Showdown brewing on the waterfront

Gov. Chris Christie has been furiously scribbling with his veto pen recently. Last week he had to check with the Waterfront Commission to make sure he wasn’t writing in invisible ink.

The commission said they got the note, and an unexpected one six months later.

Christie asked for a $125,000 budget line reduction last year, and the commission abided, but didn’t do what the governor asked. Christie wanted specific raises revoked, not just a reduction.

He wrote to the bi-state dockside patrol commission on Friday: “I am disturbed to learn your office ignored my directive, and indeed gave discretionary raises totaling $123,000 to non-contractual employees…Those salary increases were awarded in contravention of my letter, which eliminated funding for such salary increases.”

A source in the Governor’s Office provided a recent email from Waterfront Commission Executive Director Walter Arsenault that classifies the salary raises as “discretionary,” but the commission’s attorney has a different interpretation.

“Initially, three years ago, these were discretionary raises,” said general counsel Phoebe Sorial, but the raises were withheld pending a N.Y. Inspector General’s report. After the report and a commission overhaul, those who remained were then given their raises by the new administration.

“Those raises, we have a strong basis to say, are contractually obligated,” Sorial said yesterday.

Calling it a blatant violation of his June 23, 2010 directive, Gov. Chris Christie yesterday demanded that the Waterfront Commission of New York Harbor explain why it defied his June 23, 2010 veto of the Commission’s budget, which specifically instructed the agency to reduce its proposed budget by $125,000, the amount to be used for the Commission’s non-contractual discretionary salary increases.

The New Jersey governor has budget veto privilege, whereas the New York governor has privilege to veto minutes of meetings, like the meeting last summer when the raises were approved – with a Christie representative in the room.

Christie vetoed the budget line for salaries to match the raise amounts, which the commission reduced through attrition without giving back the raises. Christie’s administration made requests for information from the entire lot of authorities and commissions they interact with in November, and in the information submitted by the Waterfront Commission were the un-removed raise approvals.

Last week, Christie demanded a written explanation within seven days to explain why the increases were granted.

The Commission replied over the weekend.

“Frankly, we were surprised with both the timing and the content of the letter,” wrote Arsenault. “We are concerned with your misunderstanding that we disregarded your directive, and can only assume that the context and timeframe of the raises were not shared with you.”

He went on to explain that a member of the Governor’s Authorities Unit attended the meeting in June where the raises were approved by the commissioners.

“(She) did in fact attend that meeting and was seated at the conference table, as opposed to taking a place in one of the observer chairs in the Commission room,” Arsenault wrote, explaining that the commissioners discussed at length the options in regards to the raises, including their reluctance to compel litigation.

“Though (the Governor’s Authorities Unit representative) was given every opportunity to comment on our discussion and to forward the administration’s views, she declined to comment at the meeting. Indeed, we would have welcomed her input at the meeting because it would have informed the Commissioner’s decision.”

Once the raises were enacted, the Waterfront Commission believed they were, to an even greater degree, necessary obligations.

When Christie nixed the raises through the budget, the Waterfront Commission found a way to oblige his veto, but not walk headfirst into a handful of lawsuits.

Christie said at his press conference this week that Authorities Unit Director Deborah Gramiccioni was clear about the raises when the veto came down.

Gramiccioni, whose five-attorney squad is overseen by the Attorney General’s office, is many things, he said, but subtle is not one of them.

“A misunderstanding?” he said. “They want to play games? Play games…at your own risk.”

State Sen. Ray Lesniak (D-Elizabeth) – not someone Christie often finds himself on the same page with – has a bill in the Senate that would allow Christie to veto minutes of the Waterfront Commission, not just the budget.

“There’s parts of Sen. Lesniak’s bill that I’m in favor of,” he said, but there’s parts that he’s not.

Aside from expanding the type of veto rights to both governors, it also allows both states to patrol regulations and retention of  counsel, private consultants, or auditors.

Lesniak, who also has another bill to eliminate the Waterfront Commission altogether, said of the latest developments, “This guy Arsenault believes he’s above the law.”

“He sent a snotty response to my demand to get the money illegally paid (former Commissioner Barry) Evenchick for serving as a commissioner illegally,” Lesniak said, referring to the former commissioner who was never approved by the N.J. state Senate. “Then there was the sausage vendor.”

The Waterfront Commission recently went after a longshoreman for repeatedly copping food from a dockside sausage vendor without paying for it, which Lesniak said is not the type of crime he expects from a multimillion-dollar bi-state agency.

“I can’t wait to get Jan Gilhooly confirmed by the Senate,” Lesniak said of Christie’s nomination to replace Evenchick on the commission. Gilhooly is a 29-year veteran of the U.S. Secret Service and former Special Agent in Charge in the Newark office.

“I think what I want to do is see what happens when we get a responsible adult on the board,” he said, echoing Christie’s mantra of getting “adult supervision” in these authorities. (Lesniak said he was using the term first.)

The Waterfront Commission looks forward to the addition of Gilhooly, and had pressed Christie to either have the Senate confirm Evenchick, or put up a replacement, before Evenchick made headlines last year for having a Manhattan parking spot reserved for commission meetings by a cop.

Lesniak said he’s pushing to have Gilhooly put before the Senate Judiciary Committee for approval, then a floor vote.

As far as Arsenault, who Lesniak repeatedly accused of being “above the law,” he was appointed executive director in 2008 after a major overhaul of the corrupt commission. He is the grandson of a longshoreman and a former prosecutor in New Jersey and New York, who worked in the N.Y. County District Attorney’s Office, mostly as chief of the Homicide Investigation Unit, and as first deputy commissioner of the New York City Department of Investigation.

“He literally had books written about him,” said Commissioner Ronald Goldstock.

Goldstock told PolitickerNJ yesterday that the only thing Arsenault was above – far and away – was the group of candidates for the tough job he’s in.

“I hired Walter Arsenault after an independent search,” Goldstock said. “He is a consummate professional and far above believing that he’s above the law. He is one of the few people I have found to be an absolute straight arrow.”

He praised Arsenault for taking over an agency mired in corruption, facing budget cuts, and expecting to be the ire of some people’s eye once the turnaround was underway.

Revoking licenses on the docks, aiding in major mob busts, and holding public hearings would not be popular with anyone attached with the old regime.

“These were serous investigations,” Goldstock said. “We made it our mission publicly to change the culture of the waterfront within five years. We knew that we would start to be attacked.”

Yesterday, Goldstock and the Waterfront Commission, N.J. Attorney General Paula Dow, and N.J. Criminal Justice Director Stephen Taylor also announced that “a top official of the International Longshoremen’s Association, a Newark police officer and a third man were indicted today in connection with an investigation into an alleged scheme to extort money from dock workers by demanding ‘tribute’ for better jobs and wages.”

From the release: “The indictment stems from Operation Terminal, an ongoing investigation by the New Jersey Division of Criminal Justice and the Waterfront Commission of New York Harbor into the activities of a criminal enterprise that allegedly has exercised control and corrupt influence over International Longshoremen’s Association (ILA) locals operating shipping terminals at the Port of New York and New Jersey. Three other defendants were indicted in October.

“According to Director Taylor, the state grand jury indictment obtained by the Division of Criminal Justice Gangs & Organized Crime Bureau charges Nunzio LaGrasso, 60, of Florham Park, Secretary-Treasurer of ILA Local #1478. LaGrasso is Vice President of the Atlantic Coast District of all ILA locals. The indictment also charges Rocco Ferrandino, 68, of Lakewood, and LaGrasso’s nephew, Newark Police Officer Alan Marfia, 39, of Kenilworth.

“LaGrasso is charged with two counts of conspiracy (2nd degree), and one count each of extortion (2nd degree), commercial bribery (2nd degree), official misconduct (2nd degree), and money laundering (3rd degree). Ferrandino, a timekeeper at Maher Terminal in Port Newark/Elizabeth, is charged with conspiracy (2nd degree), extortion (2nd degree), commercial bribery (2nd degree), and money laundering (3rd degree). Marfia is charged with conspiracy (2nd degree), official misconduct (2nd degree) and obstruction of law or governmental function (4th degree).

“LaGrasso and Ferrandino were charged in connection with the alleged tribute scheme. Marfia was charged for allegedly using his access to police databases to obtain information for LaGrasso regarding undercover police vehicles that were conducting surveillance near his union office.

“The investigation into the alleged criminal enterprise at the New Jersey waterfront revealed that ILA members working at the shipping terminals are required to make a cash ‘tribute’ payment at Christmas time each year to the enterprise out of the year-end bonuses each ILA member receives called ‘container royalty checks.’

“It is alleged that those payments are funneled to the criminal enterprise through LaGrasso. The payments must be made for union members to receive high-paying jobs, preferred shift assignments and overtime, all as determined under the influence of the criminal enterprise. Each of the thousands of union members allegedly must make a payment that typically ranges from a couple of hundred dollars to a couple of thousand dollars depending on the size of the container royalty check. It is alleged that LaGrasso collected some tribute payments directly, but usually relied on accomplices such as Ferrandino to collect them.

“As a result of the investigation, the Division of Criminal Justice obtained an indictment on Oct. 26, 2010, charging Joseph Queli, 64, of Wall, and Nicholas Bergamotto, 63, of Newark, with loansharking and money laundering. Queli’s wife, Regina Queli, 62, was charged with money laundering and tax evasion for allegedly handling criminal proceeds and failing to report them on tax returns. The indictment was sealed until Jan. 10, 2011 because of the ongoing investigation.

“It is alleged that as part of the criminal enterprise at the Port, Queli made loans to ILA members at usurious interest rates, ranging from 78 to 156 percent per year. Queli or Bergamotto, acting on his behalf, would allegedly demand weekly payments from the union members of 1½ to 3 percent interest on the loan amount.

“Bergamotto allegedly gave the money he collected on such loans to Queli. Queli is also charged in the indictment with theft by extortion because he allegedly threatened bodily injury to one man if he did not make his loan payments.

“LaGrasso, Ferrandino, Marfia, Queli and Bergamotto were initially arrested and charged in the investigation in April 2010. All five men remain free on bail.”


Showdown brewing on the waterfront