Governor Signs Sham Reform Bill

For Immediate Release
October 12, 2009

Contact: Jeff Tittel, Chapter Director, 609-558-9100

Governor Signs Sham Reform Bill

Governor Jon Corzine is letting the weakened EnCap Reform Bill stand and signing it without it being any real reform. With all of the indictments and corruption over development that has taken place in New Jersey, the failure to have any kind of meaningful reform is outrageous. In fact, in some areas, this bill loosens oversight over existing regulations.

This bill was originally intended to strengthen oversight when public money is involved. Instead, it has been so weakened that it is a sham. All this bill will do is give cover to pay to play and other abuses of public money without providing any real oversight.

"Under this bill, we haven't stopped another EnCap. We've empowered many more EnCaps," New Jersey Sierra Club Director Jeff Tittel said. "We had asked Governor Corzine to conditionally veto the bill and send it back to original form that Assemblyman Gary Schaer put forward. Instead, he took the side of special interests over public interests."

There were changes made to this legislation in the Senate at the last minute, completely gutting more than 90 percent of the oversight. What is supposed to help fix the problem will not; instead it will be used as cover by politicians for projects that could be worse than EnCap. We believe that this bill in its current form provides political cover while reinforcing the system that is broken. There are so many exemptions to this legislation that it is not even full of holes like Swiss cheese - it has basically become a joke.

"This bill has gone from reform to sham to shame and the governor just failed to strengthen it. This is worse than no reform because they are going to hide behind saying they did something when in turn it will be business as usual," Tittel said.

The Governor refused to strengthen the stimulus bill with increased reforms. Now, he is signing a weakened EnCap Reform Bill that loosens even existing oversight, such as putting limits on where the state controller can do audits.

The EnCap Reform Bill, which establishes requirements concerning certain public contracts with private entities, deviates from its original intent of stopping the very corruption that we're reading about in the news. The bill initially required oversight for all contracts over $25 million, which was later raised to $50 million. This bill will exempt Jersey City and Hoboken from oversight and the recent headlines of widespread corruption in New Jersey show why that's outrageous

The legislature undermined true reform by removing from the bill contracts in the Urban Transit Hub Tax Credit Program. The bill exempts projects not only within the Higher Education Business Partnership Legislation but for all education development. Monies derived from tax exempt bonds are exempted as well as so-called qualified employment incentives, which is a made-up term for any company that receives any types of state money, whether it is business retention or relating to BEIP, sales and use tax exemptions, energy and utility services fund exemptions, or UEZ. This means nay project that gets any state funding is exempt from this bill, which completely defeats the purposed of this legislation.

This bill also weakens protections for people who get money from any economic or development agency. Given the fiasco with Bergen County Improvement Authority and EnCap, this is shameful. The oversight has been severely weakened by limiting the powers of the comptroller to investigate. The weakend bill has removed the person who was supposed to be a designated lead, and instead has turned this lead into an agency. Who is that agency supposed to be, the NJ Builders Association?

Besides Jersey City and Hoboken, these Urban Transit Hub exemptions could affect Camden, Perth Amboy, Trenton, and Harrison. The fact that some of these cities have a history of corruption or are currently being investigated show why the laws need to be stronger. All the exemptions listed above should have been taken out before this bill was signed.ANDREW MILLS/THE STAR-LEDGERMonmouth County and federal investigators remove boxes of evidence from the Deal Yeshiva as part of an international money laundering and corruption probe that includes rabbis in the Syrian Jewish communities of Deal and Brooklyn.

Assemblyman Schaer, who first introduced this legislation, put in a strong bill and has fought to maintain it while other legislators cut protections. Assemblyman Schaer has been a champion on this issue and his original bill should have stood.

As a result of the EnCap disaster, the state lost approximately $200 million, $50 million of which has not been recouped. While $150 million of the losses was covered from insurance by AIG, that company was recently bailed out by the federal government. EnCap borrowed from New Jersey government entities, such as the NJ Infrastructure Trust, that did not have adequate insurance or bonds to back up the lands.

"We believe the Governor's failure to strengthen the EnCap Reform Bill will cost taxpayers billions and hurt the environment," Tittel said. "Given the fact that there are billions of dollars of public money at stake, the EnCap Reform Bill should have included pay to play reforms and other oversight measures."

Kara Seymour, Program Assistant NJ Sierra Club

145 W. Hanover Street Trenton, NJ 08618

609.656.7612

(f) 609.656.7618

<http://www.newjersey.sierraclub.org> www.newjersey.sierraclub.org

Received on 2009-10-12 11:42:26

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