New Jersey state senator Ron Rice, a Democrat, calls it “Newark-gate.” He is referring to a state comptroller’s report that details how a contractor swindled the city out of millions in public funds, and to the larger culture of “white-collar crime” that he says former Newark mayor Cory Booker allowed to flourish on his watch.
For over a month now, Rice and one of his colleagues, Republican state senator Sam Thompson, have been calling for the New Jersey Legislative Select Committee on Investigation, which is currently investigating the Bridgegate scandal, to look into the “government abuses of power and cover-ups” they say occurred in the seven years that Cory Booker — now New Jersey’s U.S. senator — served as mayor of the Brick City.
The state comptroller’s report is packed with tawdry details about how these political insiders absconded with millions in public funds at a time when the city was laying off police officers and receiving tens of millions of dollars in state aid.
Watkins-Brashear wrote over 60 unauthorized checks to herself. She received a $209,097 severance package in June 2006 but continued to work at the Watershed until March 2013, when she received yet another severance package, of $453,805, although she had resigned from her position, not been dismissed from it. Watkins-Brashear issued over $23,000 in reimbursement checks to a non-employee to compensate him for running errands like cashing checks and picking up the newspaper. Between 2008 and 2011, the Watershed spent over $4,600 on flowers to decorate its Newark office.
Word of the agency’s largesse spread quickly. According to the report, one vendor received almost $390,000 for landscaping work even though he had never done any landscaping before. He told the comptroller that he met Watkins-Brashear while working on a political campaign, where he heard “buzz” about the agency’s handing out contracts, so in 2008 he created a company to obtain one. He bought the landscaping equipment after the contracts were awarded to him.
Elnardo Webster, the mayor’s friend and political ally who was supposed to be providing the Watershed with legal counsel, gave the green light for much of this abuse. He signed off on no-bid contracts that violated the agency’s bylaws. “Webster should have ensured that the board’s contracting practices were consistent with its Articles of Incorporation,” the report says, “but he did not do so.” He allowed the agency’s board routinely to approve resolutions with just three members, though at least seven votes were required. And, though Webster pocketed more than a million dollars in legal fees between 2007 and 2011, neither he nor anybody else at the NWCDC could produce the contract that authorized his services.
Webster, who did not respond to an interview request, previously told the Star-Ledger through a spokeswoman that the Watershed’s funds were spent without his “knowledge or involvement” and that he was not privy to the agency’s “day-to-day operations.” Minutes of the agency’s board meetings, however, indicate that he was present at meetings where the board approved resolutions in violation of its bylaws and was closely involved in many aspects of its operations.
The comptroller said this scandal, which unfolded over the course of several years, was “egregious and yet preventable” in part because Booker, the city’s mayor, was supposed to be overseeing the agency. The report says it was operating “free from any meaningful oversight.”
As the NWCDC’s only client, the city provided what oversight it did by making the mayor an ex officio trustee and chairman of the board. Booker, who did not respond to an interview request, told the comptroller that he relied on the city’s business administrator to attend the meetings on his behalf. When she resigned in 2010, however, he never named a replacement. The report did not mention that throughout this time, Booker was receiving payouts from his old law firm, the same firm where Elnardo Webster was a partner, as part of a separation agreement that he has refused to disclose.
The state senators calling for further investigation say that even if Booker wasn’t attending the board meetings, he should have known what was happening at the rogue agency.
“Cory is like Christie, saying he didn’t know anything,” says Rice, a longtime Booker foe, referring to New Jersey governor Chris Christie’s response to revelations that his aides plotted to shut down lanes leading onto the George Washington Bridge. “Even if he wasn’t there, these people are close to him, so he should’ve known what was going on,” Thompson says.
Booker called the comptroller’s findings “infuriating” and said in a statement, “For years, I led a public battle to reform Newark’s water system and improve oversight and accountability, but those efforts were repeatedly blocked.”
As mayor, Booker attempted in 2010 to turn control of the city’s water over to a municipal utility authority (MUA). The MUA would have produced substantial revenue for the city, but critics said it would have vastly increased the power of the same corrupt gang that was running the Watershed. Columbia University economics professor Dan O’Flaherty, who led a citizens’ group opposed to the plan, says Booker’s proposal would have “taken NWCDC and multiplied it ten times.” Booker’s response to the report, he says, is “complete bull****.”
In January 2012, the Newark city council formed an investigative committee to examine the Watershed’s expenses after it noticed they had increased dramatically. Webster filed an injunction to stop the investigation. He billed the city hundreds of dollars to do so.
“The decision to sue the council is kind of major,” says O’Flaherty. “Any responsible mayor would have stopped it.”
The council’s investigation and a subsequent probe by the Star-Ledger unearthed evidence of the widespread corruption that the comptroller would detail two years later: They found that the Watershed had paid $15,000 to the father of one of its board members for make-work and $16,000 to an interior-decorating firm owned by Watkins-Brashear’s ex-husband.
“You can say Cory didn’t know that they were thieves” in 2010 when he proposed the MUA, says O’Flaherty. “So, when should he have known that they were thieves? He should have known in the beginning of 2012,” when the investigative committee’s findings came to light and the Star-Ledger published its reports.
Despite the outcry from numerous sources, the NWCDC continued to operate with Booker’s support throughout the fall of 2012 and until its eventual dissolution in March 2013.
When the city council refused to approve a new contract for the agency in July 2012, Booker worked around it, using an executive order to implement emergency contracts that kept it operating without council approval. When the city council unanimously approved a motion — based on a petition with more than 5,000 signatures from O’Flaherty’s Newark Water Group — to dissolve the agency and put it under the city’s control, Booker defeated the measure in court.
Even as the Watershed overtly flouted his city council, Booker stood by. In September 2012, Webster led a successful effort to change the Watershed’s bylaws, removing any mention of Newark, empowering the agency to appoint its own board, and eliminating both the requirement that Booker act as board chairman and the city’s right to appoint board members. “This current move is almost like an insurrection,” Ron Rice, a West Ward councilman (and son of State Senator Rice), said at the time. “They’ve separated themselves from us who created them,” he added. “That’s why it’s a Frankenstein.”
Still, Booker said nothing, and on October 1, 2012, issued an executive order allowing the city’s contract with the group to continue open-ended. With the comptroller’s investigation hanging over its head and Booker preparing to run for the U.S. Senate, the agency voted to dissolve itself, though it did not explain why.
Though the comptroller’s report paints a bleak picture of corruption and self-dealing, O’Flaherty maintains that there are bright spots. “Citizens investigated and blew the whistle on corruption,” he tells me. “The council and the Star-Ledger followed up and did what they were supposed to do in any civics textbook.” The only exception, he says, “was the mayor.” Rice, the senator, echoes that sentiment. “People think we are part of what they’re doing and [that] we don’t want accountability and transparency, and that’s embarrassing,” he says. South Ward councilman Ras Baraka, who is currently running for mayor, was one of the lawmakers who tried to blow the whistle on the Watershed, and he is now calling for a forensic audit of the Watershed. He says he’ll order one if he’s elected mayor if a judge doesn’t before then.
Despite all the anger, it appears unlikely that the Select Committee on Investigation will widen its attention from Bridgegate to the malfeasance at the Watershed. “For the immediate time being their focus is on the bridge issue and the Port Authority and coming to a point where they feel comfortable that they’ve done all of the work they can do on the issue,” says a spokesman for Assemblyman John Wisniewski, who co-chairs the panel with senator Loretta Weinberg. Weinberg was more definitive. “The committee is only investigating issues connected to the lane closures at the George Washington Bridge,” she says.
Meanwhile, some say the scandal is continuing unabated. Elnardo Webster no longer personally represents the Watershed, which is still in the process of being dismantled, but last month his law firm, which until last week was still doing work for the agency, filed a successful lawsuit seeking over half a million dollars in legal fees to continue the “dissolution process.”
“It’s April 2014 and the money is still flowing,” O’Flaherty says. As for Booker, he may be “infuriated,” but not enough, it appears, to demand that the spigot to his political allies be shut off.
— Eliana Johnson is media editor of National Review Online.