Norcross, firms sue Murphy over tax credit investigation

May 21, 2019 GMT

TRENTON, N.J. (AP) — One of New Jersey’s most influential unelected political leaders — and a handful of firms linked to him — is suing Gov. Phil Murphy, alleging that a task force created to probe business tax incentives was unlawfully created.

George Norcross, the insurance brokerage Conner Strong & Buckelew, and the Camden hospital system Cooper University Health, as well as The Michaels Organization and law firm Parker McCay, filed the suit Tuesday in Superior Court in Mercer County.

They’re seeking the dissolution of the task force, as well as the repayment of $1.3 million in public funds that went to the New York-based law firm counseling the task force, whose lead attorney isn’t licensed to practice in New Jersey, according to Norcross’ lawyers.


″(All) Plaintiffs have a protected interest in safeguarding their reputations from the defamatory comments made or elicited about them by the Task Force Defendants,” the suit says.

In a written statement Murphy spokesman Darryl Isherwood said the task force’s investigation stemmed from the state comptroller’s audit of the Economic Development Authority, the agency overseeing tax credits. The audit found that the agency couldn’t verify that all the benchmarks required by law were being met before awards were made. Isherwood said the administration’s probe of tax incentives isn’t about a single person or city.

“We look forward to vigorously defending the task force, its investigation, and the actions of this administration in court,” he said.

The lawsuit is the latest escalation in what has become a gripping political dispute between Norcross and the first-term Democratic governor, who has focused much of this year on the state’s expiring business tax incentive programs.

Norcross compared Murphy to the King of England in interviews and defended his businesses’ use of tax credits as an effort to boost the long-languishing city of Camden.

Murphy has largely not engaged in the back-and-forth, though, he said recently that it’s “very hard” as someone with Irish roots to be compared to the King of England.

The suit alleges that the task force, which is chaired by former Rutgers Law School dean Ron Chen, unlawfully used subpoena power to try to produce documents from the plaintiffs in the suit. The suit argues that as an independent authority, the EDA is not subject to the governor’s authority to launch an investigation. Even if it were, the suit argues, that power wouldn’t extend to non-government third parties, like Norcross and the businesses.


The suit also takes issue with Jim Walden, the task force’s special counsel, and his firm Walden Macht & Haran, which has billed the state at least $1.3 million for its work on the task force. Walden isn’t licensed in New Jersey, according to the suit.

Norcross is Cooper’s chairman and is also an executive at Conner Strong & Buckelew. Though, he holds no office, Norcross is a former County Democratic Committee chair, a major party fundraiser and the brother of Democratic Rep. Donald Norcross, of Camden.

Earlier this month, the task force held a public hearing that raised questions about whether some of the Norcross-linked firms bet obligations to get tax credits. Cooper, for example received $40 million over 10 years, with about $13 million already paid out.

During the hearing, the task force presented emails showing that Cooper said it had initially no intention of leaving New Jersey but then later said it was considering a move to Philadelphia, which the EDA cited as a factor in awarding the credits.

That hearing came just after reports by The New York Times and WNYC and ProPublica raised questions about how the incentive law was written and doled out in Camden.

The Times reported that a lobbyist with Parker McCay helped write the legislation. WNYC and ProPublica reported that Camden got about four times as many tax breaks as other cities.

The plaintiffs in Tuesday’s suit said they’re eager to set the record straight and would participate in planned legislative hearings on tax credits. They were not at the task force’s May hearing.