George Norcross | Matt Rourke/AP Photo Murphy task force hits Norcross world in new report on tax programs

The task force appointed by Gov. Phil Murphy to investigate New Jersey’s corporate subsidy programs released its second report Thursday, making a broad, new set of allegations against companies and people tied to South Jersey Democratic power broker George Norcross.

The 84-page report unearths smoking-gun-like emails it says suggest maleficence by a number of people it has investigated; suggests there are severe oversight issues at a state agency; and accuses Norcross himself of offering inaccurate testimony to a state Senate committee. It also provides a detail accounting of how the state’s now-expired tax incentive law came to include a provision that gave benefits based on “phantom” taxes — or tax breaks on tax breaks.


The report’s main conclusions focus on what it says are major failures at the Economic Development Authority, the state agency charged with overseeing the incentive programs. Leaders at the agency, according to the report, “fostered a permissive culture of ‘getting to yes.’” In some cases, underwriters were criticized for asking “too many questions” of applicants.

“This general culture provides context for, and raises questions concerning, the extent to which the EDA carried out its vital role as a steward of public funds,” the report says.

The task force builds on issues it raised in its first report, which was released in June and claimed that some $500 million in tax credits had been improperly awarded and that “special interests” had effectively seized control of the operation. That document had been condemned by a number of organizations it targeted.

This final report accuses Norcross — an insurance executive with ties to numerous companies that received tax credits — of delivering inaccurate testimony to a state Senate committee in November. Norcross and several companies linked to him — Conner Strong & Buckelew, NFI, The Michaels Organization, Cooper University Health Care and the law firm Parker McCay — had sued to try to halt the task force’s work.

At the same time as it prods at the testimony, the report presents new questions about the tax incentive application of Cooper Health, which was awarded $40 million in credits to relocate back office jobs from the New Jersey suburbs to the city of Camden.

Executives at Cooper, which is chaired by Norcross and was a focus of his testimony, intentionally tried to convince the EDA that it was considering a move to Philadelphia when it had no intention of moving there — and the staff at the EDA bought it, the report alleges.

Norcross insisted in his November remarks that Cooper’s tax credit application, prepared by Cooper staff, “specifically stated that no jobs were at risk of leaving the State of New Jersey” and only presented a lease offer after EDA staff asked. But, the task force says, Cooper representatives went out of their way to suggest otherwise once the EDA requested the offer — and that Norcross was “incorrect” in his testimony.

The report says it was not “merely comparative or hypothetical information,” but willfully false.

“I toured [the Philadelphia building] today and believe that I will have a [proposal letter] in hand by the end of tomorrow that provides our ‘credible threat to move’ to satisfy the EDA,” Andrew Bush, an executive of Cooper Health, wrote in a December 2014 email.

Five days later — a day before EDA’s board was set to approve the application — another Cooper employee, Vice President Jill Sayre Lawlor, sent Norcross and four other top Cooper executives a copy of the authority’s memo proposing the award of their tax credits. The memo, on which board members based their decision to award the incentives, said Cooper Health had “certified that the 353 New Jersey jobs listed in the application are at risk of being located outside the State.”

“The memorandum made clear, therefore, that the EDA believed that if Cooper Health did not receive incentives to locate the jobs in Camden, it would relocate them to Philadelphia,” the report says. “There is no evidence, however, that any of the Cooper Health executives who received the memorandum made any effort to inform the EDA that the health system was not, in fact, considering a potential relocation to Philadelphia.”

The report includes other emails it says support that conclusion.

The task force also raises similar concerns with Conner Strong, the insurance company Norcross heads. In a 2015 memo surrounding a press conference announcing a major new waterfront development — now the home of NFI, The Michaels Organization and Conner Strong — longtime Norcross spokesperson Dan Fee raised the need to “walk the line” in describing Conner Strong’s intentions.

“It will be difficult to walk the line that needs to be walked — highlighting the development and the involvement of you and George without crossing any line to confirm that Conner Strong is likely to move its headquarters,” Fee wrote. “I have attempted to detail what an important and exciting development this will be, while raising the prospect of a CSB move to it, without confirming one.”

In its first report, the task force cited a Philadelphia Inquirer article in which an anonymous source said Conner Strong was “considering moving its headquarters into the development.” The companies pushed back on the task force, the report notes, saying the article was “flimsy evidence,” “outrageous” and “offensive to [the] right to due process.”

But the report says it turns out it was Fee who was behind the claim. In an email to Norcross, which included the memo, he described the plans for the Inquirer story and noted that “‘sources’ will confirm that local partners, including YOU, will consider moving their companies to Camden under the Grow NJ program.”

“The evidence shows that by September 2015, more than a year before the companies applied to the EDA for tax incentives, they were already formulating plans to relocate to Camden,” the task force says in its report.

When a portion of Fee’s memo came out in November, ahead of the Senate hearing where Norcross testified, Fee said in a statement to POLITICO that the difficulty surrounding the announcement was the result of the uncertainty of what Conner Strong would do. He said the company “hadn't committed, which is what that line is in reference to.”

“It was important to ensure that no one believed it had,” he said an email. “We had to be clear that it was possible to be committed to Camden and The Camden Waterfront, without having committed to relocate” Conner Strong.

On Thursday, in an email to POLITICO, Fee said he was not personally the source mentioned in the story, adding that his “walk the line” memo was to " to make sure no one thought they had committed to moving because they hadn’t.”

“I would have thought that high dollar New York lawyers would have known the difference between 'will' and 'will consider', but as you know, they are different,” he said, referring to Jim Walden, the lead counsel for the task force, and other attorneys working at the lam firm Walden, Macht & Haran.

Norcross, in his own lengthy statement in response to the report, said the document reads like a “justification” for its costs and says Walden seems “defensive about being sued by the same companies he’s smearing.” He notes that the U.S. attorney in New Jersey had investigated Conner Strong’s award tax credits and decided not to file charges, though he leaves out that both state and federal prosecutors in Pennsylvania have been looking into similar issues.

“We — my firm and its partners — have always complied with the letter and the spirit of the law. Nothing in today's document changes that fact,” Norcross said. “This report proves what I said in testimony before the Senate Committee in November: Walden has made a series of selective, misleading, and too often outright incorrect statements. One can only wonder why, out of the over 900 firms which have received tax incentives, only Camden and those who committed to rebuilding the city have been unfairly attacked by Walden.”

The task force report also includes new details about how Philip Norcross, a top Trenton lobbyist and George Norcross’ brother, was able to work with former Gov. Chris Christie’s administration to rapidly secure changes to tax incentive legislation that benefited a company he represented. This, the report says, is the origin of the “phantom” tax concept.

Philip Norcross was representing Holtec International, a nuclear energy company, as the tax law was being drafted in 2013 and the company was planning to construct a campus in Camden.

Unsatisfied with how much it would receive in tax credits under the draft Economic Opportunity Act — the main tax incentive law that expired last summer — the company turned to Philip Norcross for help. The lobbyist and lawyer called the EDA and, within the course of a day, the “phantom” taxes provision was drafted, sent to Christie’s office, added to amendments to the bill and considered by lawmakers that same day.

Holtec ended up qualifying for a $260 million award, in part by counting taxes it would never actually pay as benefiting the state, according to the report. The award was one of the most generous ever handed out by New Jersey.

“By allowing companies to characterize illusory taxes as state benefits, the provisions have both limited the real benefits to the State and contributed to public confusion concerning the relative costs and benefits of the Grow NJ program," the report reads.

Read the final report here.

Katherine Landergan contributed to this report.