N.J. watchdog’s probe of Delaware River Port Authority began with activists’ complaint about George Norcross, court records show

A New Jersey government watchdog agency has asked a state judge to order the Delaware River Port Authority to comply with subpoenas for documents and testimony related to the authority’s procurement policies, contracts, and leases.

The Office of the State Comptroller made that request in court this month after the DRPA — a bistate agency that collects hundreds of millions of dollars in bridge tolls every year — filed a federal lawsuit seeking to block the subpoenas and alleging the comptroller lacked the power to investigate the authority. The DRPA owns and operates four bridges and the PATCO commuter line between Pennsylvania and New Jersey.

“The DRPA’s actions affect New Jerseyans every day — it should have to answer questions and provide information to OSC for the benefit of the public,” attorneys for Acting Comptroller Kevin D. Walsh said in an Oct. 9 filing. The attorneys revealed in the filing that the probe began in 2020 after progressive activists raised concerns about South Jersey power broker George E. Norcross III’s potential influence over the DRPA.

“If this court were to accept the DRPA’s arguments, it would call into question not only the DRPA’s obligation to respond to subpoenas from OSC but also subpoenas originating from the state Judiciary, the state Legislature, grand juries, and other administrative agencies,” wrote the attorneys, of Connell Foley LLP.

» READ MORE: DRPA sues NJ comptroller over an attempt to investigate its contracts and leases

Port Authority CEO John Hanson said in a recent interview that the authority would voluntarily comply with the requests for information but contended that the comptroller lacked legal authority to issue the subpoenas. “We cannot set a precedent of accepting this subpoena,” Hanson said in August. “We’re not afraid of any kind of investigation. We’ve been through them before. There’s absolutely not even a hint of influence in our procurement process.”

The comptroller’s investigation hadn’t been publicly disclosed until the DRPA filed its lawsuit. In court filings this month, attorneys for Walsh — an appointee of Democratic Gov. Phil Murphy — said the inquiry began in 2020 after the comptroller received a referral from Murphy’s office regarding a complaint from the New Jersey Working Families Party.

That complaint alleged that the DRPA “has operated as a tool” of Norcross, “committed to advancing his business and political interests over the interests of toll payers, residents and local communities.” The DRPA at the time described the complaint as “misguided, inaccurate and misleading” and said the authority had acted “in an appropriate, legal, and ethical way.”

A spokesperson for Norcross declined to comment Wednesday.

The progressive Working Families Party cited, among other things, a 2019 Inquirer article about Norcross’ investments on the Camden waterfront. The article focused on a Norcross investor group’s purchase of a three-acre parking lot from developer Liberty Property Trust — a parcel of land that had been previously owned by the DRPA and the Camden Redevelopment Agency. It raised questions about whether government agencies, including DRPA, received fair market value in various transactions.

Hanson has said that the authority received fair market value for its rights to the parcel and that he did not know a partnership involving Norcross would end up with the land. An attorney for Norcross has said Liberty was adequately compensated, and the transaction was part of a “swap” with the developer involving other waterfront land.

Norcross earlier this year was indicted on state racketeering charges related to his acquisition of Camden waterfront property, but the transactions involving the parking lot weren’t mentioned in the charging document. He has pleaded not guilty and denied wrongdoing.

The scope of the comptroller probe couldn’t be determined. The subpoenas seek information on contracts signed from 2021 through last year, as well as all current policies and procedures on the procurement of goods and services, and all current leases and rental agreements, according to court records. The subpoenas do not mention any of the land deals referenced in the Working Families Party complaint. The group’s leader at the time, Sue Altman, is now a Democratic candidate for Congress.

Pam Kruger, a spokesperson for Walsh, didn’t directly answer a question about whether the issues raised by the Working Families Party were still under investigation. Kruger directed a reporter to the comptroller’s court filings and the office’s past statement that “oversight is needed anytime there is concentrated power in order to protect New Jersey residents from fraud, waste, and abuse.”

Mike Williams, a DRPA spokesperson, said the comptroller “has refused to accept the information” from the authority.

“If the comptroller truly wanted the information, they would have accepted our offer of voluntary compliance and already had the information,” Williams said in a statement. “This leads me to believe that the comptroller is acting on some motivation other than trying to obtain information. If that is true, it would be helpful if they would disclose their actual motive so that we could try to meet their needs.”

In a state court filing, the Office of the State Comptroller described its inquiry as “a follow-up investigation” to one completed more than a decade earlier under the administration of Republican Gov. Chris Christie.

That investigation resulted in a 2012 report that found people “treated the DRPA like a personal ATM, from DRPA commissioners to private vendors to community organizations.”

The authority made some changes, including ending economic development spending after the authority had allocated $500 million toward projects such as concert halls, sports stadiums, and museums.

At the outset of the new inquiry in 2020, Walsh’s office requested documents from the DRPA and, “for the first time in OSC’s oversight of the bistate agency,” the authority objected to the comptroller’s jurisdiction over it, according to the comptroller’s court filing.

That objection came despite the fact that during the earlier comptroller probe, the DRPA not only complied with a subpoena, it actually requested the comptroller serve a “friendly subpoena” because the comptroller “sought sensitive personnel information,” according to the comptroller. (Williams, the DRPA spokesperson, said the authority “never acknowledged or accepted that OSC has the authority to compel DRPA compliance with a subpoena.”)

Nevertheless, the filing says, the DRPA told the comptroller it would “voluntarily” provide the information requested.

The comptroller’s investigation continued behind the scenes and then ramped up over the summer when it served the subpoenas. The DRPA again agreed to provide the requested information — but only if the comptroller withdrew the subpoenas, according to the court filing.

Walsh’s attorneys said that while his office was reviewing that request, the DRPA filed the federal lawsuit seeking to block the investigation. In a filing this week, the comptroller asked the judge to dismiss the suit.