of the plaintiffs in this action (Cooper, Conner Strong, NFI, and Michaels) submitted applications to participate in Grow NJ in full compliance with the governing statutes and regulations,” the lawsuit said.

“Three of those entities (Conner Strong, NFI, and Michaels) have not received a single dollar in tax incentives, while all have made important contributions to the Camden community. Specifically, upon transfer of their operations to Camden within the next ninety days, Conner Strong, NFI, and Michaels will exceed by 10-15% the number of jobs they promised and certified would be created, and they have paid more than $1.5 million in fees to the EDA.

“And Cooper has already created more than 500 jobs — approximately 150 more than anticipated — and invested millions of dollars in Camden’s revitalization.”

Walden addressed the suit in a statement released late in the day.

“As we’ve contended for some time, we welcome the opportunity to defend the Governor’s powers to establish this Task Force to bring full transparency to the management of the EDA and award decisions that resulted in billions of dollars in tax incentives to companies across the state,” the statement said.

“We are fully confident that we are acting within the bounds of the constitution and the laws of the State of New Jersey. As everyone is now well aware, we have invited all of these companies to provide fact witnesses at the next hearing. Rather than responding to that offer they have filed an unfounded lawsuit against the task force instead.

“The public can judge this tactic for what it is.”

The lawsuit is the latest step in the battle over incentives.

On May 6, Norcross’ lawyers sent a letter to Walden and task force chair Ron Chen, saying the companies accused of improprieites were not offered an opportunity to respond to accusations in the task force hearings.

Walden issued a written response days later that week. It was not made public, but it was included in exhibit attached to the lawsuit.

In that written response, Walden told Norcross’ lawyers that they are welcome to challenge the legitimacy of the task force.

“Feel free to file a challenge to Executive Order No. 52,” Walden said in his written response. “We are certainly prepared to defend it.”

Walden also offered the Norcross brothers and others tied to them to appear and provide five minutes of testimony at the May 23rd hearing — which was not, according to Walden, going to focus on the Camden companies.

“Your letter of May 6th is hardly cooperation, and, at bottom, you have produced not a single document — before or after the hearing — supporting any conclusions or assertions that your clients’ out-of-state locations were bona fide, suitable, and available,” Walden said.

“We await word from you on when you will voluntarily produce the documents we requested, assuming it is still your clients’ intention to do so.”

He then asked Norcross lawyers to confirm, by May 23, whether the following individuals will voluntarily provide sworn testimony:

· Conner Strong & Buckelew officials George E. Norcross, John Muscella, Matthew Tiagwad

· NFI officials Troy Adams, Jeffrey Brown, Sidney Brown, Scott Brucker, Michael Landsburg, Steven Grabell

· Michaels Organization officials Michael Levitt, Joseph Purcell

· Cooper Health System officials Andrew Bush, Adrienne Kirby, Douglas Shirley,

· Parker McCay officials Philip Norcross, Kevin Sheehan”

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NJMEP, NJEDA sign MOU that includes pilot program on manufacturing resources

The New Jersey Economic Development Authority approved a memorandum of understanding with the New Jersey Manufacturing Extension Program at its regular board meeting Tuesday.

The MOU signifies the growing headway the manufacturers group has been able to make in the state.

The memorandum includes a $15,000 commitment from the EDA to help with a pilot program that aims to more widely broadcast resources the NJMEP has to connect manufacturing companies with a pipeline of new labor from community colleges and vocational schools in the state.

The resource guide created by the NJMEP also will be tweaked by a joint group from the NJMEP and EDA to make it a better tool for the industry and educational institutions.

NJMEP CEO John Kennedy has said the industry is a $50 billion-plus sector that employs at least 360,000 workers in the state.

In December, Gov. Phil Murphy also highlighted the work the NJMEP has done by signing a bill that would provide $250,000 from the state to match a federal grant awarded to the NJMEP for being a top-performing program in the state.

The funding was slated to be used in Newark, Paterson and Trenton to expand apprenticeship programs in various sectors related to manufacturing.

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Hispanic chamber adds Rodrigues, Pinzon, Artiles to board

The Statewide Hispanic Chamber of Commerce of New Jersey has added three new members to its board, it announced Friday.

The new members include Ana Rodrigues, a vice president at Banco Popular; Cristina Pinzon, a managing principal at public relations firm Stateside Affairs; and Guillermo Artiles, a partner at law firm McCarter & English.

The new members give the board a more balanced female-to-male ratio and lower the average age, CEO and President Carlos Medina said.

“We are excited that our board has grown to its largest size in my memory — the fact that we have also been able to attract both age- and gender-diverse candidates makes me most proud. I hope more corporations will lean on the SHCCNJ to help diversify their boardroom, as well,” Medina said in a statement.

Chairman Luis De La Hoz said the new members will help continue the chamber’s mission of growing and developing New Jersey businesses.

“All three of our newest board members embody the spirit, expertise and energy needed to be at the table,” De La Hoz said. “Our commitment is to lead by example and that our leadership reflects the best of our talented men and women of our community. We are very fortunate to have them by our side as we continue to strengthen our Chamber #Familia.”

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EDA investment has been part of watershed transformation of Camden — and wasn’t that exact purpose of Economic Opportunity Act?

(Editor’s note: This op-ed originally appeared on NJ.com. It is reprinted here with permission.)

There’s another round of “dog pile on the rabbit” occurring in New Jersey. In this case, it’s politicians and the media bashing the how the Economic Development Authority has been doling out tax credits to businesses connected with South Jersey political leader George Norcross — the rabbit, it would seem, at the bottom of this particular pile of dogs.

I’ve sat and watched this with incredulity, because it appears that everyone so scandalized by the Economic Development Authority’s actions seems a bit clueless about the law itself, and what its intentions were.

A primer:

What was the intended purpose of the Economic Opportunity Act?

The bill was designed as a mechanism to help bring economic development to South Jersey, specifically creating set-asides for the eight southern counties, especially Camden. Why? As Matt Friedman (then with NJ.com, now with Politicoreported in 2013, state Senate President Steve Sweeney (D-West Deptford) noted that in the “last incentive bill … almost 97 cents out of every dollar went to Jersey City and Newark. If something isn’t done, South Jersey won’t see any of it.” At that point, $211 million had gone to Prudential for its headquarters in Newark. Honeywell received $40 million to move five miles from Morris Township to Morris Plains, and on and on.

But the geographical inequities in state funding weren’t limited to the Economic Development Authority: Millions of dollars of Casino Reinvestment Development Authority money had gone to North Jersey pet projects. CRDA money was taken from needy Atlantic City and used to help build a museum to Yogi Berra (who I love, but that’s beside the point) on my Montclair State University campus (which I also love, but is also beside the point) in one of the most affluent communities in the state (which is the point). The EOA was designed to address some of these historic inequities.

Who supported it?

In short, almost everyone. OK, not everyone. A total of seven legislators in both houses opposed the measure, with the lone Republican opponent in the Senate citing his support of the free market system rather than government subsidies as his motivation for opposition. The point is that sometimes, in politics, deals are made. Through logrolling, one legislator supports a bill that doesn’t matter to her in order to gain support of a measure that will benefit her constituents. It’s not pretty, but it’s how politics is done. And the overwhelming majority of the state Legislature supported the set-asides for South Jersey.

Why Camden?

When this legislation was drafted, Camden was the poorest city in the nation. Its unemployment rate was approaching 40 percent, nearly half of its families lived below the poverty line, and the average income was about $26,000 (compared with a statewide average of over $70,000 at the time). And, unlike most of the state, the damage to Camden’s economy hadn’t been caused by the Great Recession. Rather, Camden had witnessed decades of abandonment by industry and outmigration by residents.

So, what’s the deal with the George Norcross ‘connections’? 

He’s the most powerful unelected man in the state, and, by all accounts, the Camden native envisioned Camden’s transformation. Should it be surprising that companies that want to do business in Camden are “connected” to him, or, heaven forbid, he convinced companies to locate in Camden? Is there something illegal about that?

At the height of his power, could you imagine development in Newark’s North Ward in which the principals didn’t go kiss Steve Abudato Sr.’s ring? Or major development in Union City where Brian Stack wasn’t tangentially involved? If a company is looking to secure tax incentives, wouldn’t it be reasonable that they contract with a law firm that specializes in securing these incentives?

In watching the recriminations of companies connected to Norcross, I couldn’t help but ask, “So what?” Should business leaders with “connections” to Norcross be precluded from receiving the tax incentives? Is there something illegal about having a connection to the man? Are these people who are so incensed new to politics? To New Jersey? Do they not understand how spheres of influence work?

Have you been to Camden lately?

Since the EDA’s investment, the poverty rate is down 5 percent, the unemployment rate is down 8 percent, the high school graduation rate is up 20 percent, and the crime rate is down nearly 60 percent. There have been improvements in public safety and green spaces to encourage Subaru, Holtec International and the Philadelphia 76ers’ employees to stay in town; the Eds & Meds anchor institutions — Rutgers University and Cooper University Hospital — have expanded their downtown footprints; market-rate housing is being built for millennials who are increasingly seeing Camden as desirable. A hotel is opening.

I am not claiming that all of these indicators are a direct result of the EDA investment exclusively, but, clearly, the investment has been part of a watershed, systemic transformation of the city of Camden, what the Wall Street Journal characterized as “a development boom.” And isn’t that exactly what the purpose of the Economic Opportunity Act was?

Brigid Callahan Harrison is professor of political science and law at Montclair State University, where she teaches courses in American government. A frequent commentator on state and national politics, she is the author of five books on American politics. Like her on Facebook at Brigid Callahan Harrison. Follow her on Twitter @BriCalHar.

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EZ still does it: Longtime public-private partnership, EZ Ride, is still helping N.J. with transportation needs

To really appreciate how public-private partnerships have shaped transportation services in New Jersey, it’s worth remembering how these arrangements are used in a jam.

Entire street block-long lines once trailed out of Garden State gas stations; that was amid the nationwide rationing of motor fuels during the oil crises in the 1970s.

Not everyone remembers it, but it fueled a public-private partnership that’s still around today.

EZ Ride, spearheaded by transportation business executive Krishna Murthy, was formed in the aftermath of that turmoil to expand available carpooling services to brace for more motor fuel woes.

“We were basically set up just to help businesses get their employees to work during that time,” Murthy said. “Everyone was having the same issue — there were major commuting challenges.”

Still one of the state’s top examples of a public-private partnership focused on transportation, EZ Ride, started as the Meadowlands Transportation Brokerage Corp. The name, tied to the geographic area it once solely served, was changed as the organization’s reach expanded throughout Bergen, Essex, Hudson, Monmouth, Passaic and Union counties.

The organization, which now facilitates carpools, vanpools, shuttles and other programs in those counties, was the first in the state of what’s referred to as a Transportation Management Association.

“There are many other associations now, each one with a different flavor of transportation offerings,” Murthy said. “But all these entities are working to promote mobility in some shape or form and partnering with private and public agencies for that.”

With its fleet of minibuses and sedans, EZ Ride is manages of the largest carpool, vanpool and shuttle service for businesses and other entities. The shuttle program ferries around about 2,000 Jerseyans each day.

One of the organization’s new programs is one that gives a company’s employees free rides home in the event of a personal emergency so that they aren’t stranded at work.

“Businesses appreciate the fact they have these options for employees year-round,” Murthy said.

It might not have a lot of visibility as far as transportation issues go, but EZ Ride is also addressing the problem of older individuals struggling to keep up with new ride-hailing technologies. One of its newest programs is a partnership with Lyft to launch Ryde4Life, a statewide program to facilitate rides for seniors.

“Folks who are older may not have a smart phone or comfortability with technology to use Lyft or Uber,” Murthy said. “With this program, all people have to do is call us to set up a ride. It’s something that about 1,000 riders are participating in so far.”

While transportation challenges are changing character all of the time, companies and public entities continue to pair up today to make sure that there’s no roadblock to Jerseyans getting around.

“It’s important to have organizations working together to get people where they need to be,” Murthy said.

Sharing is caring

If there is a crisis in transportation that public-private partnerships are looking to address today, it’s the access low income individuals have to the rising costs of transit. EZ Ride has, for many years, been carefully monitoring how it can ease costs for this population.

Private sector companies, such as Uber, are pitching their own solutions and looking to forge partnerships with the public sector in the process.

Uber’s bike-share service Jump is making a play at parking itself in Jersey City, which would be the service’s first New Jersey city. Uber spokesman Harry Hartfield said Jump has come up with plans to subsidize the cost of traveling on its dockless e-bikes through a cheaper subscription plan for some individuals.

“And in other parts of country where we do have a presence already, such as Washington, D.C., we’ve found that these dockless bikes tend to be more popular in low-income and diverse communities than alternative systems,” he said, adding that he wanted to see Jersey City served in an equitable manner.

The company has made that pitch alongside an appeal to how the bikes could alleviate any trouble caused by an upcoming suspension of light rail service at three stations on the West Side Avenue spur of the Hudson-Bergen light rail line.

It made a proposal to Mayor Steven Fulop to allow the bikes to be deployed locally. But the hurdle for the company is that right now, Citi Bike, New York City’s bike share system, has an exclusive agreement with the city.

“Our view is that these systems could complement each other well,” Hartfield said. “We’re not changing the way Citi Bike operates. We just want to come in and offer these bikes in order to supplement some of the mass transit holes in Jersey City. Citi Bike itself promised to serve parts of the city it’s no longer serving.

“We need the city and mayor’s approval; we’re hopeful we can get there.”

Conversation Starter

Reach Krishna Murthy of EZ Ride at: kmurthy@ezride.org or 201-939-4242.

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This year’s budget battle starts early, as Sweeney blasts Murphy

Let New Jersey’s tax incentive programs run out with a replacement?

State Senate President Steve Sweeney thinks that would be a horrible idea. But he’s not afraid to call Gov. Phil Murphy’s bluff on the issue.

“He’s the governor — and, if he wants to see the economy really slow under his watch, that’s up to him,” Sweeney (D-West Deptford) said.

Sweeney was speaking after making remarks at a forum sponsored by Garden State Initiative on Thursday night in New Brunswick.

Most of his thoughts were the same as they’ve been for months — he pledged to not support the millionaire’s tax and to fight to make state employees pay a greater share of their health care benefits.

A new wrinkle, however, came with the incentive programs, currently under attack.

Sweeney, looking for comprehensive reform on so many issues, put incentive reform in Murphy’s lap.

“We put a committee together to look at what kind of incentive program we could put in place,” he said. “But, if he wants to be the state with no incentive programs with what’s going on and businesses start moving out of here, he can explain it. He’s the governor.”

Sweeney repeated his calls to lower the cost of government in the state.

He does not want to do so, however, with total giveaways to big business. In fact, he brought up how he not only supported raising the Corporate Business Tax, he wanted to do so more than the state did last budget season.

“Last year, we raised the CBT,” he said. “(Murphy is) the one that fought us on raising the CBT and actually had us reduce the amount of CBT. He fought me over taxing the C-corps, who were the real benefactors of the Trump tax cut.

“You know, companies went from 35% (taxes) down to 21%. They were the people that got more money for doing nothing. So, why am I going after people that are making so much money and I’m taking it away from them rather than focus on the corporations?”

Sweeney said he knows he was right for one simple reason: He didn’t hear a lot of objections.

“You didn’t hear a whole lot of hollering, because how do you holler when you’ve got so much more money for doing nothing?” he said. “That Corporate Business Tax is going to come in almost double what we projected. And if we hadn’t done the Corporate Business Tax and we had just done the millionaire’s tax, we would have a deficit right now.”

Sweeney’s disagreements with Murphy did not stop there.

Sweeney said he plans to counter the state’s EDA Task Force hearings with some of his own.

“We’re going to form a committee on Monday to examine the (Economic Development Authority) tax incentives and allow everyone to come to speak, unlike what Gov. Murphy’s panel is doing,” he said. “Right now, if you want to defend yourself, you only can submit in writing — you’re not given the opportunity to submit publicly like they’re doing.

“I’m a believer — like when we do budget hearings and we do hearings in Trenton — both sides get to present in front of you. So, we’re going to allow everyone.”

Sweeney said he’s open to modifications.

“We’re going to figure out what’s wrong with the EDA, what’s right with the EDA and how do we fix the EDA,” he said. “I agree these payments are too rich, but it’s because our state isn’t such a bad place with tax policy.

“People don’t want to come here unless you’re putting big tax incentives in front of them.”

If you thought you would have to wait until the end of June to see the real budget battles begin, think again.

The fight is on now. Sweeney said he’s not backing down.

He said he has no choice.

“This state is in serious financial trouble,” he said. “And if we don’t start fixing things now, it’s going to be too late.”

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Elnahal: Report on state’s psychiatric hospitals coming soon

The state Department of Health is set to issue a report soon on how the state’s four adult psychiatric hospitals are doing.

Commissioner Shereef Elnahal told ROI-NJ the report will include a number of policies and regulatory recommendations, which would need the support of the Legislature and Gov. Phil Murphy to put in place.

“We’re about to release a nine-month progress report in our 18-month plan that’s going to go through all of our improvements,” Elnahal said.

“Just to give you a teaser of that, (there’s been) over a 30 percent reduction of violent episodes and assaults from last year. So, this is comparing the beginning of the administration to now.”

The statistic matches a quarter-over-quarter comparison from January 2017 to January 2018, when Elnahal first announced the action plan in August 2018.

The report will include both highlights and areas the state has more work to do, Elnahal said.

“I took what I had learned in quality improvement at the VA (U.S. Department of Veterans Affairs) — we brought it to the state psychiatric hospitals,” Elnahal said.

The DOH’s 18-month plan is focused on an analysis of the hospitals, as a result of a focus on the psychiatric facilities that began under Gov. Chris Christie’s administration.

“The intent of the analysis was to provide an assessment of the organizational and operational issues affecting each psychiatric hospital, and to provide recommendations to meet the challenges with the overall goals of achieving the most important objective: improving the quality of patient care delivered to service recipients,” according to the plan in August.

“The scope of the engagement included: review of the current inventory of services, human resources and staffing assessments, clinical issues, operations issues, governance and administration functions, finance, and physical plant issues.”

Elnahal said in August that the goal of the plan was to have the psychiatric hospitals, which have come under the spotlight as the opioid crisis hit the state, operate like other acute care hospitals.

“Our vision is to have the hospitals operate as one health system of regional psychiatric facilities using the same clinical and patient safety standards,” he said last year.

“Just like acute care hospital systems or a children’s hospital, our regional psychiatric hospitals should be specialized hospitals where patients are treated, stabilized and then returned to the community — with the supports they need.”

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Legitimacy of EDA Task Force questioned by lawyers representing George, Philip Norcross

A team of six top lawyers representing George Norcross, Philip Norcross and their business interests questioned the legitimacy of the task force Gov. Phil Murphy set up to look into allegations of abuse by the Economic Development Authority in the administration of the state’s tax incentive programs, in a six-page letter that was released late Monday.

The letter, which was sent by email and hand-delivered to the New York City offices of special counsel James Walden, questioned the authority of the task force and complained about the inability of “targets” of the hearings to provide a counterpoints or statements against witness and whistleblower statements. The letter registered complaints against Walden and the committee chair, Ronald Chen:

“On behalf of our respective clients, we write to object to the unlawful process you are conducting on behalf of the Task Force on the Economic Development Agency’s Tax Incentives. For the reasons set forth herein, the Task Force’s chair, Mr. Chen, lacks statutory authority over the Economic Development Agency, which is an independent authority not subject to the gubernatorial powers set forth in N.J.S.A. 52:15-7.

“Moreover, the arbitrary restrictions you imposed on our clients’ rights to respond to false accusations against them denies each of them the opportunity to exercise their First Amendment rights as well as their right to publicly confront accusers within the same public forum. Given your stated intention to publicly adduce ‘adverse’ evidence against our clients, these restrictions are particularly noxious. We therefore demand an opportunity to submit a public presentation to the Task Force at its next scheduled hearing.”

The letter was signed by Chris Porrino, Michael Critchley Sr., Herbert Stern, William Tambussi, Michael Chertoff and Kevin Marino.

The letter was in response to the most recent meeting of the task force, held last Thursday, when incentives given to companies that relocated to Camden were heavily criticized.

Jersey City-based World Business Lenders, which also was under scrutiny, previously complained about not being able to respond to allegations against it.

The letter cites a statute that allows the governor to investigate the management “by any state officer of the affairs of any department, board, bureau or commission of the state. It does not extend to independent authorities like the EDA.”

The EDA was created by statute in 1974, the letter said, and is in “but not of,” the Department of the Treasury.

Neither the Governor’s office nor the task force had an immediate response to the letter.

Earlier Monday, Chen responded to a similar line of questioning from Camden County officials about the validity of Chen running the task force since he, Chen, is a professor at Rutgers University, which has benefitted from the state’s tax incentives.

“The governor has full constitutional and statutory authority to investigate any entity within the Executive Branch, including the EDA, either by himself or through a delegate,” Chen said in a statement.

“If anyone wishes to challenge that authority, they should bring an appropriate action in court and we are ready to defend it vigorously.”

Last week, Critchley questioned the validity of Walden, a lawyer in New York, being appointed special counsel and practicing law in New Jersey.

See a copy of the letter, addressed to Walden, below.

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Ex-employee testifies financial firm used false info to obtain incentives

World Business Lenders recently made a splash in the New Jersey business sphere by aggressively pursuing legislation to govern its operations and creating a partnership with the Statewide Hispanic Chamber of Commerce of New Jersey to help minority small businesses overcome obstacles of access to capital.

But, on Thursday in Newark, WBL made headlines for a different reason: A former employee said the company used false information to obtain and then sell a Grow New Jersey tax credit — which rewards companies for creating and retaining jobs in New Jersey with tax credits ranging from $500 to $5,000 per job.

In her testimony at the second EDA Task Force hearing, Kerrie-Ann Murray said her company made a sudden move from New York City to Jersey City in 2016, and hired and fired about 80 people just to meet the requirements of the Grow NJ tax credit it was awarded for its move.

WBL, in a statement provided to ROI-NJ, vehemently denied Murray’s allegations, saying they came from a disgruntled former employee.

“Before today, World Business Lenders conveyed to the Task Force on the Economic Development Authority‘s tax incentives that there were numerous and serious reasons to believe Kerrie-Ann Murray would not testify truthfully,” the statement said.

“We are bitterly disappointed that the task force has, nevertheless, allowed Kerrie-Ann Murray to provide her biased and unreliable testimony without also allowing World Business Lenders the opportunity to have a witness testify. Kerrie-Ann Murray is a disgruntled former employee of WBL.”

Murray’s allegations are noteworthy.

Doug Naidus, center, is CEO of World Business Lenders.

When it was located in New York, WBL had 80 employees, and needed to hire 100 to 125 more in a two-month timespan, between May and July 2016, after the staff knew it was moving to Jersey City.

Murray said staff were instructed to create a relationship with the New Jersey Department of Labor & Workforce Development to fill the positions, and in that process also benefitted from DOL incentive programs to encourage hiring of individuals on welfare, who live in specific zones, or are veterans, and the company was also reimbursed for half of the hourly wage per employee it hired from a certain pool of unemployed individuals.

WBL then hired the more than 100 people, paid them $10 per hour and created a new department to cold-call small businesses to see if they were interested in and qualified for a loan.

“It wasn’t a role or positions that the company previously used,” Murray said.

“The company does subprime lending, if I can say that, so you would have to be very experienced in sales, experienced in selling, experienced in getting borrowers to actually borrow money at the high percentage rate.”

Murray also told the task force members that the company kept a monthly spread sheet, entitled Grow New Jersey, which tracked the number of employees. It included information such as employee names, positions, hours worked, annual salaries and earned pay per month.

If an employee didn’t meet the full-time hours, managers were asked for reasons. If no reason was provided, Murray said, the company would backfill the hours as paid time off, or PTO.

That went on for about six months, and, in January 2017, the entire department was eliminated.

When employees who were left asked why, they were told it was because the tax credit had been sold.

In a recent interview with ROI-NJ, WBL CEO Doug Naidus said there is a cold-calling department whose operations matched those described by Murray.

The statement also addressed the tax credit being sold, and the rehiring of the cold-calling department.

“In accordance with the Economic Opportunity Act, WBL voluntarily sold (and was not forced to sell) its tax credit for 2016,” according to the statement.

“Under the Act, this is a permissible practice employed by many companies across the state. The reasons for WBL’s decrease in payroll in 2017 is one that would be familiar to anyone who follows industry trends. In the second half of 2016, the fintech credit bubble began to deflate, which led to downsizing across the industry. WBL was forced to reduce its payroll count the following year, even as many of our competitors went out of business altogether. Since then, our industry has recovered and we have begun to hire again.”

But Murray also told the task force Thursday that other falsified information was used to boost the jobs numbers, such as keeping an employee on the payroll even though they had already been terminated while in New York, and the severance pay was kept on the books, just to help maintain the needed number of employees for the grant.

From July to December 2016, Murray said, staff were instructed to, despite constant turnover, maintain a minimum of 225 employees.

The statement from WBL does not address this claim. Instead, it claims Murray was responsible for falsifying information.

“During 2016, Ms. Murray reported incorrect employee headcount information to WBL’s chief financial officer, which was intended to be sent to the Economic Development Authority,” the statement said.

“Ms. Murray proceeded to argue her incorrect data was, in fact, correct despite being proven wrong by management employees. In the end, the numbers submitted to EDA for 2016 exactly match the payroll numbers from ADP, the company’s payroll provider. This well-documented data is clear, transparent and unimpeachable.”

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EDA Task Force counsel draws intricate ties between Norcross family, Camden-centered incentives

The second EDA Task Force hearing Thursday in Newark took on a trial-like atmosphere in a mock courtroom at Rutgers University’s campus in Newark.

And the city of Camden, Cooper University Health Care, insurance and benefits brokerage Conner Strong & Buckelew and the law firm Parker McCay — all entities with ties to the Norcross family in South Jersey — took center stage.

A task force special counsel, James Walden, focused on connections between the Economic Development Authority and South Jersey power broker George Norcross III, who is board chair of Cooper and executive chairman of Conner, and his brother, Philip Norcross — alleging a lawyer at Philip Norcross’s firm, Parker, engaged in unregistered lobbying.

The ties Walden described, some of which were reported in a New York Times article Wednesday, include:

  • Parker McCay attorney Kevin Sheehan helped craft the 2013 Economic Opportunity Act, adding in lines that could, allegedly, favor certain companies or developers;
  • Cooper may have been wrongly approved for tax incentives for keeping jobs in Camden, rather than moving to Philadelphia;
  • Conner may also have been wrongly approved for incentives in its move to Camden;
  • Language in the economic legislation appears to favor a specific supermarket project, as well as keeping the headquarters of Subaru and others in the city.

The witnesses who testified Thursday and helped Walden establish the ties or help question the validity of some award incentive applications include former EDA President and Chief Operating Officer Tim Lizura, who left the agency in July 2018; David Lawyer, a former underwriter at the EDA; and Brandon McKoy, president of New Jersey Policy Perspective.

In his opening comments, Lizura defended the EDA’s actions in Camden and said the city’s turnaround story is a direct result of tax credits.

“We ran the EDA in a responsible and professional manner,” Lizura said.

Lawyer reviewed the application submitted by George Norcross’ insurance firm, which showed that jobs were not at risk for leaving the state and that a supposed competitor site in Philadelphia had not been selected yet.

In addition to Conner, the Archer law firm, a supply chain company and a housing company also submitted applications threatening to leave New Jersey for Philadelphia.

Lizura explained that tax incentives are a tool that municipalities and others use in order to try to influence the behavior of corporations.

Walden appeared to suggest it was the other way around, with companies taking advantage of lack of oversight or EDA officials ignoring requirements not being met that were flagged by employees — and some of the employees ended up being whistleblowers.

Some examples include:

  • Companies choosing an alternate site after applying for the incentives;
  • Companies explicitly saying there are no jobs at risk of leaving the state, but receiving the incentives;
  • Fake addresses or nonexistent sites being used as the “alternate” site selected outside the state.

Walden asked Lawyer about protocols at the EDA and whether or not training programs existed.

Lawyer said they did not, and that ongoing or annual training would be a beneficial change the task force could pursue.

The revelations from whistleblowers and officials Thursday have thrown the current incentive programs under even harsher scrutiny — and could give Gov. Phil Murphy a boost to push for new incentives to be implemented in the two months remaining until the current programs expire.

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