Christie’s Use of Sandy Funds Probed by Federal Officials

Photographer: Scott Eells/Bloomberg

Prince Harry of Wales, left, and Chris Christie, governor of New Jersey, view areas of the boardwalk in Seaside Heights, New Jersey, U.S., on May 14, 2013. Seaside Heights Mayor William Akers is looking forward to showing off the improvements. Close

Prince Harry of Wales, left, and Chris Christie, governor of New Jersey, view areas of... Read More

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Photographer: Scott Eells/Bloomberg

Prince Harry of Wales, left, and Chris Christie, governor of New Jersey, view areas of the boardwalk in Seaside Heights, New Jersey, U.S., on May 14, 2013. Seaside Heights Mayor William Akers is looking forward to showing off the improvements.

Governor Chris Christie faces a federal investigation over his use of $25 million of Hurricane Sandy relief money for a commercial he starred in promoting tourism at the New Jersey shore.

The U.S. Department of Housing and Urban Development inspector general will audit the marketing campaign, Congressman Frank Pallone, a Long Branch Democrat who requested the probe in August, said in a statement today. Democratic lawmakers have said the “Stronger Than the Storm” ads gave the 51-year-old Christie free publicity as he campaigned for a second term. He beat state Senator Barbara Buono in the November election by 22 percentage points.

Related: Christie Has Chances to Repair Image Amid Bridge Probe

“At issue is the bidding process for the campaign and released documents which raise questions as to why the state chose to award the contract to a firm that charged the state over $2 million more than a comparable bid for similar work,” Pallone said. Christie spokesman Colin Reed said in a news release that the disclosure was timed to damage the governor.

“Amazing that the inspector general’s investigation leaks now generating the headline ‘Feds investigating Christie’s use of Sandy relief funds’ when the governor is at his lowest point, no?”

Crucial Time

It is the second federal investigation of Christie’s political activities disclosed within a week. A U.S. attorney is examining his administration’s involvement in the creation of a four-day traffic quagmire in the town of a Democratic mayor who didn’t endorse the Republican governor’s re-election.

“For Chris Christie, it’s probably been the worst week he’s had yet,” said David Redlawsk, a poll director who teaches politics at Rutgers University in New Brunswick.

The governor soon faces several crucial moments. His annual agenda-setting State of the State address tomorrow will be followed Jan. 16 by a special session of the Democratic-led Assembly to consider extending its investigatory power into the September tie-ups at the George Washington Bridge, which connects Fort Lee and Manhattan. Federal prosecutors also are reviewing the matter.

On Jan. 18, as chairman of the Republican Governors Association, Christie is to appear at Florida fundraisers for several candidates, Susan Hepworth, a spokeswoman for the organization, confirmed by e-mail yesterday.

Humiliated Governor

Three days later, Christie will be sworn in to his second term followed by a party on Liberty Island, probably absent four casualties: Bridget Anne Kelly, a deputy chief of staff he fired after e-mails disclosed Jan. 8 showed she said it was “time for some traffic problems in Fort Lee” before officials shut lanes; Bill Stepien, the campaign manager with whom Christie cut ties last week; and Bill Baroni and David Wildstein, appointees who resigned last month from the Port Authority of New York and New Jersey, the bridge operator.

In an almost two-hour news conference in his Trenton office Jan. 9, Christie apologized for his allies’ involvement and said he had been betrayed. His eyes bloodshot and teary, he said he was sleepless, “embarrassed and humiliated.”

In the e-mails and text messages obtained by media including Bloomberg, Fort Lee Mayor Mark Sokolich asked Port Authority officials whether the traffic tie-ups were a punishment. Christie has said his ability to attract Democratic support is a lesson for federal politicians. Sokolich, however, hadn’t followed dozens of others in his party in backing Christie for governor.

Traffic Jam

Lanes were closed for four days, turning the typical 30-minute drive across the bridge into a trip of four hours or more, stranding commuters and emergency medical crews. A 91-year-old woman who suffered cardiac arrest died later, according to a letter among Fort Lee officials.

Sokolich didn’t return a message left at his law office. His mobile phone voicemail was at capacity, and he didn’t respond to a text message.

Fort Lee Councilman Joseph L. Cervieri Jr. said Sokolich was contacted by a “low-level” Christie campaign staff member in the summer. The mayor spoke to members of the governing body and concluded that an endorsement would be an insult to Buono, Cervieri said. Sokolich didn’t get back in touch with the staff member, whose name Cervieri couldn’t recall, he said.

‘Getting Stonewalled’

On Sept. 10, the jam’s second day, Cervieri was delayed on the way to a doctor’s appointment in Manhattan. Later, back home, he stopped at Sokolich’s Fort Lee law office.

“He was trying to make calls to Baroni and everyone else he could think of,” Cervieri, a real-estate agent, said by telephone. “He had a letter personally delivered to Baroni’s office. We were getting stonewalled.”

The Port Authority routinely sends e-mails alerting local officials to even the most mundane maintenance schedules, Cervieri said. This time, the town received nothing, he said.

“It was definitely something that was done spitefully,” Cervieri said.

Christie last week repeated what he told reporters in December: that he had no personal knowledge of the scheme. The governor could possibly be impeached if lawmakers discover that he knew about the jam or the effort to cover it up, Assemblyman John Wisniewski, chairman of the panel investigating the traffic controversy, told NBC News.

Taxpayer Money

Assembly Speaker-elect Vincent Prieto, a Democrat from Secaucus, said he will call his chamber into special session Jan. 16. The Assembly said today it will form a committee focused solely on investigating the lane closings. The panel will have subpoena power and special counsel, lawmakers said in a statement.

The Sandy investigation had its genesis last year. Pallone said in his August letter to David Montoya, HUD’s inspector general, that the winning ad firm was being paid $4.7 million for its work, while another firm proposed billing $2.5 million. The winning bid included Christie in the ads. The cheaper proposal didn’t.

“It is inappropriate for taxpayer-funded dollars that are critical to our state’s recovery from this natural disaster to fund commercials that could potentially benefit a political campaign,” Pallone wrote.

In response, a basic review was conducted, according to Pallone’s statement. Last week, Montoya’s office notified him that they had enough evidence to justify a full audit, he said.

The Christie administration said the advertisements had been properly vetted.

“The Stronger Than The Storm campaign was just one part of the first action plan approved by the Obama administration and developed with the goal of effectively communicating that the Jersey Shore was open for business during the first summer after Sandy,” Reed said in his release. “Federal agency reviews are routine and standard operating procedure.”

HUD spokeswoman Melanie Roussell said the agency had no comment on the matter.

To contact the reporter on this story: Elise Young in Trenton at eyoung30@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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