Prosecutors in the Manhattan district attorney's office in the public corruption unit and two lawyers from the Securities and Exchange Commission are looking into a $1.8 billion road repair on the Pulaski Skyway, an elevated roadway that connects Newark and Jersey City. They're investigating possible securities violations by the Port Authority of New York and New Jersey stemming from it agreeing to pay for those repairs.
The inquiries into securities law violations focus on a period of 2010 and 2011 when Gov. Chris Christie’s administration pressed the Port Authority to pay for extensive repairs to the Skyway and related road projects, diverting money that was to be used on a new Hudson River rail tunnel that Mr. Christie canceled in October 2010.The Port Authority lawyers resisted Christie's efforts to divert the funding, arguing that previous court decisions limited the Port's authority for road building to the airports or marine terminals under the agency's purview. Under what appears to be unrelenting pressure from the governor's office, the Port eventually redefined the Skyway project as as being related to “Lincoln Tunnel Access Infrastructure Improvements,” even though the Skyway and the Tunnel are not connected.
Again and again, Port Authority lawyers warned against the move: The Pulaski Skyway, they noted, is owned and operated by the state, putting it outside the agency’s purview, according to dozens of memos and emails reviewed by investigators and obtained by The New York Times.
But the Christie administration relentlessly lobbied to use the money for the Skyway, with Mr. Christie announcing publicly that the state planned to rely on Port Authority funds even before an agreement was reached. Eventually, the authority justified the Skyway repairs by casting the bridge as an access road to the Lincoln Tunnel, even though they are not directly connected.
That deception is potentially covered under a New York State law known as the Martin Act. Under that law, the Times reports, "prosecutors can bring felony charges for intentionally deceiving bond holders, without having to prove any intent to defraud or even establish that any fraud occurred." There could be criminal charges under the Martin Act, as well as civil action under the same law and potential civil action by the SEC under federal securities law.
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This is one scandal that Christie seems to be directly in the smack-dab middle of. In January, 2011, he gave a news conference in which he announced his intention to use the Port funding for the Pulaski Skyway project and tied the Skyway to the Holland Tunnell, "a move that took some Port Authority administrators by surprise, according to former agency officials." The Holland Tunnel is also not under the Port's jurisdiction and they also couldn't use funds for any improvements to roadways connected to it. Eventually, the Port gave way to pressure from the state, with Bill Baroni, then the deputy executive director giving in. (You'll remember Baroni—he resigned the post soon after that other bridge scandal broke.) On March 24, 2011, the deputy counsel at the authority sent the message "It's evident to say, but we gotta figure this out." A day later, the Port announced in a memo that it had the legislative authority to divert the funds.
So Christie's got another scandal on his hands, possibly more. The Times also notes, buried away in this story, that the Manhattan district attorney is in the early stages at looking at a number of bridge repair projects, including the Goethals and Bayonne Bridges.