Analysis: Democratic Feud Leads to Subpoenas at Powerful State Agency

The ongoing civil war between top Democrats in New Jersey has further escalated with a report from Politico New Jersey that at least one grand jury subpoena has been served to the New Jersey Economic Development Authority.

A war of political wills has been raging for months between Gov. Phil Murphy and state Senate President Steve Sweeney. Companies connected to Sweeney ally George Norcross have benefited from tax incentives handed out by the EDA. Following a state audit in January, Murphy convened a special task force to look into the EDA and whether the jobs that were promised to secure tax incentives were actually being produced. In March, that task force confirmed a criminal referral to law enforcement regarding what was termed “unregistered lobbying” connected to the enactment of the legislation that created the tax incentives under investigation.

The task force did not specify a specific target of that criminal referral. The Politico story quotes a spokesman for Norcross-connected companies as saying they did not receive a subpoena.

Aside from the public squabbling over the EDA, the undercurrent of the whole mess is the feud between Murphy and Sweeney, and now Norcross. Norcross is suing Murphy over the investigation. Sweeney and Norcross are lifelong friends and close political allies. Many credit the Norcross political machine for installing Sweeney as Senate President. Sweeney has fiercely defended the EDA, while at the same time going after the Schools Development Authority. The SDA has been plagued by its’ own scandals.  Murphy’s hand-picked CEO, Lizette Delgado-Polanco, was forced to resign amid a hiring scandal that saw several of her friends and relatives get jobs for which they were seemingly not qualified. Sweeney called for the abolition of the SDA, and folding its responsibilities into the EDA.

The EDA probe has shined light on the often shadowy dealings in Trenton and thrust arguably one of the most powerful political brokers in New Jersey (Norcross) into the public eye. It also threatens to uncover his deep political ties to multiple legislators, lobbyists, firms, and companies that have benefited from his good graces. After stumbling through his first year in office trying to navigate the complexity of Trenton politics, Murphy is going after one of the biggest fish in the Democratic ocean. If he is successful, he will have weakened perhaps his biggest political rival in Sweeney.  Sweeney has both the power and the inclination to block any of Murphy’s initiatives in the legislature.

Senate Democrats have largely stayed loyal to Sweeney, but if Sweeney loses this fight, there are some who could start sliding closer to Murphy.  With the state budget deadline now less than a month away, this clash of Trenton titans is coming at a time when the biggest debates are being had over affordability, and the state’s two top Democrats have vastly different ideas on how to accomplish that.