NJ Corruption

[Guest]

Testimony of slush fund and "payback time" at Bryant trial
By Troy Graham
Inquirer Staff Writer

TRENTON - The state treasurer's office had almost no authority over who received millions of dollars from a special-grant program, even though the office administered the money, according to testimony in federal court yesterday.
Instead, legislators and the governor's office supplied lists of recipients, and the treasurer's office then notified the grant winners, said state Treasurer David Rousseau.

The so-called "MAC account" grant program, which distributed a total of $128 million in 2004 and 2005, has become a focal point in the ongoing corruption trial of former State Sen. Wayne Bryant (D., Camden).

Revelations about the MAC account also have spilled into the current election cycle, with Republicans criticizing the way the grant program was handled by the Democratic-controlled legislature.

Bryant, who was chair of the Senate Budget and Appropriations Committee and deputy majority leader in 2005, has been accused of steering $200,000 from the MAC account to another of his employers, the School of Osteopathic Medicine, in Stratford.

That's among the millions prosecutors say Bryant directed to the institution after he was given a "low-show" job there in 2003. Prosecutors have called Bryant's position at the school a bribe for his influence.

George LeBlanc, the budget director for the Senate Democrats, testified last week that Bryant and former State Sen. Bernard Kenny (D., Hudson) each were allowed to hand out $4 million from the supposedly merit-based MAC-account grant program as they saw fit.

The MAC account's formal name was the Property Tax Assistance and Community Development grants, but the program earned its nickname, prosecutor's said, because lawmakers used it like "an ATM machine."

Rousseau, who was deputy treasurer during the MAC account's two-year existence, said the governor's office had $12 million to give out in 2005. Senate President Richard J. Codey (D., Essex) was the acting governor at the time.

Codey said yesterday that he changed a spending system "that predated my arrival in the legislature . . . into the most transparent system that exists in the United States, and that includes Congress."

Lawmakers now must put their spending requests into the budget in writing, sign them and allow the public time to review them.

Rousseau said both parties and both chambers of the legislature had access to MAC-account money, but Bryant, Kenny and Codey have been the only lawmakers specifically named in testimony so far.

Rousseau said that, prior to 2002, when Republicans controlled the legislature, lawmakers had to put spending requests into the budget as line items. There were 400 requests in 2001, the last year of that system, he said.

After 2002, under Democratic control, the system changed to a grant-based program, with blocks of money given to several state agencies to hand out. In 2004, the system was changed again to pool the grant money in the treasurer's office, said Rousseau, the first cabinet-level official to testify in the Bryant trial.

The MAC account had $88 million in 2004 and $40 million in 2005, he said.

Once legislators submitted their lists of recipients, the treasurer's office did a "cursory review" before sending them to the Joint Budget Oversight Committee for final approval, Rousseau said.

He said the treasurer's office had "very little" discretion over the lists, and he could not remember any that weren't passed along.

The treasurer's office was responsible for notifying the grant recipients and asking them to return an application. Then the treasurer's office drafted a grant contract with the recipients, Rousseau said.

Bryant did not run for reelection last year after he and the osteopathic school's former dean, R. Michael Gallagher, were indicted. Gallagher was accused of rigging a hiring process to bring Bryant onto the school's payroll.
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http://www.philly.com/inquirer/front_page/20081007_Testimony_of_slush_fund_and__quot_payback_time_quot__at_Bryant_trial.html

[Star Ledger]

Legislative leaders exchange charges about how grants were decided
by Josh Margolin and Ted Sherman/The Star-Ledger
Tuesday October 21, 2008, 9:14 PM

Legislative leaders on opposite sides of the aisle traded charges of impropriety on Tuesday as allegations over backroom budget deals involving millions of dollars grew increasingly heated and personal - even by New Jersey standards.

Assembly Minority Leader Alex DeCroce (R-Morris) said Senate President Richard Codey (D-Essex) alternately threatened and tempted him with state grant money in an effort to halt a Republican hunt for documents that would expose how state funds were really being doled out by ruling Democrats.

"It seemed like he was trying to pacify me by offering me some money," DeCroce said. "I am prepared to take a lie detector test if it comes down to that...and it may come down to that."

Codey called the assertion "an absolute lie" and said the only conversation he had with DeCroce was over the use of GOP legislative staffers to conduct "political opposition research" on state time.

"What was the threat? What was I going to do?" Codey asked. "I would never have done that in a million years."

The dispute was the latest development in a scandal that has created a level of political warfare seldom seen at the Statehouse. The attacks pit the Assembly's most powerful Republican against the Senate's most powerful Democrat, who is also a former governor.

At the center of the controversy are recent disclosures about more than $120 million in legislative grants handed out in the 2005 and 2006 budget years.

Records released by the state Treasury Department late Friday in response to a series of Open Public Records Act requests from Republicans showed, for the first time, who directed those grants, long known as "Christmas tree" items, and the political considerations that went into them. Codey, as Senate president and governor, had control over where much of that money went.

The legislative grants, which stopped after Gov. Jon Corzine was elected, have been the focus of an ongoing federal criminal investigation. They are also at the center of the federal fraud trial of former state Sen. Wayne Bryant. The Camden County Democrat is accused of abusing his position as chairman of the Senate Budget and Appropriations Committee by steering millions of dollars in grants to the state's medical university after university officials put him on the payroll.

DeCroce said he and Codey had a falling out after reports in 2005 that detailed the awarding of millions of dollars in homeland security grants to primarily Democratic legislative districts. A few days after a television appearance in which he criticized Codey's handling of the grants, he was summoned to Codey's private Statehouse office, DeCroce said.

"He asked me if I wanted grant money for me or any of my members, and I said no. I said, 'I think what you really should be doing is putting the money back into the program, let the towns resubmit because they need the money,'" DeCroce said in an interview in his Morristown office this week.

Rick Wright, the top Republican staffer in the Assembly, said he witnessed three separate conversations between DeCroce and Codey, including that one.

DeCroce said his staff already had been filing OPRA requests and reviewing state and local records to determine who was getting state grant money, and whether there was any political angle to the awards.

In December 2006, DeCroce said, he was again summoned by Codey, this time to the Senate president's suite off the Senate chamber. Wright again was present. DeCroce said Codey complained about the Open Public Records Act requests.

"Senator Codey said to me, 'You know, that's something we don't do here. We don't usually look into each others' personal issues.' He said, "By the way, if I wanted to, I could go into every municipality in your district and tell you every time you had a zoning change done,'" DeCroce said.

"I didn't say a word. I kept my mouth shut. When I left, I said he can go to my district all day long any day he wants to."

Wright said of the meeting, "When I left, I was quaking in my shoes."

Codey was outraged at the allegations.

"I never had any such conversation in any way, shape or form. Never," he said. "Not in a million years. It never happened."

According to Codey, the only discussion he had with DeCroce took place long after the grant program ended, and after Corzine had succeeded him as governor.

"I had a talk with him about the OPRAs they were filing," Codey said of DeCroce. "I told him his staff can't be throwing out OPRAs on state time to do opposition research. It's an ethical violation."

Those OPRA requests, he said, were filed long after the grant program ended.

Kathleen Crotty, the top Democratic staffer in the Senate, backed Codey, saying the focus of the Republican Assembly staffers was clearly not on legislative issues, and Codey felt it was inappropriate.

Albert Porroni, executive director of the nonpartisan Office of Legislative Services, said he spoke to Codey before that meeting and that Codey asked him whether the records being sought by the GOP were a legitimate request. Porroni said they were not.

Neither Crotty nor Porroni was at the meetings.

The release of internal budget documents Friday unleashed no small amount of anger and animosity elsewhere. With the disclosure that George Norcross, a Camden County Democratic power broker who held no elective office, secured $305,000 in grants in 2005, the South Jersey political boss quickly pointed a finger at Codey.

Norcross said in a statement that the Senate president, then also governor, had called, saying he had authority over a substantial amount of discretionary funds and asking if Norcross could recommend $500,000 of funding to worthy causes.

"I was delighted to recommend several deserving causes," Norcross said.

Codey said he wonders why DeCroce was raising questions about a program four years after the fact, and after reforms had been implemented, first by him and later by Corzine.

"I've always considered him as a friend despite all our differences," Codey said. "I think it's time to move on and forget about all this mishmosh."

DeCroce said he decided to come forward last week when it became clear the state budget process was far more political than even he had ever imagined. He said he was also offended by documents among those released Friday that show Codey's staff had suggested awarding Christmas tree money to DeCroce's district as a means of co-opting and keeping him silent after Codey became governor. The Senate president doubled as governor after the resignation of James E. McGreevey in 2004.

"After what we went through with McGreevey, we didn't think it would be necessary to take some shots at anybody at that point," DeCroce said. "The state had taken enough of a beating, so we left it alone."

Staff writers Claire Heininger and Dunstan McNichol contributed to this report.

http://www.nj.com/elections/index.ssf/2008/10/top_legislative_leaders_exchan.html