The SEC Investigation of the Port Authority and Christie’s Fiscal Record

Whether Governor Christie was behind the closing of the George Washington Bridge has taken a back seat to some local reporting on a Security and Exchange Commission inquiry as to certain decisions made by the Port Authority. One of the recent stories notes:

The SEC investigation is looking at the Port Authority’s justification for diverting $1.8 billion to pay for New Jersey road repair projects at the urging of the Christie administration, people familiar with the matter said. The largest of those projects is the $1 billion upgrade to the Pulaski Skyway, a state-owned bridge that connects Newark and Jersey City and is not operated or maintained by the Port Authority. “The Port Authority has... been advised that the Securities and Exchange Commission is conducting a parallel investigation,” stated a preliminary official statement issued on Thursday, ahead of a $400 million bond offering to pay for ongoing building and maintenance projects. Port Authority attorneys for months resisted funding the Pulaski and other road project on legal grounds in late 2010 and early 2011, The Record reported in March. But the Christie administration continued to pressure agency officials and Port Authority lawyers came up with a creative legal justification, getting around state laws that require the agency to spend money only on its own facilities unless it gets approval from lawmakers in New Jersey and New York. The Port Authority claimed the roadways were access roads to the Lincoln Tunnel, even though they are miles from the tunnel and do not connect to it directly. The SEC is positioned to investigate whether the Port Authority misled investors and bondholders when it stated in official documents that the project was authorized and was connected to one of its facilities. The Manhattan District Attorney’s Office is also investigating whether there was any criminal conduct.

Other accounts wonder if Christie’s insistence that the project to have another tunnel from New Jersey to New York City – something that is both desperately needed and part of the Port Authority reach – be shelved in favor of rebuilding this Pulaski Skyway. I have no doubt that the Pulaski Skyway should be rebuilt but the point seems to be that this project should be funded out of the State of New Jersey’s budgets. Perhaps the best story on this comes from a few weeks ago. The blog does not allow me to cut and paste from it so please read how it allowed the Governor to spend more on New Jersey roads without raising gasoline taxes to replenish the “depleted coffers” of New Jersey’s transportation fund. Governor Christie fancies himself an old fashion supply-sider. I agree as much of the supply-side spin is really accounting fraud at best if not downright theft.