New Scrutiny for Whistleblower Case

Chase Brush | October 11, 2016 | More Issues
Lawmaker says it’s unacceptable for state to pay out $1.5 million, then refuse to discuss terms of a settlement involving allegations of serious corruption

Whistleblower: Former Hunterdon County prosecutor Bennett Barlyn
Though both parties reached a $1.5 million settlement earlier this month following years of costly litigation, a high-profile whistleblower case between a former Hunterdon County prosecutor and the administration of Gov. Chris Christie may yet get a closer look from members of the New Jersey legislature.

Assemblyman John McKeon (D-Morris), chairman of the lower house’s Judiciary Committee, called last week for a “full public airing” of details of the settlement, which ended a drawn-out legal battle between Ben Barlyn, a former assistant prosecutor, and the state. The case concerned Barlyn’s claim that he was wrongfully fired six years ago after speaking out against the Christie administration’s quashing of a set of indictments to help political allies.

McKeon also introduced a bill on Friday that would bar public entities and public employees from entering into the kind of confidential agreement on whistleblower lawsuits that Barlyn and the state reached, and which has kept much of case material — that was uncovered through the litigation — from being released.

“The very essence of the whistleblower statute is to encourage the public discourse of whether it was corruption or wrongdoing or whatever. It’s counterintuitive that the litigation as part of a settlement should be stifled,” McKeon told NJ Spotlight.

The calls from the ranking lawmaker have the potential to shed more light on the recently-closed case, which began in 2010 after Barlyn complained that the withdrawal of indictments by then-Attorney General Paula Dow of three Republican law enforcement officials — Hunterdon County Sheriff Deborah Trout, Undersheriff Michael Russo, and former sheriff’s Investigator John Falat Jr. — was politically motivated.

All three had been indicted in May, 2010 on 43 counts of official misconduct, including failure to conduct proper background checks, forcing employees to sign loyalty oaths, and making a false law enforcement badge for Robert Hariri, the CEO at Celgene Cellular Therapeutics and prominent political donor who had given $6,800 to Christie’s first gubernatorial campaign.

Barlyn, along with fellow assistant prosecutors Charles Ouslander and William McGovern, had presided over the investigation. But Barlyn said that his office was overridden, when Dow, in what many experts have since agreed was an unusual move, took over the case and three months later convinced a judge to dismiss the indictments, citing “legal and factual deficiencies.”

Eventually, Barlyn was suspended for “insubordination” and later fired for what the prosecutor’s office characterized as issues with job performance. But he’s maintained that it was his questioning of the quashed indictments, as well as his suspicion that they might have been motivated by Hariri’s connections with Christie or Trout’s friendship with Lt. Gov. Kim Guadagno, whose campaign she supported in 2009, that led to his removal.

The controversy made national headlines over the past several months and at one point looked like it might rise to the level of another high-profile corruption case: Bridgegate, the closing of commuter lanes at the George Washington Bridge in 2013. Barlyn himself has pointed to parallels between that case and his own, arguing that both involve allegations of corruption at the bistate Port Authority and the misuse of political authority by the Christie administration.

He said his allegations implicate both Dow, who went on to a job at the Port Authority, and Christie’s former chief of staff Richard Bagger, who became an authority commissioner.

It never received quite the same amount of attention, though, partly because materials that Barlyn has said would help prove his accusations — including transcripts and exhibits from grand jury proceedings during which Trout and the two others were indicted — have never been publicized.

Though Barlyn did convince a judge to grant him access to those transcripts earlier this year, they remained for much of the trial under seal, and the terms of the new settlement require that confidential information acquired in the case not be disclosed.

“Because this was handled in the context of a private lawsuit as opposed to a criminal trial like Bridgegate, and because it resolved in a settlement, the discovery material is not going to be subject to public scrutiny,” Barlyn told NJ Spotlight in an interview last week. “And I would agree that’s unfortunate, but it’s not through any fault on our part.”

Barlyn said that despite serious effort, both he and Ouslander had trouble over the course of the litigation getting outside authorities, such as the Legislature or federal investigators, interested in the case. Ouslander, in a 2014 letter to the Legislature’s Select Committee on Investigation, asked then-chairman Assemblyman John Wisniewski (D-Middlesex) to expand the panel’s inquiry to include whether Dow was politically pressured by her boss to take over the prosecutor’s office and kill the indictment.

Barlyn sent his own letters, copies of which he forwarded to NJ Spotlight, to several parties asking them to look into the case. One of those letters was sent to the office of U.S. Attorney Paul Fishman, who at the time had been preparing indictments ahead of the federal Bridgegate trial. Barlyn wrote to Fishman’s office that following SCI’s decision not to investigate the case, he had “no recourse left at the state level to expose this administration’s serious breach of the public trust.”

Representatives from the state AG’s office eventually met with Barlyn, though Fishman, amid intense media coverage, later denied that that meeting had anything to do with his investigation into Bridgegate.

Another letter went to Attorney General Loretta Lynch, in which Barlyn said that the New Jersey AG’s office “appears to operate as an arm of Governor Christie’s administration, and not an independent agency.” Dated October 2015, the letter was sent after Barlyn received the grand jury materials, which he called “voluminous, encompassing nine volumes of transcripts.”

A parallel case, brought by Trout against the county for what she alleges was “malicious prosecution,” has also been rejected by three separate judges.

Barlyn, who also wrote to state Senate Judiciary Committee chairman Nick Scutari (D-Union) in 2014, just before the committee approved Christie’s nomination of Dow to a Superior Court Judgeship in Burlington County, said few of his letters elicited the kind of interest that could have helped propel the case forward. And meanwhile, he said, his civil suit had grown taxing on his family and his budget.

“A lot of people are saying well ‘gee, couldn’t you have gone to trial so we can know what you know?’” Barlyn told NJ Spotlight. “But my response is, well, no one is paying my legal fees.”

The state awarded him $1.5 million earlier this month, arguing in a statement that while it stands “by our dismissal of the criminal indictment that was at issue in this case,” the “decision to settle this employment matter was an economic one, driven by the anticipated costs associated with litigating the case to verdict.”

The state, which hired the politically connected law firm Gibbons PC to fight the case, shelled out more than $3 million in taxpayer funded legal fees — considerably more than Barlyn has originally sought — over the course of the litigation.

“Civil litigation is a really exhausting process, especially when it’s brought against a public entity,” Barlyn said. “Of course, the taxpayers of New Jersey would have been spared all of this expense, whether it be my settlement or the lawyer’s fees, had they not improperly fired me in the first place, and as a corollary did not dismiss an indictment which prompted me in my role as a prosecutor to complain in the first instance.”

But McKeon, who said Barlyn’s allegations make Bridgegate look like “no big deal,” suggested it might be an opportune moment, now that the case is closed, to seek answers regarding the settlement. He said that was one of the problems his committee had when grilling state officials, who said they could not release specific details because the case was still in litigation, about last year’s controversial settlement with Exxon Mobil over a series of environmental lawsuits.

“In that case, the state had to be defended. So nobody would have been permitted to speak,” McKeon said. “But once the case was resolved, now we have a right to know, now there’s no more substantive reason to keep the information confidential.”

McKeon’s bill, (A-4243), would prevent public entities and public employees from entering into confidential settlements of claims or actions where the employee asserts the protections of the Conscientious Employee Protection Act —which “prohibits all public and private employers from retaliating against employees who disclose, object to, or refuse to participate in certain actions that the employees reasonably believe are either illegal or in violation of public policy” — and under which Barlyn had brought his suit against the state.

The bill also provides that such settlements constitute public records under the open public records laws, but would keep with current state law that protects the name, address, and identity of a victim of a sex crime or child abuse who was under the age of 18 at the time of the offense from appearing in the indictments or other public records.

“It’s unacceptable that the state would spend $1.5 million in taxpayer money, then refuse to discuss the terms of a settlement involving serious corruption allegations,” McKeon said in a statement accompanying the bill last week. “I reiterate my call for both sides to voluntarily discuss the details of this settlement, but will be pursuing this legislative remedy in the meantime. Taxpayers deserve to know that this outrageous abuse of their money can never happen again.”

Barlyn called the Legislature’s interest “late in the day,” but said he welcomes McKeon’s legislation and any public hearings the assemblyman might want to hold on the settlement. He also said he has no doubt that others involved in the case, such as Ouslander and McGovern, would be open to testifying about what they know.

“When it comes to whistleblowers, my view is more transparency is always better than less transparency,” Barlyn said. “It keeps politicians honest. But this should have been a matter of public investigation and scrutiny years ago.”’