Who’s the most powerful person in New Jersey?
That wasn’t the legal question before the judge hearing arguments Monday in Trenton in George E. Norcross, et al v. Philip Dunton Murphy, et al, Docket No. MER-L-001007-19. But it was the subtext for the extraordinary hearing: lawyers for the state’s preeminent political power broker and its 56th governor squaring off over Murphy’s investigation into the state’s tax-incentive programs.
- Norcross-linked firms benefited from behind-the-scenes lobbying on tax breaks, N.J. task force reports
- Gov. Murphy decries ‘rigged system’, pledges to veto legislation extending controversial tax programs
- N.J. judge rejects George Norcross bid to stop Gov. Phil Murphy’s investigation into tax incentives
Norcross, an insurance executive and de facto leader of the South Jersey Democratic machine, had never been close to Murphy, a former Goldman Sachs banker who rose to the governorship outside the traditional New Jersey power structure.
But in the last two months their feud has spiraled, plunging the Democratic Party into a civil war even as it controls the governor’s mansion and both houses of the Legislature.
A Murphy-appointed task force has suggested companies tied to Norcross were awarded tens of millions of dollars more in tax credits than they deserved, while Norcross has disparaged Murphy and his wife and sued the governor. (The judge denied Norcross’ request for an injunction to temporarily halt the task force’s proceedings.)
Longtime Trenton observers say the feud is unprecedented.
At stake is not just the annual budget, the fate of the tax-incentive programs, or key items on Murphy’s agenda, such as legalizing recreational marijuana.
“It is difficult to see how this doesn’t do permanent damage to the Democratic Party and result in the destruction of some of the principal participants,” said former U.S. Sen. Robert Torricelli (D., N.J.). “Both sides have now done things that assure neither can approach the other. One side will survive. And one will perish.”
For the most part, Murphy’s predecessors had a much different relationship with Norcross.
In the early 2000s, Norcross quipped that Gov. Jim McGreevey’s office was his “Trenton rowhouse.”
Spurred by Norcross, Gov. Jon Corzine, also a Democrat, issued an executive order authorizing a medical school and millions in state aid for Cooper University Hospital, where Norcross was the longtime board chairman.
And in Gov. Chris Christie’s final State of the State address, the Republican governor praised Norcross’ “relentless will” and said Camden had “no greater cheerleader and investor.”
So after some two decades of unparalleled Norcross influence, Murphy backers are happy to see the governor stand up to him and his chief ally in the Legislature, Senate President Steve Sweeney (D., Gloucester). For years Sweeney has pushed to shore up the state’s retirement funds, battling public employee unions resistant to cuts. The unions are key Murphy allies.
Murphy campaigned as the anti-Christie who would cleanse Trenton of the insider deal-making he said had left the middle class behind, and took aim at the state’s business-tax relocation incentives.
Norcross says the dispute traces to a purported effort by Murphy allies to oust Sweeney from his leadership position during the summer of 2017.
Murphy’s allies insist there was no such plan. That same year, Norcross had asked Murphy to persuade the state’s largest teachers’ union to halt its negative campaigning against Sweeney. The New Jersey Education Association backed a little-known Republican and spent millions of dollars on anti-Sweeney television ads, though he won handily.
Once in office, Murphy ordered the state comptroller to audit the state’s tax-incentive programs, which had been revamped in 2013 to lure companies to Camden.
After the comptroller found significant lapses in oversight, Murphy appointed the task force, which concluded in its initial report Monday that the 2013 law was drafted in large part by a law firm run by Norcross’ brother Phillip with the apparent goal of benefiting the firm’s clients, including George Norcross’ insurance brokerage.
The state Economic Development Authority in 2017 awarded $245 million in tax breaks over a 10-year period to Norcross’ firm, Conner Strong & Buckelew, and two business partners to build an office tower in Camden and bring jobs there.
“This is a rigged system,” Murphy said Tuesday, as Norcross indicated he would testify before lawmakers to correct the "gross misstatements and misleading information released by the governor’s task force.”
A state grand jury is also investigating the incentive programs.
But even some of the governor’s supporters privately say they fail to see a larger strategy from the front office on West State Street. After all, if Murphy’s goal is to reform the incentives programs, he needs the support of Sweeney, who is Norcross’ childhood friend. It’s hard to see how embarrassing Norcross would help.
Murphy has said the investigation isn’t political and he wants to ensure taxpayer dollars are well spent.
“Ideological differences are one thing. A healthy debate is a good thing. Creative tension is a good thing,” said Tom Byrne, a former state Democratic Party chairman and son of former Gov. Brendan Byrne. “But we’re well beyond that in Trenton now.”
That underscores a larger problem for Murphy: He has at times been a poor tactician. Consider that after vetoing legislation that would require certain nonprofit “dark money" groups to disclose their donors, he ended up signing it this week after lawmakers threatened an override.
“I think what’s kind of extraordinary is the degree to which Gov. Murphy has been isolated within his own party,” Torricelli said.
To be sure, public-sector labor leaders and progressive groups have rallied behind Murphy, and more than 1,000 workers gathered outside the Statehouse last week to mobilize support for the governor’s proposed millionaires’ tax.
But he hasn’t won the loyalty of legislators who could help deliver his agenda.
Murphy, 61, an unabashed liberal, had not held elected office before. A former finance chairman of the Democratic National Committee, he had relationships with some national Democrats but no deep ties to local party officials.
Norcross, by contrast, has been a political kingmaker for decades from his power base in Camden County, where Democrats have long been more conservative than their North Jersey counterparts. Democrats in South Jersey feel strong loyalty to him, associates say. For his part, Sweeney has served in the Senate since 2002, and as Senate president for a decade, has his own tight allies.
Norcross, 63, has staked his legacy on revitalizing Camden, one of the nation’s poorest and most violent cities, and believes Murphy is taking a wrecking ball to progress there, allies say.
His associates say Norcross also worries about possible collateral damage to friends he helped recruit to invest in Camden.
Some in Murphy’s orbit question Norcross’ commitment to the city, given that his company reported on its application for tax credits that it would seek to relocate outside New Jersey if it didn’t get the breaks.
Norcross allies say the task force investigation is just another effort backed by public employee unions to wound Sweeney — and thus impede attempts to scale back their pensions and health benefits.
And they note that even as Murphy blasts the economic development programs as beholden to special interests, he too is grappling with controversies that hark back to smoke-filled rooms.
A patronage scandal has rocked the multibillion-dollar Schools Development Authority. And a nonprofit founded by Murphy campaign advisers, New Direction NJ, has refused to disclose its donors despite initially pledging to do so, though Politico reported that one of its donors, the statewide teachers union NJEA, had donated $2.5 million. The nonprofit is airing TV ads urging lawmakers to support a millionaires’ tax.
Norcross, in conversations caught on tape in the early 2000s, once boasted that politicians like McGreevey and Corzine needed him not because they liked him but because they had “no choice.”