A Few Observations on the AshBritt Affair

[Update: 3/29/13 – this Star Ledger story confims my analysis of the reimbursement risk issue – but why didn’t the Star Ledger report that they had to file an OPRA to get the Lauternberg letter to Christie? As written, it makes it seem like Lautenberg or FEMA leaked it for political reasons, but the truth is that the Gov. is stonewalling legislators and media:

FEMA warned Christie administration that AshBritt contract could jeopardize federal funding

TRENTON — The Federal Emergency Management Agency warned the Christie administration just days after Hurricane Sandy that its decision to award a no-bid contract to a politically connected firm to haul away debris could jeopardize maximum federal reimbursement for towns, The Star-Ledger has learned.

end update]

Charlie Stile’s column today on the AshBritt hearing surprised me and because I listened to that hearing, it prompts me to respond, see:  AshBritt’s CEO didn’t need to back down from Democrats.

This column was a surprise, especially coming from a newspaper with a rich tradition and stellar record on investigating, exposing, and slamming political corruption (from the Whitman “Open for Business” series to Encap to Xanadu).

Charlie missed a few things, so I thought I’d weigh in.

1. The headline and premise of the piece may be Trenton State House conventional wisdom, but it is just flat out wrong.

As Charlie notes, Ashbritt CEO Perkins was offensive in his disrespectful and arrogant attack on Senator Buono.

But, Charlie doesn’t mention the fact that Senator Weinberg took him to task for it and that Perkins apologized. Profusely.

This apology flat out contradicts the headline, but is a critically important point for at least two reasons:

First, with respect to the AshBritt contract, all that arrogance and attack cuts no ice with FEMA or the Obama Administration, who will make the reimbursement decisions.

FEMA is on record denying Perkins’ claim that FEMA “blessed” the contract. The FEMA regulations provide a basis to deny full reimbursement. There are facts out there right now that suggest that prices were not reasonable. Politically, the Obama people could play hardball.

Perkins knows all this and was whistling past the graveyard.

His assertion that there was “zero chance” that FEMA would not fully reimburse municipalities was flat out contradicted by his later rejection of a question about whether AshBritt would have been willing to negotiate and indemnify towns for this risk. If the risk were truly zero, why would AshBritt refuse to assume it?  Again, something Charlie does not report.

Second, in a larger political sense, the Christie macho attack dog style is not going to play well in the campaign with Buono, an attractive and articulate woman (think of the dynamic in the Massachusetts US Senate race: Scott Brown and the winner, Elizabeth Warren. NJ is a lot more like Massachusetts culturally and politically than the Christie/Perkins faux macho world).

The old boy sexism reeks and the public – not just women – will see right through it.

So, Mr. Perkins’ attacks foreshadow a losing campaign style, should Christie continue down the Christie Demagogue path.

2. I have been writing that the AshBritt scandal is just the tip of the iceburg of the real Sandy story.

Had Charlie been listening carefully to the opening statement by his paper’s hometown Senator, Senator Gordon, he would have seen the contours of this larger scandal – i.e. the LACK OF PREPARATION.

Of course, that’s a complex policy oriented story that’s difficult to fit in a State House political column, but there are many more shoes to drop on incompetence in high places. The NJ Transit story is just one of many that could be written. There are skeletons in lots of closets. 

3. Charlie’s failure to condemn AshBritt and Christie evasions and obfuscations is effectively rewarding Gov. Christie’s veil of secrecy and refusal to surrender documents and comply with Public Records laws.

At a time when the Legislative Brach is contemplating subpoena power, it is unusual, to say the least, for a newspaper to reward that kind of behavior by the Executive Branch.

4. Charlie missed several important issues that were brought out in the hearing.

Gov. Christie is trying desperately to divert attention from all that, with this remark:

“Nothing we found out was new,” Christie said. “Nobody brought out anything about any concerns about the quality of the work that was done.

But important new things WERE found.

Governor Christie has basically two arguments to support the high cost no bid AshBritt contact:

a) There was no time for bidding – the AshBritt no bid contract was necessary to get the job done quickly; (Perkins even falsely suggested that negotiation of contract terms was flat out prohibited by federal regulations); and

b) AshBritt experience with FEMA would guarantee that municipalities that signed on would be fully reimbursed.  In fact, Christie sold Ashbritt to towns on this reimbursement risk basis:

“The risk is, as I said at the time, if you don’t use one of these companies who are experienced in dealing with FEMA paperwork and the FEMA bureaucracy, that if you don’t make your request right, you’re not going to get reimbursed” Christie said.  ~~~ Asbury Park Press, 2/28/13 quoting Christie’s remarks of 2/5/13 at Union Beach

But the hearing testimony destroyed both those arguments:

a) The Gov. could have negotiated better contract terms. He is authorized to negotiate without bidding under NJ law. The Gov. could have gotten lower prices in the same amount of time it took to execute the AshBritt contract. Perkins was forced to concede this point by Assemblyman Burzichelli’s questioning, an important fact that again Charlie ignores; and

b) Because the “piggyback” on Connecticut contract is discouraged by FEMA rules and because the actual Connecticut contract costs have been shown to be significantly above actual market rates in NJ, towns now bear the risks of making up unreasonable AshBritt costs by not receiving full FEMA reimbursement.

5. Charlie drank Senator Kyrillos’ Kool-Aid on Christie’s lack of preparation.

Several Gulf and coastal states, with high storm vulnerability, have contracts and procedures in place BEFORE any storm hits. They are prepared.

Not NJ.

To cover up this lack of preparation, Kyrillos spun that there were 43 other states that do not have these contracts in place. Charlie repeats that feeble spin:

Yes, New Jersey might have saved money if it had competitively bid its own contract months, maybe even years ago, instead of “piggybacking” on the terms of Connecticut’s contract. But if New Jersey failed to take that precautionary step, it was not alone — 43 other states also do not have a statewide, storm-debris contract.

Does North Dakota need a coastal storm debris removal contract?

NJ has 120+ miles of highly vulnerable coast line. We’ve experienced devastating storms – most recently Irene – and experts have warned for years about our high vulnerability –  we are not like the land locked states, so Kyrillos is a fool.

If Charlie were listening closely to the testimony or had an ear for public policy, he would have heard AshBritt explain why NJ did not have a State contract in place.

Senator Weinberg asked AshBritt why their marketing strategy in NJ focused on local government contracts and why there was no Statewide contract in place.

AshBritt responded that some states (i.e. NJ) view this as a local responsibility, not a State responsibility.

Christie has outsourced or delegated these State responsibilities – that is a huge policy issue.

So, neither Christie nor AshBritt can be confident that this is anywhere near over. And they know it.

(especially if Senator Gordon and media follow up on the far more important issue of lack of preparation and flaws in response – issues Gordon outlined in is opening remarks.) 

PS – the allusion to Tom Petty’s classic was a hugely unfortunate way to fail to call out corruption:

Well I know what’s right, I got just one life
In a world that keeps on pushin’ me around
But I’ll stand my ground and I won’t back down