Federal probe floods Statehouse with subpoenas. Democratic, Republican leaders served as inquiry into Trenton budget process grows

Federal probe floods Statehouse with subpoenas
Democratic, Republican leaders served as inquiry into Trenton budget process grows

February 17, 2007 Star-Ledger
New Jersey legislative officials were hit with a volley of federal subpoenas yesterday, in a rapidly expanding corruption investigation into the Statehouse by U.S. Attorney Christopher Christie.

The subpoenas were served on both the Democratic and Republican leadership in the Senate and the Assembly -- seeking information on how millions in public funds were handed out over the last three years.

It was the latest development in a federal probe that began last April with an investigation into state Sen. Wayne Bryant (D-Camden), who was accused by a federal monitor of using his position to steer funding to the state's medical university after he received a "no-work" job there. The matter has now expanded into an inquiry into how lawmakers divvy up public funds.

The subpoenas, delivered by FBI agents late Friday afternoon as lawmakers were heading home, left many in Trenton thunderstruck.

"Trenton is on fire," declared Assemblyman Kevin O'Toole (R-Essex), as news of the subpoenas broke. "This is equivalent to Rome burning."

Lawmakers and other Statehouse veterans could not recall a federal probe ever going as deeply into the state's budget process.

Among those who received subpoenas were Senate President Richard Codey (D-Essex); Senate Minority Leader Leonard Lance (R-Hunterdon); Senate Majority Leader Bernard Kenny (D-Hudson); Assembly Speaker Joseph Roberts (D-Camden); Assembly Minority Leader Alex DeCroce (R-Morris), and Assembly Majority Leader Bonnie Watson Coleman (D-Mercer), legislative officials confirmed.

All planned to comply, said officials for both sides.

Michael Drewniak, spokesman for the U.S. Attorney's Office, had no comment and would neither confirm nor deny the issuance of subpoenas.

The subpoenas came after Christie's ongoing, behind-the-scenes fight for records from the Office of Legislative Services, which has been resisting his demand for information.

The Sunday Star-Ledger first reported the secret court showdown over those records last week, and the expanding inquiry by the U.S. Attorney into the Legislature.

Leaders of the Democratic-controlled Legislature have maintained that the scope of that earlier subpoena was narrowly focused -- and not necessarily indicative of a broader investigation into the Legislature itself. Yesterday's wide-ranging requests, however, made it clear that Christie was looking deeply into how the Legislature divvies up public funding.

Sources with direct knowledge of the probe have said that prosecutors are exploring whether some lawmakers have sought, through the state budget process, to steer money to nonprofit organizations that would have directly benefited them or their families.

Yesterday's subpoenas requested documents and communications from 2004 to present -- including e-mails, letters, memos and faxes -- regarding "property-tax assistance and community development grants and any other grants or assistance, commonly referred to as Christmas tree items," according to three legislative sources who saw them.

Republicans were quick to point out that Democrats have controlled the Legislature, and the budget process, during that period.

The Legislature each year awards millions in state grants with little public scrutiny or oversight. Spending for these legislative initiatives -- known in New Jersey as Christmas tree items -- more than doubled in the past five years, to nearly $350 million. Most of the money, in the form of community development grants, has historically gone to the party in power in Trenton, under a largely secretive process.

Codey said they would provide the information being sought.

"We will comply 100 percent, in every way, shape and form," he said.

Lance, confirming that his office received a subpoena, said the Republican Senate Office would also comply "completely and expeditiously" with the subpoenas.

"We have been in no way involved in the dead of night budget additions of recent years," he said. "There needs to be total transparency with regard to legislative additions to the annual state budget."

Assembly Republican Communications Director Bill Guhl, confirming the Assembly Republican Office had been served with a subpoena requesting information related to grants and budget items, said they have been clear that the Legislature should comply with the U.S. Attorney.

"We are fully cooperating with all requests from the U.S. Attorney's Office," said Guhl.

Roberts also pledged cooperation.

"Corruption is not a partisan issue. If the U.S. Attorney is going to conduct an investigation into allegations of wrongdoing, it's an inquiry that we welcome and will assist in," he said.

Roberts has already been directly questioned by FBI agents in connection with the Bryant investigation, as has several other legislators and legislative budget officials.

"I have tried to be as helpful as possible about the federal government's questions about Senator Bryant," Roberts said in a written statement late yesterday. "Federal officials spoke to me for about a half hour in December. ... I can't discuss specifics but the conversation was brief and professional."

Bryant has been a focal point of the U.S. Attorney since last year, after a federal monitor said the former chairman of the powerful appropriations committee used his position to steer state funding to the University of Medicine and Dentistry of New Jersey.

The monitor said Bryant funneled more than $12.5 million to the university's School of Osteopathic Medicine in Stratford, after he was hired to a "no-work" job that boosted his pension credits.

Federal authorities subsequently subpoenaed records about Bryant from the state Legislature, Gloucester County and Rutgers University -- where Bryant also held jobs -- and Bryant later resigned from his seat as Senate budget chairman.

Three subpoenas were served in October on the Office of Legislative Services, the state Senate and the state Treasury Department in connection with the Bryant investigation.

The Senate and the Treasury Department quickly complied with the request for information last fall. OLS, however, would not respond to the subpoena -- citing attorney-client privilege, sources have said.

In addition to serving as the nonpartisan research and operations arm of the Legislature, OLS acts as counsel to the Legislature and its members.

That led to a closed door hearing in U.S. District Court on Wednesday, as Christie sought to compel the legislative office to comply.

The stalemate turned into a politically charged debate this week spearheaded by Republicans, who accused the Democrats of a cover-up.

The Democrats on Thursday responded with charges that there was no broad investigation of the Legislature, and complained of "sensationalized media accounts based on false information about this investigation."

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