Port Authority Claims It Can Clean Its Own House, While Legislators Push Reform Bill

Meir Rinde | February 20, 2015 | Politics
Lawmakers in NJ and NY work to resurrect reform measures vetoed by both Christie and Cuomo

george washington bridge
As the board of the Port Authority of New York and New Jersey moves ahead with major changes to its leadership structure in response to Bridgegate and other scandals, its commissioners are rejecting charges that their internal efforts to boost transparency and accountability are inadequate compared with a reform bill passed by legislators in both states.

The commissioners voted yesterday to begin implementing governance changes despite vows by Democrats in the New Jersey Senate and Assembly to attempt an override of Gov. Chris Christie’s veto of the reform bill. That bill, which would subject the Port Authority to court-enforceable open-meeting laws; require commissioners to testify before either Legislature; and make numerous other changes, passed both states’ Legislatures unanimously last year.

Christie and Gov. Andrew Cuomo issued their vetoes in late December, saying they wanted the Port Authority to instead follow the recommendations of a special panel consisting of three of the commissioners and the governors’ lawyers.

Senate President Stephen Sweeney (D-Gloucester) vowed this week to schedule multiple override attempts despite Republican legislators’ reluctance to provide enough votes to overturn Christie’s veto. In New York the bill has been reintroduced after expiring at the end of 2014.

Yesterday during a meeting in Jersey City the full Port Authority board voted to accept almost all of the special panel recommendations, most importantly the switch to a single CEO instead of a bifurcated leadership consisting of an executive director chosen by New York’s governor and a deputy executive director selected by New Jersey’s governor.

The current structure has been blamed for management problems, particularly for allowing New Jersey officials to orchestrate the Bridgegate lane closures in Fort Lee without the knowledge of executive director Patrick Foye, a New Yorker.

Chairman John Degnan said the board has already solicited bids from seven search firms that would look for CEO candidates nationwide. A firm could be selected next month, and the board hopes to select a CEO by November, Degnan said. He also said Foye, who was appointed in 2011, could be considered as a candidate for the job.

When a CEO is hired later this year, the board will also change its leadership structure, as recommended by the special panel report. Instead of having a chairman from New Jersey and vice chairman from New York, the states will begin rotating the chairmanship every two years, Degnan said.

Commissioner Richard Bagger, a special panel member and former Christie chief of staff, noted during yesterday’s meeting that the board has already made other reforms, deciding for example to begin following New York’s Freedom of Information (FOIA) and New Jersey’s Open Public Records Act (OPRA) laws. Reform bill sponsor Sen. Bob Gordon (D-Bergen) and others say such internal rules are inadequate because they do not have the force of law and could be changed at any time.

In a press conference after the meeting, Degnan defended the new rules as the quickest way to improve transparency, given that the commissioners are gubernatorial appointees who must give weight to the governors’ wishes. The governors also have veto power over board actions.

“We’ve implemented reform on FOIA that’s as good as anything the law will require us to do. For the moment, it’s done, it’s available, and I believe we’ve met our responsibility,” he said. “The Port Authority lives in a world of practicality. There is a moment of time here where we have two governors endorsing comprehensive reform, and the Port Authority needs to take advantage of that opportunity, and get it done before minds change or people get distracted.”

“I’m not saying legislation shouldn’t be passed or should be passed. Legislation should not be passed, though, that would hinder reforms recommened in the Special Panel report. If legislation were to be devised which legislatively implemented the sweeping, true, structural reforms, all the better,” Degnan said.

As an example of legislation that could hinder reform, he pointed to language in the reform bill that would require certain actions of the executive director and deputy director. He asked if the bill would thus bar hiring of a CEO to replace those two officials.

Other special panel recommendations the commissioners say they will implement soon include hiring a chief ethics officer and shutting down a $600 million regional development fund that governors have used to pay for non-transportation-related pet projects. In the longer term they will sell off the World Trade Center site and other non-core real estate properties, and will restart the project to build a new trans-Hudson tunnel. Planning for a new Manhattan bus terminal and a new central terminal at LaGuardia Airport are already in the works.

One recommendation that the commissioners did not endorse — even though some of them came up with it — was for all the board members to offer to resign as an indicator of their willingness to accept the special panel’s vision.

“Part of this was to make sure the governors had the support of all of the commissioners for these sweeping reforms,” said Vice Chairman Scott Rechler, a Cuomo appointee. “The other part was having a line of demarcation, where they can ensure the commissioners are supportive and ready to move forward … So there was a demarcation of the old and the new.”

Degnan said some commissioners were unwilling to offer their resignations or felt such a move would jeopardize the independence they derive from being appointed to six-year terms that governors cannot end prematurely. After initially supporting the resignation offers, he changed his position and now opposes the idea as unnecessary given the board’s acceptance of all the other recommendations, he said.

While Degnan, Rechler and Foye sought to portray Bridgegate and other controversies as mistakes the Port Authority has learned and moved on from, the agency continues to be dogged by investigations and new revelations of alleged past misdeeds.

U.S. Attorney Paul Fishman is continuing a wide-ranging investigation of the Port Authority with an eye toward possible indictments. Earlier this month, Fishman’s office subpoenaed agency records related to travel by former board chairman David Samson and is apparently investigating whether Samson pressured United Airlines to launch what he called “the chairman’s flight” from Newark to an airport near his weekend home in South Carolina.

United, the largest carrier at the Port Authority-controlled Newark airport, reportedly canceled the underused route three days after Samson quit the board last April.

“It would be improper for any commissioner of the Port Authority, and illegal, to use his official position to secure a personal benefit. If it happened here, it’ll be the subject of the outcome of the investigation, and people who were involved will have to pay the consequences,” Degnan said. “There’s no failing on the part of the Port Authority, or lack of clarity, about the responsibility of a commissioner with respect to that.”

Degnan also responded to questions about VIP treatment granted for years to commissioners when they flew through the Newark or JFK airports, including escorts from the tarmac and bypassing security lines. Current Commissioner David Steiner was among those who benefited from the special treatment, in addition to Samson, two other former commissioners, and their families, the Bergen Record reported.

Degnan said the VIP treatment dated to a time when, “in a different climate,” commissioners frequently asked for such assistance, but was stopped last year. He also defended Steiner, who was first appointed to the board in 2003, noting his many years of service on the board under four governors.

Supporters of the legislative reform bill say its legally binding accountability measures are needed to prevent the kinds of abuses of power that Samson and the alleged Bridgegate conspirators are accused of.

Among other measures, the bill would create a whistleblower statute for the Port Authority, require the agency to record officials’ contacts with lobbyists, and mandate submission of financial disclosure statements by commissioners and top officials. The commissioners would have to adopt a code of ethics, and, for the first time, appear before state legislative committees at either Legislature’s request.

They would also be required to sign an oath affirming their fiduciary duties to the Port Authority, to recuse themselves from voting on matters on which they might have a conflict of interest, and to certify the agency’s financial statements.

The commissioners have had a code of conduct for decades and have recently adopted more rules aimed to prevent or catch misconduct, but as an independent quasi-governmental agency the Port Authority is not subject to court enforcement of its self-imposed rules.

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