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For Immediate Release: Sep 05, 2014
Contact: Kirsten Stade (202) 265-7337

FEDERAL AUDIT TAGS CHRISTIE FOR POST-SANDY TV ADS

“Significant Deficiencies” May Cost State $23 Million in “Unsupported” Expenses



Trenton — A new federal audit cited major improprieties in the controversial “Stronger then the Storm” TV campaign following Superstorm Sandy. Financial irregularities and lapses by Christie administration officials may force the state to reimburse of as much as $23 million in federal aid, according to Public Employees for Environmental Responsibility (PEER).

While the August 29, 2014 audit from the U.S. Department of Housing & Urban Development (HUD) Office of Inspector General (IG) found “nothing improper in the content” of the ads, it did find “significant deficiencies” in the manner in which they were procured. The audit cited the state for –

  • Falsely certifying compliance with federal requirements. The audit details several examples of non-compliance such as the lack of an independent cost analysis before the project was bid; .
  • Failing to collect timesheets to support $3.5 million in labor costs charged by the contractor’s employees to HUD; and
  • Altogether, expenditures of $23 million in “unsupported” costs which the auditors “cannot determine eligibility at the time of the audit.”

“This audit was far from a clean bill of health. To the contrary, it raised a number of yet unanswered questions about potential misappropriation and fraud,” stated New Jersey PEER Director Bill Wolfe. “Not only did state officials violate the rules designed to keep the taxpayer from getting ripped off, they then got caught lying about it.”

At issue is how New Jersey met the requirements for a HUD waiver allowing the state to spend no more than $25 million of its disaster recovery grant to fund a “tourism marketing program.”. The IG audit was performed under an August 8, 2013 request by Congressman Frank Pallone (D).

The HUD IG has other reports to issue, as indicated in an agency response to a January 15, 2014 PEER request to expand the scope of their inquiry beyond the TV adds. PEER requested review of the role of the law firm Wolff & Samson which had been selected as Sandy auditors despite obvious conflicts of interest; the failure to conduct a “science based risk analysis” and to consider climate change as required by new HUD rules and Obama Executive Order; the lack of a “transparent and inclusive process” required by HUD rules; the propriety of state exemption of infrastructure from permit requirements; and whether the Seaside Park boardwalk fire was eligible for Sandy funding, among other issues.

“If there is this much mismanagement in one small part of the Sandy recovery program, we will need smelling salts before this is all over,” Wolfe added. “The impunity of conduct by Christie officials – such as not requiring timesheets – is emblematic of larger problems. Who gets paid without submitting proof you did any work?”

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Read the HUD IG audit findings

Scan the PEER audit expansion request

See the HUD IG reply


New Jersey PEER is a state chapter of a national alliance of state and federal agency resource professionals working to ensure environmental ethics and government accountability