New rules proposed Wednesday by the Delaware River Port Authority chairman would make sweeping changes in the way the bi-state agency operates, responding to demands from New Jersey and Pennsylvania governors to make the DRPA more open and responsive.

Even as chairman John Estey moved to quiet criticism of the politically connected port authority, fellow board member John "Doc" Dougherty called for dismissing DRPA chief executive John Matheussen and replacing Estey and vice chairman John Nash as the leaders of the board.

And a long-overdue independent audit of the agency, released Tuesday, added fuel to the fire as it described problems of political meddling, unauthorized projects, and employees who are "deemed by the staff as 'untouchable' because of their political connections"

Pennsylvania auditor general Jack Wagner asked Estey on Wednesday to convene a special board meeting.

The port authority operates four Delaware River toll bridges and the PATCO commuter rail line between Philadelphia and South Jersey. Its $300 million in revenue comes largely from bridge tolls, most of which are paid by New Jersey commuters.

The proposed changes ennumerated by Estey in a letter to Gov. Christie and Gov. Rendell included:

- An end to hiring relatives of executives and employees.

- An end to closed-door "caucus" meetings by DRPA board members.

- The right of state auditors to audit the DRPA.

- A ban on outside employment for DRPA managers.

- Opening all board meetings to the public and requiring the board to follow the Pennsylvania "Right to Know" law.

- New ethics rules and a requirement that DRPA officials "avoid the appearance of impropriety."

- Restrictions on vendors who hire former DRPA officials.

- A ban on performing political work while on DRPA duty.

- "Prohibit undue influence" by board members, officers and employees on DRPA decision-making.

- Require all DRPA vendors to disclose political contributions.

- Create a committee to review executive-level compensation.

Estey also told the governors he had directed Mattheussen to suspend free E-ZPass use for all DRPA employees. He said Mattheussen had ended car allowances for the 11 DRPA officials who received them, including himself, effective June 30.

Estey, a Philadelphia lawyer who is former chief-of-staff to Rendell, told the governors that he planned to implement the 16 proposed reforms "as quickly as possible, so that DRPA may continue to improve public confidence in its operations."

After the governors review the proposed changes, Estey said, he will submit them to the New Jersey and Pennsylvania board members and to the public for review before asking the board to enact the reforms.

The next scheduled board meeting is Aug. 18. Estey said it might be possible to meet earlier to vote on the proposed reforms.

The DRPA is facing demands from several Pennsylvania board members, most notably labor leader Dougherty, for major changes. Gov. Christie has said he will not permit Matheussen to be rehired to a third term as chief executive until questions about policies and ethics are addressed, and legislators from New Jersey and Pennsylvania have called for a federal investigation of the agency.

Mattheussen's "time has come," Dougherty said Wednesday.

"The governors need to step in and make some serious personnel decisions," said Dougherty, who is business manager of IBEW Local 98 and a significant player in Philadelphia politics. "Mattheussen needs to go, and we need to reshape the the leadership of the board."

In addition to Estey, he singled out vice chairman Jeff Nash, a Camden County freeholder.

The governor of Pennsylvania appoints the chairman and the governor of New Jersey the vice chairman of the DRPA.

"Stop the nonsense," Dougherty said. "The same three or four guys are still doing the same stuff. They're continuing to hire and give things out and act like they're trying to save the ship."

Dougherty endorsed Wagner's call for an early board meeting to tackle reform.

Last week, the DRPA's chief of public safety, Michael Joyce, resigned from his $180,081-a-year post, after it was learned he had borrowed a free E-ZPass transponder from another DRPA official for Joyce's daughter to use on daily trips to her private high school in Pennsylvania.

The owner of the E-ZPass, DRPA corporate secretary John Lawless, was dismissed from his post in April and escorted from DRPA headquarters in Camden, but he continues to collect his $123,806-a-year salary.

DRPA officials have declined to discuss the reasons for Lawless' removal, and Lawless referred questions to his attorney, who has not returned calls for comment.

Lawless has filed two complaints against the DRPA with the federal Equal Employment Opportunity Commission, claiming discriminatory treatment based on an unspecified disability.

The independent management audit released Tuesday gave the DRPA mostly passing marks and said PATCO is "above average," especially considering its antiquated equipment.

"However, for the DRPA to achieve excellence in both effectiveness and efficiency, the organization would need a breakthrough level of performance improvement," said auditors TransTech Management Inc., a North Carolina consultant that was paid about $500,000 to conduct the audit.

The DRPA is required by its enabling charter to have an independent management audit every five years. This one is four years late; the last one was in 2001.

The auditors said the DRPA should eliminate two political patronage posts - the assistants to the chairman and the vice chairman. The assistant to the chairman is Mary-Rita D'Alessandro, a Dougherty ally who is paid $140,000 annually, and the assistant to the vice chairman was Michael Joyce before he was promoted to public safety chief.

The posts "have no appropriate role or responsibility in managing or operating the agency," the auditors said. "The 'dual-reporting relationship' allowed by this arrangement is a deterrent to good business practices and sound organizational design. The incumbents may not be held accountable by either the Board leadership or the staff leadership alone, and they are in a position to disrupt legitimate analysis and decision-making."

The auditors also noted that for years the DRPA has apparently violated its enabling charter by approving economic development projects that are not contained in its master plan. In fact, since 2005, it has not had an updated master plan, the auditors said.

The agency prepared a draft for a new master plan in March, the auditors said, but it has not been made public or adopted by the board.

"If the DRPA began any projects that were required to be included in the Master Plan or an update or amendment, the commencement of those projects could violate the [DRPA's governing] Compact," the auditors wrote. "Based on information received during interviews with staff and review of documents, the Authority may have commenced some projects that were not included in any of the updates or amendments to the master plan and thus they would appear to have been in violation."

The DRPA went on an economic-development spending spree over the past decade, spending about $386 million on projects such as Lincoln Financial Field, the Kimmel Center, the National Constitution Center, the Camden Riversharks' baseball stadium, a soccer stadium complex on the Chester waterfront, the National Museum of American Jewish History, and the President's House memorial near Independence Hall.

Contact staff writer Paul Nussbaum at 215-854-4587 or