NON-EXISTENT $2,875,000 GRANT FUELS UNION CITY BUDGET FRAUD;            
UNION CITY CONCERNED CITIZENS GROUP DEMANDS FEDERAL INVESTIGATIONUNION CITY, NJ -- February 5, 2013 -- Union City’s current municipal budget is fraudulent. It contains a mysterious $2,875,000 revenue item that is supposedly a grant from the Port Authority. THERE IS NO SUCH GRANT AND THERE NEVER WAS. In fact, there was never even an application for any such grant. The current Union City budget that expires on June 30 is short $2,875,000.

This fraud was perpetrated by State Senator and Union City Mayor Brian Stack and rubber stamped by the New Jersey Division of Local Government Services. The State approved Union City’s budget -- and the Port Authority grant -- even though there is no evidence that the grant ever existed.  The purpose of the fraud was to cover up Mayor Stack’s reckless spending by patching a huge hole in the municipal budget.

Records obtained from Union City, the Port Authority, the Governor’s Office and other state agencies show that there is no grant application, no approval letter, no record of any correspondence between the Port Authority and Union City and no documentation of any kind that would support the existence of the grant.

Despite being provided with this information, the State Comptroller refused to investigate the matter (Exhibit A).

“It appears that state budget laws were ignored or deliberately violated because of Mayor Stack’s political juice with the Governor’s office,” said UCCCG attorney Eric Dixon.  “This reeks of politics and hypocrisy. Unfortunately, the state refuses to investigate, so we are calling on the U.S. Attorney to step in and review this matter impartially.”

The only record that does exist is a letter supposedly dated June 6, 2012 from Governor Christie addressed to the Port Authority asking it to make $2,875,000 in grant money available to Union City for certain street improvements (Exhibit B). But the letter is also shaky because the date was not typed on the letter in the same font as the body of the text. Just look closely at the “J” in June and compare it to the “J”s in the text. They’re different.  Did someone else alter or backdate the Governor’s letter?

That letter was apparently never mailed or faxed to the Port Authority since the Port Authority’s response to an OPRA request shows it has NO RECORD of having received the Governor’s letter or anything else related to an application for, or consideration of, any such $2,875,000 grant to Union City (Exhibit C).

Nonetheless, the Governor’s office did fax a copy of his letter, supposedly dated June 6, 2012, directly to Mayor Stack’s office on July 13, 2012 (Exhibit D).

At no time did Union City even apply for the grant. At no time did the Governor’s office have any communication with the Port Authority about the grant. Nevertheless Union City included a general revenue item of $2,875,000 as an unrestricted grant from the Port Authority (Exhibit E). 

It should be noted that Union City’s budget does not even bother to restrict those “grant” monies to the street improvements mentioned in the Governor’s letter.

The budget was submitted for approval to the Division of Local Government Services which is the State agency that reviews all municipal budgets to ensure that they are correct, have proper back up and are in compliance with law.

Had the Division done its job and demanded ANY documentation whatsoever to back up the claim of such a large unrestricted grant from such an unlikely source the fraud would have been uncovered and the “grant” disallowed in the budget.
Unfortunately the Division did not -- or would not -- do its job and a budget which relies on $2,875,000 of nonexistent grant money was approved.

The laws of the State of New Jersey are supposed to apply equally to everyone. Under the current administration they do not apply to State Senator and Mayor Stack and the situation grows more outrageous with each episode.

[A PDF file for all exhibits is available upon request to Eric Dixon at edixon@NYBusinessCounsel.com]