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Public Statements

Letter to Inspector General David A. Montoya - Investigation into Christie's Misuse of Disaster Aid for Political Gain

Letter

By:
Date:
Location: Long Branch, NJ

Congressmen Frank Pallone, Jr. (NJ-06) today called for an investigation into the contract and bidding process used by Governor Chris Christie for the marketing campaign to promote the Jersey Shore and encourage tourism. While the Congressman supports the campaign, he questions whether Governor Christie took advantage of the federal funds for his personal political gain.

In a letter to the Inspector General of the U.S. Department of Housing and Urban Development, Pallone questions the Governor's decision to award the contract to a bidder that cost the state $2.2 million more than a comparable firm's proposal. These taxpayer-funded television ads feature the Governor and have been aired in New Jersey and surrounding states during his reelection cycle. However, the proposal from the less expensive firm that was not chosen during the bidding process did not propose featuring the Governor in the ads.

"The fact that this particular proposal was chosen despite an obvious conflict of interest, in addition to the higher costs, raises serious concerns with the entire process. I fought hard for passage of the Sandy aid package in Congress by assuring our colleagues that this funding was critical to our recovery and that it would be spent responsibly without waste, fraud and abuse," wrote Pallone in the letter.

Had Governor Christie chosen the less expensive firm, $2.2 million in federal disaster aid could have potentially been directed elsewhere, for example, to provide 44 Sandy impacted homeowners $50,000 grants to raise their homes.

Full text of the letter follows:

David A. Montoya

Inspector General

U.S. Department of Housing and Urban Development

451 7th Street, SW

Washington, DC 20410

August 8, 2013

Dear Inspector General Montoya,

I write to you today regarding the State of New Jersey's Community Development Block Grant Disaster Recovery (CDBG-DR) Action Plan. The Department of Housing and Urban Development (HUD) provided a waiver for the state to spend $25 million of its CDBG award on a marketing campaign to promote the Jersey Shore and encourage tourism. While promoting tourism at the Jersey Shore in the wake of Hurricane Sandy is certainly a worthy endeavor, recent reports have led me to believe that the state has irresponsibly misappropriated funding allocated by Congress from the Sandy aid package and taken advantage of this waiver for political purposes. I respectfully request that you review and investigate the contract, bidding process utilized by the State of New Jersey, and appropriateness of the content of this marketing campaign.

Recently released documents relating to the bidding process and contract award for this marketing campaign show that the contract was awarded to a firm that is charging over $2 million more than the next lowest bidder to develop the marketing plan. The winning firm is being paid $4.7 million for their work, while a comparable firm proposed billing the state $2.5 million for similar work. This large discrepancy between the competing proposals raises concerns as to whether these federal funds are being spent in the most cost effective manner, and should be reviewed by your office.

II am also concerned that the winning bid proposed including Governor Chris Christie in the advertisements, while the lower cost proposal that was not selected did not. As you know, the Governor is running for reelection this year in a high profile race. It is inappropriate for taxpayer-funded dollars that are critical to our state's recovery from this natural disaster to fund commercials that could potentially benefit a political campaign. In these sensitive circumstances, even the appearance of a conflict of interest should be avoided.

The fact that this particular proposal was chosen despite an obvious conflict of interest, in addition to the higher costs, raises serious concerns with the entire process. I fought hard for passage of the Sandy aid package in Congress by assuring my colleagues that this funding was critical to our recovery and that it would be spent responsibly without waste, fraud and abuse. Many in Congress objected to this funding precisely because of concerns their citizens' tax dollars would be misspent. In that regard, the state's mismanagement of taxpayer funds for this marketing campaign is extremely troubling, especially when there are so many New Jersey residents still in need of assistance to recover and rebuild from this historic storm.

Once again, I ask that you investigate the state's actions regarding this contract selection process, the appropriateness of the Governor appearing in taxpayer-funded advertisements in an election year, and report back to Congress with your findings. We must ensure all taxpayer funds from the Sandy aid package are being spent appropriately. Thank you for your attention to this important matter.

Sincerely,

FRANK PALLONE, JR.

Member of Congress


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