New Jersey Governor Chris Christie’s administration is reviewing the terms and awarding of a contract with the state’s toll-road authority that paid a Jersey City financial adviser $1.5 million last year.
Those fees spent by the New Jersey Turnpike Authority accounted for more than two-thirds of the $2.2 million the firm, NW Financial Group LLC, collected from 21 local governments and public authorities in the state in 2009, a disclosure report filed with the New Jersey Election Law Enforcement Commission in March shows.
Christie’s administration is examining how the Turnpike Authority contract with NW Financial was awarded, whether the fee levels are appropriate and how the fees are structured, said the governor’s spokesman, Michael Drewniak.
“I think any reasonable person would question this arrangement,” Drewniak said in an April 14 interview. The contract “is being closely reviewed,” Drewniak said in an April 16 interview.
The Turnpike Authority awarded a three-year contract to NW Financial over two other bidders in March 2009. The agency agreed to pay the firm a $75,000 annual retainer and 50 cents for every $1,000 in bonds it issued last year, records of the transaction obtained by Bloomberg show.
The authority operates the 148-mile (238-kilometer) New Jersey Turnpike and the 173-mile Garden State Parkway that stretches from Cape May to the New York state line. The agency, in the first year of a 10-year, $7 billion capital-improvement campaign, issued $2.5 billion in bonds last year, generating $1.3 million in fees for NW Financial.
Diane Scaccetti, executive director of the Turnpike Authority, referred questions about NW Financial’s contract to agency spokesman Joe Orlando when reached by telephone at the authority’s Woodbridge headquarters. Orlando declined to comment.
NW Financial is run by Dennis Enright, who didn’t return telephone calls to his office or e-mail requests for comment or a message left at his home.
A competing bidder for the Turnpike Authority advisory contract, Acacia Financial Group of Marlton, offered to cap its fees at $175,000 for any single transaction, authority records obtained by Bloomberg show. There was no such cap for NW Financial, which collected $879,000 from one $1.75 billion deal in May 2009, according to the records.
A separate New Jersey agency, the Transportation Trust Fund Authority, agreed to pay First Southwest Co. of Dallas $125,000 for financial advice on $1.2 billion in bonds issued last year, state records show. That amounts to about 10 cents per $1,000, according to Bloomberg calculations.
Christie, 47, a Republican and former U.S. prosecutor who ousted one-term Democrat Jon Corzine in the November election, has said political corruption and patronage helped create the financial crisis in New Jersey, which faces an $11 billion budget deficit amid declining tax revenue. He has ordered a review of spending by all of the state’s authorities.
The governor’s Authorities Unit, which has oversight over 40 independent agencies, boards and commissions, is reviewing the Turnpike Authority’s contract with NW Financial, Drewniak said. The unit is led by Deborah Gramiccioni, a former prosecutor who was director of the Division of Criminal Justice in the state Attorney General’s office.
Christie’s challenge to the contract with NW Financial comes a month after the governor vetoed $5 million in professional contracts awarded by the Turnpike Authority, saying it hadn’t justified bypassing lower-cost bidders.
“Such high fees cannot be considered fair and reasonable,” Christie, who took office Jan. 19, said in a March 18 veto letter.
Enright, a Democratic campaign contributor, has been the Turnpike Authority’s financial adviser since 2002. His firm earned a total of $1.1 million from 2006 to 2008, according to filings with the state’s election law enforcer, known as ELEC.
Enright and members of his firm have contributed about $250,000 to New Jersey political committees and candidates over the past four years, with almost all the support going to Democrats, according to the firm’s filings with ELEC and the Municipal Securities Rulemaking Board, an industry self- regulating panel based in Alexandria, Virginia.
Scaccetti, a Turnpike Authority employee since 1989 who has been executive director since 2008, told state Transportation Commissioner James Simpson in an April 6 letter she plans to retire, Drewniak said.
Asked about those plans, Scaccetti declined to comment. Orlando also declined to comment.
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