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Gov. Phil Murphy. Photo by Kevin Sanders for New Jersey Globe

Murphy, activist groups encouraged by first EDA hearing

By Nikita Biryukov, March 28 2019 3:43 pm

Gov. Phil Murphy and activist groups seeking reforms at the Economic Development Authority scored an early win Thursday, when a whistleblower testifying before the governor’s EDA task force said Jackson Hewitt lied on an application seeking an award from the authority.

“While the January 2019 State Comptroller’s report identified serious deficiencies in how the EDA has been managed and administered under the Christie administration, we are a long way from having a true understanding of the scope of the mismanagement and the rampant cronyism that has plagued the EDA programs,” NJ 11th for Change executive director Saily Avelenda said.

“These hearings will hopefully give us much-needed clarity into how our taxpayer funds were used, to what extent they were used to favor a select few, and how the communities that were supposed to benefit have been impacted by the mismanagement.”

Gulsen Kama, a former Jackson Hewitt vice president who has since blown the whistle on the company’s alleged abuse of New Jersey’s tax incentive programs, on Thursday said the company lied about considering leaving the state to secure an award under the Grow NJ program.

Jackson Hewitt, the EDA and others are entitled to cross examine Kama but opted not to do so on Thursday. They may invoke the privilege at a later date.

Murphy’s camp was please with the hearing’s explosive beginning.

“The comptroller’s report earlier this year detailed a disturbing lack of accountability that was highlighted in news accounts last week and again in today’s testimony before the task force,” Murphy spokesman Darryl Isherwood said. “The governor appointed the task force to ensure that every dollar of taxpayer money that has been awarded by the EDA is accounted for and every promised job created or retained.  Based on the findings so far it seems the task force is doing that job admirably.”

In a statement attributed to a Jackson Hewitt spokesperson and provided by Michelle Starr, the company denied any wrongdoing and said it intended to cooperate with the task force’s investigation.

“New Jersey Policy Perspective commends Gulsen Kama for shining a light on the fraudulent tactics that have flourished under New Jersey’s tax subsidy programs. Kama’s testimony exposed a culture of corruption that has robbed the state of critical taxpayer dollars,” New Jersey Policy Perspective senior policy analyst Sheila Reynerston. “This first hand account detailed just how easy it is to cheat the system and lie on applications for tax credits. Today’s hearing should give lawmakers pause about the integrity of existing corporate subsidy programs. The need for reform has never been more pertinent.”
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