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A Lot More Than State Contracts Involved In Corporate Scheme

Investigative journalists need a big shovel to dig in this mud – Encap on Steroids

The Bergen Record has a killer story today about how corporate contributors to Governor Christie’s political campaign junkets have huge business dealings before the State government Christie controls, see:

• Christie’s overseas travel funded by firms that do business with N.J.

A non-profit organization created to promote business and job growth in New Jersey is funding Governor Christie’s trip to England this week with backing from some of the state’s largest public utilities, labor unions, law firms and contractors — some that have received multimillion-dollar contracts and tax breaks from the state.

But it’s not just multi-million dollar contracts and tax breaks from the state that are involved in this corrupt evasion of NJ’s loophole ridden pay-to-play laws.

As examples of abuse, the Record story begins to suggest the far wider scope of the corruption (do any Record editors recall the their award winning investigative series on the Whitman Administration: Open For Business”? ).

The Record story briefly mentions regulatory issues – which the Record did such a great job in exposing in it’s investigative reporting on the Encap scandal – in the context of a Verizon corporate scheme:

Verizon New Jersey, for instance, had three meetings in the governor’s office, one regarding “actions and issues” of the Board of Public Utilities, which regulates the telecommunications company, and another to a “settlement agreement” with the BPU, lobbying reports show.

State regulators approved a settlement last year that resolved their dispute with Verizon over whether the telecom company had fulfilled a 20-year-old promise to provide high-speed Internet throughout the state by 2010. The regulatory board agreed with Verizon’s position that its high-speed wireless service, known as 4G, was an acceptable substitute.

Connecting the dots between money and State agency regulatory favors, the story also nails the South Jersey Gas Company’s proposed pipeline before the Pinelands Commission:

Also on the Choose New Jersey board is South Jersey Gas, a utility that has proposed a controversial 23-mile gas pipeline through the South Jersey pinelands. Christie attempted to replace two members on the commission that oversees development in the preserve after the pipeline was rejected — a move critics said was intended to push the project through.

But there are many other State government regulatory approvals that can provide favors to corporate contributors, particularly at BPU and DEP, where regulators exercise enormous discretion that can provide hundreds of millions of dollars in benefits.

For example, the Wolff & Samson law firm (of Bridge-gate fame) is the lobbyist for Rockland Capital, owner of the BL England power plant that received DEP approvals to pursue a $400 million re-powering project and will benefit from the South Jersey Gas Co. $100 Pinelands “dedicated line”.

The Pinelands controversy has heated up. The Attorney General’s Office has denied OPRA request, heavily redacted emails involving the Gov.’s Office that a Court ordered disclosed, and just directed the Pinelands Commission to impose a gag on public discussion of the emails.

I’ve previously disclosed the fact – unreported by NJ press – that Wolff & Samson ELEC reports show meetings with the Gov.’s Office to lobby for the BL England plant and the SJG pipeline (see this and this for examples of W&S lobbying of DEP)

Here are some of the benefits of that lobbying, worth hundreds of millions of dollars granted by Christie controlled state agencies:

1.In an April 29, 2013 Order, BPU quietly granted huge tax breaks and subsidies to the Rockland Capital BL England Plant:

Source: BPU Order

2. This BPU Order also provided secrecy to cover up the amount of huge ratepayer subsidies to Rockland Capital.

Subsidies result from the fact that ratepayers are required to pay 60% ($60 million) of the cost of construction of the proposed pipeline. Additional subsidies result from the fact that BPU approving a below market contract with lower gas prices for the BL England plant. BL England demand will drive up prices for south jersey consumers, while they are guaranteed lower gas rates.

Source: BPU Order

3. The Christie DEP reversed a prior DEP 2006 enforcement Order that would have shut down the BL England plant.

Instead of a plant shutdown, the revised 2012 Order specifically calls for re-powering the the BL England plant.

Source BPU Order 4/21/13

4. DEP expedited approval of air pollution control, water pollution discharge, and coastal management (CAFRA) permits for the BL England plant to allow the re-powering project to go forward. All these permits were issued below the radar with virtually no public awareness or participation. NONE.

This pattern of expediting DEP permits exposes the fact that under Christie and DEP Commissioner Bob Martin, DEP’s role has been changed to promoter of economic development, not as environmental regulator and enforcer of NJ’s environmental laws.

5. DEP exempted the BL England plant from cooling tower requirements – that exemption alone is worth hundreds of millions of dollars to BL England/Rockland capital. Sierra Club and others have filed a lawsuit to reverse this DEP decision.

6. In addition to systematically promoting the SJG pipeline and BL England plant re-powering, the Christie DEP made a highly unusual – if not unprecedented – appearance before the Pinelands Commission to testify in support of the SJG pipeline.

I don’t ever recall DEP appearing before another regulatory body to support a project – ever.

The Wolff & Samson lawyer that quarter-backed and coordinated these complex BPU, DEP and Pinelands Commission regulatory approvals was  John Valeri.

Valeri served in Gov. Christie Whitman’s Office and knows how to play the inside regulatory game with State agencies.

Mr. Valeri has the same skill set of former Assemblyman Van Pelt, who bragged that he:

Van Pelt’s assertions that he knows how to “work the channels” at DEP (Transcript @page 155); where he advised “don’t worry about the [DEP] permits” (@page 55); his promise of a “smooth ride” on expedited CAFRA permits (@page 155); and that he has “a pretty good relationship with a lot of people” at DEP (@page 204).

We need the Record’s superb investigative reporter Jeff Pillets to begin digging in these pits – surely another Encap trove of stories would emerge –