Norcross files suit against Murphy, challenging legitimacy of EDA Task Force

By Anjalee Khemlani
New Jersey | May 21, 2019 at 7:05 pm

In the latest move in the ever-increasing battle between Gov. Phil Murphy and South Jersey powerbroker George Norcross, the team of lawyers representing Norcross’ interests filed a lawsuit Tuesday, challenging the legality of the state’s Task Force on EDA Incentives.

The lawsuit, filed in Mercer County Superior Court, represents Norcross, his interests and his brother, Philip Norcross. (See the filing below.)

In the lawsuit, the team of lawyers claims the governor’s task force is operating unlawfully, with unauthorized powers, and that it is soliciting counsel from a New York lawyer, Jim Walden, who it says is not licensed to practice in New Jersey.

“Gov. Murphy unlawfully empowered the task force with powers he did not possess and authorized the retention and payment of New York lawyers who proceeded to commence and conduct an investigation in violation of multiple provisions of New Jersey law,” the lawsuit said.

In the suit, the team of lawyers denied any accusations of misconduct when Camden companies tied to George Norcross applied for state Economic Development Authority tax credits. Those accusations were raised at a task force hearing earlier this month.

In the May 3 hearing, the task force alleged that Cooper University Health Care, Conner Strong & Buckelew, NFI and the Michaels Organization applied for Grow New Jersey tax incentives that they may not have properly qualified for, or falsified information in order to qualify for.

In the lawsuit, the lawyers said the companies with ties to Norcross have followed the rules and qualify for the incentives.

File photo
George Norcross.

“Several of the plaintiffs in this action (Cooper, Conner Strong, NFI and Michaels) submitted applications to participate in Grow NJ in full compliance with the governing statutes and regulations,” the lawsuit said.

“Three of those entities (Conner Strong, NFI and Michaels) have not received a single dollar in tax incentives, while all have made important contributions to the Camden community. Specifically, upon transfer of their operations to Camden within the next 90 days, Conner Strong, NFI and Michaels will exceed by 10-15% the number of jobs they promised and certified would be created, and they have paid more than $1.5 million in fees to the EDA.

“And Cooper has already created more than 500 jobs — approximately 150 more than anticipated — and invested millions of dollars in Camden’s revitalization.”

Walden addressed the suit in a statement released late in the day.

“As we’ve contended for some time, we welcome the opportunity to defend the governor’s powers to establish this task force to bring full transparency to the management of the EDA and award decisions that resulted in billions of dollars in tax incentives to companies across the state,” the statement said.

“We are fully confident that we are acting within the bounds of the constitution and the laws of the state of New Jersey. As everyone is now well aware, we have invited all of these companies to provide fact witnesses at the next hearing. Rather than responding to that offer, they have filed an unfounded lawsuit against the task force instead.

“The public can judge this tactic for what it is.”

A spokesman for Murphy also addressed the suit Tuesday night.

“The Task Force on EDA Incentives was formed as the result of a report from the state comptroller, who was appointed by former Gov. Chris Christie, detailing a lack of accountability and oversight in the state’s tax incentive programs,” the spokesman told ROI-NJ. “That effort has never been about one person, one company or one city. It is about ensuring that the tax incentive programs are operated to the benefit of everyone in New Jersey, not just a select, connected few. We look forward to vigorously defending the task force, its investigation and the actions of this administration in court.”

The lawsuit is the latest step in the battle over incentives.

On May 6, Norcross’ lawyers sent a letter to Walden and task force Chair Ronald Chen, saying the companies accused of improprieties were not offered an opportunity to respond to accusations in the task force hearings.

Walden issued a written response days later. It was not made public, but it was included in an exhibit attached to the lawsuit.

In that written response, Walden told Norcross’ lawyers that they are welcome to challenge the legitimacy of the task force.

“Feel free to file a challenge to Executive Order No. 52,” Walden said in his written response. “We are certainly prepared to defend it.”

Walden also offered the Norcross brothers and others tied to them the opportunity to appear and provide five minutes of testimony at the May 23 hearing — which was not, according to Walden, going to focus on the Camden companies.

“Your letter of May 6th is hardly cooperation, and, at bottom, you have produced not a single document — before or after the hearing — supporting any conclusions or assertions that your clients’ out-of-state locations were bona fide, suitable and available,” Walden said.

“We await word from you on when you will voluntarily produce the documents we requested, assuming it is still your clients’ intention to do so.”

He then asked Norcross lawyers to confirm, by May 23, whether the following individuals would voluntarily provide sworn testimony:

  • Conner Strong officials George E. Norcross, John Muscella and Matthew Tiagwad;
  • NFI officials Troy Adams, Jeffrey Brown, Sidney Brown, Scott Brucker, Michael Landsburg and Steven Grabell;
  • Michaels officials Michael Levitt and Joseph Purcell;
  • Cooper officials Andrew Bush, Adrienne Kirby and Douglas Shirley; and
  • Parker McCay officials Philip Norcross and Kevin Sheehan.

Anjalee Khemlani | akhemlani@roi-nj.com | AnjKhem