(Photo by Edwin J. Torres/N.J. Governor’s Office)

The National Mediation Board has ended more than four years of negotiations between NJ Transit and a union representing its engineers without a resolution, paving the way for a strike that federal law could still delay by months.

NJ Transit locomotive engineers have been working under an expired contract since 2019 amid a collective bargaining standoff with the state over pay, but federal law that limits labor actions by railroads has kept them from striking despite a unanimous vote by the union’s members.

“It’s time for NJT to make a fair offer and settle this dispute voluntarily, otherwise our members will be walking picket lines rather than operating trains,” said Eddie Hall, president of the national branch of the Brotherhood of Locomotive Engineers and Trainmen.

Because rail service interruptions can significantly impact interstate commerce, railways — and commuter railways especially — must complete lengthy mediation processes before launching a job action.

The National Mediation Board is the largest of those hurdles. The body can indefinitely mediate disputes between rail unions and transit agencies, and it has kept the dispute between the union and NJ Transit in mediation for years.

The end of mediation kicks off a 30-day cool-off period, meaning locomotive engineers could strike as early as July 25, though they will likely have to wait months longer.

The union declined an offer of arbitration that followed the National Mediation Board’s release, which means the dispute will likely go to a Presidential Emergency Board.

Federal law requires President Joe Biden to convene a Presidential Emergency Board upon request from either of the parties or a governor in a state that would be affected by a job action. In this case, that list includes Govs. Phil Murphy, Kathy Hochul, and Josh Shapiro.

Statute requires the president to grant a requests emergency boards, which will create another 120-day lockout on job actions, though the board could end that lockout sooner.

The governors and parties can request a second Presidential Emergency Board be convened if the first does not reach a settlement within 120 days.

“While we are currently in the 30-day ‘cooling off’ period, in light of the BLET’s response to the National Mediation Board (NMB) rejecting binding arbitration to settle this matter, NJ TRANSIT fully intends, to make a formal request for a Presidential Emergency Board (PEB),” said Jim Smith, a spokesperson for NJ Transit.

the three governors did not immediately return requests for comment on whether they will ask Biden to convene a board.

“Our members are angry and feel betrayed,” Hall said. “Locomotive engineers kept the trains running during the pandemic. They have gone five years without a pay raise during a period of high inflation. These men and women want to serve the public with uninterrupted service, but they cannot continue working for subpar wages. They have had enough.”

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A Smith & Wesson .357 magnum revolver cools down at a target range at the Los Angeles Gun Club on December 7, 2012, in Los Angeles. Gun enthusiasts rent the the weapon to try out before making a purchase at a gun store. Leading firearms maker Smith & Wesson reported an almost 50% increase in sales revenue. (Photo by Kevork Djansezian|Getty Images)

Gun manufacturer Smith & Wesson must release marketing documents sought by a subpoena issued by the New Jersey Attorney General, a federal appeals court ruled Tuesday.

The federal appeals court ruled it could not toss the subpoena because of a legal doctrine, called issue preclusion, that bars judges from reconsidering another court’s ruling on a single issue of contention between the same parties.

A state appellate court upheld the subpoena in 2023 in a case Smith & Wesson called a “carbon copy” of its federal complaint. 

“Smith & Wesson lost its case at every level of the New Jersey court system, which concluded that the gun company’s efforts to evade subpoena compliance were meritless. The decision shows that Smith & Wesson cannot run to federal court when it did not get its way in state court,” Attorney General Matt Platkin said in a statement.

The case centers on a subpoena issued to the gun manufacturer to probe whether it had violated New Jersey’s Consumer Fraud Act by misstating the legality, safety, effectiveness, and benefits of its firearms.

Smith & Wesson has charged the subpoena violates a series of constitutional rights and, in its federal appeal, argued the state appeals court did not properly weigh its constitutional claims, denying the gunmaker’s appeal based only ripeness — a measure of how prepared a case’s facts are for trial.

But the newer ruling says that is a faulty reading of the state court’s decision. New Jersey’s Appellate Division had indeed weighed the constitutional claims and found them wanting, the judges wrote.

“The Appellate Division considered Smith & Wesson’s constitutional defenses, held they were not legally cognizable, and held that, in the alternative, the claims were not ripe,” the federal judges wrote.

They also discounted the gunmaker’s claim that state proceedings did not afford them a chance to state their case, finding “Smith & Wesson had a full and fair opportunity to litigate its claims in state court” even though it was a pretrial proceeding.

One judge on the federal panel took a dissenting view, arguing state court rulings had not delved deep enough into the gunmaker’s constitutional arguments and, therefore, failed to reach the merits.

“More than three years ago, Smith & Wesson asked a federal court to decide whether the novel decision by New Jersey’s Attorney General to use a state consumer fraud law to investigate ads for ordinary guns and ammo treads on the freedoms recognized by the U.S. Constitution. Today, and four opinions later, those questions remain unanswered,” Circuit Judge Paul Matey wrote in his dissent.

Smith & Wesson did not return a request for comment, and it’s unclear whether the firm will petition the matter to the New Jersey or U.S. Supreme Courts. The gunmaker has already furnished documents responsive to the subpoena, though those documents are subject to a protective order that demands their return if the subpoena is declared unlawful.

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(Photo by Hal Brown)

Republican gubernatorial candidate Bill Spadea is arguing in a new campaign filing that his weekday radio show on New Jersey 101.5 does not amount to an impermissible in-kind contribution to his campaign because it does not include direct appeals for his election.

His two primary opponents are taking the opposite position, claiming in filings made public Tuesday by the New Jersey Election Law Enforcement Commission that the platform afforded to Spadea by the radio station amounts to aid well above the state’s campaign contribution limits.

The commission is due to hear arguments on the matter on Friday.

An adverse ruling would immediately spell trouble for Spadea, a conservative firebrand who has placed himself firmly in the Trump wing of the Republican Party. Apart from choosing whether to give up his radio show or his campaign, a ruling against him would likely put him in immediate violation of state campaign finance laws.

Spadea’s filing says his show does not constitute an in-kind contribution — that’s a non-monetary donation to a political campaign, usually in the form of goods or services — because state regulations define political communications as those urging the election or defeat of a given candidate. The radio host claims not to have made any such appeals.

“Thus, the mere presence of a candidate does not transform a communication into a ‘political communication contribution.’ It must include an explicit appeal for the election or defeat of a candidate,” Spadea’s attorneys wrote in their brief, which calls the commission’s planned review “extraordinary and extralegal.”

The brief adds that the proper procedure here would be for the commission to investigate only if Spadea engaged in political advocacy on his show, not “prospectively restricting speech that might potentially become a campaign contribution.”

Spadea’s attorneys appeared to admit in a footnote that the show could cause campaign finance issues come January.

The state regulations say communications absent a direct appeal for election are political communications if their audience is substantially made up of eligible voters, if they contain political objectives or achievements, and if they were made with at least some cooperation or consent from the candidate, subject to a time bar. For most candidates, that rule kicks in 90 days before an election. For gubernatorial candidates, it becomes effective on Jan. 1 of the year of the gubernatorial election — in this case, Jan. 1, 2025.

Townsquare Media, which owns New Jersey 101.5, echoed its host’s arguments in its own brief. It says a finding that his show is an in-kind contribution would improperly restrict speech.

“Classifying Spadea’s airtime as an in-kind contribution … would open the door to excessive regulation of media activities involving any candidate, chilling free speech and hindering political participation,” Townsquare’s attorneys wrote.

The station said it has instituted internal rules to bar mentions of Spadea’s candidacy or attacks on his opponents, adding he will no longer be allowed to host New Jersey 101.5 radio programs after he becomes a legally qualified candidate as defined by the Federal Communications Commission.

Spadea will meet that bar if and when he files nominating petitions and secures a spot on the ballot. The deadline to file nominating petitions is typically in late March or early April of the election year, or a little more than 60 days before the primary.

He could become a legally qualified candidate earlier if he declares a write-in campaign, though he is not expected to do so.

Sen. Jon Bramnick (R-Union), one of Spadea’s opponents for the Republican nomination, argues the show is an in-kind contribution because it is a contribution of a good or service — namely airtime — to a candidate.

“His program offers substantial promotional advantages to his campaign, including unrestricted market access and significant advertising influence typically purchased by other candidates,” attorney William Burns wrote for Bramnick’s campaign.

Bramnick’s attorneys cited a 1997 advisory opinion from the Election Law Enforcement Commission that found the publication of political newsletters could be an in-kind contribution. That opinion centered on a newsletter that was to be sent within the 90-day lockout period for non-gubernatorial candidates.

Attorneys for Jack Ciattarelli, a former assemblyman mounting a third bid for governor next year, argue Spadea’s airtime is a contribution on different grounds. New Jersey’s definition of expenditure includes an exemption for some news coverage, but Ciattarelli’s campaign argues Spadea’s show does not qualify for this exception because it does not provide “reasonably equal coverage to all opposing candidates” as the exception requires.

“Even Spadea and Townsquare Media cannot credibly contend that they afford ‘reasonable equal coverage to all opposing candidates,’” attorney Mark Sheridan wrote for the Ciattarelli campaign. “Instead, they provide coverage to a single candidate with a single point of view.”

But that isn’t the only test in the news media exception. It also asks whether a candidate or political committee owns or controls the news organization’s facility. Spadea does not own or control Townsquare Media, his attorneys said in his filing.

Townsquare Media bills $500 per minute of airtime for ads on Spadea’s morning show, according to a rate card for political advertisements provided by the firm to Ciattarelli’s campaign.

Spadea’s show runs for 20 hours each week and has aired 28 hours since Spadea announced his candidacy. That could be up to $420,000 in airtime, though not all the time would be considered an expenditure even in the case of an adverse ruling. New Jersey caps campaign contributions to $5,800 per election.

“This situation is entirely of Spadea’s making. He could have sought an advisory opinion from this Commission as to whether his airtime constituted a ‘contribution’ under the Act,” Sheridan wrote. “Spadea and his employer, Townsquare Media, both failed to avail themselves of that opportunity.”

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(Hal Brown for New Jersey Monitor)

After reaching a deal on a new state budget, lawmakers intend to advance the annual spending bill through budget committees on Wednesday with final votes set for Friday, though the timing is still in flux, a top Democrat said during a Monday budget hearing.

Legislators must approve and Gov. Phil Murphy must sign a budget by June 30 to avert a state government shutdown, and they rarely approve an annual spending bill without rubbing against the deadline.

“The timing is still up in the air,” said Sen. Paul Sarlo, the Senate’s budget chair.

Because New Jersey’s constitution requires bills to sit for a day between moving out of a committee and seeing a floor vote, budget committees must approve a budget no later than Friday and both full chambers must approve them by Sunday to avoid shutting down New Jersey’s state beaches, public parks, and government.

As part of the budget deal, legislators and the governor have agreed to enact a 2.5% surtax on corporations with more than $10 million in profit. The tax on roughly 600 businesses operating in New Jersey is expected to generate about $800 million annually and is forecast to bring in more than $1 billion in the fiscal year that begins July 1 (it will retroactively apply to the first six months of 2024).

Murphy proposed that the tax be dedicated to NJ Transit to cover a $766.8 million fiscal cliff the agency faces starting July 1, 2025. Sarlo on Monday said legislators would dedicate the funds in the budget year that begins next week.

“Every dollar will go to New Jersey Transit, dollar for dollar. No diversion whatsoever,” Sarlo told reporters following Monday’s Senate Budget Committee meeting.

It’s not yet clear how that squares with Murphy’s vision for the next year of spending. His budget proposal calls for the first year of revenue from the surtax, dubbed the corporate transit fee, to be used as a one-shot to boost state revenue as New Jersey continues to spend more than it takes through taxes and fees.

Murphy’s budget proposal includes a $1.8 billion structural deficit that will bring the state’s surplus down to $6.1 billion, or roughly 11% of proposed spending.

The eventual fate of the new tax is also unclear. Murphy has pitched it as a dedicated source of funding for the transit agency, but lawmakers have agreed on a proposal to have the tax sunset after five years. The deal was first reported by Politico New Jersey.

That timeline is a boon to business groups that have urged against a surcharge they feared would remain in perpetuity, warning that it would leave New Jersey with the highest tax rates in the nation for highly profitable businesses.

“The problem is, for me anyway, is the regional competitiveness, because Pennsylvania is on a longer-term plan to keep reducing their CBT, and it’s usually those surrounding states of Delaware and Pennsylvania that are our biggest competition,” said Michael Egenton, executive vice president of government relations for the New Jersey Chamber of Commerce.

At present, the 9% rate charged by New Jersey’s top corporate tax bracket is the fourth highest in the nation. Pennsylvania last year put itself on a path to cut its corporate tax rate to 4.99% by 2031.

Neighboring New York levies a 6.5% corporate income tax, or 7.25% for firms with more than $5 million in profit, while Delaware levies an 8.7% corporate tax.

There’s some question as to whether the tax will actually expire. The prior corporate business tax surcharge — which sunset at the end of 2023 — was meant to phase down from 2.5% to 1.5% but never did. It was also initially set to expire in 2021.

“I think the bigger picture is how do we go forward with any of these programs if government is going to say one thing and then ends up doing something else,” Egenton said.

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Passengers board a New Jersey Transit train at Pennsylvania Station on April 26, 2017 in New York City. (Photo by Spencer Platt/Getty Images)

Trains on the country’s busiest commuter rail line stopped running Friday for the third time this week amid scorching heat and persistent technical problems, spawning a new round of finger-pointing.

Rail service in and out of New York Penn Station was suspended Friday morning and delayed into the afternoon — snarling trains on the northeast corridor and other lines as transit officials offered competing explanations for the latest delays.

NJ Transit said issues with Amtrak’s overhead wires were responsible, while Amtrak — which owns the tracks the corridor’s trains travel on — said a disabled commuter train in New York Penn Station was responsible for the cancellations.

“We are working with our partners at NJT to investigate the cause of this morning’s disruption,” said Amtrak spokesman Anderson Kyle.

A spokesperson for the governor deferred a request for comment to NJ Transit, which called the frequency and severity of recent service disruptions “beyond unacceptable.”

The agency said an inspection of the disabled train conducted before it left Newark uncovered no issues, including with pantographs that collect power from overhead lines.

“What we can say is that we operate approximately 700 trains every weekday along hundreds of miles of track on 11 rail lines with the same equipment and these incidents are mainly occurring on just this one stretch of track on the NEC between Newark and New York,” NJ Transit CEO Kevin Corbett said in a statement. “We continue to offer Amtrak our assistance to resolve the issue.”

It has been a rocky week for the two transit agencies.

On Tuesday, train service to and from New York Penn was suspended during the morning rush due to Amtrak wire issues, with delays throughout the day that grew worse in the evening after officials reported a disabled Amtrak train near the station.

A power issue at a substation near train tunnels running into New York Penn caused more wire problems and another set of service suspensions on Thursday, and those were exacerbated by a nearby but unrelated brush fire that delayed wire repairs.

“I know everyone likes to dump on New Jersey Transit, but this is a bigger issue. This is an Amtrak issue, and we really have to bring our federal representatives and state representatives together to address this. This is a number one priority,” said Sen. Patrick Diegnan (D-Middlesex), the Senate Transportation Committee chairman.

Rep. Frank Pallone (D-06), whose district includes a portion of the rail line that runs along the Jersey Shore, on Friday called the service disruptions “utterly unacceptable.”

Throughout the week, Amtrak officials have warned the heat wave battering the Northeast could force trains to run at lower speeds, creating delays of up to an hour during afternoons.

Excessive heat can deform rail tracks and the overhead wires that power trains, and it can cause certain train parts to fail.

“I always had a feeling like once we hit the first heat wave, sh*t was going to go down,” said Assemblyman Clinton Calabrese (D-Bergen), the Assembly transportation chair. “Here we are in the first heat wave, and things are going down.”

Calabrese and Diegnan said they hope the early-summer disruptions do not presage another “summer of hell” of the type that has dogged NJ Transit in recent years.

Amtrak issues have mounted over the past few months. The quasi-public corporation was responsible for 185 of the 381 cancellations NJ Transit saw in May, according to NJ Transit data, though the causes for cancellations can vary widely month-to-month.

Sen. Raj Mukherji (D-Hudson), the Senate transportation vice chair, said the latest issues underscore the need for customer advocacy at NJ Transit, pointing to a bipartisan bill that would create a new independent office to represent riders’ interests on fares and services.

“With everybody pointing fingers and a lack of clarity as to what keeps going wrong, this underscores why we need to pass my customer advocate legislation so that an independent rider advocacy commission can investigate these things and report to the Legislature and the governor and, most importantly, our commuters when things and go wrong what solutions must be implemented,” said Mukherji.

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(Getty Images)

A new directive Attorney General Matt Platkin issued Thursday will limit — but not end — law enforcement’s ability to obtain blood samples drawn as part of a mandatory state newborn screening program.

Platkin’s directive was released alongside a Department of Health rules change limiting how long blood drawn for newborn screenings can be retained by the state. The changes come as New Jersey faces a class-action lawsuit lodged after the Office of the Public Defender alleged New Jersey State Police obtained blood from the screening program without a warrant and used it to tie the child’s father to a 1996 sexual assault.

A public records lawsuit filed by the New Jersey Monitor and the Office of the Public Defender later revealed four law enforcement agencies had issued five grand jury subpoenas to the program over a period of roughly five years.

“Even the infrequent use of information gathered via a public-health program can impact the public’s trust in such programs, which can in turn jeopardize public safety and public health,” Platkin said in the directive.

He said Thursday’s directive would ensure law enforcement only seeks information from the newborn screening program in “genuinely exceptional circumstances.”

Under the new rules, law enforcement would in most circumstances require court-issued subpoenas or warrants to obtain newborn blood spots, which are used to test newborns for dozens of rare and potentially deadly conditions.

The directive bars law enforcement from obtaining blood spots through grand jury subpoenas, instead requiring they obtain a Dyal subpoena, a court-issued subpoena that requires authorities to show they have a reasonable basis — a lesser legal standard than the probable cause required for a warrant.

Law enforcement can also obtain blood spots through administrative subpoenas issued in missing-persons or unidentified-body cases. The New Jersey State Police’s missing persons unit has statutory authority to issue administrative subpoenas to “obtain information necessary to conduct an investigation.”

“The Newborn Screening Program is an important public health program – and it is crucial for the success of the program that its information is kept private,” Platkin said in a statement. “Today’s Directive adds new limits to ensure law enforcement agencies only seek such information in genuinely exceptional circumstances.”

In each case, law enforcement agencies must file written requests with the director of the state’s criminal justice division that explain why other methods won’t work before demanding blood spots.

Attorneys at the Institute for Justice, the public-interest libertarian law firm representing plaintiffs in the class-action suit, said Platkin’s directive and the Department of Health rules change are a step in the right direction but still fall short of the plaintiffs’ goal.

“I think they’re trying to sound like they’re being more protective, but it seems to me to still have a lot of different ways that law enforcement can obtain these blood spots,” said Brian Morris, the Institute for Justice’s lead attorney on the case. “We think they should be off the table unless there’s a warrant through the regular warrant process.”

The plaintiffs have alleged existing state policies on the retention and use of blood spots drawn for the screening program violate Fourth Amendment protections against unreasonable searches and seizures.

They’ve asked a judge to require the state to immediately destroy blood spots once testing is complete unless parents provide informed consent for their retention and use — including by law enforcement.

The Department of Health’s rules change cuts how long the state can retain newborn blood spots from 23 years to up to 10 years.

Under the new rules, blood spots that test negative would be destroyed two years after testing is complete, while those that test positive will be deidentified and retained for 10 years.

“Two years is obviously better than 23 years, but it’s still keeping the blood without asking parents for permission, which is really what our entire lawsuit boils down to,” Morris said.

The new Department of Health policy, which went into effect immediately with delays for the destruction of existing blood spots, allows parents to submit forms to have the state destroy the samples any time after testing is complete.

The new policy does not prevent the Department of Health from releasing blood spots to law enforcement, though it says if there is no parental consent, it will do so only under the conditions laid out in Platkin’s directive.

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Gov. Phil Murphy speaks about launching a new expedited clemency initiative and establishing a clemency advisory board at Saint James A.M.E. Church in Newark on June 19, 2024. (Jake Hirsch/Governor’s Office)

Gov. Phil Murphy signed an executive order Wednesday intended to speed clemency applications to his desk in hopes of extending pardons to thousands of New Jerseyans in and out of the state’s jails and prisons.

Murphy’s order creates a board that will review clemency applications and make non-binding recommendations about which requests should be granted in an effort to expand grants of clemency beyond friends and allies of the governor, as has often been the practice in New Jersey and elsewhere.

“Historically speaking here in New Jersey, receiving a pardon or having your sentence commuted was not a matter of either fairness or objectivity,” Murphy said at Saint James A.M.E. Church in Newark. “It was a matter of who you knew or how well connected you were to those in power. With the executive order I’m signing today, we are changing that.”

Rapper Meek Mill — real name Robert Rihmeek Williams— spoke at Wednesday’s announcement in support of the initiative. He became a champion for criminal justice reform because of a 2007 arrest on gun and drug charges in Philadelphia that prosecutors later conceded may have been improper. The state’s Superior Court in 2019 vacated the rapper’s conviction, citing credibility problems with the arresting officer.

“Everything you’re talking about — clemency, second chances, giving people a fair shot — I grew up on that side of life, and I never thought I would be in rooms like this,” the rapper said Wednesday. “You guys give me the courage and the energy to use my platform to keep pushing forward to better our communities.”

Murphy’s order comes two days after Maryland Gov. Wes Moore, a Democrat, signed an order pardoning 17,000 misdemeanor cannabis-related convictions (cannabis use is legal in that state for those over 21).

Murphy’s order, which comes after lobbying by the American Civil Liberties Union of New Jersey, directs the board to expedite applications if they pass a two-pronged test based on time and the offense for which they seek a pardon. The governor says he expects the first batch of clemencies to come in roughly six months.

Clemency seekers who are no longer incarcerated would be eligible for expedited review if 10 years had passed since the end of their sentence, including parole, probation, and court diversionary programs. That time bar falls to five years for applicants who are 60 or older or who were no older than 25 at the time of their offense.

They could meet the offense test if the crime for which they seek a pardon was not subject to the No Early Release Act or is no longer illegal.

“Corrections is based upon providing the opportunity for second chances, and our criminal and justice systems must provide meaningful opportunities for rehabilitation and redemption,” said Corrections Commissioner Victoria Kuhn.

The order bars clemency for offenses involving public corruption. Those with pending charges or who have been convicted outside of New Jersey for crimes that would prevent expedited review are likewise ineligible.

Murphy’s order creates a separate process for those who are currently incarcerated. Such individuals would be eligible for expedited review if they were a victim of sex trafficking or domestic violence, they were handed an excessive sentence, or they were convicted of a crime that is no longer illegal or has had its penalties reduced.

Regardless of a person’s carceral status, they are eligible for expedited review if the conviction review unit within the Office of the Attorney General refers the application to the new board for that purpose.

The Department of Corrections will work to solicit clemency applications from those still jailed, Murphy said, while those who have completed their sentences must apply online.

“Sometime in the future, I suspect after I’ve hung my cleats up, there will be an opportunity for somebody to press a button and automatically know who’s eligible or is considering eligibility, but today we don’t have it,” Murphy said. “So, the responsibility’s going to be out there on the individual to come to us.”

The six-member board must include the New Jersey attorney general and five public members, among whom there must be a retired judge, an experienced defense attorney, an expert on clemency, and a victim advocate.

Murphy has selected Justin Dews, a former senior counsel to the governor, as the board’s chair. The panel’s members will serve at the governor’s pleasure and receive no compensation.

“Clemency, whether it be a pardon or a commutation, is transformational,” Dews said Wednesday. “A pardon removes barriers that the law erects. Commutations shortens sentences. What the law says you cannot do, a pardon restores, and what the law says you must face, a pardon wipes away.”

Murphy has not issued any pardons since taking office in early 2018, and executive clemencies are a relative rarity in New Jersey.

Since Christine Todd Whitman became governor in 1994, the state’s executives have issued just 105 pardons and commutations, with most coming at the end of a governor’s lame-duck term.

Chris Christie, who issued more pardons than any governor since at least 1994, issued 15 clemencies in his first seven years in office, pardoned 38 in his last year, and commuted the sentences of three others.

Murphy on Wednesday declined to rule out issuing pardons or clemencies to individuals the board did not recommend should receive them.

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George Norcross III, right, and lawyer Michael Critchley speak to reporters in Trenton on June 17, 2024, after hearing Norcross has been indicted by the state Attorney General's Office. (Photo by Hal Brown for New Jersey Monitor)

The indictment unveiled Monday that accuses insurance executive and Democratic power broker George Norcross III of overseeing a criminal enterprise is replete with accusations of threats, intimidation, and political corruption that go on for 111 pages.

But at the heart of the charges filed by Attorney General Matt Platkin’s office are claims that Norcross — a Democratic kingmaker widely regarded as New Jersey’s most powerful unelected person — conspired with his allies to leverage their control of Camden County government officials to steer redevelopment work to their preferred investors and punish those who did not fall in line.

While some details of the saga have previously emerged in press reports or through a gubernatorial task force convened to probe abuses of the state’s tax incentives, the indictment against Norcross and five of his allies presents new details about how prosecutors claim they used their political power for personal gain.

It centers around voluminous New Jersey tax incentive programs meant to steer investment to the state’s financially struggling cities and accuses Norcross and others of enriching themselves with taxpayer dollars while lying to the government.

Norcross, a former Democratic national committeeman who faces 13 counts in the racketeering indictment, has denied any wrongdoing and alleges the prosecution is politically motivated.

“What’s being alleged here, it’s a wild story, a fanciful story woven together, a concocted criminal enterprise,” said Kevin Marino, an attorney for one of the defendants. “I don’t see a single allegation here that rises to the level of criminal activity.”

Triad1828 & 11 Cooper

In 2013, Norcross and allies sought to build on plots near Camden’s waterfront as expanded tax incentives became available under a new law.

Parts of the law were written by Kevin Sheehan, an attorney at the Parker McCay firm — Norcross’s brother Philip, a co-defendant, is the CEO — who the indictment calls lawyer-1, and offered more generous awards with far fewer guardrails to projects in Camden than it called for elsewhere. But Norcross and his allies still ran into problems.

They did not own the land and lacked the rights to develop it, and Philadelphia-based developer Dranoff Properties had the right of first refusal for one lot and a view easement that would limit the height of construction in the other.

Norcross and allies sought an end to the easement so they could construct the Triad1828 Centre — the tallest building on Camden’s waterfront, which now hosts Conner Strong & Buckelew, NFI, and the Michaels Organization — but met with resistance from Carl Dranoff, the developer whom the indictment refers to as developer-1.

Norcross is executive chairman of Conner Strong & Buckelew. NFI CEO Sidney Brown and Michaels Organization CEO John O’Donnell have also been charged.

City officials, including then-Mayor Dana Redd — another co-defendant — then stopped returning the developer’s calls, and an offer followed, prosecutors claim. Dranoff Properties would receive $1.3 million in reimbursements and consulting fees plus $1 million to cede its development rights, its easement, and $18 million in state tax credits to Liberty Property Trust, the developer favored by Norcross, according to the indictment.

The offer included the promise of a push by Norcross allies to lobby the Camden Redevelopment Agency to issue permits that would lower the environmental remediation standards at a separate site the developer sought to redevelop, the indictment says. The firms played no legal role in that process.

The deal fell through the same day it was offered, and those in Norcross’s orbit turned to other methods, prosecutors claim.

“I think we just do it. F**k ‘em. F**k ‘em. Just do it,” Norcross said during a recorded conversation with his brother, according to the indictment.

The indictment alleges Norcross turned to two strategies: His team would have the Camden Redevelopment Agency challenge the easement in court, and they would challenge the developer’s character in public.

The court filing was an effort to get the easement thrown out under the New Jersey Eminent Domain Act, which allows governments to seize private property under certain circumstances that include just compensation for the property owner.

There is no evidence the redevelopment agency intended to follow the process set out by that law, which requires the condemning agency appraise the property to be seized and make a written offer that meets or exceeds its value before moving to condemn the building, prosecutors said.

The indictment says the developer feared the financial harms borne of Norcross’s control of Camden government and his ability to do businesses elsewhere in the future. He ceded his easement and sold his $18 million in tax credits and his development rights for $1.95 million in October 2016.

Prosecutors allege Norcross and his allies resorted to coercive tactics over a separate site some 16 months later, when they charged Dranoff was responsible for stalled redevelopment at Radio Lofts, a former Radio Corporation of America building that could not be redeveloped because the Camden Redevelopment Agency could not secure sufficient financing for environmental remediation.

“He’s gonna come under some serious accusations from the City of Camden, which are gonna basically suggest that he’s not a reputable person and he’s done nothing but try to impede the progress of the city,” Norcross said on a recorded conference call, according to the indictment. “You can never trust him until you got a bat over his head.”

Officials began deriding the developer after he sued the city, the redevelopment agency, and others in 2018 after Camden moved to end his development rights on the Radio Lofts site.

“The city of Camden is taking action against those who have taken advantage of the city when it was down,” then-Camden Mayor Frank Moran said when the city countersued Dranoff in 2018.

The developer settled that suit in 2023, agreeing to pay the city $3.3 million and cede redevelopment rights to the Radio Lofts site. He believed he was in the right, the indictment says, but “had concerns over corruption in Camden which made him believe that he would not be treated fairly by the court system.”

That accusation raised the hackles of Norcross attorney Michael Critchley, who likened them to Donald Trump’s claims that his New York hush money conviction is the result of a corrupt judicial system.

“Why would an officer of the court, meaning Platkin, the attorney general, put shame unnecessarily, unjustly, and salaciously, on the entire court system of Camden, and in particular the judge,” Critchley told the New Jersey Monitor. “This is just out of Trump’s playbook.”

Conner Strong & Buckelew, NFI, and the Michaels Organization won more than $240 million in tax credits for the Triad1828 Centre through the now-defunct GROW NJ tax credit program. The three firms have received at least $29 million of those tax credits, prosecutors said, much of which they sold.

The Michaels Organization has received roughly $3.5 million in tax credits for 11 Cooper, a residential project on the site to which the developer had the right of first refusal. Michaels sold those tax credits for roughly $4.3 million.

A Dranoff spokeswoman declined to comment.

L3 complex

The indictment alleges similar misconduct over the nonprofit Coopers Ferry’s redevelopment of an office building Cooper University Health Care wanted for its own offices. Norcross is chairman of the Cooper health system’s board.

Philip Norcross railed at top officials at Cooper’s Ferry over the project, saying it should be handed over to a private developer, the indictment claims. Prosecutors allege that within a day, he urged the nonprofit to partner with Ira Lubert, a Pennsylvania real estate mogul with financial ties to George Norcross whom the indictment calls Investor-1.

Cooper’s Ferry entered a non-disclosure agreement with Lubert but chose another developer, a decision that immediately drew Norcross’s ire, prosecutors say.

Two days later, on April 25, 2014, Philip Norcross, who held no formal role with the city or Cooper’s Ferry, told the nonprofit it was not allowed to use its chosen developers, a statement then-Cooper’s Ferry CEO Anthony Perno took as a threat, prosecutors allege.

In an email cited by the indictment, Perno called the two bids a “false choice,” saying Cooper’s Ferry would likely not be able to close a deal with its chosen developers “given the opposition.”

In the end, Cooper’s Ferry partnered with Norcross’ chosen developer, netted just $125,000 for its work on the project, and never received shares of future profits promised to it during negotiations, the indictment alleges.

The nonprofit’s agreement with its preferred developer would have seen it win 25% of future profits from the site. At the time of closing, the L3 site was appraised at roughly $54 million, tens of millions more than the $32.7 million Lubert’s partnership paid for it.

Cooper Health had applied for tax incentives to cover the costs of rent at the site a month earlier, though in its applications to the state Economic Development Authority, it left out that it planned to purchase an interest in L3, prosecutors say.

Cooper Health received an award of nearly $40 million just 28 days after filing its application and, four months thereafter, purchased a 49% stake in the site for about $2.5 million. Between 2015 and 2020, Cooper Health received more than $27.1 million in tax incentives, which it sold for about $25.1 million.

Prosecutors allege Norcross and others then sought to shield their role in the saga. Norcross, during a 2016 FBI interview, claimed he did not know anyone at Cooper’s Ferry, according to the indictment.

But Susan Bass Levin, who the indictment calls CC-1, joined the Cooper Ferry’s board two years earlier. Bass Levin is CEO of the Cooper Foundation, the charitable arm of Cooper University Health Care.

In 2017, Norcross moved to oust Perno as he shifted officials through positions within his influence, prosecutors allege. Perno resigned at the urging of Bass Levin — losing a full year in severance — though his departure had less to do with his job performance than Norcross’s view of his performance, prosecutors claimed.

If he refused to quit, officials would just invent a reason to remove him for cause and thereby deny him severance, Bass Levin said, according to the indictment.

The indictment recounts a conversation about Norcross that prosecutors claim Bass Levin had with Perno.

“You don’t want that fight. Believe me when I tell you. If you don’t think that he can’t get to anybody he wants to, you’re kidding yourself,” Bass Levin said.

Marino, the attorney representing Philip Norcross, said that exchange is an example of many in the indictment that prove no criminal activity and were included to create the appearance that George Norcross and his allies acted improperly.

“One party’s telling another party that George Norcross can get anywhere and do anything. What is that doing in an indictment?” Marino said. “The reason this indictment runs to 111 pages is it takes a lot of work to construct what actually happened in such a way as to make it look like it violates the law. It doesn’t.”

The post Inside the ‘wild’ charges against Dem power broker George Norcross appeared first on New Jersey Monitor.

(Photo by Edwin J. Torres/N.J. Governor’s Office)

Murphy administration officials will propose a $100 million program to allow the state’s Economic Development Authority to purchase properties from NJ Transit for development in hopes of remitting some funds back to the transportation agency.

Under the proposal, whose details are still being negotiated, the authority would be required to remit a portion of its proceeds back to NJ Transit if the sale or lease of a transit property exceeds the authority’s purchasing costs. NJ Transit’s exact share of such proceeds has not yet been determined.

Economic Development Authority CEO Tim Sullivan and NJ Transit CEO Kevin Corbett announced the plan during a call with reporters Thursday.

“We think this is an exciting opportunity. It’s a way for us, the EDA, to be helpful in bringing more sites forward for development and also helping out with transit’s efforts that the governor and Kevin and the team at transit have been at for many years now,” said Economic Development Authority CEO Tim Sullivan.

As part of the program, developers would purchase or lease properties from the authority for residential, commercial, or mixed-use projects.

Market conditions and local governments would ultimately dictate what types of projects get built, but Sullivan said he expects residential construction to take up the greatest share. He cited continued strains in the commercial real estate market following the pandemic and high residential demand near transit stations.

Officials have proposed funding the program with $100 million from the still-unenacted corporate transit tax proposed by Gov. Phil Murphy. That tax is expected to generate roughly $1 billion for the general fund in its first year, and lawmakers are expected to dedicate its proceeds to NJ Transit in later years, when it’s expected to collect about $800 million annually.

On Thursday, officials said they are aiming to see the program approved before legislators take their summer recess after passing the annual budget. Murphy must sign the annual spending bill before July 1 to avert a government shutdown.

The legislation would require transit property sales to the Economic Development Authority under the proposal to be sold at fair market value, Sullivan said.

“This is not a fire sale of properties to us. This is a fair-market-value sale,” Sullivan said.

The two agencies would work together to identify the most appropriate parcels to purchase. That list is still being drafted but is likely to include parking lots abutting some NJ Transit stations.

Commuters at some NJ Transit stations, especially those close to New York City, face lengthy wait lists for parking, and Sullivan said such locations were unlikely to see their lots sold, at least in the program’s early stages.

“Places that have the most complex parking challenges probably don’t make the first cut here. Places where the parking challenges are more reasonable probably are likelier to be on the go-list,” Sullivan said.

He added replacement parking would be a consideration in “almost every imaginable scenario.”

Officials said cooperation between the two agencies would amount to more than the sum of its parts.

While NJ Transit owns and occasionally develops parcels abutting its stations, the responsibilities of running a transit network and the Economic Development Authority’s broader development powers make the authority a better fit, they said.

“If Tim and his team are able to leverage our parcel to get greater value, it’s one plus one equaling three,” Corbett said. “It’s fair that EDA gets some because they’re going to be enhancing the value beyond anything we would be able to achieve.”

Property sales under the program still require approval from the Economic Development Authority and NJ Transit boards, and projects under the program are likely to focus more on rail stations than bus stops, Sullivan said.

The post State pitches $100M plan to develop NJ Transit properties appeared first on New Jersey Monitor.

Rotunda in New Jersey Statehouse in Trenton (Dana DiFilippo | New Jersey Monitor)

A new series of financial projections find New Jersey would face smaller deficits in coming years if lawmakers raise taxes to fund NJ Transit — but warn the state is still likely on a path to drain its reserves in a few years under all but the rosiest forecast.

The state would continue to face steep structural deficits under a budget that includes no new government spending other than what is already authorized by law. But those deficits would significantly shrink if the budget includes millions in new tax collections lawmakers have proposed, according to the projections from the Rowan University-based Sweeney Center for Public Policy.

David Rousseau, a former state treasurer who sits on the center’s multi-year budget group, said the report shows we’re seeing a “return to normalcy in New Jersey budgets” — where treasurers year-to-year face the kinds of budgetary pressures they have always faced.

“My guess is since this millennium or even back further than that, at least two-thirds of the budgets during that period of time had a structural deficit,” Rousseau said.

Former Senate President Steve Sweeney founded the center after losing reelection in 2021 but left its board after saying he would seek the Democratic nomination for governor next year.

The group drafted three forecasts. Under its baseline forecast, the likeliest of the three, New Jersey would face about $10.8 billion in structural deficits over the four subsequent fiscal years.

That scenario would see New Jersey drain its surplus to $493,346 by July 2027 and fall into the negatives the following budgetary year. The group’s February forecasts predicted New Jersey’s surplus would go into the red as early as July 2026 in baseline conditions.

Gov. Phil Murphy’s budget proposal projects New Jersey will end the fiscal year that begins July 1 with roughly $6.3 billion in reserves.

The Sweeney group’s pessimistic scenario, which assumes a mild recession the state recovers from, would see New Jersey face $17.7 billion in combined deficits through fiscal year 2028 — roughly $9.6 billion more than state reserves could support.

The state’s surplus would fall $3.7 billion into arrears as early as July 2027 under that forecast, a year later than under earlier forecasts.

“I think the downside risks we were afraid of seem a little less imminent, and the upside plusses seem a little less likely, so it’s a bit of a narrowing of range,” said Charles Steindel, a former New Jersey chief economist.

New Jersey would maintain its surplus, though at much reduced levels, under the Sweeney group’s optimistic scenarios, with combined shortfalls totaling about $7 billion.

The rosiest forecast would leave New Jersey with just $1.1 billion in surplus by the end of fiscal year 2028. That low level of reserves presents fewer pressing issues than an entirely drained surplus, but it could lead to credit rating downgrades for the state and higher bonding costs, though they’re unlikely to be much higher.

“From experience, there is always a demand for New Jersey bonds,” Rousseau said.

Empty reserves also make the state less able to respond to economic shocks, making tax hikes or service cuts more likely in emergencies.

That the more recent forecasts present a slightly more encouraging picture of state finances than the center’s February report is unsurprising. The earlier forecasts assumed New Jersey would annually invest $500 million in NJ Transit beginning this July without raising any new revenue.

Lawmakers have indicated they will bridge the $766.8 million fiscal cliff NJ Transit faces in the budgetary year that begins July 1, 2025, by raising roughly $800 million in new taxes.

Murphy has pushed for those collections to come from a 2.5% surcharge on businesses with more than $10 million in profit, though budget chairs in both chambers have floated raising the state’s sales tax from 6.675% to 7% as an alternative. Both tax hikes would raise roughly $800 million.

“They can’t balance this year’s budget without one of those taxes or cuts,” said Mark Magyar, the center’s director.

Even so, New Jersey’s finances are likely to create a dilemma for lawmakers and the nascent Stay NJ tax credit program for seniors.

Among other things, Stay NJ requires the state to maintain a surplus equal to 12% of spending. New Jersey’s surplus is set to fall below that level in the fiscal year that begins July 1 and is expected to fall further in future years.

But the statutory restriction is far from absolute — lawmakers could simply write it out of law.

“If the governor tells you he wants to get something done, the legislative leaders tell you they want to get something done, you’re going to give them the options to get it done,” said Rousseau. “Now, it could mean you have to do other things and there could be other consequences to those actions, but anything is doable.”

The post Tax hikes would ease deficits, but budget surplus still at risk, group warns appeared first on New Jersey Monitor.