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NJ companies tied to Norcross on track for tax breaks after probe


When Phil Murphy hired a team of high-powered lawyers to investigate how the state doled out tax breaks, the move was viewed as a declaration of war on the powerful South Jersey political machine led by George E. Norcross III and his longtime friend Senate President Stephen Sweeney. 

The lawyers’ hearings, conducted in public with the feel of a courtroom trial, revealed allegations of political favoritism and, perhaps, even criminal behavior. Their first report zeroed in on Camden companies tied to Norcross, who has wielded tremendous political influence for decades but faced the prospect of diminished power if Murphy’s attorneys uncovered wrongdoing.

But three years and nearly $14 million later, no criminal charge has been made public against any of the five companies tied to Norcross. 

Three of them have been certified by the state for their tax breaks, though they have not gotten the required certification for payouts, which total nearly $250 million overall. A fourth is receiving its credits. And a Superior Court judge ruled last month that the fifth business — the nuclear manufacturing company Holtec International — should receive its award. The state is appealing the decision.   

Holtec was awarded the state’s largest tax break, $260 million over 10 years, before the legal dispute. 

To allies of Norcross, who argued in an unsuccessful lawsuit that the Murphy administration targeted the Camden businesses, the results confirm there was no wrongdoing by the companies that applied for tax breaks. One South Jersey insider familiar with the matter described the investigative panel’s work as a “great PR campaign that they ran, mostly funded by the taxpayers.” 

The Murphy administration has always denied political motivations in creating the Task Force on EDA’s Tax Incentives and said its work led to much-needed reforms at the Economic Development Authority, the agency in charge of vetting and awarding tax breaks.

The agency has tightened its controls and clawed back $350 million from companies, which “is a very real savings to the taxpayers,” Chief Executive Officer Tim Sullivan said in an interview. “And that number will grow.” A comptroller’s audit earlier this month said the “EDA has made substantial progress” since its 2019 report that prompted Murphy to empanel the task force. 

“While we are disappointed in the decision on Holtec, the serious problems that the Task Force on EDA Incentives revealed and investigated went far beyond this entity,” said Michael Zhadanovsky, a spokesman for Murphy. “The task force’s work shined light on a number of very troubling deficiencies in the incentive program passed under the prior administration.”

Emphasis on South Jersey

The focus on Camden companies affiliated with Norcross always loomed over the task force’s work.

Murphy hired the team of lawyers — led by Jim Walden and Pablo Quinones, former federal prosecutors in New York, and Ronald Chen, a former Rutgers Law School dean — in January 2019, after the state comptroller’s audit showing loose oversight and management of tax incentives.

Murphy took office a year earlier critical of the tax break programs, and he’d gotten off to a rocky start with Sweeney and Norcross. Murphy’s team of attorneys, armed with subpoena power, seemed to critics of Norcross to represent the best opportunity for a political newcomer to weaken the South Jersey machine. 

As a wealthy insurance broker with a stable of loyal Democrats in Trenton, Norcross has for many years been considered the most powerful unelected official in New Jersey politics — regardless of who the governor was.

He and his childhood friend Sweeney famously cut deals with Republican Gov. Chris Christie in ways they said helped revitalize the Camden area. 

But the crafting and awarding of the tax incentives under Christie struck progressives as the prime example of Trenton deal-making to benefit the politically connected.

Related: NJ tax breaks panel: ‘Special interests’ exerted influence, and then they benefited

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Lawyers for Parker McCay, the South Jersey law firm by run Norcross’ brother Phil Norcross, had “extraordinary influence” in the legislation creating the incentive programs, according to a ProPublica and WNYC series that also showed that companies connected to Norcross received $1.1 billion in tax breaks.

Those companies are: Conner Strong & Buckelew, George Norcross’ insurance firm; Cooper University Health Care; Holtec International; the Michaels Organization; and the shipping company NFI. 

The task force recommended in July 2020 that the EDA freeze the incentive awards for those organizations and seven others, totaling $578 million. It also made unspecified criminal referrals.

In public hearings, some of the Camden companies seemed to have taken advantage of programs administered by an agency with “a culture of getting to yes,” as the task force put it.

Cooper and Holtec came under considerable scrutiny. In one six-hour hearing, the task force focused heavily on whether Cooper, a mainstay of Camden, was seriously considering moving across the Delaware River to Philadelphia, which would put hundreds of jobs at risk of leaving New Jersey. Norcross is the chairman of Cooper’s board of trustees.

In that same hearing, the task force also homed in on apparent issues with the incentive applications of Conner Strong & Buckelew, the Michaels Organization and NFI. All three companies submitted letters of intent to move to Philadelphia. NFI and the Michaels Organization had been approved for $160 million in tax incentives in an agreement with Norcross’ insurance firm to share office space in Camden.

Incentives likely to be paid

Conner Strong, the Michaels Organization and NFI were later certified by the EDA for their tax awards but not the annual certification for payouts. Last year the agency approved Cooper’s tax credits and, in a letter obtained by the Philadelphia Inquirer, said it was doing so “given the time that has elapsed, and the lack of any further developments” on the allegations against it. Cooper declined to comment.

A spokesman for the three other companies said they and their owners have invested hundreds of millions of dollars in Camden’s future, including nearly $300 million in their joint headquarters building, brought hundreds of jobs to the city and hired Camden residents.

“We are pleased that the state has agreed we have met our commitments and we look forward to being part of Camden’s continued renaissance,” the spokesman, Dan Fee, said in a statement.

The task force spent time scrutinizing Holtec at another hearing. The company had been prohibited from doing any federal business for 60 days in 2010 after a money-funneling scheme, but its CEO, Kris Singh, certified on its application that it hadn’t been barred from state or federal contracts.

Holtec sued the EDA after the suspension of its tax credits. Last month a Superior Court judge rejected the EDA’s arguments that it could revoke Holtec’s incentives and ordered the agency to pay the annual award of $26 million. The state’s application for incentives was “ambiguous,” Judge Robert Lougy said, and Holtec did not make disqualifying misrepresentations. 

Holtec deferred to its statement after the court ruling, saying it was pleased with the decision and it looks forward to working with the state and Camden. The EDA is appealing the decision.

Barring a successful appeal, four of the five remaining Camden businesses are on track to get the awards despite the task force’s investigation, since Cooper is already approved for its credits. That does not render the panel’s work ineffective, said Sue Altman, director of the New Jersey Working Families advocacy group and one of the most vocal critics of Norcross and the tax breaks. 

She said she does not agree with the new tax incentives signed by Murphy last year but is happy with the oversight measures the EDA has put in place. 

“Do I wish the outcome was different? Of course,” Altman said, referring to the companies in Camden. “But I am pleased that it sparked a conversation and it gave people a voice who were previously unheard.”

Dustin Racioppi is a reporter in the New Jersey Statehouse. For unlimited access to his work covering New Jersey’s governor and political power structure, please subscribe or activate your digital account today.


Twitter: @dracioppi 

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