Award–winning journalist Andrea Bernstein is Senior Editor for Politics & Policy for WNYC News. She has previously served as Metro Editor, Political Director, Director of Transportation Nation, and Senior Reporter.
How Christie's Men Turned the Port Authority into a Political Piggy Bank
Thursday, January 16, 2014 - 04:00 AM
Back in October 2010, Governor Chris Christie of New Jersey gathered reporters around him at the statehouse. “Approximately 30 days ago,” a grim-sounding Christie said, “I received information from Jim Weinstein, the executive director of New Jersey Transit, which called into great concern the projected cost of the ARC Tunnel.”
ARC was short for the clumsily-named “Access to the Region’s Core.” Twenty years in the making, it was the largest transit project then underway in the United States, a new tunnel under the Hudson River connecting New Jersey to New York City. When completed, it would double the capacity of the maxed-out New Jersey Transit commuter rail service. But, Christie said, he was shocked to find there were cost overruns in the budget.
“In light of that information, the executive committee has made a recommendation to me that the project be terminated,” Christie said. Over the next few weeks, there would be a public drama, one in which the then-U.S. Transportation Secretary, Ray LaHood, a fellow Republican, traveled to Trenton to try to change Christie's mind. But, asserting “you can’t fit a size ten foot in a size seven foot – you just can’t,” Christie killed the $8.7 billion project.
As a source close to the negotiations put it, “Christie wouldn’t take ‘yes’ for an answer.”
According to multiple sources familiar with the negotiations, Christie’s public version didn’t square with the real version, which goes like this:
During his first campaign for governor, Christie had vowed to rein in Trenton’s fiscal excesses. At the same time, he promised not to raise the state's gas tax, among the lowest in the nation. Doing so would have been the kiss of death for a Republican with national ambitions.
But when he took office, his staff was caught off guard by just how empty the state’s coffers were. The state's new transportation commissioner, James Simpson, was telling people there was no money for roads.
So Christie turned to the Port Authority of New York and New Jersey. According to documents and interviews with more than a dozen top-level sources, the governor made clear from the get-go that the agency would be the source of cash for New Jersey’s hard-up infrastructure budget. And he and his team proceeded to wrangle billions from the bi-state authority to further his political goals — much of that for projects that had never been under the Port Authority’s jurisdiction before.
“It’s politics,” said City College of New York Professor Robert “Buzz” Paaswell of Christie’s use of the Port Authority’s pot of money. “They’re using it to solve their budget problems.”
Michael Drewniak, a spokesman for Christie, dismissed as "an extremely odd premise” the idea that the governor had abused the Port Authority. If the projects that Christie set his sights on "weren’t “on the boards” before,” Drewniak asked, “therefore, they should have continued to languish as merely an idea or a wish-list item while New Jersey, the Port (including NY) fall further behind competitively?”
Drewniak continued: “These are major public infrastructure projects with lasting benefits not just to a particular town but to the entire port facility, New Jersey and New York’s economic well being.”
Early in his administration, Christie appointed a former state senator, Bill Baroni, to be his top man at the Port Authority. And he tapped David Wildstein, a political blogger who went to high school with him to be director of Interstate Capital Projects — meaning Wildstein was in charge of the big money deals. Neither had any transportation expertise.
David Wildstein (L) in Trenton, December 2013 (Terri Langford)
One of the first things Wildstein did upon arriving at the Port Authority, sources say, was to start asking about the ARC money. Could New Jersey recoup the $2 billion the Port Authority was spending on the tunnel? What would the legal liabilities be? What could the money be spent on? The answer came back: it could be spent on roads.
New Jersey’s roads “didn’t have dedicated funding sources,” said Tom Wright, executive director of the Regional Plan Association, a group that strongly backed the tunnel project. “And so by cancelling ARC, the governor was able to shift the resources to his priorities.”
At the same time Wildstein and Baroni were talking about pulling the plug on the ARC inside the Port Authority, Governor Christie was committing himself to the project, according to a letter Transportation Secretary LaHood later wrote to then U.S. Senator Frank Lautenberg, a New Jersey Democrat who also favored the project.
“In February, 2010, Governor Christie sat in my office and expressed his full commitment to the completion of the ARC project,” LaHood wrote. “In March of 2010 news stories called Governor Christie’s commitment to the completion of the ARC project into question. I asked the Governor to restate that commitment in writing. He did so in a letter to me dated April 6, 2010.”
Then LaHood essentially called Christie a liar. “The possibility that this project’s cost could run [as high as $12 billion] was first shared with New Jersey Transit as far back as August 2008. Any notion that the potential for cost growth constituted new and emergent information when the Governor made his decision is simply not accurate.”
But it appears even LaHood didn’t know how far along the plan to kill the ARC tunnel was by then.
Baroni and Wildstein were eying the funds for the Pulaski Skyway, a broken-down bridge that funnels cars between the Holland Tunnel and Newark. The roadway, which didn’t even allow trucks, had never been within the Port’s jurisdiction. But if the Port Authority didn’t pay for it, Trenton would have had to - a daunting prospect, because the state's road fund was tapped out. (Only Wyoming and Alaska have lower gas taxes - the funding source for road projects - than New Jersey.)
In later hearings before the U.S. Senate, Baroni provided this justification: “The Pulaski— we believe will have a benefit to the current crossings at Lincoln—certainly at Lincoln—and at Holland, so we believe it will be a marginal improvement there.”
Shifting money away from the ARC project allowed New Jersey to fund its road construction budget till well after 2016 - without raising the gas tax.
At the same time, multiple sources say, Wildstein and Baroni were working to push other projects. The purchase of an old army terminal near the Bayonne Bridge for $235 million bailed out the town of Bayonne, which was facing bankruptcy. Inside the Port Authority, sources say, the long-term value of the deal was sharply questioned. But a bankrupt town would have been a huge headache, not least for Trenton.
Some 20 minutes away in Harrison, there was another big project—the upgrade of the PATH station for $256 million. Baroni got behind that project personally. “The folks who know me at the Port Authority (know) it’s been one of the projects I spent a lot of time pushing and pushing and pushing,” Baroni said in the Senate hearings. “And that’s a new train station in Harrison. Mayor [Ray] McDonough—working across party lines—Mayor McDonough in Harrison points out that the Harrison train station needed work.”
The Harrison mayor, a Democrat, would ater endorse Christie for re-election. The mayor denies there was any quid pro quo. “I happen to like the guy,” he told the Star-Ledger.
Many of these new projects were for roads and airports that have nothing to do with the Port Authority. “It’s the wrong thing to do,” said CCNY’s Paaswell. “There are other ways. You can solve the budget problems by being honest with the people of the state, saying if you want to improve transportation facilities, it’s going to cost more.”
To pay for all of these projects—not to mention rebuilding the World Trade Center, a Port Authority property —the agency needed more money. But the Port receives no state or federal funding; just about its entire budget comes from airport fees and highway tolls.
And so, on a Friday afternoon in August 2011—just before the tenth anniversary of the 9/11 attacks—the Port Authority said it would raise tolls on the Hudson River crossings, in part to pay for the World Trade Center. (Port officials has since changed that narrative—although not before AAA filed a lawsuit, saying that the money raised from the toll hike should go solely to road infrastructure.)
Friday afternoons, particularly in the summer, are a common time for bad news to be announced. The Port Authority press release not only came late that day, but reporters’ email in-boxes soon filled with statements of support from business, labor and transit groups, all issued through the Port Authority press office. Then came a carefully-worded —and rare—joint statement from Governors Andrew Cuomo and Chris Christie, who together control the Port.
The plan, multiple sources say, was orchestrated by Wildstein and Baroni. But the governors' statement howled disapproval. “The Port Authority has informed us of its proposal to dramatically increase its tolls on tunnels and bridges.” The upshot was that the Port commissioners approved a somewhat lower increase. And that, sources familiar with the process say, was the plan all along.
Wildstein and Baroni didn’t return requests for comment. Governor Cuomo's spokesman said the governor isn't commenting on Port Authority matters while investigations continue into the George Washington Bridge traffic jam that cost Wildstein, Baroni and two other Christie associates their jobs.)
The toll hike was a significant new expense for motorists, but it wasn’t—crucially—a tax. Some months later, Baroni appeared at a hearing in Washington on the hikes before Senator Lautenberg, who asked wide-ranging questions beginning to scratch at what the Christie administration was really doing inside the Port Authority.
Baroni was ready. “Respectfully, Senator,” he said in a voice that was anything but respectful, “you only started paying tolls recently. For years, Senator, as a former commissioner of my agency, you received a free EZ-Pass. (Lautenberg had been a Port Authority commissioner from 1978-1982.)
With Wildstein seated behind him, Baroni referred to a large black binder, containing, apparently, dirt on Lautenberg. “Senator, you took 284 trips for free in the last two years you had the pass,” he said.
This was, sources say, Baroni and Wildstein’s modus operandi: to aggressively push their goals and embarrass their enemies.
Back in December, after Baroni resigned over the GWB traffic jams, Christie defended him.
“Senator Baroni's tenure at the Port Authority, which I think was a very good one, where he fought very hard and got a lot of projects started for New Jersey that needed to be started for a long time, like the Bayonne Bridge and others. So I still have great respect for Senator Baroni, and consider him a good friend,” Christie said.
For years, the $1 billion Bayonne Bridge project had been sharply debated. The project raises the bridge so larger, so-called Panamax ships, can pass underneath. Some see it as a crucial to the New York-New Jersey ports remaining competitive when the Panama Canal is expanded, but others see it as a waste of money.
When Christie's team settled in at the Port Authority, the message was clear: the New Jersey side would not support finalizing plans for the World Trade Center without an agreement on Bayonne. In August, 2010, the Port Authority board voted on the WTC plan. A month later, Bayonne was approved.
“When we were campaigning last year,” Christie said at a press conference announcing the project, “I met with all of these groups and told them that this was going to be the highest transportation priority of this administration.”
Among the interest groups for which the bridge project was hugely important: the construction unions. And one of the Port Authority commissioners voting for it was Raymond Pocino, whose day job is heading the Laborers International Union of North America and who was appointed to the Port board by Governor Jim McGreevey in 2002.
A year after the bridge project got the go-ahead, Pocino (who didn’t return requests for comment) stood next to Christie at the very first rally of the governor's re-election campaign. To rousing cheers, claps and whistles, Pocino called Christie “our friend, my friend, our choice for governor for the next four years.” It was a big deal for Christie, who wanted to show he could attract labor support.
“This campaign has just started,” he said, to raucous applause, “but I doubt that I’ll have many better days than the day I was endorsed by the Laborer International Union of North America.”
The endorsement helped scare off strong Democratic challengers. In accepting it, Christie cited the Bayonne Bridge. “I’m not in this race for re-election just for the hell of it,” he said, adding a trademark nod. “I am in this thing, and I believe you’re in it with m,e because we are going to win—and we are going to win big. And that’s what it’s all about.”