South Jersey Democratic power broker and businessman George Norcross III struck back Monday at a governor-appointed task force investigating New Jersey tax breaks, after investigators publicly questioned applications for nearly $300 million in tax credits made by his firm and others at a hearing last week.
Lawyers for Conner Strong & Buckelew – the insurance brokerage where Norcross is executive chairman – claimed the task force was “unlawfully constituted,” and curtailed the firm’s rights to “respond to false accusations,” according to a letter sent to task force special counsel Jim Walden.
The letter also took aim at task force chair Ronald Chen, questioning his statutory authority over the beleaguered Economic Development Authority (EDA), the state agency that was the focus of a scathing audit for poor oversight of the multibillion-dollar tax credit program. The task force said last week that any company that lied to the EDA in its application for tax credits could face possible criminal exposure.
Chen, a professor at Rutgers Law School and a former New Jersey public advocate, said at the hearing’s outset that the task force had identified nine “entities of concern,” but did not identify them.
“It is plain that [Chen] has targeted our clients but has refused to disclose anything further about this dubious designation,” said the letter from lawyers representing Cooper University Heath Care, the Michaels Organization, NFI, and the Parker McCay law firm, in addition to Conner Strong.
Chen, in a statement, defended the mandate and reach of the special task force, which Democratic Gov. Phil Murphy created through an executive order in January, after the state comptroller identified “numerous significant deficiencies" with EDA oversight.
“The governor has full constitutional and statutory authority to investigate any entity within the executive branch, including the EDA, either by himself or through a delegate,” Chen said. “If anyone wishes to challenge that authority, they should bring an appropriate action in court and we are ready to defend it vigorously.”
The state approved $1.6 billion in state incentives between 2013 and 2017 to firms relocating to Camden and promising to create jobs. The task force is looking into how the related legislation was crafted behind the scenes, and has already made one criminal referral for alleged “unregistered lobbying.” Investigators are also examining whether grant recipients were actually considering moving out of New Jersey, as stated in their applications.
Norcross has championed the tax credit legislation signed into law by his Republican ally, former Gov. Chris Christie, in the name of bringing private investment to long-struggling Camden.
Companies connected to Norcross have also benefited from legislation. An investigation by WNYC and ProPublica found that organizations with ties to Norcross and one of his brothers, a lawyer and lobbyist, were granted approval for $1.1 billion in tax credits – out of the $1.6 billion in incentives headed for Camden.
Norcross is chairman of the board of trustees for Cooper University Hospital and Cooper Health System, which won approval for $40 million in tax credits in 2014. Conner Strong, the Michael Organization, and NFI were approved in 2017 for $245 million worth of tax incentives, toward a new office tower on the Camden waterfront.
An EDA official testified last Thursday that aspects of all four applications raised concerns and would have merited further scrutiny. Testimony and evidence also focused on the role played by Parker McCay lawyer Kevin Sheehan, both in consulting on Conner Strong’s tax credit application, and in making changes to drafts of the tax credit legislation, the 2013 Economic Opportunity Act.
Parker McCay’s managing shareholder and CEO is Philip Norcross, brother of George Norcross. The firm has insisted it gave input on the bill at the request of legislators, and was not being paid to lobby on it.
On Monday, Conner Strong and other organizations on the letter demanded an opportunity to present evidence and witnesses at the task force’s next public hearing. The high-powered lawyers representing the various firms include Christopher Porrino, a former New Jersey attorney general, and Michael Chertoff, former secretary of the Department of Homeland Security.
“This one-sided investigation smacks of political retribution and undermined the credibility of your exercise,” the letter said. “We reserve all rights to seek full remedies to the extent any of these false and defamatory accusations were directed at our clients.”
Camden Democratic leaders lambasted the task force on Monday, as well, accusing Chen of having a conflict because Rutgers University has benefited “directly and indirectly" from EDA tax incentives.