You’re fired, governor says to Christie appointees. Board members at beleaguered agency mostly ignore him.

Updated Apr 17, 2019

It could be a long goodbye.

A day after Gov. Phil Murphy called for the resignations of five members of the Economic Development Authority board appointed by his predecessor, only the chairman has stepped down — his photo and bio quickly scrubbed from the agency’s website.

Four others have been silent, and have given no indication that they are going anywhere. The governor’s office said none had resigned. None returned calls for comment.

Meanwhile, former Gov. Chris Christie, a Republican, lashed out Wednesday at Murphy, calling the move by the Democratic governor to oust those he had appointed to the board a “partisan political assassination.”

Christie charged that Murphy took aim only at Republican commissioners, who he argued had voted the exact same way as their Democratic counterparts on a range of economic development matters before the EDA.

“Now let me tell you something, everybody. If that had been done in the Christie administration, there would have been mayhem,” Christie asserted at a public appearance in Woodbridge.

A spokesman for Murphy, in a sharp response, declared that “policy and fact-based analysis took a backseat to backroom political deals” in the Christie administration, and said the new governor was committed to “turning the page” from the economic policies of the previous administration.

“It’s no surprise to see Governor Christie defend a program that his own comptroller found ‘improperly awarded, miscalculated, overstated and overpaid’ tax credits,” Murphy spokesman Dan Bryan said in a statement.

The dispute over the direction of the state’s economic development agency already has the business community on edge.

Tom Bracken, president and CEO of the New Jersey Chamber of Commerce, said the EDA is in complete flux. “It is decimated. The chairman has resigned, more changes to the board are expected, and the business incentive programs it administers are set to expire on June 30,” Bracken said. “This is a lot of upheaval in an organization whose mandate is essential to New Jersey’s economic health.”

The EDA assists businesses looking to move to the state or expand with a portfolio of tax credits, grants tax-exempt and taxable bond financing, loans, and loan guarantees. But the tax incentive program has come under attack in recent months. Supporters, including Christies, have argued that it has helped create and retain employers and jobs in a high-cost state facing stiff competition beyond its borders. Opponents have argued the programs lacked proper controls.

The authority has been under a harsh spotlight since a scathing audit by the state comptroller in January, which criticized its management of a program it found had handed out billions in tax credit incentives to keep companies that had no real intention of leaving the state, or without verifying that jobs would be created as promised.

In the wake of the audit, Murphy quickly convened a special governor’s task force, which disclosed last week that it had uncovered evidence of "unregistered lobbying on behalf of special interests,” and referred the matter to law enforcement. Officials would not provide any details on the nature of the alleged offense.

The fight over the EDA all came to a head on Tuesday, when the governor asked for the resignations of all the authority’s board members who serve as gubernatorial appointments. The board includes eight public members — four named by the governor, two recommended by the Senate President and two recommended by the Assembly Speaker. Five others make up the board by virtue of their positions in the administration, including the state treasurer, New Jersey’s state banking commissioner and the labor commissioner.

The positions are unpaid.

The gubernatorial appointees asked to step down were Laurence M. Downes, the CEO of New Jersey Resources Corp., a board member and chairman of the EDA; Louis Goetting, a public policy consultant who served as deputy chief of staff to Christie; Bill Layton, a lobbyist who had served as the political director of the New Jersey Republican State Committee; attorney Thomas P. Scrivo; and attorney John T. Lutz, who serves as an alternate.

All of those asked to leave had been appointed by Christie. Within hours of the request, Downes — a Christie appointee who was actually named chairman by Murphy — tendered his resignation. Goetting’s term does not expire until September 2020. The terms of Layton, Scrivo and Lutz expire in December of this year, according to an EDA spokeswoman.

The terms of three board members recommended by the Assembly Speaker and Senate President expired last year and they are serving as holdover appointments.

Matthew Hale, a political science professor at Seton Hall University, said Murphy may have a hard time removing the others who do not go voluntarily. He observed that the staggering of appointments to agencies such as the EDA was a good-governance reform that was put in place to allow some institutional memory between administrations and remove politics from decision making.

Whether the governor has legal authority to force them out would be set in the state statute that established the EDA and in fact, that statute says commissioners can only be removed for cause.

“We’re clearly a long way from cause to removing these people,” suggested Hale. “The governor may argue they made bad judgments, but if bad judgment were cause for removal from state government, there would be nobody left.”

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