Governor Chris Christie is proposing several bills to tighten his state's already tough gun laws. But the potential presidential contender in 2016 is leery of the push for federal reforms.
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Both New York and Connecticut have already passed bills in response to the Newtown shootings. Now Trenton is set to take action even though it already has the strictest gun laws in the country.
(New York, NY -- WNYC) The day after the Port Authority of New York and New Jersey released a consultant's report lauding the agency's newfound zeal for transparency and accountability, the public showed up at the agency's monthly Board of Commissioners meeting with a very different assessment.
It was a full house.
A contingent of 9/11 family members used the public comment period to urge the Commissioners to reject a Memorandum of Understanding entered into last week between the bi-state agency and the National September 11th Memorial and Museum. The deal, reached a day before the eleventh anniversary of the terror attacks, cleared the way for work to resume. Construction at the site had halted last year after a funding squabble.
Sally Regenhard, who lost her firefighter son on September 11th, took the Port Authority to task for not sufficiently involving the 9/11 families in the process. "Do not approve this MOU until we can have full public disclosure involving the 9/11 families as well as the community."
Richard Hughes of the Twin Towers Alliance told the panel it was being expedient with their deal with the Memorial and Museum that calls for passing ownership of the former site of the Twin Towers to the non-profit in exchange for adjacent land where the Deutsche Bank building once stood.
"You have eight acres of prime important downtown real estate -- a site that is sacred to all of us -- and you are giving it away or swapping it, but it is really giving it away, without public debate, behind closed doors," Hughes said.
Under the agency's public comment period protocol, Commissioners don't respond directly to the public. But speaking to reporters afterwards, officials defended the deal as breaking a lengthy impasse and insuring the project stays on budget while guaranteeing the site remains a memorial.
Of particular concern to family members at the hearing were the plans to place several thousand of the unidentified remains from the attack in the museum. Boosters of that plan say it will permit work to continue on identifying the remains. The 9/11 families want the surviving families to be polled.
The full board approved the MOU over their objections -- but after the vote, Port Authority executive director Patrick Foye reminded reporters the agency had lost 84 employees in the attack. He said he understood the families' concerns about the remains. "Given the grievous loss those family members experienced that is an issue that resonates with me," Foye said.
But it isn't only how the Port has handled Ground Zero that had members of the public fuming.
Casandra Dock came with residents of of the city of Newark. She chastised the Commissioners for not holding public meetings of the board west of the Hudson in New Jersey.
"I come before this board today -- since this is the Port Authority of New York and New Jersey -- to ask this board to have some of these board meetings over in Newark, New Jersey," Dock said.
In the board's brief public meeting it did move on some items without controversy. John F. Kennedy International Airport will host a animal handling facility that the Port Authority says will be the most comprehensive facility of its kind in the nation. The board also approved the deal with ARK Development LLC to convert a vacant building at JFK into what Foye says will be a state-of-the-art facility that will handle everything from household pets to horses.
"And this facility will provide animal daycare and kenneling services, more efficient animal transport services--a full service veterinary hospital. The facility is expected to serve approximately 70,000 wild and domestic animals a year,"Foye said.
The deal will net the agency more than $100 million dollars in rent over the next 20 years.
The Port also funded a study looking at the feasibility of taking over Atlantic City International Airport. It will also take a look at running its existing PATH train from where it currently ends -- in Newark Penn Station -- out to Newark Liberty Airport.
The latest board actions come as the agency grapples with how to fund some $44 billion dollars in upgrades it says the region's transportation infrastructure will need by 2020.
(New York, NY -- WNYC) Two consulting firms hired to conduct an independent review of the Port Authority of New York and New Jersey have concluded that the bi-state agency has experienced major improvement in how it is operating -- but still must find additional ways to raise revenue to pay for the region's aging transportation infrastructure.
Last year, in the midst of a public outcry over toll and fare hikes at the agency's bridges and tunnels, Navigant Consulting and Rothschild Inc were retained to take a detailed look at the Port Authority. The consultants reported that under the agency's watch the redevelopment costs for the World Trade Center had ballooned from $11 billion to $14.8 billion.
The initial outside review described a dysfunctional bureaucracy with a debt load that had more than doubled -- from $9 billion to $21 billion in just ten years -- while boosting the compensation pay for its employees by 19 percent over the same period.
Now, just seven months later, Port Authority chairman David Samson says a multi-faceted push to reform the agency has paid off with glowing reviews from the same consultants for the management team put in place by New Jersey Governor Chris Christie and New York Governor Andrew Cuomo.
In a conference call with reporters Wednesday, Samson quoted from the latest Navigant report which concluded "the Port Authority has made great improvements in transparency and efforts to complete the World Trade Center program within the estimated costs." Samson said the agency had embarked on "50 distinct initiatives" to revamp everything from its basic governance structure to how the agency manages its capital projects.
The consultants also backed up the Port Authority's controversial toll and fare hikes as being "necessary" to support the agency's capital spending for its Interstate Transportation Network. That point is still hotly contested by local elected officials from both states and the Automobile Association of America. AAA has taken the Port Authority to court over what it claims is the illegal diversion of toll revenues to support non-transportation related projects like the World Trade Center.
And the same day that the Port Authority rolled out the consultant report on the agency's increased transparency, Assemblywoman Nicole Malliotakis was expressing outrage over the agency's decision to appeal a judge's order requiring the Port Authority to turn over an internal report on the impact of its toll hikes on the New York Container Terminal on Staten Island. Malliotakis says the terminal, which provides 550 good-paying jobs, has already lost 58 percent of their business "mostly due to these toll hikes." "What makes this organization so unbelievable is their arrogance in that they feel they can hide this information from the public who partially paid for this study to take place," Mallitokis said. The agency maintains the report is just a draft.
On the conference call to announce the major reset at the Port Authority, executive director Pat Foye insisted the agency's efforts at cost containment had produced tangible results. According to Foye, requiring the agency's non-union staff to contribute to the cost of their health insurance will save the Port $41 million dollars over the next 18 months and tens of millions of dollars in the out years.
But Port Authority officials conceded they still face formidable fiscal challenges. "Our ambitious ten-year capital plan budgets $26.9 billion dollar in capital expenditures for the 2011-2020 planning period. But there is more than $44 billion dollars of known investments that we need to maintain our region's competitiveness," said Port Authority vice chairman Scott Rechler.
"The agency's 80-plus year-old faculties are at capacity and are in critical need of state of good repair work," Rechler said. "There is a significant backlog of projects due to past deferral of state of good repair expenditures. For more than eight years our tunnels, bridges and terminals departments have not met its 80 percent target of preventative maintenance routines which could lead to more costly emergency repairs down the road in the future."
"The region's airports have aged significantly, frequently ranking among the worst in the nation in terms of customer satisfaction, and upgrades will require up to $6.5 billion dollars in additional capital through 2020," Rechler added.
Foye says the Port Authority is going to look to the private sector to help it finance some of its big ticket items -- like the rebuilding of the Goethals Bridge, which links Staten Island and New Jersey. Foye says the public-private partnership model is being given "serious consideration" for upgrading the Central Terminal Building at LaGuardia, as well as at Newark Airport's Terminal A. He says using this model could help the agency raise the $6 billion dollars needed to complete all three projects.
The consultants identified several areas where they felt the Port Authority could bring in as much as $150 million dollars in additional cash annually in non-toll revenue. On the list of possible money makers: additional advertising revenue, improving toll violation recovery, selling off some of the agency's real estate portfolio like the Newark Legal Center and the Teleport business park -- as well as selling air rights to the Port Authority's midtown bus terminal and its Journal Square PATH train station.
Port officials told reporters they are also looking to raise revenue by bringing new hotel capacity to the area around JFK Airport. "The JFK region doesn't have the hotel rooms adequate to service the millions of people who go through each day," Foye said. "We are working on two or three hotel opportunities right now that we expect to be announcing in the future."
New Jersey Assemblywoman Valerie Vainieri Huttle, a long time Port Authority critic, credited the Port Authority with "responding to years of inadequate accounting and managerial procedures" but hoped "the newfound commitment to proper governance" would endure.
“My greatest concern is that once the agency no longer feels public pressure to reform, it will return to its old ways," Huttle said in a statement. She's still pushing for passage of the Port Authority Accountability and Transparency Act, which legislators say would increase the Port's public accountability and require an annual audit.
Any legislation to reform the agency has to be passed in both Albany and Trenton. The Port Authority, a bi-state compact, was created by an act of Congress in 1921.
Months after one of New York City’s biggest construction giants agreed to pay nearly $60 million for inflating costs on public works projects, WNYC has learned that the criminal probe into billing fraud has expanded to other major contractors.
Bovis Lend Lease, which avoided indictment in the 2007 Deutsche Bank fire that killed two firefighters, agreed in April to pay $56 million in penalties and restitution for overbilling.
Now, WNYC has confirmed federal prosecutors are looking into the billing practices of Turner, Plaza, Skanska and Tishman construction companies. The construction contracts under scrutiny run into the billions of dollars.
The firms are linked to major public projects like the Croton Filtration Plant, the extension of the 7th Avenue Subway and the World Trade Center.
In April, Janice Fedarcyk, the head of the FBI’s New York office, zeroed in on the impact of Bovis's fraudulent inflation of public construction costs.
"The over billing fraud affected city, state and federal public building projects,” she said. “If you are a New York City resident, Bovis indirectly swindled you on three different levels. For 10 years the pattern of fraudulent over billing was a standard practice, business as usual.”
At the heart of the probe is what prosecutors say is an industry-wide practice known as "8 and 2" in which construction companies fraudulently bill clients for hours not worked by labor foremen.
Bovis would add two hours of overtime pay on top of regular hours for as many as 60 foremen and falsely listed unworked hours as worked, prosecutors said.
The standard contract states that the union foremen get $34.24 an hour with no guaranteed overtime.
Federal prosecutors say the union foreman were not charged and did not break the law because they played no role in Bovis’s fraudulent billing.
(A few stories remained at the Deutsche Bank building in lower Manhattan in 2010. Stephen Nessen/WNYC)
At the Bovis announcement in April, Loretta Lynch, U.S. Attorney for the Eastern District of New York, had a warning for the city's construction industry.
"The message should be clear to all who are engaged in similar contract billing fraud: You are in our sights,” she said. “And the defense that ‘everyone does it’ will not be a shield against law enforcement."
In a statement to WNYC, Tishman’s corporate parent, AECOM, confirmed that in December 2011 it was served with a grand jury subpoena in the billing investigation. The company said that it was cooperating with prosecutors.
A spokesman for Turner would say only that the company "could neither confirm nor deny" it was under investigation. Skanska and Plaza declined to comment.
Brian Aryai, a 13-year veteran of the Treasury Department, was a former senior vice president at Bovis. He is the whistle blower credited by prosecutors with tipping them off to the 8-and-2 billing scheme that set off the probe.
Aryai, who could collect a substantial reward under the federal False Claims Act, said that what Bovis admitted to is a common industry practice.
"I think within the industry there was such rampant corruption that the people who were entrusted with being in positions of accountability and power overlooked very visible symptoms of the issues that have been uncovered," Aryai said in an interview with WNYC.
One of the former Bovis employees who pled guilty is James Abadie, a leading contractor trade group and former chairman of the powerful Contractor Association of Greater New York.
Abadie is awaiting sentencing and faces 20 years in jail. His guilty plea has sent off shock waves in construction circles, because he was so well regarded across the industry, according to Louis Coletti, president of the Building Trades Employers Association.
Coletti said Abadie’s fall and the wider probe has the industry “reeling.”
He says the across-the-board nature of the continuing probe is a challenge for builders at a time when contractors are dealing with thin profit margins.
(Photo: Croton Filtration Plant in Van Cortland Park in the Bronx. The $3.5 billion dollar project is being built by Skanska. Bob Hennelly/WNYC)
Coletti defended the industry's "8 and 2" practice as a cost of doing business. He says the money paid to the foremen was to assure jobs got done on time.
"This was not a question of over billing. There is some question about procedures and compliance issues," Coletti said.
Prosecutors say what matters is how contractors represent these costs to their customers in their bills.
Coletti predicted the fallout from the focus on billing practices would force the industry to be more transparent in how it does business.
He conceded the industry has had a tough time shaking its image of being plagued by 'no show jobs' linked to organized crime. He says, in reality, those days are the stuff of TV and the movies.
"There is a certain excitement to thinking that kind of activity goes on on a regular basis. It’s like the Sopranos TV show. It was a very popular show. I don't know if we are over going to overcome that kind of perception, unless we begin to do very publicly the kind of things I am talking about with you now," Coletti said, referencing the industry’s efforts improve transparency.
Ronald Goldstock, former director of the New York State Organized Crime Task Force – which investigated the infiltration of the construction trades by the Mafia – says law enforcement has been successful in rolling back the mob's dominance in construction. But he says the organized crime legacy still makes the industry vulnerable to corruption like the "8 and 2" billing arrangement.
"Over time customs and practices are set up within the industry. They do become internalized. People don't think about them as being corrupt necessarily,” he said. “Over time it is an accommodation between both sides, and no one really knows which it is anymore.”
As federal prosecutors pursue white-collar cases in the construction industry, one challenge they may encounter is that the bigger the construction firm, the more limited their enforcement options may be.
This was the case with Bovis. US Attorney Loretta Lynch struck a deferred prosecution deal with the Australian-based multinational building firm. She cited concerns that criminally prosecuting Bovis would do more harm than good for the city because Bovis was so central to so many ongoing projects.
This is not the first time Bovis avoided criminal prosecution because of its size and dominance in the city’s construction industry.
In 2008, Bovis benefited from similar forbearance by Manhattan District Attorney Robert Morgenthau for the firm's role in the Deutsche Bank Building fire.
Two firefighters were killed, and the DA’s investigation determined that Bovis was partially responsible as the prime contractor. In that case Bovis was granted a non-prosecution agreement.
It paid the families of the firefighters $16 million and agreed to reform its management of subcontractors.
Two more Governors are speaking out against last week's audit of the Port Authority.
Former Governor Elliot Spitzer was Governor from June 2007 until March 2008. He says the latest Port Authority audit by Navigant Consulting was unfair to his successor Governor David Paterson and Paterson's pick to lead the Port Authority, Executive Director Chris Ward.
That audit sharply criticized the Port Authority, and, by implication, Ward, who led the bi-state agency until this fall. But Spitzer says Ward himself cut through a thick knot of problems.
"Chris cut through a great deal of it with deadlines that were imposed upon him, some legitimately, some for political purposes -- and got things moving The effort now to revisit and repaint that picture is unfair to Chris and inaccurate," Spitzer said in a telephone interview.
Spitzer's remarks back of those of his successor, David Paterson, who said in an interview that cost overruns at the Port Authority were in part driven by demands by New Jersey that every expenditure on the World Trade Center be matched by a similar layout across the Hudson.
Spitzer said Ward got the stalled project moving. He says Ward deserves credit for the on time completion of the Memorial that was the focal point for the global commemoration of the tenth anniversary.
Spitzer also said the Port Authority has become a fundamentally political organization.
"Inevitably over time organizations like that become dominated by politics, not substance. The Port has not escaped that," says Spitzer. "Overlay on top of that the reality of two states balancing and juggling competing political needs and you have clear opportunities for waste and outright corruption."
Former Democratic New Jersey Governor Dick Codey, who is now a state senator, is also backing his former cohorts accounts that the Port Authority has long been beset with problems.
Codey said during his tenure from 2004 until the beginning of 2006 he was frustrated by the lack of progress at Ground Zero. He said from his first-hand experience overseeing the agency it's bi-state nature slowed progress and drove up costs.
" I mean obviously it took way too long to get that done and that is the problem when you have a bi-state agency; one wants to do it their way, the other wants it their own way.
"The thing I was frustrated at was the lack of progress dealing with the World Trade Center site," Codey said in an interview. " You got to compromise and sometimes that compromise takes a very long time, and the money you thought it would take to rebuild just escalates."
Codey says the governors of both states, including himself, were too quick to let the Port Authority carry the huge cost of rebuilding the site. "I think if there is any criticism to be laid at any Governor is that we were not vigilant in going after Federal money because is really a monument to our country as opposed to New Jersey or New York. It was not new Jersey or new York that were hit that day. It was America, clearly."
Both Codey and Spitzer say that any meaningful reform of the Port Authority has to include ending what has become the standard practice of the Governors from both states appointing campaign contributors to the powerful Port Authority Board of Commissioners. They oversee the agency that generates more than $4 billion dollars in revenue annually and employs almost 7,000 people.
"Part of the problem is that we want people that are non-partisan and who are professionals and clearly we have gotten away from that," says Codey. " There is no question about it. People that are on these authorities are big donors. Whether that be on my Democratic side or on the Republican side. So I think both parties need to take a hit on this. "
Both former Governors say the Port Authority, originally established to facilitate the development of the region's Port and transportation infrastructure, has to get back to its core mission. Forays into so called "economic development projects" are examples of a diversion from that mission.
"Well you would think that Port Authority is running the bridges and tunnels and that would be it," says Codey."These economic things that came about maybe 15 years or so, why? I don't understand. You are supposed to be doing the infrastructure that binds us together. And yet we have gone away from that. Economic development is really the federal government and the state's role."
After signing off on controversial toll and fare hikes Governors Christie and Cuomo called for a first of its kind internal audit of the bi-state agency that was first created in 1921. The audit found that the agency had more than doubled its debt from $9 billion to $21 billion in just ten years while boosting the compensation for its own workforce by 19 percent over the last five.