WolfeNotes.com

Why is Legislature extending a loan program under investigation?

Bill Wolfe

According to Inspector General Cooper’s February 28, 2008 Report to Governor Corzine on the Encap project boondoggle:
“ENCAP OBTAINS $212M IN PUBLIC FINANCIAL ASSISTANCE FROM EIT/DEP
…. Counsel for EnCap approached the Executive Director of the Environmental Infrastructure Trust (EIT) and various State officials including the Treasurer to propose that EIT and DEP examine the eligibility criteria for their programs in order to issue loans to EnCap…….Documents obtained by OIG indicate that EnCap representatives continued in their efforts to obtain the low interest EIT and DEP funding for the Project despite the fact that a decision had not been made concerning EnCap’s eligibility for EIT and DEP loans……Furthermore, in October 2003, Wisler sent DEP Commissioner Campbell an analysis of the law promoting EnCap’s eligibility for EIT and DEP funding. Acknowledging that the EIT and DEP have traditionally issued clean water loans to public entities, …Wisler argued that the then current law allowed for the issuance of loans to EnCap” (starts on page 111 of a must read report: http://www.state.nj.us/oig/pdf/Meadowlands%20Remediation%20and%20Redevelopment%20Project.pdf
Thus began another tawdry chapter in this saga of corruption and insider special interest deals. You really must read this Report to get a glimpse of how the dirty deals are done in Trenton. I won’t go into all the ugly details here – but, take my word for it, they are ugly – or better yet, read the report yourself.
Well anyway, getting back to the water off the duck’s back, my purpose for writing this post.
IG Cooper found all kinds of major problems, from outright fraud and corruption, to mismanagement, incompetence and bad policy in the DEP and Environmental Infrastructure Trust loan programs. To begin to root some of this out, the Senate held what I assumed to be the first of several legislative oversight hearings last month, calling IG Cooper to testify and present her Report. There were calls for a criminal investigation.
So, needless to say, I was rather surprised to see a package of bills to extend and make appropriations to the EIT loan program suddenly appear on yesterday’s Senate Environment Committee’s agenda (see S1823 et al http://www.njleg.state.nj.us/BillsForAgendaView.asp
Surprise turned to shock after I read the bills – they make no change whatsoever to the EIT/ or DEP programs, other than to extend the 2007 expiration date of the Trust’s authority to issue bonds. Nothing. Nada. Zip.
Shock turned to disgust when I appeared as the sole witness to testify before the Committee and realized that the gameplan was to basically ram the extension and appropriations bills through with absolutely no effort to even think about fixing the problems Cooper documented. (testimony here: Download file
Why on earth should one more dime be provided to this program until the Encap related problems are fixed?
Why is there no outrage that the Corzine administration is expanding the use of the flawed policies that led to Encap, specifically allowing private uses of public funds dedicated to clean water, for all sorts of taxpayer subsidies for new development schemes?
Corzine’s DEP adopted new regulations that not only do not restrict the uses of these clean water funds to public entities for strictly clean water purposes, they expand the use of these funds to subsidize private development schemes via “conduit financings”, “transit villages” and “transfer of development rights” projects” (see: NEW JERSEY FLOATS DEVELOPMENT SCHEMES ON CLEAN WATER FUNDS — Golf Courses, Transit Villages and Transferable Building Rights Are Eligible Projects http://www.peer.org/news/news_id.php?row_id=813
DEP has identified a $16 BILLION unmet need for investment in clean water infrastructure – see: HUGE NEW JERSEY WATER INFRASTRUCTURE NEEDS NOT BEING MET — State’s Economic Future Threatened by Not Investing in Environmental Quality http://www.peer.org/news/news_id.php?row_id=764
Not one dime of clean water money should go to subsidize new development schemes. Period.
And the EIT and DEP programs should not be reauthorized, extended or receive any new appropraitions until the law is amended to prohibit the use of clean water funds for private development schemes, as was done in Encap.