Jersey files lawsuit after 'pay-to-play' reforms stall
award of $347 million for projects
BY JOE DONOHUE AND JOE MALINCONICO
Star-Ledger Staff
New Jersey's effort to clean up its reputation as a
"pay-to-play" state has run afoul of red tape in
Washington, and the dispute is holding up federal funding
for highway projects around the state.
State officials went to court yesterday to try to break
the stalemate they say imperils at least $347 million in
federal aid.
The Federal Highway Administration froze the funding last
week, saying new state regulations against awarding public
contracts to campaign contributors are at odds with
federal contracting guidelines.
In a lawsuit filed in federal court, Attorney General
Peter Harvey said the dispute has already blocked $251
million for 19 projects, including some involving safety
improvements, and that another 10 projects requiring $96
million also are likely to face the bureaucratic blockade.
The lawsuit seeks a court order to free up the funds.
The affected projects range from the biggest road
improvement getting under way in the state this year --
the widening of Route 18 in New Brunswick -- to the
routine painting of stripes on highways.
"All of these projects are still going to get done if this
gets resolved quickly," said state Department of
Transportation spokesman Marc La Vorgna. "But if this
problem persists, then there's going to be serious impact
on the jobs and on the motorists who expect these jobs to
be finished."
At issue is an executive order signed by former Gov. James
E. McGreevey in September, intended to break the
pay-to-play cycle of political donations from companies
that win state contracts. It bars the award of contracts
worth more than $17,500 to any firm that has contributed
more than $300 to county and state parties or
gubernatorial candidates in the previous 18 months.
State officials received notice last week that no federal
highway funds would be approved for New Jersey projects
because the executive order appears to conflict with
federal rules for competitive bidding.
In his legal papers, Harvey contended there is no
justification for the federal freeze.
"Federal transportation officials have not articulated any
official reason why executive order 134, which seeks to
remove political influence from contracting, conflicts
with federal law or would result in any decrease in
competition for state contracts in New Jersey," he said.
Acting Gov. Richard Codey called the federal decision
"fundamentally flawed."
"They insist that banning contributions somehow inhibits
competition and, on behalf of the people of New Jersey, I
couldn't disagree more," said Codey. "Using their logic,
Olympic athletes should pay the judges to keep the games
fair and competitive."
The Federal Highway Administration issued a statement
yesterday saying it has made no final decision about the
executive order "but we look forward to receiving more
information from the state about how attaching new state
conditions to federal assistance is intended to improve
the competitive bidding process."
Martin Robins, executive director of the Alan M. Voorhees
Transportation Center at Rutgers University, said with the
state's Transportation Trust Fund nearly broke, the timing
couldn't be worse.
"New Jersey couldn't be in any worse position for this to
happen," he said. "They desperately need the federal
money."
Construction industry officials said the funding holdup
already is causing pain.
"It's wreaking havoc with our entire industry," said
Leonard DePinto, president of Associated General
Contractors of New Jersey, a trade group. "Most of the
jobs on the street right now are on hold."
Jon Orcutt, executive director of the Tri-State
Transportation Campaign, a watchdog group, expressed
dismay that among the jobs being delayed are projects
designed to prevent head-on collisions, including 14 miles
of new barriers in road medians.
"It's terrible to hold back any of these projects, but
especially these safety-related things," he said.
Harry Pozycki, chairman of Common Cause New Jersey, a
civic group that strongly supports tight restrictions on
political donations by contractors, said his group plans
to file legal papers supporting the state's lawsuit.
"We strongly support Governor Codey and the attorney
general's actions in protecting the pay-to-play executive
order from the arbitrary and baseless actions by the
Federal Highway Administration," he said.
Joe Donohue covers state government and politics. He
can be reached at jdonohue@starledger.com or (609)
989-0208.
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and Transportation Unions
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Sacramento, CA 95814
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