Murphy task force continues questioning Christie-era tax break programs in N.J.

May 4, 2019

A task force set up by Gov. Phil Murphy poked more holes in the state’s tax break programs Thursday, as it continued to investigate whether the state’s tax incentive regime was misused and questioned witnesses with knowledge of the Economic Development Authority’s inner workings.

“Some have disclosed, in large ways and small, evidence of potential corruption and self-dealing and arguable illegal activity,” said New Jersey Economic Development Authority Task Force special counsel Jim Walden.

During its second public hearing, the task force specifically raised questions about an application submitted by a company owned by South Jersey powerbroker George Norcross, as well as three other companies connected to him.

The New Jersey Economic Development Authority Task Force met in Newark on Thursday. (Joe Hernandez)

Although Norcross’ name was not mentioned, Walden questioned whether the powerful Democrat’s firm seriously considered moving its offices out of New Jersey to Philadelphia, which it claimed to have done in order to qualify for the incentive.

In addition to raising the possibility of abuse of the tax break programs, the testimony also highlighted the political rift between Murphy and Norcross, a powerful Democrat aligned with state Sen. President Steve Sweeney.

A WNYC/ProPublica story published this week showed that nearly two-thirds of the $1.6 billion in tax credits awarded to Camden companies went to Norcross’ company, his business partners, his political allies, and clients of his lobbyist brother.

“The fact that private investment is returning to Camden is no accident — it was planned and fought for,” Norcross said in a statement. “As WNYC and other media outlets have reported, the commitment to rebuilding Camden’s future began years ago and focused on the city’s three biggest challenges: improving public safety, reforming education and bringing jobs and economic investment to the city.”

Others who testified Thursday defended the tax incentive programs they said provided a real benefit to the state and brought an unprecedented level of development in Camden and other distressed cities.

“There are different ways to count these numbers and discuss these numbers, but the simple and accurate conclusion is the same: EDA expected these projects would generate far more revenue for the state of New Jersey than the total cost of the credits,” said Tim Lizura, the former chief operating officer of the EDA.

Thursday’s public hearing also featured a corporate whistleblower who said officials at the New Jersey company she worked for lied in order to reap the benefits of a multimillion-dollar state tax break.

Kerrie-Ann Murray, the former payroll manager for World Business Lenders, said the company manipulated payroll records to show that employees had worked the required number of hours when they hadn’t and also to extend the tenure of an employee who had already been fired — all to remain within the requirements of its $16.8 million incentive.

In a statement, World Business Lenders called Murray a “disgruntled former employee.” The company also called her allegations “baseless” and said it was “bitterly disappointed” the task force did not allow a company representative to testify in response.

The state EDA awarded World Business Lenders the $16.8 million tax break in 2016 to set up shop in Jersey City instead of moving to a location in Queens, New York.

During the hearing, special counsel Walden also noted the influence of political insiders in the writing of the Economic Opportunity Act, which was signed into law by former Gov. Chris Christie and vastly expanded what the state could offer in tax incentives.

Walden highlighted the case of Kevin Sheehan, an attorney for the firm Parker McKay, which is also tied to Norcross, who suggested changes to the legislation as it was being drafted.

The New York Times reported earlier this week that Sheehan was not a registered lobbyist at the time he was making edits to the bill that would benefit his clients.