N.J. legislators question oversight of Sandy spending

TRENTON - Gov. Christie's handling of federal Hurricane Sandy recovery money came under scrutiny during an Assembly committee hearing Monday, as Democrats pressed a state Treasury official to explain why no reports had been issued by firms assigned to monitor Sandy contracts.

David Ridolfino, associate deputy state treasurer, told the State and Local Government Committee that the state needed to complete extensive work before it could assign integrity monitors to certain Sandy contracts, including at the Department of Community Affairs, which is overseeing the main housing recovery program.

Assemblywoman Linda Stender (D., Union) questioned the time frame, given that a law requiring the monitoring was passed in March 2013.

She also voiced concern about transparency related to contracts, noting that little information had been released on the reason for the state's early termination of a three-year, $68 million contract with Hammerman & Gainer Inc., which had been administering the Rehabilitation, Reconstruction, Elevation and Mitigation (RREM) housing recovery program.

"We've had no reports from the work that was done. We simply don't know a lot about . . . the money that was flowing in the past year," Stender said.

Ridolfino said Navigant, the firm monitoring DCA contracts worth $200 million, would release its first report July 1.

According to a Treasury spokesman, Navigant is monitoring contracts related to management of the RREM program - a task that, upon HGI's firing, has involved an expanded role for several contractors, among them ICF International, which ran the troubled Hurricane Katrina housing program.

So far, Ridolfino said, firms have been assigned to oversee about $360 million worth of contracts at eight state and local governmental entities, with other monitors still to be selected.

The monitors will be paid $2.9 million, while Ernst & Young, hired to conduct an assessment before the assignment of monitors, will be paid $2 million, Ridolfino said.

Though the monitors were only recently put in place, Ridolfino said, other forms of oversight have been in effect.

Some departments, DCA included, have retained internal monitors, he said.

"There's absolutely ongoing oversight," Ridolfino said. "It isn't as if the only thing out there is this integrity monitoring."

Lisa Ryan, a DCA spokeswoman, said Monday that draft reports had been produced by the department's internal monitor, CohnReznick, and would be released "upon completion."

Also on Monday, Christie conditionally vetoed legislation backed by Senate President Stephen Sweeney (D., Gloucester) with standards to make the process of obtaining grant money more transparent for Sandy victims.

In vetoing the "Sandy Bill of Rights" - which passed with unanimous support in the Senate and Assembly - Christie said the bill's requirements were "accompanied by a raft of partisan political findings, all styled as 'rights' ready to be pursued by lawyers."

He outlined a list of proposed changes that he said would increase transparency without imposing "undue administrative burdens." One change, for example, would give the state 120 days to respond to the appeal of a person denied benefits - as opposed to 50 days in Sweeney's bill.

In a statement, Sweeney did not address Christie's changes but said the governor's veto "lacks common sense."

"His administration continues to mismanage the Sandy recovery process, and this veto may be one of the biggest blunders yet," Sweeney said.

Housing advocates also attacked Christie's decision, which they said overlooked the needs of storm victims.

Kevin Walsh, an attorney with the Cherry Hill-based Fair Share Housing Center, called the veto "another disappointing move by this administration that has a major blind spot on the real suffering that has occurred as a result of the recovery being neither fair nor transparent."