Joseph Pennacchio

New Jersey Investment Council Chairman Orin Kramer says the state's pension fund - under attack by Republicans for losing $118 in a Lehman Brothers investment - lost less over the last year than the funds of the 30 other states who make the information available on the Internet.

Kramer made the argument in a letter to state Sen. Joseph Pennacchio (R-Montville), who has been a vocal critic of the State Investment Council's decision to invest in Lehman shortly before it collapsed.  It was a response to a letter Pennacchio wrote to State Division of Investment Director William Clark to question why the state would not reveal which in-state companies the fund invested in as part of the two-year-old NB/NJ Custom Investment Fund program. 

In an interview with PolitickerNJ.com, Kramer said that the ranking is vindication of his strategy to diversify the state's holdings - a strategy that the Lehman investment ultimately came out of -- and that politicizing the council will jeopardize its future performance.

"The portfolio diversification that made that possible has been under political attack," said Kramer.  "When people make the pension system a political football, seeing that kind of ranking again becomes harder and harder to achieve." 

Although the state's pension fund lost 14.2%, or $10.9 billion, between June, 2008 and June, 2009, the average for the other states was 18.8%.  North Carolina tied New Jersey, also losing 14.2%. 

The state is currently suing Lehman Brothers' former executives and directors, alleging that the company misrepresented its financial position when the state made its $182 million investment in Lehman shares. 

"An irony about Lehman Brothers is that a major source of New Jersey's outperformance arose from underweighting financial services companies.  For every investor, some decisions produce atrocious outcomes," wrote Kramer in his letter to Pennacchio.  "While the State believes it was misled in making that decision, Lehman was obviously one of those atrocious outcomes."

If Christopher Christie wins his race for Governor, look for Assembly Minority Leader Alex DeCroce (R-Parsippany) to actively seek a post in the new administration.  The 73-year-old Morris County Republican has been anxious to serve in the cabinet for several years; he was interested enough in becoming the Commissioner of Transportation that he discussed the job with then-Gov. James E. McGreevey. 

“I am singularly focused on winning a Republican majority in the state Assembly and helping Chris Christie become the next Governor of New Jersey. I am not interested in becoming Transportation Commissioner," DeCroce said in an e-mail to PolitickerNJ.com. "I am very interested in serving as Assembly Speaker and working with Governor Christie to restore fiscal sanity and make New Jersey affordable again. Any report to the contrary is simply false.”

A DeCroce move to the administration would create two new campaigns - one to replace him as the Assembly Minority Leader (assuming the GOP does not capture control of the Assembly in November) and the other to fill his District 26 Assembly seat.  Some Assembly Republicans believe a leadership battle could turn out to be contest between the GOP Conference Leader, Peter Biondi (R-Hillsborough) and Minority Whip Jon Bramnick (R-Westfield).  Biondi has been eyeing the Minority Leader post for a while, and has reportedly considered challenging DeCroce.    Don't count out Assemblywoman Alison McHose (R-Franklin) as a leadership candidate.

Parsippany, the largest town in solidly Republican Morris County, has not had a Republican mayor in fourteen years.  In 2005, Democrat Michael Luther won his first term as mayor by a scant 39-vote margin - a contest that spent two years in court.  Luther faces Republican Councilman Jamie Barberio this fall.  If Luther wins, look for some Democrats to recruit him to run for State Senator in 2011 against the incumbent, Joseph Pennacchio (R-Montville).

Parsippany (pop. 50,649), is a town of ticket-splitters.  Despite Democratic victories in the last four mayoral races, Republicans have held a firm grip on the Township Council. Barack Obama and Frank Lautenberg both carried the town by more than a thousand votes in 2008.  Robert Menendez lost it by less than 100 votes in 2006, and Jon Corzine lost it by less than 700 votes in 2005.  But Republicans like Pennacchio and U.S. Rep. Rodney Frelinghuysen (R-Harding) carry the town easily as well.

State Sen. Joseph Pennacchio (R-Montville) says that the New Jersey Lottery Commission should not sign a deal for scratch off lottery tickets with the Jets if the NFL team uses New York in its logo.

"Having professional sports in our great state of New Jersey is very much appreciated by both our fans and our taxpaying citizens. These same citizens have been very good to both the Jets and Giants with their hard earned tax dollars," Pennacchio says. "It is time that that appreciation is reciprocated. All those empty seats in the new Yankee Stadium,(the house that greed built), should serve as a reminder that fan's loyalty can go just so far. It is time for the Jets and Giants to "step up to the plate" and do the right thing.

Some political conflicts never go away: State Sen. Gerald Cardinale (R-Demarest) today opposed the nomination of the State Senator he unseated 28 years ago to serve as the Morris County Superintendent of Elections.  The Senate Judiciary is considering 78-year-old Frank Herbert, who represented Bergen County in the Senate from 1978 to 1982, for the $102,304-a-year elections post in Morris, where he now resides.

The committee went into recess without approving Herbert's nomination, although it could still be done before the end of the day.

Frustrated by his inability to select a new Superintendent of Elections to replace the late Roseanne Travaglia without having State Sens. Anthony Bucco (R-Boonton) and Joseph Pennacchio (R-Montville) block the gubernatorial appointment, Morris County Democratic Chairman Lewis Candura recommended Herbert, a retired English teacher from Rockaway.  Senate rules do not permit senatorial courtesy to be used to block a former member of the upper house.

Gov. Jon Corzine might have pulled a rabbit out of his hat by suddenly finding an extra $400 million for his budget, but the political trick of the week goes to Morris County Democratic Chairman Lewis Candura.  Frustrated by his inability to select a new Superintendent of Elections to replace the late Rosemary Travaglia without having State Sens. Anthony Bucco (R-Boonton) and Joseph Pennacchio (R-Montville) block the gubernatorial appointment, Candura picked Frank Herbert, a 78-year-old retired English teacher from Rockaway.  Herbert served one term as a Democratic State Senator from Bergen County (1978 to 1982), and Senate rules do not permit senatorial courtesy to be used to block a former member of the upper house.

Herbert is actually a good pick for Morris County Democrats: younger than the state's current senior United States Senator, he first won public office in 1969 when he was elected Waldwick Councilman.  He won a race for Bergen County Freeholder in 1973 -- the Watergate landslide year -- defeating future Congressman Harold Hollenbeck.   (Hollenbeck, elected to the State Senate in 1971, opted to run for Freeholder instead of re-election.)

Defeated for a second term as Freeholder in 1976, Herbert ran for an open State Senate seat in 1977.  The 39th district had gone Democratic in 1973, elected Raymond Garramone to the State Senate and two Democrats to the State Assembly.

Instead of seeking a second term in the Senate, Garramone instead ran for Governor -- unsuccessfully challenging incumbent Brendan Byrne in the Democratic primary.  The Republicans ran John Markert, who had won one of the Assembly seats in 1975.  But Byrne carried the 39th in the general and helped Herbert score a 53%-47% victory in the Senate race

Four years later, the Republicans ran Gerald Cardinale (R-Demarest), who had lost an Assembly race in 1977 but won in 1979.  Cardinale easily defeated Herbert, 58%-42% -- a margin of nearly 11,000 votes.

One of the perks of being the new GOP State Chairman: Assemblyman Jay Webber (R-Morris Plains) gets to appoint the five Republican members of the Legislative Redistricting Commission, which will redraw districts for the 2011 elections.  That could help Webber move up to the State Senate.

The conventional wisdom is that State Sen. Anthony Bucco (R-Boonton) will retire in 2011 and that three Republicans - Assemblyman Michael Patrick Carroll (R-Morris Twp.), Morris County Freeholder John Murphy, and soon-to-be Assemblyman Anthony Bucco, Jr., the son of the Senator - will compete for his seat.

But with just some minor tinkering of the two Morris County-based legislative districts, Webber could find himself without substantial opposition for the Senate seat.  Morris Plains and Parsippany could move from the 26th to the 25th, and Morris Township, Morristown, Boonton Township and Boonton Borough could shift from the 25th to the 26th - a nearly even exchange of population, based on 2006 census estimates.

That would mean a 26th district ticket of State Sen. Joseph Pennacchio (R-Montville), Carroll and Bucco, Jr.  In the 25th, it would be Webber for Senate, running with Assembly Minority Leader Alex DeCroce (R-Parsippany) and an open seat. Murphy, who sought the 2005 Republican gubernatorial nomination, lives in Morris Township.  Shifting his hometown to District 26 could easily block his legislative ambitions.

State Sen. Joseph Pennacchio (R-Montville) has provided PolitickerNJ.com with some detailed work product completed by his $3,000-a-year part-time legislative aide, John Inglesino.  According to correspondence and e-mails, Inglesino has helped Pennacchio with legislation involving the Council on Affordable Housing, legal questions concerning illegal alien inmates in the state's correctional facilities, the Transparency in Government Act, anti-discrimination and harassment policy, and the State Investment Council's purchase of Lehman Brothers stock.

An aide to Pennacchio says that Inglesino reviewed more than 500 pages of OPRA documents regarding Lehman Brothers and has had numerous meetings with the Morris County Senator to discuss legislation.

Earlier today, State Sen. Joseph Vitale (D-Woodbridge) called on Pennacchio to release Inglesino's work product.

Senate Health Committee Chairman Joseph Vitale (D-Woodbridge) wants State Sen. Joseph Pennacchio (R-Montville) to release work product related to former Morris County Freeholder John Inglesino's $3,000-a-year job as a political advisor.  Vitale cited an Associated Press report that Inglesino went on Pennacchio's staff the day after his term expired, allowing him to continue in the state pension system.

This is a standard practice for the state's political elite from both parties, but Inglesino is also an advisor to GOP gubernatorial candidate Christopher Christie, who has called for an end to part-time politicians participating in the pension system.

"Does Christie condone using state taxpayer money to pay for a state senator's political adviser?" asked Vitale.  "He says he did not know that his long time friend, political adviser and chief fundraiser was put on a state payroll to extend his state taxpayer funded benefits, so Christie should  join me in demanding the release of Inglesino's work product for Senator Pennacchio.  We all deserve to see exactly what this ‘political adviser' did in his state taxpayer funded job that allowed him to pad his pension."

Vitale wants Pennacchio to release any "documents that were authored by, copied to or mention Inglesino to illustrate the work he performed to earn his taxpayer-funded salary and pension benefits. Vitale said such documents could include, but not be limited to, memos, letters, emails, reports, or any other written correspondence, as well as Inglesino's calendar of appointments and or schedules and records of meetings and phone logs."

Citing a lack of time, Senate Judiciary Committee Chairman Paul Sarlo (D-Wood-Ridge) has told Senators that he will not call the "Lehman Three" to appear at their Senate confirmation hearings.  Sarlo wants to avoid Republican Senators questioning the three former Lehman Brothers executives.

The State Investment Council has lost nearly $25 billion in 2008, with the state pension fund dropping from $82 billion last July to $57.7 billion as of last month.  Alleging fraud and misrepresentation, the Corzine administration filed a lawsuit against nine top executives of the now-bankrupt Lehman firm last month. The State Investment Council bought $182 million in Lehman securities last April for the state pension fund - a move that has caused State Sen. Joseph Pennacchio (R-Montville) to demand an investigation.

But despite the losses, Corzine renominated Jose Claxton, Erika Irish-Brown and Montgomery Cerf to the NJSIC for new terms. All three were executives at Lehman, although they are not parties to the state lawsuit. The three are awaiting Senate confirmation, and the Judiciary Committee has not yet scheduled hearings on their nominations.