TRENTON - A former Philadelphia deputy mayor who later oversaw New Jersey school construction projects statewide made false statements during an ethics investigation about prior business and personal relationships, according to a report issued Tuesday by the New Jersey inspector general.

While serving as the vice president and chief operating officer of the New Jersey Schools Development Authority (SDA), Gerald Murphy filed a written statement to the state Ethics Commission that contradicted previous sworn interviews to ethics investigators, the report said.

The SDA manages billions of dollars of public school construction projects throughout the state; it was created by the Legislature to succeed the beleaguered New Jersey Schools Construction Corp.

Murphy has acknowledged his ethics violations and agreed to pay a $3,000 civil penalty, according to the inspector general, Mary Jane Cooper, whose office has referred the issue to the state attorney general to determine whether the actions warrant criminal charges.

Murphy served as a deputy mayor under Mayor Ed Rendell from 1992 to 2000. He resigned from his Schools Development Authority job effective Feb. 1 during the inspector general's investigation.

Murphy's attorney, Mark Catanzaro, did not return calls for comment.

According to the Inspector General's Office, charges such as perjury, false swearing, and unsworn falsification to authorities may apply, which means Murphy, if convicted, could face imprisonment.

The inspector general's report provided the following account:

The state Ethics Commission opened an investigation in 2005 after a complaint that Murphy had used his position at the SDA to force two individuals to help Murphy's son in his business.

Cooper said the report did not include Murphy's son's name or his business's name because he "really hadn't done anything wrong."

During that investigation, Murphy provided two sworn interview statements to the Ethics Commission, in which he said that his personal relationships with the two individuals - Joseph Ashdale, a union representative with potential SDA contacts, and Tom Foy, vice president of Hill International, a company with a contract with SDA - began before he was employed by the SDA.

Ashdale is chairman of the Philadelphia Parking Authority board of directors and the assistant business manager of District Council No. 21 of International Union of Painters and Allied Trades. He did not return a call for comment.

The Ethics Commission later shifted the focus of its investigation to whether Murphy had violated ethics laws as an SDA employee in light of his personal relationship with Foy, who served as an assemblyman in the New Jersey State Legislature from 1984 to 1990 and as a senator from 1990 to 1992.

The commission found during its investigation that Murphy had served as the chairman of a five-person selection committee to choose a firm to develop protocols to select and monitor school facilities projects. Murphy neither recused himself nor disclosed that he had a close friendship and business relationship with Foy, who has since died.

The selection committee chose Hill International for the job, even though the firm submitted a proposal for fees and expenses totaling $519,560, the highest of three proposals submitted and more than $356,000 higher than the fee proposal from the second-rated firm.

After negotiations with Murphy and another SDA employee, Hill International reduced its proposed fee to $396,810, still $233,000 more than the second-rated firm.

Murphy had direct oversight over Hill International's performance and was responsible for approving payments made to the firm under the contract, including expenses submitted by Foy. Murphy and Foy also dined together a number of times, with Foy billing the SDA for business meals. Murphy said he paid his share of business meals, although he could not provide documentation.

Asked during a sworn interview for the Ethics Commission whether he was social friends with Foy, Murphy said yes.

"Social friends as well, yeah. If you knew Tommy Foy, he had a lot of friends. He's been elected to every office except dogcatcher, I think. He's been a senator and deputy commissioner over here. But Tommy's just a good - great guy, good friend."

John Paolin, vice president of marketing and corporate communications with Hill International, said Foy was a senior vice president with the company and died in 2004. He would not comment further.

According to city records, Murphy worked for Philadelphia early on as a lifeguard, then was a police officer for seven years before resigning in 1980.

Murphy worked for a period at the Philadelphia Parking Authority as the assistant director of security. During Rendell's mayoral campaign, Murphy helped organize union support. Among Murphy's duties as a deputy mayor under Rendell were handling communications with nonmunicipal unions and fair-labor-practices issues. Murphy was earning $80,000 when he resigned from the city in 2000.

Murphy started working as the director of workforce development for the New Jersey Economic Development Authority Schools Construction Program in 2002.

The Ethics Commission filed a complaint against Murphy charging that he violated ethics laws. Murphy contested the charges and filed a certification on Feb. 23, 2009, denying that he knew Foy before Murphy's employment with the SDA, directly contradicting his previous statements.

Murphy claimed in the certification that he had misspoken in his previous statements.

After Murphy submitted his certification and was provided transcripts of his sworn interviews, he entered into a consent order on March 17, 2009, with the Ethics Commission, stating that the sworn interview statements were correct and the more recent certification false.

After the Inspector General's Office offered Murphy a chance to explain the contradictions, he declined to answer questions, citing the advice of his attorney and the Fifth Amendment.

Contact staff writer Adrienne Lu at 609-989-8990 or alu@phillynews.com.

Inquirer staff writer Marcia Gelbart contributed to this article.