The State Senate approved the state Legislature’s top elected official’s legislative committee, armed with subpoena power, that will scrutinize the Economic Development Authority’s massive, multi-billion dollar Grow New Jersey tax break program, setting up a showdown with a similarly-natured task force the Murphy administration put together in January.
The May 2 public hearing of Gov. Phil Murphy’s New Jersey Task Force on EDA Tax Incentives on. – AARON HOUSTON
Lawmakers approved the measure, Senate Resolution 139 at a Monday afternoon session – with no opposition – to create the Senate Select Committee on Economic Growth Strategies. The resolution would go into effect immediately rather than need approval from the governor’s desk.
Backed by Senate President Stephen Sweeney, D-3rd District, a supporter of Grow New Jersey and opponent of Gov. Phil Murphy’s task force scrutinizing the program, the committee will be tasked with identifying “the best strategies, policies and practices to create jobs, attract investments and generate long-term economic opportunities throughout the state,” according to a statement from the Senate Democrats Office.
Earlier in May, the governor’s task force unearthed allegations that businesses with strong ties to insurance executive and South Jersey powerbroker George Norcross were able to obtain $1.1 billion of the $1.6 billion of tax breaks that went to businesses moving into Camden.
The task force also unearthed allegations that Kevin Sheehan, partner at Parker McKay, a law firm owned by George Norcross’ brother Phil Norcross, crafted parts of the Grow NJ legislation to benefit clients.
Sheehan, according to the task force, provided consult to Norcross-linked businesses to provide questionable information about where out of state they would move if the companies were not awarded the tax breaks.
Those companies included 2014, Connor, Strong & Buckelew and Cooper Health – where George is a partner and sits on the board respectively – and were awarded tax breaks of $86 million and $39 million respectively to move into Camden.
The other two companies were NFI, which was awarded $79.4 million in 2014 and The Michaels Organization, which the EDA awarded $79.4 million in 2017.
Sheehan prepared the applications for all four companies.
The companies initially said they had no plans to leave the state if they did not win the tax breaks. But Walden, in documents he presented to the task force, suggested that those four corporations provided questionable and bogus data about leaving the state in order to strengthen their tax break applications.
Representatives for those companies have maintained that they had no plans to leave the state, even though application materials and board meeting minutes have suggested otherwise.
Senate President Stephen Sweeney speaks with NJBIZ in 2018. – AARON HOUSTON
“We’re going to give both sides the opportunity to speak,” Sweeney told reporters following the Senate session. “I wanted to get to the bottom of this. There’s been a lot of claims. Is it being portrayed factually, or is it being portrayed politically? The truth needs to come out regardless.”
Sweeney said that the actions of Parker McCay did not constitute any form of lobbying, given that the businesses were not technically clients of Parker McCay.
“It’s not wrongdoing. Lobbying is clear if you have a client at the time as you weigh in on something. If you don’t have a client, it’s not lobbying,” Sweeney said.
“So what I’m saying is if Parker McCay didn’t have a client then it wasn’t lobbying. You know Parker McCay was a registered lobbyist, so there was no reason to hide if he was doing something.”
Sweeney said the committee would have to delve deeper into certain passages that the task force said Sheehan crafted, including one to scuttle the tax break aspirations of a supermarket competing against a client of Optimus Partners, a lobbying firm owned by Philip Norcross who is also a partner at Parker McCay.
“We’ll find out whether that’s true or not,” Sweeney said.
The Senate Democrats statement assures that the commission would get a “truth accounting” of the success of the program, and “how these programs may be improved in the future including recommendations for enforcement.”
Murphy unveiled the task force on the heels of a January audit from the state comptroller which found that the EDA failed to thoroughly vet recipients of billions of dollars of tax credits that were awarded between 2005 and 2017, and lacked the means to thoroughly monitor compliance with the program.
Sweeney would not say whether the task force would subpoena Murphy’s own task force.
“I hadn’t thought about that,” he responded, commending the creativity of the journalist who asked the question.
A spokesperson for the governor’s office did not immediately return a request for comment.
