A Year Later...Just Five Sandy Recovery Projects Get Oversight

Sandy damage at the Jersey shore.

A year after the legislature passed a bill requiring all Sandy-recovery contracts worth more than $5 million to be assigned a monitor, the oversight has begun on only a handful of multimillion dollar projects.

The state has begun monitoring five programs, according to the NJ Treasury Department. A spokesman says the state still does not know how many projects will need a monitor because they are still gauging which ones meet the criteria.

Here’s what is being monitored so far:

  • Veteran’s Memorial Waterfront Park in Elizabeth - $16.2 million
  • Harbor Marina and Piers in Atlantic Highlands - $14.9 million
  • Marina and Walkways in Perth Amboy - $8 million
  • Boardwalk in Belmar - $7.5 million

The New Jersey Department of Community Affairs (DCA), which is in charge of $1.83 billion dollars in Sandy money, just got assigned a monitor last month.

The DCA oversaw Hammerman & Gainer International, known as HGI, one of the private contractors in charge of getting Sandy victims back in their homes. HGI didn’t get assigned a monitor until two months after the Christie administration terminated its contract with them following complaints of ineffectiveness. But not before HGI billed the state for $51 million.

The DCA, however, did hire the firm Cohn Reznick last June to conduct an internal audit and assist with oversight of Sandy disaster relief funds, according to the state Department of Treasury.

The wait for external monitoring on Sandy programs has angered legislators.

“I don’t think it takes 12 months for either the Governor’s Office or his administration or his Treasurer to assign integrity monitors to projects,” said Assembly woman Sheila Oliver, who co-wrote the law requiring Sandy monitors.

Oliver says monitors were supposed to turn over quarterly reports to the Treasurer and pass them on to the legislature. 

“We have not received that from this Treasurer,” Oliver said.

Christopher Santarelli, a spokesperson for the New Jersey Department of Treasury says they’ve spent the last year working with state and local agencies to implement the program.

“Over the last year Treasury has worked continuously with the State Comptroller’s office, the Office of the Attorney General of New Jersey, New Jersey Office of Emergency Management and many individual departments of the state as well as local agencies to ensure that the program’s implementation has been in complete accordance with requirements of the law.”

Since monitors were only recently assigned, the state Dept. of Treasury says there aren’t any reports to share yet.

The first reports will be due on July first.  

How Monitors Are Assigned

The state Dept. of Treasury chooses from a pool of 34 firms that have been pre-qualified to become potential Sandy monitors.

Among them is Lori Grifa, a lobbyist at Wolff & Samson — the law firm led by Port Authority chairman David Samson.

He is implicated in two scandals surrounding Gov. Christie, and is now under investigation about potential conflicts of interests, according to sources familiar with the case.

Until 2012, Lori Grifa was in Chris Christie’s cabinet, as the commissioner of the Department of Community Affairs. That's the state agency that has received the lion's share of Sandy aid to administer — $1.83 billion.

Grifa's name surfaced in the Hoboken Sandy aid scandal.

Her client, the Rockefeller Group, was proposing a 40-story development in Hoboken.

The mayor, Dawn Zimmer, alleges Christie’s Lt. Governor threatened to withhold Sandy money unless the mayor approved the deal.

In an April 2013 email, a lawyer for the city sent an email to Mayor Zimmer saying he was “getting the full court press on this,” from Grifa and Samson, who wanted to meet to discuss the development project with him.

On May 31, 2013, Wolff & Samson submitted its proposal for Lori Griffa to become a Sandy monitor

In an email to New Jersey Public Radio, Grifa wrote:

“I had nothing to do with the request for Sandy money from the federal government, nor have I had anything to do with how the money has been disbursed. Given my total lack of involvement in the process, there can be no conflict of interest.”

Although she has been approved to be a Sandy monitor, Grifa has yet to be assigned to a project. 

Weak Oversight

A lack of oversight of the state's private contractors is a problem that extends beyond Sandy aid, according to a new study by Janice Fine, an associate professor at the Rutgers University School of Management and Labor Studies.

“The problem with oversight right now is that we have oversight by audit and by expose, which only catches problems after they arise, and in many cases, only once they have become quite severe,” Fine said.

And often only after money has been spent.

For example, Grifa’s former agency, the DCA, handed out more than a billion dollars in Sandy aid before it got a Sandy monitor. It’s getting another $1.463 billion soon.