Lawmakers still finding ways to hide conflicts
Four years ago, New Jersey embarked on a sweeping government ethics reform program. In the second part of an eight-day series, Gannett New Jersey looks at how major conflicts of interest still can be hidden by lawmakers.
By JONATHAN TAMARI
GANNETT NEW JERSEY
TRENTON -- Like many Trenton lobbying firms, the Westfield-based Alman Group offers a staff with years of government experience that can help clients shape laws and win state aid.
But the firm also boasts a seemingly unique quality: a sitting lawmaker on its marquee.
Assembly Deputy Speaker Gerald B. Green, D-Plainfield, also is vice president for local affairs at the Alman Group. In the Legislature, Green chairs the committee that oversees housing rules and sits on the Health Committee. Both panels vet laws that could impact Alman clients, which include major developers and at least 18 hospitals.
Green's job is one example of how Trenton's rules and culture allow lawmakers' public roles and private work to come tantalizingly close.
Even though many lawmakers with private jobs say they painstakingly avoid any direct conflicts, including Green, the Legislature's current financial disclosure requirements allow officials to keep their clients secret.
That gives lawmakers the ability to hide relationships with clients or partners who might have a vested interest in new laws. There is no way to tell if a lawyer or consultant who, for example, helps craft environmental regulations also is working with a major housing developer.
And at least one member of the Legislature's ethics committee believes the existing conflict-of-interest restrictions come with built-in loopholes.
In Green's case, he has received legal opinions that say he is in the clear.
While legislative rules bar lawmakers from accepting gifts, jobs or anything of value worth more than $250 from lobbyists, two ethics opinions issued by the nonpartisan Office of Legislative Services in 1998 and 2006 say Green's consulting work at Alman doesn't violate that restriction, as long as his work at the firm is unrelated to his "official duties."
Green said he requested the opinions and makes sure to keep his private job and public role separate, although he declined to say what Alman clients he has worked with.
In addition to lobbying, Alman offers consulting on issues such as development, land use and permitting, according to the firm's Web site.
The 2006 advice to Green notes that the Legislative ethics committee has traditionally interpreted conflict-of-interest rules to allow the "the widest possible participation" in voting by lawmakers -- meaning, essentially, that only the most blatant conflicts are explicitly barred.
The opinion concludes by referring Green to an ethics tutorial on the Legislature's Web page.
When questioned by reporters about potential conflicts, several lawmakers noted their actions are allowed under current rules because they won't directly profit. Lawmakers said their jobs in the Legislature are part time and that they have to be allowed to make livings elsewhere.
Retired Superior Court Judge Herbert Friend, the acting chairman of the Joint Legislative Committee on Ethical Standards, is planning to set up a subcommittee to recommend the first major update to the Legislature's ethics code in 25 years.
"There are holes in the code of ethics that you could drive a truck through," Friend said.
Conflicts seem obvious
The existing conflict rules did not stop Sen. Wayne R. Bryant, D-Camden, from overseeing the Senate Budget and Appropriations Committee, which steered tens of millions of dollars to two universities that hired him, or getting his law firm work through legislation he crafted to send $175 million to Camden city's economic recovery. Bryant remains on the Senate Education Committee.
They also did not prevent Sen. Sharpe James, D-Essex, from pushing through a law that gave him additional power over land sales in Newark, where he was mayor.
Prosecutors now claim that the law helped James sell city properties to friends at cut-rate prices. James remains on the Senate Community and Urban Affairs and Budget and Appropriations committees.
Sen. Joseph Coniglio, D-Bergen, another member of the budget committee, got a $5,500-per-month job as a plumbing consultant at the Hackensack University Medical Center from 2004 to 2006, while the hospital received more than $1 million in state grants during those years.
Both Bryant and James face federal corruption charges for their actions, although both have proclaimed their innocence. Coniglio is the target of a federal investigation and recently dropped out of a re-election bid. He said he would fight the "false accusations" that his work at the hospital was connected to state grants.
"I am quite confident that my name and reputation -- which has suffered immeasurable damage -- will, with time, be restored," Coniglio said in a statement he issued when he dropped out of the race in mid-September.
[Green] defends consulting work
In Green's case, his position at Alman is described on the firm's Web site, but the arrangement is not apparent on Green's state financial disclosure form, where his income from consulting is listed under a company simply called "Jerry Green Enterprises."
That company, which Green said he uses for his private ventures, earned at least $50,000 in 2006.
Green, who has not been accused of any illegality, would not say what other clients he works with, saying he did not want to draw private firms into a story about his public work.
But Green said he makes sure his outside projects, which he said involve consulting, not lobbying, don't involve state government. He said he has worked with Alman for roughly 10 years but has done little with the firm in the past 18 months, in order to avoid any potential conflicts, though he still is a part of the firm.
"I try to make sure that anything I do does not interfere with what I consider my job as a legislator," Green said. He said he is not salaried at Alman, earning money on only a per-project basis. "There's a whole lot of gray areas there, and I don't want to take a chance."
Ten of Alman's hospital clients split nearly $26 million in state grants in the 2006-07 state budget, for which Green voted yes.
Alman also works with several developers, including housing builder K. Hovnanian Companies in Edison. Green, who made much of his money in real estate, chairs the Assembly Housing and Local Government Committee.
Green also has consistently offered support for a hospital in his hometown, Muhlenberg Regional Medical Center, which in 1999 hired Alman to help win state approval to perform cardiac surgery.
Green's advocacy dates to before that contract and continued even after the hospital and lobbyists parted ways.
Green and Alman's president, George Albanese, said the lawmaker did not help the lobbying firm on either the hospital grants or any other issues involving state government. Green said questions about his involvement with Muhlenberg and the city of Plainfield are two reasons he has backed away from projects with Alman.
"He does nothing with the state of New Jersey," Albanese said. "I wouldn't put him in that position to even suggest or ask him."
"As long as I don't benefit financially, then there's nothing I have done wrong," Green said, referring to the OLS opinions.
Touting technical expertise
Assemblyman Upendra Chivukula, D-Somerset, made a similar argument after recently sponsoring a law that gives Verizon Communications the chance to compete for cable television customers in New Jersey. Verizon also is a client at the consulting firm where Chivukula is chairman, and it is expected to invest $1.5 billion in New Jersey as a result of the law.
As with Green, the association is not apparent on Chivukula's disclosure form, which lists the consulting job but not clients.
Chivukula also has sponsored bills (currently pending before Corzine) to give tax breaks to companies producing digital media, a field he said could lead to more work for his firm, Rangam Consultants, and to forbid the state from regulating services that provide phone calls over the Internet. Rangam's Web site touts its work in the telecommunications field.
Chivukula, chairman of the Assembly Telecommunications and Utilities Committee, said there is no conflict because he doesn't own Rangam. His firm is unlikely to benefit from the cable bill because Verizon's investments involve laying new fiber optic cables, an area in which Rangam is not involved, he said.
"State laws are clear. If you don't have any ownership in a company, you don't have any conflicts. If I had ownership in Rangam, then it's a different story," Chivukula said. "I'm just an employee. Tomorrow they can fire me."
Chivukula, a former engineer for AT&T, said it only makes sense that he would sponsor bills in the area of his expertise.
"The reason I'm in the Legislature is because I have something to offer in the telecommunications field," Chivukula said. "When you are making public policy, you need expertise. If I work in the agricultural committee, I have no expertise. What kind of contribution can I make?"
Verizon and other cable companies waged an expensive advertising and lobbying battle over the cable competition bill. Verizon and its lobbyists have contributed $6,200 to Chivukula's campaigns in the past three years.
Rangam might be hired to produce software for the digital media providers that would benefit from another of his bills, Chivukula said, but it's no sure deal.
In the wake of several scandals and investigations in the Legislature, Senate President Richard J. Codey, D-Essex, has called for a review of the code of ethics. But the work has not yet begun, and Codey has given few details on potential changes. One idea he floated was to require lawmakers to meet with a lawyer once a year, at which time they could request legal opinions on whether their private work created conflicts.
"That accrues to the legislator's benefit. So that when someone raises an issue, you can say, 'Hey, I asked this question, and here's the opinion,' " Codey said.
Gannett New Jersey writers Jason Method, Jean Mikle and Gregory J. Volpe contributed to this report.
COMMENT
Reporter Jonathan Tamari’s October 1 article (“Lawmakers hide conflicts by keeping clients secret”) contained some notable omissions of fact and several distortions of the public record regarding my actions as an Assemblyman and my position with Rangam Consultants, an information technology consulting firm.
Moreover, the article takes alarming liberties with the role I played on telecommunications measures in the state Legislature, most notably the 2006 state law that allows Verizon and other phone service providers to provide cable television services to New Jersey consumers.
Here are the unvarnished facts:
• I earn $2,000 a month by Rangam Consultants. I do not own the company; I am an employee. I am neither directly involved with the company’s clients nor its operations.
• Verizon has not been a client of Rangam for seven years. This includes the time that the Legislature considered and acted upon the 2006 statewide cable television franchising law. Frankly, Rangam is too small by Verizon’s standards to be a preferred vendor for the company.
• Rangam does not stand to reap new business from Verizon because of the new cable franchising law. Rangam’s business is providing information technology programmers. It is not involved in cable services or fiber optics, the fields that stand to gain from Verizon’s entry into the cable television marketplace.
• The statewide cable franchising legislation had been in existence for two years before I even signed onto it. I frequently was accused of slowing down action on that legislation as a member and as chairman of the Telecommunications and Utilities Committee. Your article is the first time anyone ever intimated (and I might add wrongly) that I somehow facilitated that measure’s passage.
• As for my sponsorship of legislation to provide tax breaks for companies producing digital media and to prohibit state regulation of Internet phone companies, there is no direct benefit for Rangam. The company is in the business of providing information technology programmers to other companies. Conceivably, they could be hired to produce software for digital media companies. But this would be a stretch. As Rangam’s chairman, I do not direct how or where company programmers are placed and I do not exercise jurisdiction on the company’s operations.
• On the occasions that arise when my profession in the information technology field intersects with my role as a state legislator, I have made it a policy to seek guidance and counsel from the Legislature’s non-partisan lawyers. I have been advised on multiple occasions that I may work for companies in my field of expertise and that conflicts most often arise when you are an owner of a private company and not when you are an employee – as is the case with me.
I have long sought to conduct myself in an ethical and professional manner. And while I take issue with the treatment I received in Mr. Tamari’s article, I acknowledge that his report does raise some valid questions about the current financial disclosure standards for state legislators.
If there are any shortcomings in the area of financial disclosure requirements, they should be thoroughly examined and addressed. At a time when increasing numbers of New Jerseyans are concerned about corruption in government, it’s imperative that we do all that we can to ensure high ethical standards and maximum public accountability.
Sincerely,
Assemblyman Upendra Chivukula
Posted: Mon Oct 08, 2007 8:07 am"
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