“Like Sands Through The Hourglass”: Gov. Christie’s Wife Works At Firm Managing State Pension Funds
Last week, The Nation published my piece exploring how Gov. Chris Christie — a champion of so-called “pension reform” — has presided over a massive transfer of state retiree money into the hands of hedge funds and other high-fee investment managers, including to Wall Street titans who have boosted the governor’s political career with hefty donations to the Republican Governors Association.
As part the piece, we noted that this shift came as perhaps somewhat of a surprise to those who followed Christie’s first campaign for statewide office. In 2009, Christie and his surrogates bashed Democratic Governor Jon Corzine for the same practice of moving large amounts of pension money into so-called “alternative investment” managers. “Jon Corzine made it easier for his friends from Wall Street to manage New Jersey’s pension fund,” blasted a “Christie for Governor” press release. In fact, Christie suggested that Corzine’s personal investments with a fund that had won New Jersey pension contracts reeked of corruption — and demanded that he divest.
Well, it appears that Christie’s wife, Mary Pat Christie, also has a financial interest in a firm that invests money on behalf of New Jersey retirees. Mary Pat joined the alternative investment firm Angelo Gordon in 2012, where “she works full time on strategic planning and marketing, focusing on bank debt and distressed funds,” according to Bloomberg. Disclosures from the New Jersey Division of Investment, the agency that oversees the state pension, reveal that Angelo Gordon continues to manage money on behalf of the fund, though they have wound down some of the investments over the years. The particular fund is called “AG Garden Partners,” one of many investment vehicles owned by Angelo Gordon.
A request for comment from the Division of Investment and to Angelo Gordon has not been answered.
Now, the contact between the New Jersey pension plan and Angelo Gordon began in 2006, well before Christie became governor. But as the Christie campaign, including then-campaign surrogate Bill Baroni, charged, such potential conflicts of interest opens ”up the door to the perception of politics.”
Will Mary Pat Christie’s employment with Angelo Gordon influence continued investments from the New Jersey pension fund into her firm?
Another question this relationship raises is, how will the many hedge fund and private equity business deals at stake in 2014 influence Christie’s chairmanship of the Republican Governors Association, the organization responsible for ensuring Republicans win gubernatorial races. In most states, governors have wide latitude in managing how state pension funds are run. Angelo Gordon manages pension money for the Nebraska and New Mexico state plans — two states where Republicans are hoping to retain power, and where Christie and the RGA are likely to play a role.
By: Lee Fang, Republic Report, March 24, 2014
“Oh, What A Tangled Web We Weave”: Christie’s Exoneration By His Own Lawyers Is Even More Conflicted Than It Looks
Did you hear? Chris Christie has been cleared of any wrongdoing in the three-day lane closures at the George Washington Bridge in September launched by his aides and Port Authority appointees as retaliation against the Democratic mayor of Fort Lee. So, who issued the exoneration—was it the legislative committee that’s been looking into the closures? Or the U.S. Attorney for New Jersey who is also investigating them?
No, it was Christie’s own lawyers. The New York Times reports:
With his office suddenly engulfed in scandal over lane closings at the George Washington Bridge, Gov. Chris Christie of New Jersey two months ago summoned a pair of top defense lawyers from an elite law firm to the State House and asked them to undertake an extensive review of what had gone wrong.
Now, after 70 interviews and at least $1 million in legal fees to be paid by state taxpayers, that review is set to be released, and according to people with firsthand knowledge of the inquiry, it has uncovered no evidence that the governor was involved in the plotting or directing of the lane closings…It will be viewed with intense skepticism, not only because it was commissioned by the governor but also because the firm conducting it, Gibson Dunn & Crutcher, has close ties to the Christie administration and the firm’s lawyers were unable to interview three principal players in the shutdowns, including Bridget Anne Kelly, the governor’s former deputy chief of staff.
But lawyers from the team who led the inquiry are prepared to vigorously defend their work, which they described as an unfettered look into the inner workings of an administration known to prize loyalty and privacy.
Lower down in the article, it notes: “Gibson Dunn has worked for the administration in the past, and Mr. Christie is friendly with a top partner there, Debra Wong Yang, who like him was appointed United States attorney by President George W. Bush in the early 2000s.”
That’s putting it mildly. What the article does not note is that Debra Wong Yang was one of six lawyers who received highly lucrative contracts from then-U.S. Attorney Chris Christie in 2007 to monitor a half-dozen medical device makers as part of a “deferred prosecution agreement” he reached with the companies after an inquiry into allegedly fraudulent billing practices. The contract that got the most attention when they were inadvertently disclosed in 2008 was the one awarded to John Ashcroft, who had been Attorney General at the time of Christie’s selection as U.S. Attorney in 2001, and who received between $28 million and $52 million for 18 months of work. Another contract that drew scrutiny at the time was the one that went to the former U.S. Attorney for Manhattan, whose office had just two years earlier opted not to bring criminal charges against Christie’s brother, a Wall Street trader who had been named in a civil SEC complaint but, unlike most of the others in the complaint, had not been hit with criminal charges as well. Both that contract and the Ashcroft one were the target of questioning by a House committee that called down Christie in 2009; the contracts also prompted a revision of Department of Justice guidelines for deferred prosecution agreements.
Now, two of the other contracts have come under more scrutiny. One, worth $10 million, had gone to David Samson, a former state attorney general whom Christie went on to name chairman of the Port Authority and who is now the subject of several federal subpoenas himself as the lane closures investigation broadens out into other matters involving the Port Authority.
And another, the amount of which has never been disclosed, went to Yang, who had in 2002 become the first ever Asian-American woman to be named U.S. Attorney. Her selection as a corporate monitor by Christie had raised fewer questions than the others, beyond the fact that she was a loyal Republican with close ties to Alberto Gonzales, who succeeded Ashcroft as attorney general. But as the Star-Ledger of Newark recently noted, Yang had in 2011 introduced Christie at a 2011 event in New York in glowing terms that suggested their association went beyond being merely fellow former prosecutors, describing him as her “very dear friend” and “truly the real deal.”*
And now Christie has hired her firm, where she is co-chair of the white-collar defense and investigations practice group, to lead the taxpayer-funded inquiry into his administration. In fact, Yang is part of the team working on the case, according to Randy Mastro, the former deputy mayor under Rudy Giuliani who is leading the team for Gibson Dunn.
Neither Yang nor Christie’s spokesman responded to requests for comment today, but Mastro previously dismissed concerns about any conflict between Yang’s receipt of the lucrative contract from Christie and her work on the team “investigating” his administration. “The work that Deb Yang performed years ago for a private company is completely unrelated to the work now being done in New Jersey today,” Mastro told the Star-Ledger. “Her reputation for integrity and independence is unparalleled. She was one of the most respected US Attorneys in the country and, before that, a distinguished California judge.”
This of course sidesteps the question: the work was indeed paid for by a “private company,” a subsidiary of Johnson & Johnson. But Yang got the job from Christie.
It should be noted that Yang’s history with Christie is only one of a tangle of associations and potential conflicts among lawyers and clients in the legal fallout from the lane closure scandal. Mastro, the lead Gibson Dunn lawyer representing Christie, had until recently been representing the Port Authority on a case challenging its toll increases. Port Authority Chairman Samson’s lawyer is Michael Chertoff, the former secretary of Homeland Security who is a predecessor of Christie’s as U.S. Attorney for New Jersey.
Most notable, perhaps, is the representation for Bridget Anne Kelly, the former Christie aide who issued the “time for some traffic problems in Fort Lee” order and whose testimony, if any, will be so crucial to the investigation. She first hired as her lawyer Walter Timpone, whom Christie had selected as his chief deputy as U.S. Attorney before having to choose someone else when it emerged that Timpone had not been candid about a visit he paid to the home of then-senator Robert Torricelli, who was under federal surveillance at the time as part of an investigation into possible campaign finance abuses and had played a key role in signing off on Christie’s nomination as U.S. Attorney. Soon after Kelly hired Timpone, he stepped back from the case because of a potential conflict, his role as the Christie-appointed vice chairman of the state’s Election Law Enforcement Commission. So Kelly instead turned to Michael Critchley, one of the most top (and reputedly most expensive) defense lawyers in the state, who has done a lot of representation of George Norcross, the powerful Democratic boss from South Jersey with whom Christie has enjoyed a mutually beneficial alliance. In fact, it was Critchley who set up a legendary 2003 dinner in New Brunswick between Christie and Norcross, at a time when Norcross was under state investigation—an investigation that was later referred to Christie but he decided to pass on.
In other words, a lawyer with very close ties to George Norcross, who already has considerable leverage over Chris Christie given Christie’s reliance on him for providing Democratic votes in the legislature, is now advising Bridget Kelly on whether she should or should not cooperate with prosecutors from Chris Christie’s former office in their investigation into what really happened inside Christie’s administration in the matter of the retaliatory lane closures.
“Oh, what a tangled web we weave”—Sir Walter Scott wouldn’t even know where to start with this one.
*Addendum, 5 p.m.: As Matt Katz at WNYC has reported, Yang also contributed $500 to the fund to pay for Christie’s second inauguration this past January, just before she and her firm were hired for the taxpayer-funded job of representing him.
By: Alex MacGillis, The New Republic, March 24, 2014
“Christie’s Latest Scandal”: How He Sold Public Pensions To Wall Street Donors
The media would label it Pensiongate — if they were interested.
When Governor Chris Christie (R-NJ) cruised to his first statewide election victory in 2009, his promise to responsibly manage the state’s pensions helped deliver him the governor’s mansion. It’s Democrats like Governor Jon Corzine who are playing fast and loose with public pensions, the Christie campaign argued. “Jon Corzine made it easier for his friends from Wall Street to manage New Jersey’s pension fund,” read a campaign press release.
But soon after Christie took the reins as governor, his skepticism of the relationship between Wall Street and pension funds quickly evaporated. Hedge funds managed by influential Republican donors soon landed enormous contracts to manage public pensions. Friends of The Governor benefited handsomely.
As the Investigative Fund’s Lee Fang reports, the controversy centers around Paul Singer, the billionaire founder of Elliott Associates. The month prior to Christie’s first 2009 gubernatorial victory, Singer donated $100,000 to the Republican Governors Association, a fervent supporter of Christie’s election bid. After his election, and despite his campaign rhetoric to the contrary, Christie suggested that Elliot Associates be given a contract to manage $200 million in public pensions. In 2012, the firm was indeed granted the contract.
The result of this investment was large payoffs for the hedge fund, while New Jersey public workers saw their pension returns fall below average. In 2013, the median pension return was 16.1 percent; in New Jersey, the pension program delivered a return of just 11.79 percent.
But because of fines and fees associated with a hedge fund investment, it was a lucrative business for managers like Singer. As Fang reports, Singer benefited greatly from the deal: Chris Tobe, a former trustee of Kentucky Retirement Systems, estimates that in 2013 alone, Elliot Associates collected close to $8.6 million in fees from the New Jersey public pension fund.
And Singer, it seems, is not one to let a favor go unreturned. After Christie became chair of the Republican Governors Association in 2013, Singer donated $1.25 million to the group.
Interestingly, Singer’s profitable deals with politicians do not start and stop with the embattled Governor Christie. A recent report in The Hill shows former Rep. Connie Mack (R-FL) may also have used his office to aid the notable Republican donor. Mack, now a lobbyist, has registered to lobby for American Task Force Argentina, a group that seeks to “hold medium and wealthy nations accountable for the repayment of their debts to U.S. creditors and to uphold U.S. court judgments against these same nations.” Holding impoverished South American nations accountable for their debt to American companies is an initiative Mack touted during his time in office.
As it happens, Elliot Associates is also a member of Task Force Argentina. According to The Hill, employees of Elliot management were the second largest contributor to Mack’s failed 2012 Senate run. Furthermore, another hedge fund linked to Singer is owed $1.6 billion by the Argentine government.
By: David Feuerherd, the National Memo, March 20, 2014
“The Chris Christie Scandal Just Got Worse”: Amid New Gale Force Winds, Will Christie Be ‘Stronger Than The Storm’?
When there is still snow on the ground past St. Patrick’s Day, thoughts turn longingly to the beach. Say, the Jersey Shore. Which in turn brings to mind the extreme yet comically ham-handed efforts of Governor Chris Christie’s administration to keep secret the process that led to the controversial selection exactly one year ago of a firm to run a $25 million ad campaign for last summer’s tourist season touting the Shore’s comeback from Superstorm Sandy.
As you may recall, Christie came under criticism during his reelection campaign last summer for having inserted himself and his family into the rousing “Stronger than the Storm” ads encouraging tourists to come back to the Jersey Shore. The ads had been funded by federal Sandy recovery aid, and it seemed eyebrow-raising, at the least, for them to feature beaming pictures of a governor in the middle of a reelection campaign, rather than just your average smiling New Jerseyans. The eyebrows shot up quite a bit further when it emerged that the firm that had gotten the job after proposing to feature Christie in its ads, public relations giant MWW, had bid at a much higher price—$4.7 million versus $2.5 million—than a well-regarded New Jersey ad firm that had proposed ads that did not feature the governor. Making matters even more interesting was that the award had been made by a selection committee led by Christie’s very close longtime aide, Michele Brown, whom Christie appointed to run the New Jersey Economic Development Authority, a $225,000 post. Also noteworthy was that MWW had hired just a few months earlier the former executive director of the influential Burlington County Republican Party. (It was also hard not to notice that MWW’s founder and CEO, Michael Kempner, who is normally a loyal Democratic donor, was not writing any big checks to Barbara Buono, Christie’s opponent, last year.) New Jersey congressman Frank Pallone, a Democrat, in January asked the inspector general of the U.S. Department of Housing and Urban Development to audit the awarding of the job to make sure federal contracting rules were followed.
Further raising the intrigue around the “Stronger than the Storm” ads has been the lengths to which the Christie administration has gone to keep secret the relevant documentation. When Shannon Morris, the president of the New Jersey company, Sigma Group, that came in second to MWW, last summer requested the state’s evaluations of the proposals to better understand why her firm had lost, she received almost nothing in response. “Typically when you have a state-run bid like that you have…it fully transparent, it’s all posted online,” Morris told me. “There was nothing like that in this case.” When Asbury Park Press reporter Bob Jordan made an open-records request for the scoresheets that the selection committee members filled out to rank the ad proposals, the state returned to him in January the scoresheets—with the names of the committee members redacted.
Knowing this, I was heartened to find that my own request for the scoresheets was returned to me later in January with the names of the committee members fully disclosed. I planned to include details from the scoresheets in a cover story on Christie that I was in the process of writing, but the piece’s main thrust veered away from the Sandy ads, and I decided to revisit that issue later. This week, when I went to do just that, I discovered that the Internet link the Economic Development Authority had given me for the reams of documents I had requested was no longer operable. I asked that the documents be resent. They were, and lo, this time the names of the committee members were redacted from the scoresheets. When I asked the authority’s legal officer, Shane McDougall, about the discrepancy, he replied that “if the original documents had been disseminated without these redactions, it was done inadvertently.” He added that the redaction of names was done “on the basis of the advisory, consultative, and deliberative privilege, the expectation of privacy and the protection of the competitive bidding process.”
This retroactive redaction might have been maddening were it not so ineffective: I had seen enough between what had been sent before and what was in the newly redacted documents to piece together the story behind the evaluation process. Put simply, there was no contest whatsoever between MWW on the one hand and Sigma Group and the two other finalists on the other hand. In fact, reading the scoresheets is a bit like looking at the scores of the East Bloc figure skating judges at the Olympics during the height of the Cold War.
The average score the six committee members gave MWW’s proposal, out of 1000 possible points, was 953. The average score for Sigma Group’s proposal was 718.
And as I had taken note of when I had first seen the unredacted scoresheets, the differential was the largest of all in the evaluation by Michele Brown, who has a very long history with Christie: she is a longtime close neighbor of his in Mendham Township, she traveled extensively with him when she worked alongside him in the U.S. Attorney’s Office, she received a $46,000 loan from him in 2007 that he failed to report on his income taxes, and she took the lead in screening open-records requests for his tenure as U.S. Attorney while he was campaigning for governor in 2009. In her new role as head of the Economic Development Authority, she was in charge of the selection committee for the Sandy ad. And she, more than anyone else on the committee, made sure to put MWW far ahead of the competition—she gave MWW a score of 970, above even the high average score it received overall, and she gave Sigma Group only 590, by far its lowest score. (A spokesman at the Economic Development Authority did not respond to a request for comment from Brown.)
Matching the other scoresheets to the committee members was not exactly a forensic challenge. One of the sheets had an evaluator’s name accidentally left unredacted—Jackie Kemery, a procurement analyst in the state’s Department of the Treasury, who gave MWW a score of 940 and Sigma a score of 750—and it required only rudimentary handwriting analysis to match with a high degree of confidence the other scoresheets with the handwriting on other, unredacted paperwork filled out by the committee members that had been included in records I received. (The other committee members included Maureen Hassett, senior vice president for finance and development at the Economic Development Authority; Sara Maffey-Duncan, deputy director of the authority’s Office of Recovery; Melissa Orsen, chief of staff in the Department of State within the Lieutenant Governor’s office; and Gabrielle Gallagher, director of legal and regulatory affairs at the Department of Community Affairs, which oversees state aid to towns and cities.)
Which raises the question: why in the world was the Christie administration going to such lengths to obscure such basic facts about the selection process as which committee members awarded which sky-high scores to MWW? Morris, the head of Sigma Group, has a pretty good hunch: that the administration is doing anything it can to cover up the fact that the selection process had been essentially rigged from the get-go, which is the thought that came to her when she got to see the proposal from MWW. MWW and the ad firm it was partnering with, Brushfire, had less experience in this realm than did Sigma and the big national ad firm it partnered with, Weber Shandwick; whereas Weber Shandwick had produced comeback ads for New Orleans following Hurricane Katrina, MWW’s application cited Brushfire’s experience making ads for Minwax, Thompson’s Water Seal and DeLonghi cappuccino machines. Given that contrast, Morris thought “we had a slam dunk here” to get the job.
But then she saw MWW’s proposal, and it was far, far beyond what her firm had managed to put together in the four days they’d been given to submit a proposal. Whereas Sigma had basic storyboards for the ads it was proposing, MWW had “fully conceptualized” apps, video games, and other digital components on top of its conventional ad proposal. “It was like looking at a 10-day term paper versus a 150-page book,” she said. “I don’t know how you do that unless someone had a head start.” (MWW did not respond to a request for comment.)
As it happens, Morris did get one communication back from Michele Brown after her repeated attempts to get an explanation for being passed over: Brown sent Morris a form letter congratulating her for being named one of New Jersey’s “Best 50 Women in Business.” The letter urged Morris to reach out to Brown if she ever needed any assistance, so Morris wrote her asking again for an explanation of the contract award.
She never heard back.
By: Alec MacGinnis, The New Republic, March 18, 2014
“Chris Christie’s Nightmare Worsens”: Walls Caving In Amid New Revelations And Poll
While reporters pondered the meaning of of former Chris Christie aide Bridget Kelly appearing in court personally to fight subpoenas for her email and documents – Why would Kelly show up at all? Might she eventually talk? Why is she wearing a black cardigan and pearls? — the bad news for Christie continued. A Des Moines Register poll shows that Iowa voters are paying attention to Christie’s bridge scandal woes, with 57 percent disapproving of the way he’s handled it and only 25 percent approving.
Meanwhile, back in New Jersey, the damage is even worse. Christie’s approval numbers have flipped in the new Fairleigh Dickinson poll: the man who won reelection in a landslide in November has seen his disapproval ratings spike, and for the first time since his first election, more New Jersey voters disapprove than approve of the job he’s doing as governor. A Rutgers/Eagleton poll also released Tuesday found that trust in Christie has cratered, too: 23 percent of those polled said the word “trustworthy” could be used to describe Christie “very well;” that’s down 20 percent just since October.
In some ways, the Iowa news doesn’t matter much to Christie: it was never going to be a strong Christie state in the 2016 GOP nominating process, since social conservatives dominate its first-in-the-nation caucuses. Christie’s only hope was mobilizing Republican-leaning independents to join the caucuses, a heavy lift in any scenario.
But now even that path seems closed to Christie, as Iowa Independents disapprove of Christie’s bridge-scandal handling 60-20. Among registered Republicans, 47 percent disapprove while 34 percent say he’s doing all right. “If Governor Christie runs, he may choose to follow John McCain and Rudy Giuliani’s path and skip Iowa,” a top Iowa GOP strategist told the Des Moines Register. That worked for McCain, temporarily anyway, but not at all for Giuliani, who was once the towering Christie figure on the GOP horizon – a blue-state Republican tough guy beloved by the media — whose presidential campaign flame-out was a remarkable display of hubris and incompetence.
Still, the most damaging developments for Christie are closer to home. A New York Times investigation published Tuesday shows he’d turned the Port Authority “into a de facto political operation” even before Kelly declared it was “time for some traffic problems in Fort Lee.” Christie used big Port Authority projects to win endorsement from Democrats and union leaders, and in a ghoulish touch, even handed out wreckage from the World Trade Center to reward mayors who backed him. Just last week a WNYC-NJ Spotlight investigation revealed that his administration mishandled $25 million in Hurricane Sandy grants, giving huge awards where there was no storm damage, stiffing places with huge flooding problems while, yes, underpaying the city of Hoboken by about $700,000, as Mayor Dawn Zimmer has alleged.
All of this corruption has been hiding in plain sight, but the bridge scandal suddenly helped people connect the dots.
Christie continues to insist he’s putting the mess behind him. He took his son to watch New York Mets spring training baseball over the weekend, then showed up at another local town hall Tuesday, though he hasn’t taken questions from the media since his two-hour pity party in early January. Christie is still being covered like a top-tier 2016 candidate, which, given his competition, is somewhat defensible, I suppose. So it’s hard to ignore the bad Iowa news for Christie, and yet it’s irrelevant. Christie’s national career is over, and his tenure in Trenton is endangered as well.
Back to Bridget Kelly: She may win this round in court, but only because it’s become clear that she has a reasonable fear of federal prosecution for her role in the bridge lane closures. Until this round, committee counsel Reid Schar had denied that Kelly might be incriminating herself if she shared the documents the committee wants. In court Tuesday, he acknowledged that risk but insisted his subpoena was narrow enough to protect Kelly’s Fifth Amendment rights.
But if state investigators don’t get Kelly’s documents, federal prosecutors are likely to. I read Kelly’s black-cardigan-and-pearls appearance in court today as designed to remind everyone that she sacrificed her personal and professional life for Christie, and her reward to date has been enormous legal bills and lots of time with lawyers. It’s hard for me to imagine Kelly taking the fall for her ex-boss. But either way, voters are holding her ex-boss accountable.
By: Joan Walsh, Editor at Large, Salon, March 11, 2014
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