Hoboken: City for Sale (Part III)

8/7/2009 Update:

Wheeling still prevalent

For those of you that read this article from 411 contributor estevens back in March – you remember how he shined light on the giant loophole in New Jersey’s campaign contribution laws.

NorthJersey.com has an interesting article today about how the “wheeling and dealing” continues in the Garden State, – with $19,000 being contributed to ex-Mayor Peter Cammarano’s campaign from a South Jersey “Political Committee” this year! Seems like Hoboken’s Pay-to-Play laws are easily circumvented.

3/11/2009:

[This is part of a series of article submissions by resident and 411 reader “estevens.”]

Hoboken: City for Sale

Third in a series of articles about the back-room machinations of Hoboken.

hoboken-a-city-for-sale-series-estevens-part-iii.jpg

Brokers and Bribes

hoboken-money-changing-hands-city-for-sale.jpgFirst, if you please, a little perspective: In September of 2007, eleven New Jersey politicians were arrested as part of an FBI sting operation for accepting cash bribes in return for using their official influence to award contracts.

The 18-month investigation – Operation Broken Boards – began in mid-2006 amid evidence of corruption in the Pleasantville school district (an Abbott district near Atlantic City). Cooperating witnesses and undercover agents established two undercover companies for insurance brokerage and roofing. Five school board members accepted thousands of dollars in bribes from the fictitious businessmen in return for their assistance in steering public contracts to the two companies. Incredibly, they also referred the brokers to corrupt public officials in northern New Jersey who, in turn, referred them to yet more corrupt officials. All eleven politicians, plus a chief of staff to a Newark council president, pleaded guilty or were found guilty by trial of accepting bribes. [See list below]

There is a fine line between cash bribes and campaign contributions from those who receive public contracts. In Hoboken, campaign contributions go hand-in-hand with the awarding of insurance consulting contracts. Business & Governmental Insurance Agency (BGIA) has repeatedly received contracts with the City of Hoboken as well as the Board of Education. In return, campaign contributions from BGIA and its president, Steve Edwards, totaling more than $37,000 have been made over the past nine years to local candidates and political party committees allied with or controlled by Mayor David Roberts.

Continue with more after the jump…

(Hoboken: A city for sale, Part 3, continued…)

hoboken-city-for-sale-ruben-ramos.jpgInsurance consultants are typically awarded professional services contracts or extraordinary unspecifiable services contracts, which ostensibly allow public officials to award contracts based on experience and reputation. In fact, this allows our officials to award contracts at will with little regard for cost. Insurance consultants are typically paid by the insurance provider and thereby may make more money for the provider – and themselves – by selecting more expensive plans for the city. While we would hope that city officials select a consultant who will get the city the best plan for the least cost, it is quite likely that those who make substantial campaign contributions may get the nod with little regard for cost to the city.

Hoboken’s Pay-to-Play Reform ordinances of 2004 and 2007 were adopted to control the influence of campaign contributions on the awarding of such contracts. Since then, our officials have mouthed adherence to the rules while quietly playing games to circumvent the rules. In 2007, BGIA had a contract with the city when it made a $2000 contribution to Hoboken Councilman Ruben Ramos, who suggests in this video that no law can stop him from taking illegal contributions. Though the contribution was made to his state assembly campaign, the city ordinance does not allow for any contributions from a business entity with professional/extraordinary contracts to any officeholder involved in the awarding of contracts to that business entity. Per the penalty clause of the city ordinance, BGIA is apparently ineligible for city contracts for four years, though it did continue to provide services for the Hoboken BOE the following year.

Wheeling and dealing

Enter Federal Hill Risk Management (formerly Gartland Associates), an insurance brokerage firm out of Maryland. On May 25, 2007 during the spring election season, Federal Hill, Dynamic Claims Management (a sister company), Gartland & Company, Diana Gartland, and Victor Bramble (a manager with Federal Hill), all made $300 contributions to Ruben Ramos’ assembly campaign. The contributions met the $300 limit set by Hoboken’s pay-to-play laws for the one-year period prior to awarding of a contract, though such bundling could potentially violate the terms of the ordinance and certainly violate the spirit of the law.

On the same date, a little-known political committee called Committee for Efficiency in Government, run out of an apartment at 108 Monroe Street, made a $5000 contribution to Ruben Ramos as well. A week later, Gartland & Co, E-Administrative Systems (same address as Gartland), Dynamic Claims Management, and Victor Bramble made a total of $5000 in contributions to Committee for Efficiency. This was apparently what is referred to as “wheeling” – a pass-through of money to circumvent Hoboken’s pay-to-play law – or was perhaps just another remarkable Hoboken coincidence.

On September 4, 2007, Derek Johnson – a manager with Federal Hill – contributed $2000 to Voice for All Hoboken, a political committee managed by City Councilman and Mayoral candidate Peter Cammarano, which made contributions to and spent money in 2007 on behalf of candidates Chris Campos, Michael Russo, Theresa Castellano, Nino Giacchi, and Richard Tremitiedi. Evidently, someone in the campaign thought better of it and returned the $2000 ten days later. On September 24, Committee for Efficiency made a $2000 contribution to Voice and then received $3000 from Derek Johnson four days later. On December 7, Federal Hill was awarded the contract to serve as insurance consultant for the City of Hoboken. Yet another remarkable Hoboken coincidence?

Getting back to where we started, politicians around the state have gone to jail for accepting cash bribes in return for their official influence in awarding insurance brokerage contracts. In Hoboken, thousands of dollars in “gratuities” are considered business as usual so long as they are deposited in political campaign accounts. Our local politicians will wrap themselves in the American flag and opine about the First Amendment and free speech, but any reasonable person can understand what is behind these machinations.

Other politicians get busted for bribes

  • Former Orange Mayor and Assemblyman Mims Hackett pleaded guilty to accepting a $5000 bribe with $25,000 more promised. A transcript of his indictment provides a detailed example of how these deals are arranged. Passaic Mayor Samuel Rivera also pleaded guilty to accepting a $5000 bribe. Rivera reportedly boasted of how he could arrange council votes “easy, easy, easy.” See video of Rivera accepting the bribe here.
  • Passaic Councilman Jonathan Soto was found guilty of collecting $44,500 in bribes on behalf of himself and others. Passaic Councilman Marcellus Jackson pleaded guilty to accepting $26,000. Former Assemblyman and Passaic County Undersheriff Rev. Alfred E. Steele pleaded guilty to accepting nearly $16,000. Paterson BOE President Chauncy I. Brown III pleaded guilty to accepting $13,000. Keith Reid, Chief of Staff to Newark City Council president Mildred Crump, pleaded guilty to accepting $10,000.
  • Five school board members in Pleasantville accepted bribes: Jayson G. Adams pleaded guilty to accepting over $62,000. James A. Pressley, pleaded guilty to accepting more than $40,000. Rafael Velez pleaded guilty to accepting $15,000. James T. McCormick was found guilty for accepting $4,500. Maurice “Pete” Callaway, who was serving on the City Council at the time of his arrest, pleaded guilty to accepting $13,000. His brother, former Atlantic City Council President Craig Callaway, served time in federal prison for unrelated corruption charges.

Leave a Reply

20 Comments on "Hoboken: City for Sale (Part III)"

jc5201
Member
jc5201

I just read an article that pertains to this very subject on a national level. The conservative majority on the Supreme Court might overturn a law banning corporate camapign contributions, and it offers an interesting historical persepctive. Insurance co’s have been involved in campaign controversey for 100 years.

Here’s the link

nytimes.com/2009/08/11/opinion/11tue4.html?_r=1&ref=opinion

jc5201
Member
jc5201

Great article. The problem with very constrictive pay-to-play laws is that it costs money to run a campaign and the people who really benefit is the ultra rich candidate like Mason, Corzine or Bloomberg.

It definitely rids us of bad contracts, but it also rids us of good people who cannot afford the cost a campaign on their own.

We should make sure we’re pushing strict pay-to-play laws, to avoid the situations mentioned above, but we also need to focus on fair elections.

camel2
Member
camel2

this is why it pays for politicians to read hoboken411. He would have educated himself about what to look out for!

Biffy B For Mayor
Member
Biffy B For Mayor

In fact – its not only the politicians that are for sale, its the entire public that is for sale.

Biffy B For Mayor
Member
Biffy B For Mayor

It’s really sad that all this money is needed to run for public office. Instead of citizens coming out and tracking down the candidates, campaigns need to spend dollars upon dollars to reach apathetic americans.

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