Does this story sound familiar? An independent, bi-state agency that oversees major bridges is headed by gubernatorial appointees but otherwise free from direct voter control. It spends hundreds of millions on “economic development” grants and sweetheart loans for projects connected to board members, employees, and local politicians — borrowing against toll revenues to finance the projects. A state investigation accuses numerous individuals of treating the agency “like an ATM.” The spending is shut down, the U.S. Attorney launches a long-running investigation, but legislators fail to win approval for a reform bill.
The Port Authority of New York and New Jersey? Actually, no — it’s the Delaware River Port Authority, its smaller cousin downstate, between South Jersey and Philadelphia. While the amounts of money and the political ramifications are relatively minor compared with the scandals up north, the alleged shenanigans at the DRPA are sadlyrecognizable.
What it is: The Delaware River Port Authority controls four bridges, a passenger rail line across the river, and until recently, a ferry service. The agency has an $89 million budget and expects $302 million in revenue this year.
Despite its name, the DRPA does not oversee a port, though it ran a cruise ship terminal until 2010. The area’s marine terminals are actually managed by two state agencies: the Philadelphia Regional Port Authority on the Pennsylvania side and the South Jersey Port Corp. on the New Jersey side.
The governance structure: The DRPA has 16 commissioners, eight from each state. The New Jersey commissioners are appointed for five-year terms by the governor and may not be removed until their terms expire. Six of the Pennsylvania commissioners are appointed by the governor, who can replace them at will. The state treasurer and auditor general hold the other two spots.
The four bridges: The DRPA maintains and operates the Ben Franklin, Walt Whitman, Commodore Barry, and Betsy Ross bridges. The Ben Franklin and Walt Whitman each carry about 100,000 vehicle trips a day, while the Commodore Barry and Betsy Ross carry around 30,000. The basic car toll is $5, with buses and large trucks paying more.
The Ben Franklin is the agency’s oldest bridge, having opened in 1926. Connecting Center City Philadelphia and Camden, it carries I-676/Route 30 and the PATCO rail line, which is operated by the DRPA’s Port Authority Transit Corp. . The Walt Whitman opened in 1953 and carries I-76 between South Philadelphia and Gloucester City. It is the busiest of the four bridges.
The agency’s southernmost crossing, the Commodore John Barry Bridge, opened in 1974 and carries Route 322 for more than two-and-a-half miles between Bridgeport and Chester, PA.. It is being repainted over five years at a cost of $100 million. The Betsy Ross, which open in 1976, is part of Route 90 between North Philadelphia and Pennsauken.
The rail line: PATCO opened in 1969 and has 13 stations, from the eastern terminus in Lindenwold to the western terminus at 15th/16th streets and Locust in Philadelphia. Ridership has generally been on an upswing over the past decade, to almost 40,000 passengers a day or 10 million a year, though the number dipped recently because of construction and poor weather.
In January 2014 the agency began a two-year, $103 million project to replace the track system on the Ben Franklin Bridge, replace railroad systems, and perform structural rehabilitation. It is also in the midst of a $194 million project to rebuild its 120 train cars. PATCO is considering reopening its Franklin Square station in Philadelphia, which closed in 1979, but has balked at the cost, which has been estimated at between $18 million and $26 million.
The ferry: The DRPA took over the RiverLink ferry between Philadelphia and Camden in 2000. Earlier this year it sold the service, include the ferry vessel and two docks, to a joint venture of the Delaware River Waterfront Corp. and the Cooper’s Ferry Partnership for $300,000.
Economic development spending: In 1992 the DRPA’s compact was modified to allow it to spend money on regional economic development projects in the port region. Until the program ended in 2011, the agency spent close to half a billion dollars, either using surplus funds or borrowing against its tolls and other revenues. That eventually forced the agency to cut back on its core transportation mission, according to 2012 report by New Jersey Comptroller Matthew Boxer.
[related]Among the projects funded were museums, stadiums, concert hall, cancer center, and the Army-Navy football game, the Philadelphia Inquirer reported. Much of the money reportedly went to politically influential recipients or people with connections to DRPA commissioners. Many people “treated the DRPA like a personal ATM, from DRPA commissioners to private vendors to community organizations,” Boxer said.
A criminal investigation: In December 2013 the U.S. Attorney’s office for the Eastern District of Pennsylvania reportedly subpoenaed several DRPA employees and officials, including at least three commissioners: Camden County Freeholder Jeffrey Nash, Philadelphia lawyer William Sasso and South Jersey labor leader Richard Sweeney, the brother of Senate President Stephen Sweeney (D-Gloucester).
The subpoenas covered years of records of economic development spending, including low-interest sweetheart loans to developers in Philadelphia and Camden, which were paid back slowly or not at all. The probe also looked at millions funneled through the Philadelphia Industrial Development Corp., the Inquirer reported. That money was ostensibly for small-business development but actually went to tourism groups or nonprofits, some with close ties to DRPA board members, and in one case to a multibillion-dollar commercial real estate developer.
The grand jury investigating the matter was active as recently as April 2014, when a prosecutor interviewed Nash. But the U.S. Attorney’s office has refused to even confirm the investigation and so far no indictments have been issued.
Insurance contracts: Among the practices Boxer criticized was the sharing of commissions paid by the DRPA for insurance-broker services. His report highlighted a series of transactions in which the agency’s broker, Willis of New Jersey, paid $455,000 in “referral fees” to South Jersey Democratic leader George Norcross’s insurance brokerage and an associated broker. Similar payments were made between two firms in Pennsylvania.
Since Norcross was not employed by the DRPA, it was unclear how the politically powerful Democrat ended up picking the agency’s broker. Boxer could find no DRPA records on the selection of Willis. Norcross vehemently rejected any suggestion of wrongdoing, saying his firm had a marketing agreement in which it was paid for referring work it didn’t want to the other broker.
It’s been noted that the agency’s CEO at the time, John Matheussen, had a long relationship with Norcross, who reportedly got him the job in 2003. Matheussen, a Republican, had quit the state Senate to take the CEO position, which helped Norcross’ South Jersey Democratic machine take the Senate seat and contributed to Democrats winning control of the chamber.
Leadership changes: In 2012 the DRPA hired its first inspector general, former FBI agent Thomas Raftery, to root out fraud and waste. But after clashing with commissioners and staff he quit last fall. Senior investigator David Aubrey was appointed acting IG and the board said a search for a new inspector general would begin immediately. A spokesman said last week [May 22] that there was nothing new to report on the search.
Last year, as the grand jury was probing the non-transportation spending that Matheussen had authorized during his decade-long tenure, he left the agency to become a Superior Court judge. Gov. Chris Christie nominated him with the support of Senate President Sweeney, whose brother serves on the DRPA board. John Hanson, a Cherry Hill Republican who was previously a commissioner and then the agency’s CFO, was selected as the new CEO. He has said the agency needs to “build public trust and accountability.”
The makeup of the DRPA board also changed substantially in March when new Pennsylvania Gov. Tom Wolf, a Democrat, exercised his authority and removed members appointed by his Republican predecessor Tom Corbett. With Wolf’s appointment of six Democrats to the positions he controls, all 16 board members are now Democrats.
The five-year terms of the New Jersey commissioners appointed by former Gov. Jon Corzine, a Democrat, have expired, but Christie has not replaced them. He may be deferring to. Sweeney and to Norcross, who have formed a political alliance with the governor over state aid to Camden and other issues.
Proposed reforms: In recent years state legislators have repeatedly proposed DRPA reform legislation. But the measures, which would require approval in both states and by Congress, have made little headway.
One bill written by Sen. Joe Pennacchio (R-Morris) and two Pennsylvania legislators last year would ban economic development programs, subject the agency to open-record laws, restrict employee perks, require regular audits, crack down on conflicts of interest, and impose other rules.
Hanson has called the legislation unnecessary because the DRPA already ended its economic development funding — though, without a legal ban, the commissioners are free to reinstate it in the future.
Sweeney, who controls which proposals are considered in the legislature, has also said Pennacchio’s bill is unnecessary. That despite his fervent support for similar legislation that would reform the Port Authority of New York and New Jersey and for an attempted override of Christie’s veto of that measure.
Light rail extension: In 2009 the DRPA and Corzine proposed a new rail line between Glassboro and Camden, where it would connect to PATCO and the River Line light-rail line. Initial work on an environmental impact study was underway last year, but the Federal Transportation Administration has suspended the $1.6 billion project because neither DRPA nor NJ Transit has agreed to build and run the new line. State funding is dependent on replenishment of the state’s nearly depleted Transportation Trust Fund, officials said.