Four weeks before superstorm Sandy struck New Jersey and turned him into a media superstar, Gov. Chris Christie delivered a sarcastic but little-noticed evaluation of his own administration: “Sometimes, I know it’s going to be shocking for everyone to hear, government doesn’t always work the way it’s supposed to.”
Christie’s comment at a press conference in Dover on October 1, 2012, was meant to be a flip throwaway excusing the inexplicable failure of his Department of Community Affairs over an 18-month period to get $300 million in federal foreclosure aid into the hands of tens of thousands of New Jerseyans facing eviction from their homes — in sharp contrast to 17 other states participating in the same program.
It wouldn’t happen again, Christie vowed.
Nevertheless, the same agency last month was the subject of a Senate Legislative Oversight Committee hearing into its failure to get $600 million in federal aid into the hands of homeowners who lost their homes to Sandy. The agency yet to fully explain its secret firings of two of the largest private contractors hired to administer Sandy relief programs.
Last week, an NJ Spotlight/WNYC investigation revealed that the Christie administration’s system for awarding $25 million in Sandy energy grants was so riddled with errors that it awarded large grants to towns that were unscathed by the superstorm, gave no money at all to flood-prone municipalitites like Belmar and Atlantic City, and shorted Hoboken by $700,000.
Although the report did not find conclusive evidence that the errors were a result of politics, it did serve to lend credence to Hoboken Mayor Dawn Zimmer’s claim that her town was denied Sandy aid because she opposed a high-rise development that Christie wanted built — a claim that is under investigation by the U.S. Attorney’s Office.
And yesterday, the Assembly Transportation Committee held a hearing into how New Jersey Transit failed to provide enough trains and buses to transport tens of thousands of frigid Super Bowl fans, who ended their visit chanting in unison “New Jersey sucks!” The Super Bowl fiasco came just 15 months after NJ Transit lost $140 million worth of locomotives and rail cars to flood damage during Sandy because it failed to heed warnings that Sandy was a once-in-a-century storm.
“This is Management 101,” Sen. Robert Gordon (D-Bergen), the Senate oversight committee chairman, said last month in explaining the purpose of the various legislative hearings. “In each case, we’re trying to understand why the mistake happened, and what we can do to fix it to make sure it doesn’t happen again. But there’s a more interesting question that goes beyond any particular issue. We need to understand what the overall problem is with this administration. As an ex-management consultant, I find myself asking if there are too many former members of the U.S. Attorney’s Office and not enough managers running these agencies.
“Does this administration put political credentials ahead of policy expertise? In an administration that rewards loyalty and punishes every sign of disloyalty, does anyone dare to give the governor bad news? Does anyone dare to tell the king what he doesn’t want to hear? And if the governor is really making every decision right down to who gets hired in individual departments in ‘red light, green light’ meetings, that’s just bad management,” he said.
Gordon is not alone is his assessment of the failings of the embattled Christie administration.
The failure of Community Affairs to expeditiously and properly process federal aid for homeowners displaced by Sandy or facing eviction and the inability of New Jersey Transit to protect trains from Sandy flooding and get fans home smoothly from the Super Bowl are part of an unprecedented series of high-profile governmental foul-ups in Christie’s first four years as governor. That’s the verdict from a series of interviews conducted over the past month with more than 20 academics, lawmakers, and Statehouse insiders from both parties who have served in high posts in state government or represent important interest groups, trade associations, or lobbying firms.
Can Christie Manage?
While the media focus has been on investigations by the U.S. Attorney’s Office and a special legislative committee into Bridgegate, the Zimmer charge, and other alleged abuses of power, government experts say that Christie’s record raises fundamental questions about the effectiveness of his management of state government overall.
“Government’s never perfect, but usually governors have one or two major foul-ups every four years — nothing like this,” said one Statehouse insider with more than three decades inside and outside state government who, like most interviewees, agreed to talk candidly only on condition of confidentiality.
The problems, they agree, are a direct result of a series of related factors:
Christie’s communications department did not respond to emailed questions about criticism of state government operations based on the centralization of power in the governor’s office, the high percentage of former prosecutors in high-ranking positions, and the failure of key administration officials to testify before legislative committees.
Christie’s Sandy czar has refused to appear at four legislative committee hearings, his Community Affairs commissioner did not disclose the dismissals of two top Sandy contractors, New Jersey Transit’s three top officials were dismissed or resigned before they gave explanations for the Super Bowl mass transit mishaps, and Christie himself has not held a press conference in two months because he does not want to answer questions about Bridgegate and other scandals.
Meanwhile, law enforcement officials and other legislative committees are investigating potential criminality, official misconduct, and ethics abuses related to Bridgegate; the alleged threat to withhold Sandy aid from Hoboken if its mayor did not support a favored high-rise development, the use of Sandy aid to build a senior citizen complex in a town unharmed by Sandy whose mayor endorsed Christie, and the takeover of the Hunterdon County Prosecutor’s Office in an apparent effort to suppress a grand jury indictment.
“It’s just unprecedented,” said Carl Golden, who served as communications director for both Republican Govs. Thomas Kean and Christine Todd Whitman. “I’ve never seen a governor in this position. You have the weight of all the federal and legislative investigations, 20 subpoenas, tough policy questions about Sandy aid and why there weren’t more trains after the Super Bowl, and overall the worst press I have ever seen for any public official.”
The pressure of trying to run a government when the governor’s office, most of the governor’s current and former senior staff, the lieutenant governor, the Port Authority chairman, the community affairs commissioner, the former attorney general and the governor’s campaign manager are all the targets of subpoenas, named in investigations, or charged in lawsuits has certainly added to the Christie administration’s management challenge, but the issue goes much deeper and much further back.
Statehouse insiders, legislators and academics agree that the Christie administration’s policy failures — like Bridgegate and the other political scandals that have dominated the headlines — flow directly from the decisions Christie made on how to set up and run his governor’s office and the $50 billion, 70,000-employee state government he was elected to administer.
“We went from an administration where the guy at the top couldn’t make a decision to a guy who can make a decision, but wants no input,” said Monmouth University political scientist Patrick Murray, comparing Christie to his predecessor, Democrat Jon Corzine. “The problem is that when you pretty much shut out all outside voices in the decision-making process, you’re more likely to make a mistake. It’s just amazing to me how little public input there has been into how this Sandy aid is being spent.”
Experts agreed that the Christie administration is both more centralized and has less hands-on policy and political experience in the governor’s office and in key state agencies than the administrations of the six elected governors and two acting governors who ran New Jersey state government prior to Christie’s election in 2009.
“Ultimately, you can’t run a business you don’t understand,” said Raphael Caprio, director of Rutgers University’s Local Government Research Center. “In any organization, it all comes down to having the right people in the right place, and I’m not sure the senior administration officials who are responsible understand the aims, the mission, and the needs of the constituencies of the agencies they have been asked to run. Their inherent background is prosecutorial, it’s not advocacy and it’s not policy.”
Witnesses for the Prosecution
Kevin O’Dowd and Charlie McKenna, Christie’s chief of staff and chief counsel for the past two years, both served with Christie in the U.S. Attorney’s Office (see “All the Governor’s Prosecutors”) So did Economic Development Authority Chief Michele Brown, former Chief Counsel and U.S. Sen. Jeffrey Chiesa, past and present Attorney Generals Paula Dow and John Hoffman, Sandy reconstruction czar Marc Ferzan, Community Affairs Commissioner Richard Constable, Board of Public Utilities President Robert Hanna, newly appointed Port Authority Deputy Executive Director Deborah Gramiccioni, Comptroller Marc Larkins, Press Secretary Michael Drewniak and Rosemary Iannacone, director of operations in the governor’s office.
Lt. Gov. Kim Guadagno, who coordinates business development, is both a former assistant U.S. Attorney and Monmouth County sheriff. Port Authority Chairman David Samson worked with Christie when he served as attorney general with former Community Affairs Commissioner Lori Grifa as his chief of staff, and Guadagno, O’Dowd and Sports and Exposition Authority chief Wayne Hasenbalg also served previously in the Attorney General’s Office. Christie’s political team — strategist Michael DuHaime, recently fired Campaign Manager and Deputy Chief of Staff Bill Stepien, and Communications Director Maria Comella — all came to Christie after working for Rudy Giuliani, a former U.S. Attorney who brought a similar management style to his mayor’s office.
Christie’s decision to rely on a top staff dominated by those who took orders from him for years when he was U.S. Attorney, plus those political operatives who proved their worth in his first 2009 campaign, is rooted in his insistence upon absolute loyalty and the fact that Christie was never really a part of New Jersey’s Republican establishment. Unlike former GOP Govs. Kean and Whitman, Christie had no lifelong GOP allies with deep Statehouse ties to bring into his administration, one veteran GOP legislator noted.
Christie quickly became a national media star and dominated New Jersey politics by forming alliances with Democratic power brokers George Norcross and Joseph DiVincenzo that furthered his own national and state political ambitions. It did nothing, however, to showcase future Republican leaders, promote the Republican Party brand in New Jersey, or give the GOP a chance to recapture control of the legislature, as Kean did. Christie, unlike Kean, owed the state party little.
That’s because Christie was — and remains — an outsider. He and Corzine were the first governors in a half-century who did not rise up through the ranks of party politics. Christie, a brash Morris County freeholder who was ousted by his own party after a tumultuous three-year term in 1997, bypassed the GOP hierarchy by teaming with his brother Todd Christie, a controversial Wall Street financier, and Kean’s political guru, Bill Palatucci, to raise millions for George W. Bush, who resurrected Christie’s career by naming him U.S. Attorney. Along with Christie’s wife Mary Pat, Todd Christie and Palatucci remain the governor’s most trusted advisers in a tight inner circle.
Other than Richard Bagger, a former state senator who served as Christie’s chief of staff for the first two years, the team of lawyers chosen by Christie lacked the Statehouse experience, long-term relationships with key politicians and stakeholders, in-depth understanding of ongoing policy issues, and years of experience responding to constituent complaints that make an administration successful, the government experts agreed.
Choking Off the Funnel
Nowhere is that clearer than in the Department of Community Affairs. It was Grifa, Samson’s former chief of staff, and Constable, who served under Christie in the U.S. Attorney’s Office, whose management as Community Affairs commissioners has been called into question in the provision of foreclosure aid to homeowners in 2011 and 2012 and the delivery of Sandy aid over the past two years.
“Grifa and Constable are the first two Community Affairs commissioners in history who did not have hands-on experience as mayors, legislators or Cabinet officials, so they did not know what it was like to get complaints from constituents, and they did not understand that complaints are a sign that you are doing something wrong and you need to fix it,” said one expert on the agency. “Randy Primas and Susan Bass Levin were great Community Affairs commissioners because as mayors, they understood what they needed to do.”
“Community Affairs is supposed to function like a giant funnel,” Golden said. “State and federal aid pours in one end and goes out the other to help local governments and citizens.”
But Grifa choked off the funnel. As a former prosecutor, she was so focused on preventing fraud that she set up a system where only eight people a month qualified for federal grants worth up to $48,000 designed to avert eviction in a state with one of the highest foreclosure rates in the country, leaving $300 million in federal Troubled Asset Relief Program (TARP) money sitting unused for months, Constable conceded a year after taking over the agency.
Constable increased the New Jersey Home-Keeper staff from six to 41, but even after 15 months, only $42 million had been distributed. But while Constable took credit for fixing the foreclosure problem, it is on his watch that only $25 million had been awarded and another $112 million obligated as of last month out of $600 million federal fund for storm damage repair related to superstorm Sandy — an issue that Constable failed to appear at a Senate Legislative Oversight Committee hearing to address last month, although he promised to do so in the future.
For Grifa and Constable as incoming commissioners, one problem was that the Community Affairs Department they inherited, like most other state agencies, had lost much of its career upper management in a wave of downsizings. An assistant commissioner, two bureau chiefs, and the agency’s deputy attorney general all took Corzine’s 2007 early retirement offer, and other top personnel soon followed, resulting in a loss of institutional memory and expertise at DCA and other agencies.
Another perhaps more critical problem was that the governor’s deputy chiefs of staff for legislative and intergovernmental affairs, Stepien and his protégé Bridget Kelly, took over much of the direct liaison and problem-solving for mayors as part of a concerted effort to win endorsements for the governor’s reelection. Not only did Stepien’s and Kelly’s heavyhanded political approach make it clear that politics trumped policy in the governor’s office – an attitude that would ultimately lead to Bridgegate – but it also made it clear to local government officials that the Community Affairs commissioner ranked beneath the governor’s office’s second-level operatives — not above them, as would typically be the case for Cabinet officers.
Following the chain of command is something Grifa and Constable would have been used to as former prosecutors.
“In the U.S. Attorney’s Office, everything that is going on has to go up the chain of command, and that’s what Gov. Christie and so many of his appointees are used to,” Golden said. “But in government, there’s a risk if you try to concentrate too much power in authority in one person or office. There’s a balance between the need to let the governor’s office knows what’s going on vs. the need to get every decision approved by the governor’s office.
“That leads to delay in decision-making, and contributes to the perception that the Cabinet is 15 people who are there only because the Constitution says you have to have a Cabinet,” he quipped.
Ben Dworkin, director of Rider University’s Rebovich Institute for New Jersey Politics, said “every administration has a management tone set by the governor and it starts with the organization of the front office, who gets access to the governor, how small is the inner circle, and how much of a gatekeeper it is.
“Sometimes it’s a team of rivals, sometimes it’s filled with true believers. But how an administration organizes itself is predicated on the governor’s personality and management style,” he said, then added, “it doesn’t matter which style it is, there are going to be problems. The question is how you handle them.”
Unlike Christie, governors like Kean, Whitman, and Democrat Brendan Byrne vested considerable authority in their Cabinet to make policy. Kean, for example, recruited national experts like Drew Altman and Molly Coye to run Human Services and Health and gave them considerable freedom to enact innovative programs that reflected their overall principles.
They also recruited experienced teams to run their governor’s offices: Judy Shaw, a former Chief of Staff in three Cabinet agencies under Kean; Jane Kenny, Kean’s former Cabinet secretary, and Golden, Kean’s Communications Director, served as Chief of Staff, Chief of Policy and Planning, and Communications Director under Whitman, giving her substantial prior experience in three of the top four posts in her governor’s office.
“It makes a difference if the governor brings you in because of what you can bring to the job and because the governor needs you,” said one longtime lobbyist. “When that’s the case, you have the ability to go in and tell the governor what he needs to know, whether he wants to hear it or not. It’s different when your whole career is dependent on the guy at the top, which is the case with everybody there now. The only exception was (former Senator) Rich Bagger, and he left as chief of staff at the end of the second year.”
Let’s Not Make a Deal
The biggest name in Christie’s original Cabinet — and the one most likely to push the envelope on policy — was Education Commissioner Bret Schundler, the former Jersey City mayor who had been the losing Republican candidate for governor in 2001.
Schundler said he kept Bagger informed when he was negotiating a significant compromise with the New Jersey Education Association on merit pay and teacher tenure rules in order to put the state in line for a $400 million Race to the Top grant from the Obama administration in May of Christie’s first year — only to have Christie undo the deal after New Jersey 101.5-FM, the talk radio station that fervently supported Christie’s candidacy, criticized Christie for negotiating with the hated NJEA the day after it was announced.
Subpoenaed by the Senate Legislative Oversight Committee, Schundler testified that Christie, who was becoming a national Republican celebrity and YouTube star with his video smackdowns of the teachers union, called and told him “he was not going through the fire, with all the attacks on him, merely to cave into the union” and that “the money was not worth it.”
The governor’s office rewrote the application without the NJEA compromise, including a merit pay plan very similar to the one Christie would praise two years later when Newark adopted it. When New Jersey missed out on the $400 million by just a few points, Christie blamed Schundler for not catching a clerical error — an error that would not have mattered if the NJEA compromises had stayed in the application — and fired him.
“The Schundler thing had a chilling effect on the rest of the Cabinet,” said one Trenton insider with friends inside the Christie administration. “The governor didn’t just call him on the carpet, he fired him. Everybody knew from that point on: You don’t do anything unless you’re absolutely sure it’s what the governor wants, and that it’s what he wants that week, and you have the written approval in your hand.”
That modus operandi became more and more pronounced as Christie was being urged to run for president in the fall of 2011, emerged as a leading vice presidential candidate in the spring of 2012, delivered the keynote address at the Republican National Convention that August, and entered his 2013 reelection campaign as the likely frontrunner for the GOP presidential nomination in 2016.
“The bigger Christie got, the more paralyzed the government became,” the Trenton insider said. “Because this governor’s office is very controlling, because they micro-manage and because everything has to go through the governor’s office, they’ve created a culture where people say, ‘We know what to do, but let’s check,’ and that creates a logjam in the bureaucracy because everybody’s waiting for approval. Nobody takes initiative on their own because they’re afraid they’ll get blamed for it. And that’s when everything gets fouled up.”
What is inexplicable to veteran government-watchers, especially considering Christie’s 2016 presidential ambitions, is the failure of the Christie administration to make sure that the governmental operations on which the governor will be judged go smoothly.
“It’s the Sandy aid and the Super Bowl problem I can’t understand,” said one veteran lobbyist. “Christie’s whole state and national reputation is tied into how he handled Sandy, so you would think they would do whatever it takes to get it right. And the governor knows the whole country is watching how New Jersey hosts the Super Bowl. How can he say he doesn’t have the time to check into whether NJ Transit’s mass transit preparations are adequate, or whether they have a backup plan?”
The problem, one former top state official said, is that there isn’t enough backup. It isn’t just the exodus of hundreds of upper and middle managers in the wake of the 2007 Corzine early retirement buyout and Christie’s antigovernment rhetoric and pension and benefit cuts, but also Christie’s continuing focus on cutting the state government payroll. “It’s great to brag to conservative audiences that you cut 6,000 state government jobs, but when something like Sandy hits, you can’t handle it. State government can still handle routine everyday functions, but not much else,” said one former state official.
Contracting Without Oversight
Contracting out the Sandy aid disbursement — which is paid for out of federal Sandy aid — to private firms instead of hiring temporary state employees keeps the state government headcount down, but private firms have an incentive to maximize profit by hiring as few employees as possible. Neither the governor’s office nor the Department of Community Affairs hired or assigned enough people to adequately oversee the tens of millions of dollars paid to private management firms, a Rutgers study found.
What’s more, the administration failed until recently to hire the integrity monitors required by a law Christie signed last spring.
The Christie administration decided to pay out $68 million to Hammerman & Gainer, Inc., a private management firm, to handle the $600 million Reconstruction, Rehabilitation, Elevation and Mitigation program that was the state’s biggest Sandy homeowner relief effort, even though the company had been criticized in Louisiana for its work after Hurricane Katrina.
Constable terminated the firm’s contract in December after numerous complaints from displaced families and after the Fair Share Housing Center obtained state documents proving that 80 percent of the families rejected by HGI were actually eligible for assistance, but he kept the firing secret from a legislative committee when he was called in to testify on problems with the Sandy aid program.
“The mistake was not in hiring somebody who did not do the job right on Sandy relief. The mistake was hiding it and not owning up to it publicly, like Kean did,” said Murray, the Monmouth University political scientist.
Kean’s defusing of a second-term motor vehicle inspection scandal by holding an immediate impromptu press conference in a Statehouse hallway to denounce the private contractor and pledge to implement major reforms is still regarded as the gold standard of Statehouse crisis management, the political equivalent of Johnson & Johnson’s handling of the Tylenol crisis.
“It’s the lack of transparency and the inability to admit mistakes that hurts Christie,” he said. “Mistakes get magnified when they’re hidden and the press corps has to dig them up.”
Murray said he watched Christie set the stage for his strategy of bypassing the New Jersey press corps to make his pitch directly to a national audience on cable TV and through YouTube when he ignored requests for followup interviews from the Statehouse press to do an NBC interview the day he announced his candidacy for governor in January 2009.
It’s not just Christie who ignores the Statehouse press corps at a level unheard of in previous administrations. Guadagno refused interviews even during the reelection campaign, his press aides routinely ignore requests for comment, and Christie’s Cabinet – with the exception of former Education Commissioner Chris Cerf – has been virtually invisible outside the annual budget process.
“As a division director, I could talk to reporters whenever I wanted, and if something happened, I had relationships I could call upon to defuse the story,” recalled one former state official who served under three governors. “But Christie’s cabinet isn’t allowed to talk the press, so they don’t have any ability to spin stories. They just go into a foxhole and wait for the bombardment to end.”
The Christie administration’s relationship with the media is mirrored by its relationship with the Legislature. Christie’s record number of first-term vetoes — including the vetoes of a large number of uncontroversial bills that passed both houses of the Legislature with overwhelming Republican and Democratic support — is a consequence of the administration’s failure to send its officials in to testify on legislation while it is still being shaped in committee.
Similarly, Christie administration officials, particularly members of the governor’s office, routinely refuse invitations from legislative committees to testify. Assemblyman John Wisniewski, chairman of the Assembly Transportation Committee, was just the latest legislative leader to voice frustration yesterday after New Jersey Transit officials failed to show up to answer questions about the February 2 Super Bowl snafu, saying they were waiting for completion of their internal investigation.
Ironically, it was the refusal of administration officials to testify on the 2011 Port Authority toll hikes that led the Assembly to give Wisniewski’s transportation committee subpoena power, which led directly to the uncovering of the email by Kelly, Christie’s deputy chief of staff, ordering the Bridgegate lane closures and engulfed the Christie administration in a series of scandals that has made national news for the past two months.
Further undermining that relationship with the Legislature is Christie’s tendency to go after legislative opponents publicly, from his suggestion that reporters “take a bat” to Senate Majority Leader Loretta Weinberg (D-Bergen) to his recent unsuccessful effort to oust Senate Minority Leader Tom Kean Jr. (R-Somerset) for the sin of trying to elect Republican senators in districts controlled by Christie’s Democratic political allies.
Christie’s tongue lashings of teachers, police, school superintendents, authority directors and, even Navy SEALs created a political culture in Trenton — prior to Bridgegate — in which critics feared disagreeing publicly with a popular governor with the ability to dominate the airwaves.
“It’s a vicious cycle,” one trade association leader said. “Christie doesn’t seek out public comment and people are afraid to publicly disagree with him. So he doesn’t find out what he’s doing wrong until after he’s done it, and then his personality won’t let him admit it.”