Did Senate President Sweeney and/or NJ Gov. Murphy Pressure Regulators To Keep Delaware LNG Export Terminal Under The Radar?

Follow the money and the finance trails

Who were the players behind the scenes that pushed this project through DRBC and DEP reviews, without disclosing the LNG aspects?

[Update below]

This is a followup to my previous post, where I explained the attempt to stealth a controversial LNG export terminal through the DRBC and NJ DEP regulatory review process.

DRBC themselves confirmed similar flaws in the DRBC review process, rejecting claims of a coverup:

“DRBC disagrees with that statement,” it said. “The public hearing on June 6 was adequately noticed, and DRBC has shared with the public all information submitted by the applicant and/or its contractors.”:

Upon approval, the DRBC exposed its narrow scope of review and total lack of consideration of climate impacts or energy policy: (Inquirer)

The commission said its review was confined to the impact of building the wharf and of dredging the Delaware River to 43 feet deep to connect with the main channel.

But, perhaps there are other reasons that can explain this huge blunder – other than pure regulatory failure, e.g.: political pressure on regulators by high level officials.

The Delaware Riverkeeper Network, who exposed the story, is alleging a coverup.

In fact, it appears that this could be another example of:

• Political Pressure on DEP – How The Game is Played

Here is what a quick Google found – given all the smoke, we strongly suspect fire.

To document what would be an Encap-level blaze of corruption, some intrepid journalist out there should file OPRA requests at DRBC and NJ DEP for all the regulatory review documents, i.e. the full administrative file and all communications regarding it (where are you Jeff Pillets!).

I) Longtime Sweeney involvement

Back on July 24, 2016, the Philadelphia Inquirer reported:

Plan to revive old South Jersey industrial site draws fans and fears

[…]

State and local leaders are confident the new port will be a positive presence in the township and county.

“This will be a big job generator,” said Senate President Stephen Sweeney, whose Third Legislative District includes Gibbstown, also known as Greenwich Township. “We’ve been working on this since 2005.”

Sweeney has already had his way with Murphy DEP Commissioner McCabe, so he knows her number (besides, he also had his own Senate staffer, Eric Wachter installed as McCabe DEP’s first Chief of Staff. But The latest DEP org chart indicates that Wachter has departed. He’s now in private sector.)

Given Sweeney’s many prior interventions at DEP, it is not a stretch to speculate that he twisted DEP arms on this proposed LNG terminal that he’s supported “since 2005”.

II.  Twisted Tales Of Wall Street Finance Could Link Gov. Murphy to the Project

Before the 2016 Philadelphia Inquirer story, back on 3/20/15, NJ.Com wrote a story with Sweeney praising Fortress Investment Group:

• Shuttered DuPont gunpowder plant to ‘rise from the ashes’, become newest port along Delaware River

State Sen. President Steve Sweeney led a press conference in Greenwich Township to announce the sale of the township’s former DuPont Repauno plant to Fortress Investment Group, which aims to turn the dormant 1,800-acre property into a port-related industrial park for imports and exports.

Sweeney goes out of his way to praise Fortress:

“That’s what they do, and they do it with private sector capital, not government money, which is the win-win-win for everybody,” said Sweeney, who declined to divulge the total value of the sale besides to say “It’s a lot of land.”

But Fortress did not provide a “win-win-win for everybody”. 

Fortress is a failed hedge fund – see:

• The Fall of Fortress  – The asset manager is selling itself at a premium, but it’s still trading at a fraction of its IPO price. The big losers? Us.

Fortress Investment Group, the struggling alternative-­investment firm that went public to great fanfare ten years ago but whose shares have since lost 74 percent of their market value. …

Kaplan says Fortress has been “terrible” for public investors.

They’ve ripped off public investors, including – as Sweeney might appreciate, given his political battles with NJ Teachers Unions – the Ohio Teacher’s Pension Fund:

Fortress was the first U.S. alternatives firm to go public, in 2007, starting a trend that burned red-hot, then quickly flamed out, proving over the past ten years that these deals have been a disaster for public shareholders, which include big mutual funds catering to both retail and institutional investors. Among Fortress’s shareholders: Allianz Asset Management, Fidelity Investments, Wellington Management Co., and even the State Teachers Retirement System of Ohio.

Now here’s where the links between Fortress and Gov. Murphy get murky and hypothetical, but good investigative journalism could connect these dots:

1. Veteran NJ environmental reporter Kirk Moore confirmed the story on the stealth LNG aspect of this project, where he also noted:

Delaware River Partners LLC, a subsidiary of New York City-based Fortress Investment Group.

2. Who is Fortress Investment Group? Wikipedia reports that they have strong links to Goldman Sachs:

When Fortress launched on the NYSE on February 9, 2007 with Goldman Sachs and Lehman Brothers underwriting the IPO.

3. More recently, Fortress was acquired by a politically wired firm called SoftBank Group Corp, as reported by Institutional Investor:

Last December business executives from around the globe made their way to Manhattan’s Trump Tower to meet with president-­elect Donald Trump. But few made as big of a splash as Masayoshi Son, head of SoftBank Group Corp., who had Trump crowing on Twitter about the Japanese mogul’s pledge to invest $50 billion in the U.S. and create 50,000 American jobs.

… on February 14 [2017], SoftBank agreed to pay $3.3 billion to buy Fortress Investment Group, the struggling alternative-­investment firm that went public to great fanfare ten years ago but whose shares have since lost 74 percent of their market value.

4. SoftBank has some interesting relationships:

Fortress’s $3.3 billion deal with SoftBank was driven by Rajeev Misra, a former Deutsche Bank derivatives expert who is now in charge of investment strategy.

Gov. Murphy was former US Ambassador to Germany, where, particularly given his Goldman Sachs finance background, one assumes he had relationships with Deutsche Bank “experts” on investment strategy.

5. Now look who Mr. Misra, who drove the Fortress deal, formed a relationship with and where that individual previously worked:

A few years ago Misra worked briefly at Fortress, where he developed a relationship with Edens and Peter Briger Jr., who cochair the board of directors. (Briger also has ties to Japan, where he previously worked for Goldman Sachs Group.)

6. Briger and Phil Murphy are both Goldman Sachs diaspora, see NY Times.

So, a few questions emerge:

Did Phil Murphy have any involvement with the Fortress deal when he was at Goldman?

Did Phil Murphy have any relationship with SoftBank or Peter Briger?

Was Gov. Phil Murphy aware of the Fortress role?

As Gov. of NJ, Murphy sits on the DRBC Board and has executive control over DEP.

Did Murphy  in any way intervene in DRBC and/or DEP regulatory review processes?

Who were the players behind the scenes that pushed this project through DRBC and DEP reviews, without disclosing the LNG aspects?

[END NOTE:  There are many “coincidences” here.

The proposed LNG plant would be located on a former Dupont massive toxic waste site, known as “Repauno”.

Tomorrow, the Senate Environment Committee will hear a bill that directly and significant impacts the Dupont/Chemours Repauno site by prohibiting DEP assumption of direct oversight. That would put Dupont/Chemours in total control of the cleanup, with no DEP oversight, for details, see:

• NJ Senate Bill Would Prohibit DEP Oversight of Some of NJ’s Worst Toxic Industrial Sites

• NJ Senate To Consider Bill To Further Weaken NJ Toxic Site Cleanup Laws

Check out the Dupont Repauno site on EPA RCRA list. S3682 would prohibit NJ DEP oversight of the Repauno site as under the “federal involvement” loophole in Section 26

This is not the first time a former Dupont toxic site was involved in a corrupt billion $ energy facility development, see:

• A Green New Deal for the People of Linden

Unbelievable corruption in plain sight.

[Update: 6/16/19 – Just to nail this down and remove the plausible denial factor, I just sent this note to the members of the Senate Environment Committee and Democratic Senate staff and the media:

From: Bill WOLFE <bill_wolfe@comcast.net>
To: senbsmith <SenBSmith@njleg.org>, sengreenstein <sengreenstein@njleg.org>, senbateman <senbateman@njleg.org>, kduhon@njleg.org, Tittel, Jeff, Tittel, Jeff, jonhurdle@gmail.com, Pringle, Dave, Jeff Pillets <jeffpillets@icloud.com>, tmoran@starledger.com
Date: June 16, 2019 at 10:31 PM
Subject: S3682 – Dupont Repauno & LNG terminal

Dear Chairman Smith:

Recent news reports have revealed a highly controversial plan to develop an LNG export terminal at the former Dupont Repauno toxic waste site.

The Dupont Repauno site (now Chemours) is a RCRA Corrective Action cleanup site (as well as subject to DEP oversight pursuant to NJ remedial State law). See EPA NJ Corrective Action cleanup site list:

https://www.epa.gov/hwcorrectiveactionsites/new-jersey-rcra-cleanup-facilities-contacts

Section 26 of your bill, S3682, would directly impact the cleanup and redevelopment of that site by prohibiting NJ DEP oversight.

Clearly, it is not in the interests of NJ’s environment, public health, the Delaware River, and the public interest to put Dupont/Chemours in total control of the cleanup of that massive toxic site, subject only to the Trump EPA under federal RCRA.

On the basis alone I again urge you to delete Section 26 and hold your bill for further consideration.

Respectfully,

Bill Wolfe