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Posted by GET NJ on January 28, 2004 at 16:45:22:
In Reply to: Selection From Cunningham's Case Against Gaughan posted by GET NJ on January 28, 2004 at 16:43:21:
18. Such inherent conflicts of interest are not limited to tax abatement issues. By way
of further example, the City of Jersey City participates with the Hudson County Incinerator
Authority and the Hudson County Improvement Authority. Such participation generates income
to the County of Hudson from the City of Jersey City. For instance, the City of Jersey could
save approximately $1,000,000.00 per year if it dealt directly with garbage disposal providers,
instead of participating through joint County/municipal departments. To a certain extent, the
City of Jersey City subsidizes County trash disposal, as the City is the largest municipality in the
County representing 45% of the entire County. It would be in the City's interest to directly
dispose of its own trash, but this would result in lost revenues to the County and more expense
for the County in handling trash disposal for its other, smaller municipalities. The Jersey City
Municipal Council would have to vote and approve any withdrawal from the County trash
disposal programs. Decisions relating to the nature and extent of the City's involvement,
including financial decisions involving monies that flow from the municipal to County level,
should not be decided by one person who holds an office at the municipal level and an office at
the County level.
19. The two positions are patently incompatible without further factual consideration.
However, if the Court is to consider the unique facts of this case, it will be further demonstrated.
As noted above, the office of Chief of Staff to the County Executive is an extremely powerful
County position. It is commonly known in Hudson County that its Chief of Staff has significant
powers, often acting in a de facto capacity on behalf of the County Executive. In this specific
case, it is well known and generally accepted that if William Gaughan, in his capacity as Chief of
Staff to the Hudson County Executive, wants a person hired or fired, that person will be hired or
fired.
20. There are presently at least three councilmen that have significant County level
jobs. It is known that at least one other councilperson has close family members who have
County level jobs. The President of the Council was just recommended by the defendant for a
high level County position. For all such councilmen, the continuation of such jobs can be greatly
influenced, either positively or negatively, by the office of the Chief of Staff.
21. As part of his statutory/regulatory duties, the Chief of Staff is required to
interview and recommend appointees to the County Executive. (Exhibit A Section 3.7.1(c)). In
November of 2003, he was required to make recommendations to the County Executive for
appointments to various positions at the County departments and commissions. This included
making job recommendations for fellow members of the Council.
22. Councilman Mariano Vega holds a job as the Director of Hudson County Public
Resources Department. The salary for that job is approximately $90,000.00.
23. Councilman Junior Maldonado has a job at the Hudson County Improvement
Authority. That job has a salary of approximately $80,000.00 per year.
24. Councilman Peter Brennan has a $65,000.00 job in the Hudson County
Maintenance Department.
25. Councilwoman Donnelly's daughter-in-law is employed by Hudson County.
26. In January of 2004, the defendant just recommended Council President Smith to
the job as Hudson County Under-Sheriff. Council President Smith has no known law
enforcement experience.
27. As the result of the position of power Councilman Gaughan now holds as Chief of
Staff to the Hudson County Executive, he has created additional incompatibility, as there is now
the appearance that the defendant may be able to exercise influence over fellow
councilmen/councilwomen, as he is their actual or de facto, "boss" at their principal places of
employment.
28. Such a position of power within the City Council is harmful to the citizens of
Jersey City. Citizens should expect that their elected representatives can freely debate and vote
upon issues, without the fear of influence or retribution from another councilmember. One
councilmember should not be permitted to promote his own political or personal agenda as a
result of leis holding a superior office.
29. Unless the Court corrects the incompatible situation highlighted above, the Court
will never know whether or not the votes of the councilmen are being made freely and openly or
as the result of such influence.
30. Such issues and questions already have arisen and exist. By way of example,
reference is made to Ordinance No. 03-123. This was a refunding bond ordinance that would
have authorized a refunding and reorganization of the City's debt. It was designed to take
advantage of the historically low interest rates and permit refinancing of some $335 million of
past debt. It would have saved the City some $20,000,000.00 per year and likely prevented the
City from having to raise taxes to otherwise satisfy financial shortfalls. The first reading of the
Ordinance was on September 8, 2003. The defendant was absent from that reading, along with
Councilman Vega, and the Ordinance was unanimously approved 7-0. It was then set for a final
reading for final approval.
31. The second reading of the Ordinance occurred on December 3, 2003. The
defendant was present. The Ordinance was defeated 3-6. The defendant voted against the
Ordinance. The five other councilmen/councilwonren who voted to defeat this measure were all
those named herein who had County jobs or ties to County jobs. (Brennan, Donnelly,
Maldonado, Vega and Smith all voted "Nay", Exhibit C.)
32. The City of Jersey City faces irreparable harm unless this situation is immediately
addressed and corrected. There are major issues that face the Jersey City Municipal Council on a
regular basis that have tremendous effect on the citizens of the municipality. The
aforementioned Ordinance No. 03-123 is a prime example. The City would have saved
$20 million this year had the Ordinance passed. As a result of the Ordinance not passing, the
City has essentially lost the benefit of $10 million of debt savings and is faced with financial
crisis that may require a cut-back of City services and/or a tax increase. There is no way to
measure the harm that may occur to individual citizens if the City is forced to reduce services.
33. The City will have one final chance to restructure its debt prior to the time
upcoming bonds are due in June of 2004. Assuming an Ordinance can be passed permitting debt
restructuring with favorable interest rates, then the City will need at least 30 days to market the
plan to various financial vendors. The Ordinance itself requires two separate readings at two
meetings. If the debt restructuring is not passed, the City's credit rating will suffer, likely being
reduced to "junk bond" status. This would cause irreparable harm on the City for years into the
future.
34. The citizens of the City of Jersey City deserve a municipal council that functions
freely, where one member cannot potentially or actually influence the others due to his superior
office.
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