Editor’s Note: This article was updated with Comment from Norcross at 4:13 p.m.
The task force convened by Gov. Phil Murphy to investigate tax incentives meted out by the Economic Development Authority released a second scathing report Thursday.
The report charges that the EDA’s awards were often handed out with the interests of the applicant companies in mind instead of the interests of New Jersey taxpayers, that the tax incentives were often oversized and that the EDA employees were warned of criticized for asking too many questions about companies’ applications.
The task force’s second report reveals new information about allegedly-faulty applications that led to tax incentives worth millions of dollars to firms with ties to South Jersey powerbroker George Norcross.
A roughly $40 million award to Cooper Health System, where Norcross is chairman of the board, was apparently based on an empty threat that the hospital system would move itself out of New Jersey, the task force charged, citing an Dec. 3, 2014, email sent by Andrew Bush, Cooper’s vice president of real estate and special projects.
“I toured [the Philadelphia building] today and believe that I will have a [proposal letter] in hand by the end of tomorrow that provides our ‘credible threat to move’ to satisfy the EDA,” Bush said.
That email, as well as others cited by the EDA’s report, undercut testimony Norcross gave to the Senate Select Committee on Economic Growth Strategies.
During his testimony, Norcross claimed the hospital system never intended to leave New Jersey and was clear with the EDA on that point, despite having filed documents showing interest in a Philadelphia location, making press statements expressing their interest in out-of-state locations and claiming that 353 New Jersey jobs were at risk of being moved out of state.
“Because New Jersey was never actually at risk of losing the jobs, those incentives were awarded in error,” the report says. “Any contention that Cooper Health was not responsible for the erroneous incentives because it was ‘clear’ with the EDA that its jobs would stay in New Jersey, as Mr. Norcross contended in his testimony, is inconsistent with the available evidence we have been able to review.”
The report further claims the size of Cooper’s tax incentive award was boosted by its claims that jobs were at risk of leaving the state. If no jobs were at risk, the task force said, Cooper would have qualified for an award worth a little more than $7 million instead of the $40 million it received.
During his testimony Norcross claimed provisions in the 2013 Economic Opportunity Act exempted Camden from provisions requiring firms to show that jobs were at risk and that that policy was not changed until 2017.
The task force contends the powerbroker was wrong, saying that amendments to the regulations governing the EDA in late 2016 only codified the Authority’s existing policy. The EDA said as much when the amendments were announced.
The report makes further claims about three other Norcross-linked firms, NFI, Connor Strong & Buckelew and The Michaels Organization, which the task force has previously claimed filed their applications under false pretenses.
Emails between NFI Vice President Edward A. Leo, Jr., and the organization’s Chief Financial Officer, Steven Grabell, appear to show that NFI never considered moving out of state, as its application claimed.
“Directionally looks good. With wording, we should be cognizant of the fact that we cannot make any commitments to Camden until tax credits are approved. In theory we are still pursuing Pa.” Mr. Leo
“Ok. Thanks for letting me know. I didn’t realize that,” Leo said.
A similar exchange occurred between The Michaels Organization’s Chief Financial Officer, Joseph Purcell, and a broker at CBRE, one of the country’s largest real estate service firms.
Purcell told Matthew Stefanski he needed a list of locations in Eastern Pennsylvania comparable to what is now the firm’s Camden headquarters.
“Please do not put any time in this, just thought maybe something would come to mind,” Purcell said. “The bottom line is when the agency compares the two (as apples to apples) that the Camden deal comes in at a higher price (but need to be comparable in quality, etc.).”
The email was sent under the subject line “Move to Camden.”
In a statement, Norcross attacked the task force’s findings, claiming it was trying to justify its cost to taxpayers.
“This final report reads as a justification by someone who has billed state taxpayers in excess of $11M and is defensive about being sued by the same companies he’s smearing,” he said. “The award of tax incentives to my firm was previously investigated by the United States Attorneys Office, which determined no further action was warranted. We — my firm and its partners — have always complied with the letter and the spirit of the law. Nothing in today’s document changes that fact.”
There’s little to indicated the report released by the task force Thursday will be its last.
The panel, led by former New Jersey Public Advocate Ronald Chen, makes numerous references to ongoing investigative activity in Thursday’s report, including ongoing reviews of EDA and applicant documents.
“This report proves what I said in testimony before the Senate Committee in November: Walden has made a series of selective, misleading, and too often outright incorrect statements,” Norcross said, referring to former assistant U.S. Attorney Jim Walden, the task force’s lawyer. “One can only wonder why, out of the over 900 firms which have received tax incentives, only Camden and those who committed to rebuilding the city have been unfairly attacked by Walden.”
Norcross’s statement does not mention the inconsistencies between the testimony he gave before the Senate EGS committee and the internal communications of Cooper and the other Norcross-linked firms.
The task force’s report also charges that Rainforest Distribution Corp., a firm not mentioned in the EDA’s previous hearings of its first report, falsely claimed it was exploring a move from what was then its New York headquarters to a location in Orangeburg, New York, in order to secure tax incentives for a location in Bayonne.
The proposal letter for the Orangeburg location, received by Susan Harte, a consultant retained by Rainforest to assist it in its bid for an EDA award, on Oct. 19 appears to have been backdated to Oct. 1 in what the task force believed was an effort to show the firm was considering the site for a longer, more significant period of time.
Subsequent pages were date to Oct. 19.New Jersey Task Force on EDA's Tax Incentives Second Report
One thought on “EDA task force releases second scathing report”
The Norcross Family, Christie, Mayer, Beach, Nash Trump and Sweeney have HIJACKED NJ of Trillions of dollars over the decades that this one world order leadership continues to reign in power. They provide jobs to those they control. This ensures their power base and allows them to keep this horrifying army of corrupt and devious liars in control. They produce Injustice and evil wickedness to retaliate and punish people by hiring biased reporters to lie and defame characters; they hack into your smart phone, home and job computers and secretly spy and stalk those who they seek to persecute and defame. Harassing innocent people and destroying good peoples lives to ruins. Murphy needs to step up and help those who this political boss machine has destroyed