NJ Gov. Murphy’s PR People Dismiss DEP Corporate Capture, Revolving Door, And Ethics Abuses As A “Cooling Off Period”

Actual Corporate Background Of DEP Acting Commissioner Contradicts Murphy’s Appointment Press Release

Gov.’s Office Downplays Erosion of DEP Integrity And Public Trust

This Is Worse Than Bad Optics

Today, NJ Spotlight wrote the story I gave them about the corporate background – including legal work that secured critical government regulatory approvals (including DEP permits) for a controversial huge regional Delaware River fracked gas LNG export facility known ominously as “Fortress Energy” – of NJ Gov. Murphy’s recently appointed Acting DEP Commissioner Shawn LaTourette, see:

• DEP head recuses himself from permitting decisions for South Jersey LNG terminal

Aside from the awful headline (which makes it appear that Acting Commissioner LaTourette took some kind of noble action instead of the minimum in compliance with legal requirements), substantively it’s a pretty good story.

But, Spotlight left a few important stones un-turned and serious issues unclear in the story, which I feel obligated to note, as follows:

1. The timing raises significant concerns

Mr. Latourette was appointed Acting DEP Commissioner by Gov. Murphy. That appointment was announced via Murphy tweet on January 13, 2021.

That Friday, January 15, 2021, was Commissioner McCabe’s final day in Office. So, because of the Martin Luther King holiday on Monday, his first official day in office was Tuesday January 19, 2021.

I electronically filed my OPRA request for LaTourettte’s ethics documents – specifically including any recusal documents – on Saturday January 16, 2021. Curiously – despite the fact that DEP OPRA electronic filing always responds to confirm receipt within moments and start the 7 day response clock  – I didn’t receive confirmation of the OPRA filing until Tuesday Jan. 19. That could have been a result of the Saturday filing or the Monday holiday. Giving DEP the benefit of the doubt, the DEP’s OPRA reply deadlines was 7 days later, or January 26.

I filed the OPRA after reading the January 13, 2021 Insider NJ story.  That story (which has been updated since with Murphy’s Tweet) was based on Gov. Murphy’s Jan. 13 Tweet and a statement by the Murphy press office.

Mr. Latourette’s recusal memo was not submitted until January 25, 2021, almost a week after his official assumption of duties and my Jan 16 OPRA request for his recusal documents.

Is it a coincidence that LaTourette wrote that recusal memo exactly 1 day BEFORE my OPRA response was due?

So, it appears that LaTourette could have been prompted to write that recusal memo in response to my OPRA request and that DEP intentionally delayed response to my OPRA to provide time for him to write it. (On Jan. 28, DEP denied my request allegedly due to COVID. I objected, twice. DEP didn’t provide the documents until February 9.)

He should have written it well before his appointment by Gov. Murphy and before assuming  Office.

But far worse, it raises questions about what LaTourette disclosed to the Governor and the Governor’s press office, which takes me to my next point.

2. LaTourette’s recusal document grossly contradicts Gov. Murphy’s press office statement about his appointment

Was Gov. Murphy and the Murphy Press Office aware of Mr. LaTourette’s extensive corporate legal background BEFORE the Gov. made the appointment and the press office issued a statement?

I have first hand knowledge of the vetting process by the Gov.’s Office for political appointees at DEP. After 10 years in an open competitive civil service professional environmental planner’s position at DEP (1985 – 1995), I once served as a DEP political appointee (2002 – 2004 “confidential assistant” and policy advisor to Commissioner Campbell). My prior professional career and political background had to be reviewed by the Gov.’s office and my appointment had to be approved by Gov. McGreevey. So I have personal knowledge of how DEP political appointments are vetted by the Gov.’s Office.

Was Gov. Murphy aware of LaTourette’s corporate legal background – including work on permitting the controversial Delaware River LNG plant championed by NJ Senate President Sweeney – BEFORE he appointed him Acting DEP Commissioner?  Is that WHY the Gov. appointed him?

If so, Murphy made a serious mistake.

Is Gov. Murphy now having buyer’s remorse and trying to back away from the LNG project? (Spotlight)

Despite New Jersey’s vote in favor of the project at the DRBC meeting, Murphy said in late December he would try to “prevent” the transportation of LNG at the port.

Documenting Senator Sweeney’s long time 15 year support of that LNG port, as I wrote, 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.”

Mr. LaTourette’s ethics documents and his recusal memo reveal an extensive corporate legal background, including representing the highly controversial Delaware LNG export plant. There is just one example of pro-bono legal work, and that work appears to be a challenge to DEP restrictions imposed after Sandy – hardly work in the public interest.

Given LaTourette’s extensive corporate career and pitiful pro-bono public interest work, how could Gov. Murphy’s press office possibly issue a statement that not only failed to mention this corporate work, but created the impression of significant public interest work?

How could they think that LaTourette’s background would remain secret?

Let’s repeat that Gov. Office press statement.

The Gov. press release claimed (emphases mine):

With twenty years of environmental experience, LaTourette began his career partnering with the Erin Brockovich law firm to organize and defend New Jersey communities whose drinking water was contaminated by petrochemicals. … . Before entering public service, LaTourette specialized in protecting the rights of victims of toxic injuries while also advising infrastructure, transportation, energy, and other industries on compliance with state and federal environmental laws and policies.

How can you square LaTourette’s corporate background with that press statement? It doesn’t pass the straight face test.

3. Gov. Press Office downplays revolving door, corporate capture, & public trust in DEP 

Given these facts – and prior concerns by environmental groups that there was a coverup on the LNG plant permit process at DEP – one would think the Gov. press office would want to tread lightly and be sensitive to legitimate  public concerns with DEP’s independence and  integrity once this cat is out of the bag. One would be wrong.

The Gov.’s Office is quoted in the NJ Spotlight story:

Acting Commissioner LaTourette was required to observe a one-year cooling off period related to his former employer,” Alfaro said in a statement. “In addition, he was required to permanently recuse from client matters, which he effectuated and has maintained since September 2018 when he joined the DEP.”

“Cooling off period”? What?

Delaware Riverkeeper gets it right:

Critics said the disclosure that LaTourette previously worked for clients that are now seeking permits from the agency he heads may raise questions in the public mind about the integrity of the DEP’s decisions.

“There certainly should never be any appearance of a tainted review of a project due to a conflict of interest within the permitting agency,” said Tracy Carluccio, deputy director of Delaware Riverkeeper Network, an environmental group that has led opposition to the LNG project. “It leads to the questioning of the agency’s decision-making process. In this case, the leader of NJDEP needs to be head and shoulders above any whisper of impropriety — if there is any question at all, the public’s trust is eroded and that is unforgiveable.”

Spotlight should have mentioned the fact that the NJ ethics laws are based on and include a public appearance standard for triggering an ethics violation. Clearly, LaTourette may have violated that standard.

As I wrote:

The State Uniform Ethics Code has a very broad standard regarding potential conflicting interests:

So, this is far more than an “optics” issue.

4. Will Gov. Murphy submit LaTourette’s appointment for Senate Confirmation?

The DEP Commissioner must be reviewed and confirmed by the NJ Senate. The Senate’s confirmation review includes a public hearing before the Senate Judiciary Committee.

NJ Senate President Sweeney – by his own words – has championed and secured millions of dollars in State subsidy funding for the Delaware River LNG project.

In addition to Senate President Sweeney’s support for Fortress LNG, Gov. Murphy might have prior links to Fortress, while he was at Goldman Sachs and Ambassador to Germany.

Does Gov. Murphy want to open this can of worms in a public hearing before the NJ Senate Judiciary Committee?

As I wrote:

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.

[…]

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?

Paraphrasing recently deceased journalist Bill Greider, Who will tell the people about all this?

[End Note: Mr. Latourette’s delegation to Sean Moriarty also raises revolving door, regulatory capture, corporate influence, and conflict of interest ethics concerns.

Moriarty began his legal career at a private law firm Archer & Greiner, P.C. in 2010 and worked for over 5 years for corporate clients. He was hired into the AG’s Office in 2011 during the Christie Administration and worked on regulatory affairs. Christie Administration and DEP were extremely hostile to regulations. He then went to DEP under Commissioner Bob Martin, who was hostile to regulations and pro-business.

A lawyer’s first job out of law school is revealing on important things, including expertise, values, ethics, ideology and priorities.

THIS IS A HORRIBLE BACKGROUND.