Critics assail Christie's plan for fiscal watchdogs

TRENTON - Gov. Christie's proposal to merge three state watchdog agencies with the Comptroller's Office would hurt New Jersey taxpayers because less fraud would be exposed and too much power would shift to the executive branch, critics of the plan said Wednesday.

The governor has said he hopes to save $3.5 million a year by abolishing the State Commission of Investigation, the Inspector General's Office, and the Medicaid Inspector General's Office and transferring their duties to the Comptroller's Office, which is within the executive branch.

The state Auditor's Office, which falls under the legislative branch, would not be affected.

Senate Majority Leader Barbara Buono (D., Middlesex), who chairs the Legislative Oversight Committee, which held a hearing on the proposal, told Comptroller Matthew Boxer: "That's chutzpah. To me, that would seriously undermine the separation of powers."

The 56-employee Comptroller's Office has performed audits, reviewed contracts, and conducted investigations during its 21/2 years of existence.

The State Commission of Investigation, funded through the Legislature's budget, was established in the 1960s. The Inspector General's Office, established in 2005, and the Medicaid Inspector General's Office, established in 2007, are funded through the executive branch.

Other opponents of the proposal warned lawmakers that the plan would cost the state in savings many times over. Leaders of the State Commission of Investigation and the Inspector General's Office said their investigations had recovered millions of tax dollars by uncovering corruption and waste in government.

W. Cary Edwards, chairman of the State Commission of Investigation, said state taxpayers spend a combined $100 billion a year to fund government at all levels, yet less than $20 million goes to fund fiscal watchdogs.

Citing his 40 years of government experience, Edwards said, "If there's one thing I've learned, it's that you can never have enough expert eyes and ears to hold government accountable to look out for the public interest."

"The way that the oversight structure has been set up in New Jersey to some extent mirrors the way that local governments have been set up in New Jersey, in that it's a bit balkanized," said Boxer, who prosecuted public corruption and other cases under Christie in the U.S. Attorney's Office.

"The notion is combining these agencies under one roof would make for a more efficient and productive oversight function," he said.

Boxer noted that some investigators and auditors would lose their jobs, including about 43 of 53 employees at the State Commission of Investigation. Christie's proposed budget would cut more than 75 percent of its funding, and Edwards testified Wednesday that the commission would cease to exist in that case.

The commission, which originally focused on organized crime, recently conducted investigations into gangs that run criminal enterprises from behind bars and how local governments waste millions of dollars on unnecessary employee benefits such as sick-day payouts. Edwards said the Legislature had adopted 80 percent of the commission's recommendations over the last five to seven years.

State Inspector General Mary Jane Cooper argued that there was no overlap in the functions of the three offices and questioned whether there would be enough checks and balances with one consolidated watchdog office.

"One of the things you must consider is that someday there might be a comptroller who would be mismanaging his office or her office - who will be investigating that comptroller?" she asked.

Her office, which has a staff of about 16, has produced five reports since Christie took office this year; that is as many as or more than the office has published in any given year since it was established. Last year it published two reports, one on pension abuses by Gloucester County Democratic Chairman Michael Angelini. In its early years, the office produced a number of reports about high-profile abuses in the state's school construction program.

The Comptroller's Office audits public entities, and its policy is to perform follow-up audits to ensure that recommendations are acted on. It is also charged with uncovering wasteful spending, and recent investigations have found millions of dollars' worth of abuses in Atlantic City, Camden, and state agencies. The office has released about a dozen reports and audits.

Lawmakers also discussed and heard testimony on the benefits and pitfalls of having an elected comptroller, rather than one appointed by the governor under the current system.

The advantage of an elected comptroller is the perceived independence of the position, said former State Auditor Richard Fair, now director of Rutgers University's masters program in governmental accounting.

He also said that in an election, a lot had to occur that "might somehow impede that person's independence."