When, in 2011, Governor Chris Christie did an end-run around Port Authority rules to siphon $1.8 billion in PA funds for pet projects in New Jersey, the New York side of the PA, including Governor Andrew Cuomo, went along. Why? As Christie Watch has learned, the New York PA officials had their own concerns—namely, getting the new World Trade Center built—and, worse, in the words of one former PA official, they didn’t want “to go to war with Christie.”
Christie may have hoped that last week’s resignation of Port Authority chairman David Samson, a Christie political mentor, would end the headlines linking his administration to unethical and possibly illegal activity at the Port Authority. But new revelations are already coming out about how he pressured legal staff at the PA to find ways to justify a money grab that they warned he couldn’t do.
As Christie Watch has reported, in October, 2010 Christie suddenly cancelled the $8.6 billion ARC tunnel, which had been in the planning stages for more than a decade and half and for which more than $400 million had already been spent on engineering, property acquisition and other expenses. He wanted to use the $1.8 billion that had been allocated to New Jersey from the Port Authority for the tunnel to bail out the Transportation Trust Fund, which pays for rebuilding and fixing New Jersey bridges and roads.
The fund was bankrupt. Christie, holding fiercely to his image as a non-tax Republican, was determined not to raise New Jersey’s gas tax, one of the lowest in the country.
At that time, one of the major state projects that needed funding was rebuilding the Pulaski Skyway and related roadways, a key link between New Jersey’s largest city, Newark, and the Holland Tunnel that goes to New York City. The only problem was that for historical reasons, the Holland Tunnel and its road and bridge links were outside the jurisdiction of the Port Authority.
No PA money can be used for such projects unless okayed by the legislatures of both states. PA lawyers warned Christie’s political operatives at the agency, Bill Baroni and David Wildstein, that they had grave concerns about the legality of using the money for the Pulaski Skyway. They feared it would open the agency up to lawsuits, according to investigative reporter Shawn Boburg in the Bergen Record.
Soon after the ARC tunnel was killed, New Jersey officials started thinking about using the money for the Pulaski Skyway, and the PA legal staff recommended the proper way would be to go to both state legislatures for approval. According to the Record, without clearance from either lawyers or state legislators, Christie announced he would move forward:
But two months later, on Jan. 6, 2011, without going to state lawmakers or getting sign-off from the Port Authority’s legal team, Christie announced that the Port Authority would provide the money to the state Department of Transportation for the Pulaski Skyway, the Wittpenn Bridge on Route 7, Route 139 and Portway New Road.
A memo later on from Carlene McIntyre, assistant general counsel of the PA warned:
As we have previously advised, in order to receive Port Authority funding, projects are required to fall within the scope of statutory authority and comply with the contractual requirements under which the Port Authority operates.
Just as the Port Authority cannot give money to a municipal government to plug a hole in their municipal budget (a structural deficit like the city of Newark’s), neither can the Port Authority expend Port Authority funds to plug a hole in the TTF’s operational expense budget.
Other members of the legal team agreed. But one former official told Christie Watch that there was an implicit message sent from Christie to the staff from his political operatives at the PA: “I’m the governor, this is the number one thing I want and it’s my money and you have to find a way to get it done.”
Since the money could be used for access to the Lincoln Tunnel, the staff found a way to link it to the Pulaski Skyway project according to the Record.
Instead, through a quietly orchestrated series of moves following the announcement, the Port Authority approved the payment by eventually saying the improvements would enhance access to the Lincoln Tunnel, even though all four stretches of road were miles from the crossing into Manhattan.
PA lawyers warned that the justification was questionable and might open the agency up to a challenge by bondholders. Despite these warnings the Port Authority Commissioners voted unanimously to allow it.
As Christie Watch has reported, the New Jersey legislative committee investigating Bridgegate has also been looking into why and how Christie cancelled the ARC tunnel and has subpoenaed documents on this issue.
One question that comes up in this is where were the New York Commissioners, the New York governors and other officials when New Jersey was making its power grab for almost $2 billion? Several former Port Authority officials explained to Christie Watch how the dynamics worked at the agency.
“The veto power of New Jersey was far stronger at that time than the balance of opposition by New York,” said one former official. It was the very end of David Paterson’s term as New York Governor and the start of Andrew Cuomo’s term and both men were concerned primarily with the rebuilding of the World Trade Center. Billions of dollars had already been spent on it and they worried that New Jersey officials might argue it was not really the Port Authority’s responsibility to rebuild it all because although the PA owns most of the land, it had leased out the buildings.
At the time Christie cancelled the ARC tunnel at the end of 2010, the World Trade Center had all the attention of New York officials, especially with the tenth anniversary of 9/11 looming. Building office space on the site was critical to bringing in revenue, to reviving the area. And restoring the Port Authority-run PATH complex along with subway service into that part of lower Manhattan was central to revitalizing it too.
New York officials were concerned that if they nixed Christie’s plan for the ARC money, it would trigger another fight over the World Trade Center and it “would have paralyzed downtown for another few years.” The World Trade Center needed another $1 billion in funding and there were other issues with office builders as well.
Neither Paterson nor Cuomo wanted to “go to war against Christie,” said a former official. Paterson was soon out of office and Cuomo was not focused on urban issues, except for the World Trade Center. The ARC money had been slated to help out New Jersey and so the New York side still considered that money allocated to them, as did Christie.
Said one former official, “It was a Hobbesian choice. We could have fought it tooth and nail, but it wouldn’t have gone to a good place. We believed we needed to make sure, from a New York perspective, that the things we needed got done at the World Trade Center.”
So with New York officials acquiescent, and the New Jersey governor determined to grab the ARC money to avoid tax increases, the use of the money for the Pulaski Skyway and related building went through. “The governors of either side don’t seem to have any qualms about committing Port Authority funds for their own purposes even though they may be non-Port Authority related,” says David Gallagher, a former executive at the PA. “But it’s not a regional piggy bank. It was intended to provide the transportation, business and commercial infrastructure to make the bi-state region grow.”
Read Next: Lee Fang looks into the massive pension contracts offered to Christie campaign donors.