Politics & Policy

Cory Booker’s Problematic Tax Returns

Newark mayor Cory Booker, who hopes to be New Jersey’s next senator, claims to have “released” 15 years’ worth of his tax returns in what his campaign trumpeted as a “historic gesture of transparency.” Perhaps the mayor should consult T-Bone or another of his possibly imaginary felonious friends about the definition of “release.” The mayor’s tax returns remain locked up, though they were allowed a conjugal visit with the press: Nine reporters, all hand-picked by the Booker campaign, were permitted three hours with the documents in a hotel ballroom in Newark — no photographs, no copies, no removing documents from the room, resulting in what one of the reporters present described as a mad scramble to record information as the clock ticked to zero.

Perhaps there’s a reason the Booker team didn’t want anybody looking too closely. Given his political celebrity, the $1.3 million Booker has made on the speaking circuit comes as no surprise. But the tax returns also raise the possibility that Booker, who rode into office pledging to cleanse the city of the corruption of its old political bosses, has used the mayoralty for personal gain.  

The confidential separation agreement Booker struck with his old law firm, Trenk DiPasquale, netted him nearly $700,000. At the same time, his old firm was raking in more than $2 million from two city agencies — the Newark Watershed and the Newark Housing Authority. His claims to transparency notwithstanding, Booker steadfastly refuses to disclose the terms of the agreement he struck with the firm. Reporters have requested it and been rejected, and now Booker’s Republican challenger, Steve Lonegan, is demanding to see it. He is right to do so.

Booker seems to be unclear about the definition of “transparency.” But then, he is unclear about a great many things, including the nature of the payments he received from the firm. For three years running, he claimed on his tax returns that he had “materially participated in the operation” of the firm: If true, that would present a clear conflict of interest. At the same time, Booker spokesman Kevin Griffis told the New York Post that Booker was not required to detail the payments on his Senate financial-disclosure form because the money was a return on equity rather than “compensation for services rendered.” If that is true, then the mayor’s tax returns are fraudulent. In any case, Griffis’s account directly contradicts the sworn statements on Booker’s tax returns; Griffis now claims that the tax returns were filled out improperly. Stranger still, Booker raced to amend his financial-disclosure form to add the law firm’s 2012 payment, saying it had been “inadvertently omitted” — even though his spokesman maintains he is not obliged to disclose it.

If the mayor of Newark is functioning as an employee of a law firm that does millions of dollars of business with the city, then Booker has violated fundamental ethical standards. If he is not, then he made false statements on his tax returns. Neither option is especially appealing, but New Jersey voters have a right to know exactly what kind of unethical Cory Booker is.

Also worrisome are Booker’s connections to city agencies that hired his former colleagues at Trenk DiPasquale. As mayor, Booker has nominal control over all city agencies, but his relationships with the Watershed and the Housing Authority are particularly cozy. Booker personally sat on the board of the Newark Watershed, which now is being dissolved in the wake of investigations by the state comptroller and the Newark Star-Ledger that revealed a startling lack of oversight and out-of-control spending. Until recently, the agency retained the mayor’s former campaign treasurer and legal colleague, Elnardo Webster, as its general counsel. During Booker’s tenure, the Watershed’s expenditures increased astronomically, which worked out well for the mayor’s pals. “The largest contract was the general counsel contract to the firm of Trenk, DiPasquale, Webster, Della Fera, and Sodono, of West Orange,” writes Dan Flaherty, a professor of economics at Columbia University, in a report he issued on the Watershed’s financial shenanigans, aptly titled “Hog Wild.” “Elnardo J. Webster II was the highest paid partner for this work.” When the Newark city council formed a committee to investigate the Watershed’s profligate spending, Webster, on the taxpayer’s dime, went to court to file an injunction to shut it down.

While Webster was receiving generous payments from the city and Booker was receiving equally generous payments from his old firm, Webster also received a 30-year tax abatement on an office building he owns in Newark. When the Star-Ledger called to ask Webster about his good fortune, they got a return call — from the mayor’s office, demanding to know why those inquiries were being made.

At the Newark Housing Authority, Modia Butler serves as the chairman of the board while also serving as the mayor’s chief of staff. The Housing Authority also has turned to the mayor’s law firm for advice, spending more than $1.2 million on Trenk DiPasquale’s services.

In response to calls for Booker to release his secret agreement with Trenk DiPasquale, his campaign has merely claimed that the mayor “set the bar for transparency this election.” That is not true. (Lonegan, Booker’s opponent, has actually released the past three years’ worth of his tax returns.) But even if it were, it would be nothing to brag about.

Cory Booker owes the people of New Jersey a full and open accounting of his relationship with Trenk DiPasquale. He probably owes the IRS one, too. As for that “historic gesture of transparency,” it is a gesture, all right: a not-very-polite one in the faces of New Jersey’s voters. 


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