And yet more honest politicians in NJ!
http://www.nj.com/news/ledger/index.ssf?/base/news-8/1052633649110700.xml Trenton's hollow conflict-of-interest ban
Lawmakers are free to benefit themselves and the firms that employ them, and they do
Sunday, May 11, 2003
BY DUNSTAN McNICHOL
Star-Ledger Staff
A year ago, Assembly Majority Leader Joseph Roberts introduced a seemingly routine bill that would allow optometrists to perform laser eye surgery.
The bill was offered at the same time Roberts and two business partners were about to finalize a $33 million takeover of U.S. Vision, a nationwide chain of 600 eye care stores, which offer eye exams by optometrists.
A conflict of interest? Roberts, a Camden County Democrat who is now a vice president for U.S. Vision, insists not. New Jersey's ethics law backs him up.
New Jersey lawmakers frequently sponsor or vote on bills that stand to benefit them, their family members or their employers. And the state's disclosure requirements for lawmakers, considered among the weakest in the nation, make it difficult for the public to monitor any potential conflicts. Legislators are also known to quietly lobby a governor's staffers and Cabinet members to push forward business deals in which they have an interest.
That the state's laws do little to prevent questionable decisions in the state Legislature is something conceded by former Assemblyman and Sen. Paul Contillo, the Bergen County Democrat who wrote the conflict-of-interest legislation in the 1970s.
"A lot of what they do clearly is unethical," said Contillo.
But none of it is ever punished.
In its 31 years of existence, the Joint Committee on Ethical Standards has never found a single incident in which a lawmaker violated the conflict-of-interest rules.
Sometimes the overlap between public and private work is obvious, as with Roberts' case. But a review of legislative activity and personal financial disclosure reports filed by lawmakers in recent years shows less obvious instances where public work and private gain intersect in Trenton. For example:
For years, Sen. Henry McNamara (R-Bergen) has stymied the passage of legislation that would require car manufacturers to sell only clean-running cars in New Jersey. McNamara is a former Ford dealer who still collects rent and dividends from Ford, a leading opponent of the so-called clean-car legislation.
Sen. Robert Singer (R-Ocean) co-sponsored legislation in 1995 that authorized millions of dollars in state tax breaks for growing biotechnology companies. At the time, Singer's wife, Caryl, was manager of government relations for Enzon Pharmaceuticals, a Piscataway biotechnology company that has saved more than $725,000 a year through provisions in Singer's bill.
Sen. Wayne Bryant (D-Camden), a board member of state-chartered Equity Bank, is the sponsor of pending legislation that would require the state to deposit millions of dollars in state-chartered banks, at a discount to the banks.
Bryant denied his post with Equity Bank had any bearing on his decision to pursue the local deposit legislation. "You've got to work," he said. "I'm not going to shy away from something that I work for if I think it's to the public good."
Bryant also was hired recently to a new $35,000-a-year administrative post at the University of Medicine and Dentistry of New Jersey. He serves on the Senate Education Committee, which will consider the merger of UMDNJ with two other state institutions, Rutgers and New Jersey Institute of Technology.
'OUT OF HAND'
As in 41 other states, serving in New Jersey's Legislature is a part-time occupation. Senators and Assembly members are paid $49,000, so it is rare for a lawmaker to rely solely on the legislative salary. Defenders of such a citizen Legislature maintain that conflicts are the unavoidable price for having representatives who are more in touch with the issues of the day.
"Conflict of interest is the biggest issue legislatures face," said Peggy Kerns, director of Center for Ethics in Government at the National Council of State Legislatures. "It stands to reason that sometimes the lines get crossed."
For 11 years, Sen. John Adler (D-Camden) has filed legislation that would tighten up disclosure and conflict-of-interest standards, but it has never gotten so much as a committee hearing.
He said a string of controversies, including Roberts' U.S. Vision transaction, have changed the ground rules, and that the time might be ripe for reform. "I think there's a widespread sense that things have gotten a little bit out of hand in New Jersey in terms of the conduct of people in government," he said.
Now joining him as one of the loudest critics of the current state of legislative ethics is Gov. James E. McGreevey, who has announced plans to pursue a comprehensive overhaul of the Legislature's standards.
"Conflicts of interest -- both real and perceived -- have done a disservice to our citizens," McGreevey wrote in a March 21 letter to Assembly Speaker Albio Sires. "It is imperative that steps be taken to make outside income and interests more transparent and to eliminate even the perception that conflicts can influence the legislative process."
The McGreevey administration said this month it will soon propose a sweeping reform bill. It will include a ban on legislators participating in any matter that would affect their families or private businesses, and a requirement that professionals, such as lawyers and engineers, disclose their major clients. The bill would make New Jersey's disclosure requirements the toughest in the nation. Many Trenton insiders are skeptical about its chances of passing.
At the same time, Roberts and two fellow legislators have proposed a resolution to greatly expand the Legislature's financial disclosure requirements. They would add provisions requiring lawmakers to reveal all real estate holdings and any paid or unpaid directorships.
In addition, Sen. Joseph Kyrillos (R-Monmouth) said he is preparing legislation that would establish a commission to study the idea of a full-time Legislature, with no outside work allowed. Kyrillos said that as long as legislators work only part time in their elected positions, there will be times when their public duties come in conflict with their private business lives.
"You have to be very careful and take pains to not allow yourself to be involved in a conflict," Kyrillos said. "The only way to eliminate that is to have a full-time legislature."
His own outside activities offer a case study.
Kyrillos currently is a director and broker for GVA/Williams, a corporate real estate firm with clients that include many of the state's largest businesses.
Among other assignments, Kyrillos currently is marketing a property for Pharmacia Corp., the pharmaceutical giant that has been awarded more than $30 million in state grants through the Business Employment Incentive Program, a tax rebate program Kyrillos sponsored.
The senator also has helped market property for PSE&G, which hired GVA/Williams as exclusive broker for dozens of properties in New Jersey. In the Senate, Kyrillos helped write the state's utility deregulation laws in 1999 and last year sponsored legislation that created a $1 million tax break for PSE&G and other utility companies.
Kyrillos said his Senate work has no bearing on the clients GVA/Williams receives, and he said he is careful to avoid acting on any legislation that could be perceived as a conflict.
"The bill you reference, I saw as an economic development bill and a bill to assure adequate energy supply," he said.
'THAT'S STRETCHING'
McNamara, the former Ford dealer, sponsored legislation in 1993 that prohibited adoption of the so-called California clean car standards. This year he has repeatedly declined to post the clean car legislation for a vote in the Senate Environment Committee, which he co-chairs.
McNamara disagreed with critics' contention he has held up the clean car legislation. He insisted co-chairman Sen. Joseph Suliga (D-Union) is the person blocking it.
McNamara also said the Ford stock is his wife's and that it is not a significant stake. The rental income he gets from Wyckoff Ford also is not significant, he said. "That's stretching," he said of any suggestion his Ford-related income affected his handling of the clean car bill.
In 1995, Singer sponsored a series of bills that relaxed regulations restricting the biotechnology industry and created millions of dollars in tax breaks for the industry.
His wife, meanwhile, served as lobbyist for Enzon Pharmaceuticals, a Piscataway biotechnology firm that has reported to its shareholders that it saves more than $700,000 a year through the tax breaks Singer created.
In 2000, Singer co-sponsored legislation that imposed licensing standards on the companies that manage billing and claims for health insurance programs. At the time, Singer was serving on the board of directors of Health Choice Inc., a Sussex County business that was lobbying for the new law.
Singer said he never discussed the bill with anyone at Health Choice and was unaware the company's owner was lobbying for it.
"It had nothing to do with Health Choice," he said.
Last year Singer also helped win last-minute approval for a bill that steered $3 million to Monmouth Medical Center, a hospital in the Saint Barnabas Healthcare System. Saint Barnabas is the parent company of Kimball Medical Center, where both Singer and his wife were working at the time the bill won Senate approval.
"I don't see it as an issue because it was not that hospital; it was for another hospital," he said, adding he does not think he had conflicts in any of his legislative actions.
"Part of the problem is there's no clear standard," he said. "There's a lot of cloudiness."
New Jersey's current conflict-of-interest statute seems tough enough:
"No member of the Legislature shall undertake any employment or act in any way that impairs the objectivity or independence of judgment of the member of the Legislature in the exercise of his or her duties or is violative of the public trust by an elected official or which creates a justifiable impression among the public that such trust is being violated."
But the law's definition of a conflict adds a significant exemption. It says lawmakers can vote on measures that affect them or their businesses without conflict, as long as others in the same line of work are also affected by the legislation.
For instance, a lawmaker who represents clients before the Board of Public Utilities is free to act on measures affecting the board, because his actions would not affect him any more than they affect other lawyers who represent clients before the board, the Joint Ethics Committee ruled in 1981.
Roberts said his optometry legislation was well within the bounds of the ethics standard, because he would not have benefited any more from the new law than others in the optometrist business.
Contillo, a three-term assemblyman and two-term senator until 1992, said of the conflict law: "Really, it's carte blanche. Unless it has your name on it and you put the money in your pocket, you can get away with it." Contillo, who wrote the conflict-of-interest statute as a Paramus-based assemblyman, said lawmakers would not have passed anything tougher.
EIGHTY LETTERS
McGreevey's proposed reform would greatly expand the definition of a conflict. It would prohibit lawmakers from acting on bills that affect their occupations more than they affect the general public.
That would be the toughest standard in the nation. According to government ethics expert Alan Rosenthal at Rutgers University, it might be too tough.
Rosenthal said restrictions as tight as McGreevey has proposed would bar lawmakers too often from votes.
"You can't demand full-time standards from a part-time legislature," he said.
The current law allows legislators to vote even in instances where they feel they would benefit personally from proposed legislation. The only requirement is that they first file a notice identifying their potential conflict.
In 31 years since that provision became law, only 80 such letters have been filed.
Among the conflict letters was one sarcastic notice from Sen. William Gormley (R-Atlantic) regarding a proposed 1978 resolution imposing the legislative ethics code on a new term of the Legislature.
"It may be construed I have a personal interest in SCR-98," Gormley wrote in his disclosure letter. "As required by the code, I hereby state that I am able to cast a fair and objective vote and otherwise participate in the consideration of SCR-98."
More recently, Gormley dismissed the notion there was any conflict when he persuaded his colleagues to produce two last-minute votes needed to win passage for a bill allocating $3 million in special state aid to the Atlantic City Medical Center, where his wife is an employee.
NOT ON THE FORM
"The real governor in this area is the public," says Rosenthal. "If the public thinks legislators have gone too far, they can vote them out."
But finding potential conflicts can be a chore.
Anyone looking at the financial disclosure report Kyrillos files with the Legislature each year, for instance, would have a hard time detecting any potential for conflict.
Under current reporting requirements, Kyrillos is required to report his employment with GVA/Williams. But he is not required to list the firm's major clients, or those he has worked for.
Similarly, Roberts was under no obligation to list his U.S. Vision deal on his financial disclosure reports, because the venture had not yet generated any income.
In 2000, Roberts invested almost $1 million of his own money in the takeover and lined up millions of dollars in financing to buy out U.S. Vision with business partners at Commerce Bancorp. The deal does not appear on his disclosure form.
Roberts' disclosure forms for 2002 do not reflect the fact that Commerce last year extended U.S. Vision a $15 million loan to finance the takeover, and $17 million in operating credit. Under the agreement, Roberts and his partners are required to make payments of $400,000 to Commerce every three months.
Roberts' partners in the takeover were George Norcross, the politically potent South Jersey businessman who helped orchestrate Roberts' ascension last year to the post of Assembly majority leader, and George's brother Philip, a lawyer and lobbyist.
Roberts also in 2000 refinanced mortgages and credit liens with Commerce Bank for three bars he operates in Sea Isle City.
During the period Roberts and the Norcrosses were acquiring U.S. Vision, Norcross also was lobbying to have the state place millions of dollars of banking and financial work with Commerce, which employs George Norcross.
State records show Commerce has spent $446,000 on Trenton lobbyists over the past three years, seeking, among other things, to block legislation that would have required banks to pay interest to homeowners on mortgage escrow accounts.
Since April 2000, when Roberts and Norcross started acquiring U.S. Vision, Commerce's lobbyists have reported working on nine bills on the bank's behalf. Of those, three have reached the Assembly floor . Roberts voted in favor of two of the measures and did not cast a vote on the third, records show.
Roberts said his business debts to Commerce do not in any way make him beholden to the bank when he is considering legislation or policy issues in Trenton.
"Absolutely not," he said. "Some of the reasons we do business with Commerce -- in addition to the fact they're a first-rate bank and they're in New Jersey -- is they reduced our rate from 9.5 percent to 8.5 percent."
Leah Rush, who has examined state ethics and disclosure requirements nationwide for the Center for Public Integrity, said the assemblyman's financial relationships with Commerce raise questions about his independence and about the quality of New Jersey's disclosure forms.
"Those kinds of closely connected deals are what the outside disclosure is designed to capture," Rush said, "and if they don't, obviously there's a problem."
Roberts withdrew the eye surgery bill after it attracted the attention of newspapers, and he has filed notice he will not participate in discussions or votes on similar legislation in the future.
"Anyone who knows me knows that I have a reputation for integrity and being independent," he said. "It's something I really prize."
He agrees the disclosure forms should be expanded to include all business partnerships and real estate holdings, regardless of whether they are producing income.
"You want legislators who have some experience and are passionate about public policy," he said. "But the public clearly has to have a certainty that there's not an issue of conflict."
Don't forget the incredible wealth of public historical sites in New Jersey....
Partial list
Colonial Period -
Proprietary House (1750s Governor's Mansion), Old Barracks,
Revolutionary War Battlefields & Military Encampment Sites -
Morristown National Historical Park, Monmouth Battlefield State Park, Red Bank Battlefield, Princeton Battlefield State Park, Washington Camp Ground, Short Hills Battlefield, Trenton Battle Monument, Washington's Crossing State Park, Fort Lee, New Bridge Landing, Cannonball House Springfield, etc. etc.
Revolutionary War, Washington's Headquarters Houses -
Rockingham 1783, Ford Mansion 1779-80, Wallace House 1778-79, Dey Mansion 1780, Drake House 1777,
Revolutionary War, Other Officer's Quarters -
Ringwood State Park, Staat's House, Van Horne House, Knox-Vanderveer House, Low House, Bucceleuh Mansion, Boudinout House, etc.
Early 19th Century Industry -
Delaware & Raritan Canal State Park, Morris Canal,
Batsto Village (iron, glass), Allaire Village (iron), Speedwell Village (telegraph), Long Pond Ironworks State Park, Clinton Gristmill, Walnford Gristmill, Waterloo Village, Black River & Western Railroad, (coming soon Phillipsburg Railroad Museum), Paterson Mills-Great Falls Historic District, etc. etc.
Other Military Museums & Historic Sites -
Finn's Point Confederate Cemetary, Signal Corps Museum, Fort Hancock-Sandy Hook, Fort Mott, Swan Foundation Museum of the American Revolution
20th Century Industry
Thomas Edison National Historic Site
I loved the Franklin mines as a kid. There are minerals only indigenous to New Jersey; it's one of our best-kept secrets
I have one of my kids rooms painted with glow in the dark paint and a display of the minerals we have collected. Looks real nice when we turn the black, short and long wave lights on. ^-^