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N.J. Democrat Power Broker Sues Murphy Over Tax-Break Review

Elise Young
N.J. Democrat Power Broker Sues Murphy Over Tax-Break Review

(Bloomberg) -- The Democratic power broker who is reshaping one of America’s poorest cities with the help of New Jersey tax breaks is suing Governor Phil Murphy’s administration to stop a probe of the award program’s inner workings.

George Norcross III, the city of Camden’s most visible booster, and five entities with ties to him filed suit in state Superior Court in Mercer County alleging that the Murphy-appointed panel has no authority to carry out the inquiry.

The Task Force on the Economic Development Authority’s Tax Incentives was formed after a state comptroller’s audit in January found evidence of oversight deficiencies in the $11 billion statewide program. Whistle-blowers have told the panel that some companies, not publicly identified, gamed the program, and the panel has made at least one criminal referral on a matter that it hasn’t publicly detailed.

“We look forward to vigorously defending the task force, its investigation and the actions of this administration in court,” said Daryl Isherwood, a spokesman for Murphy, a Democrat. The task force, in a statement, said it was “fully confident that we are acting within the bonds of the constitution and the laws of the state of New Jersey.”

Camden, a once-mighty industrial hub on the Delaware River across from Philadelphia, routinely ranks among the nation’s most dangerous cities. More than 37% of its population lives in poverty, according to the U.S. Census. Former Governor Chris Christie in 2013 signed legislation that gave businesses additional incentives to operate there.

In a conference call with reporters, the plaintiffs’ attorneys said their clients were eager to participate in public hearings. The panel, in its statement, said it had invited all the companies to bring witnesses to its next hearing.

“Rather than responding to that offer they have filed an unfounded lawsuit against the task force instead,” the panel said. “The public can judge this tactic for what it is.”

The investigative panel, the plaintiffs’ attorneys argue, is beyond the administration’s legal scope. Norcross’s allies, including Senate President Steve Sweeney, have said the inquiry is driven by Murphy’s animosity toward Norcross, who holds no public elective office but is a Democratic kingmaker in southern New Jersey.

Murphy, a retired Goldman Sachs Group Inc. senior director who took office in January 2017, has said he supports incentives to retain and bring business to New Jersey and is only trying to root out abuses within a program that was vastly expanded by his Republican predecessor. Companies building in crime- and poverty-plagued Camden have won the lion’s share of incentives, receiving about $1.6 billion, according to investigative reporting by WNYC-FM and ProPublica. Breaks for Camden companies with ties to Norcross amounted to $1.1 billion, the news organizations found.

The panel’s work “has never been about one person, one company, or one city,” Isherwood, the governor’s spokesman, said. “It is about ensuring that the tax incentive programs are operated to the benefit of everyone in New Jersey, not just a select connected few.”

The plaintiffs are Norcross; the Conner Strong & Buckelew insurance company, where he is executive chairman; NFI and the Michaels Organization, partners with Conner Strong in a Camden high-rise; Cooper University Health Care, for which Norcross is the board chairman; and Parker McCay, a law firm that employs Norcross’s brother, Philip, and which was instrumental in the incentives legislation’s creation.

The 252-page complaint names defendants including Murphy, the task force; and its chairman, Ron Chen, and special counsel, Jim Walden.

The case is Norcross et al v. Murphy et al, MER-L-001007-19, Superior Court of New Jersey Law Division, Mercer County.

(Updates with panel’s comment starting in fourth paragraph.)

To contact the reporter on this story: Elise Young in Trenton at eyoung30@bloomberg.net

To contact the editors responsible for this story: Flynn McRoberts at fmcroberts1@bloomberg.net, William Selway, Michael B. Marois

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