Few people have influenced the development of the Hudson County waterfront and the rebirth of Hoboken as much as real estate developer Joseph Barry.Now, Barry’s legacy is on the line after the U.S. Attorney’s office announced Wednesday that he has been charged with allegedly paying nearly $140,000 in bribes to former County Executive Robert Janiszewski to obtain federal loans and grants.
Also charged Wednesday was longtime county political consultant Paul Byrne of Jersey City, a former friend of Janiszewski who was said to be the conduit through which Barry and others allegedly paid off the former county executive.
Janiszewski pleaded guilty to accepting bribes last year has been a cooperating witness for the government, naming local officials who allegedly paid him off.
For loans
According to U.S. Attorney Christopher Christie, who has lately brought a series of corruption charges against Hudson County politicians, the alleged bribes were in exchange for Janiszewski’s favorable support and assistance in securing $8.8 million in state grants and loans for development projects in Hoboken and around Hudson County between 1996 and 2001.
The indictment does not refer to any projects currently under construction in Hoboken.
Christie’s office says they have videotapes and audio recordings of transactions involving Janiszewski and Barry. Christie also says that during a raid of Barry’s office in Hoboken in August of 2001, the FBI uncovered a ledger detailing payoffs Barry allegedly made to Janiszewski through Paul Byrne, 57, who allegedly would take a share.
Both have said they are innocent of the charges.
Wednesday, Christie described Byrne as an example of a "classic bagman." The indictment alleges that Byrne was keeping a portion of the funds for himself as compensation for his role as an intermediary in the scheme.
The indictment was returned by a grand jury Tuesday. Both Barry, who lives in Peapack-Gladstone, and Byrne, surrendered to FBI officials Wednesday morning.
Later on Wednesday, both men appeared before U.S. Magistrate Judge Mark Falk in Newark, where they were read the charges and bail was set. Both were released on a $500,000 bond.
Barry, 63, secured the bond with equity from his house. Byrne used equity on his brother’s house to secure the bond. Both men had to give up all their travel documents and firearms.
In the courtroom with Barry was his father, Walter, with whom he founded Applied Housing to develop low-income affordable housing in Hoboken. The pair aided the rebirth of the city, and today, thousands of moderate-income residents live in Applied buildings in Hoboken and other cities. The Barrys also have built luxury housing along the Hudson waterfront.
Also in the courtroom Wednesday were Joseph Barry’s sons, David and Michael, who assumed control of the Applied Development Company two years ago.
Byrne was seated in a wheelchair during the short first appearance hearing. His lawyer said he is now completely blind because of diabetes and has balance problems. He said that Byrne normally does not use a wheelchair, but one was provided for him by court security.
Allegedly made from 1996 to 2001
According to the indictments, the "payoffs" were allegedly made between June 1996 and July 2001. The alleged bribe amounts ranged from $14,900 to $30,000, with Janiszewski and Byrne taking their "share" of the alleged bribes. Some were allegedly given by check made out to Byrne by Applied Housing or Shipyard Associates (Barry’s development companies), and some were allegedly given to Janiszewski in cash. Some were allegedly made in Janiszewski’s car, and one was allegedly in the former county executive’s house. (Byrne has said that he was a consultant to Barry for a time.)
Janiszewski was one of the five most powerful Democrats in the state, and then abruptly resigned as Hudson County executive and county Democratic leader in the summer of 2001. After he dropped out of sight, rumors started flying that Janiszewski had been wired for a period of time. He pleaded guilty to taking bribes and pledged to cooperate with prosecutors in an effort to lessen his punishment.
At a press conference Wednesday, Christie said that he is confident that the taped conversations and Janiszewski’s testimony will provide enough evidence to lead to a conviction.
"This is damning evidence of a corrupt bribery scheme spanning years, in which Barry was able to grease the skids to help finance his considerable development of the Hudson County waterfront," said Christie. "It is galling that Mr. Barry, someone of considerable financial means, received public money through bribery, while other non-corrupted entrepreneurs could have gotten it legitimately."
Will fight charges
Barry told the Reporter Thursday that he is innocent and is ready to fight the charges.
"The allegations in the indictment are only a small part of the overall picture of this case," he said, "and the conclusions that government draws from these allegations are just wrong. I’m innocent of the charges, and for that reason, I was unable to cooperate when they approached me two years ago, and I am still not cooperating. I’m going to fight it out and I’m confident that I will be found not guilty of all of the charges."
Barry had released a statement Wednesday saying, "For the past 35 years, I have worked hard and honestly in the revitalization of Hoboken and other New Jersey urban communities."
As Joseph Barry’s attorney, Joseph Hayden, left the courtroom, he gave the press some insight to possible defense tactics. One possible tactic that could send big ripples through the system is to put the feds’ investigation on trial (see sidebar).
Barry and Byrne also will likely attempt to show that Janiszewski, who has pleaded guilty to accepting bribes, is trying to avoid jail time by making accusations.
"All I’m guilty of," Byrne said in a lively defense on Wednesday, "is being Robert Janiszewski’s friend for almost 50 years. Now I’m the one getting whacked so that he can go skiing at Steamboat Springs." (After Janiszewski left town in August of 2001, he began working at a ski shop in Upstate New York.)
Byrne added that naming names has "become a second career" for Janiszewski and has become his "get out of jail free card."
Byrne’s attorney, John T. Coyle of Jersey City, said that he "absolutely" looks forward to "vigorously" questioning Janiszewski when he is on the witness stand.
One piece of evidence that might prove damaging to Barry and Byrne is an alleged "payoff sheet." Barry allegedly maintained handwritten notes which reflected the dates and amounts of payments made or to be made to Janiszewski and Byrne. According to Christie, the grants specified on the sheet correspond to the public funding sources in connection with large scale commercial and residential developments that Barry’s company was undertaking.
"This indictment rounds out the picture of the depth of corruption in Hudson County and the atmosphere that made it business as usual," Christie said Wednesday.
Thirty years of housing
The Applied Companies was founded in 1970 while Joseph Barry was a practicing lawyer. He had gotten a degree in English from Rutgers University and then graduated first in his class from Rutgers Law School. Since that time, Applied has become Hoboken’s largest development company.
Barry said on Wednesday, "The redevelopment has benefited the families who had lived in the declining neighborhoods for generations and those who moved to the neighborhoods after revitalization. The housing built benefited the low- and moderate-income residents and the ‘Wall Streeters.’ My work here is for all to see, and no one can dispute the quality of the work or its value to the people of our community."
Thursday morning, Applied tenant and Hoboken school crossing guard Margaret O’Brien said, "The only reason a lot of us are here is because of Walter Barry and Joe Barry."
Former three-term Bayonne Mayor Dennis Collins rehashed an experience in the 1980s in which Barry took a 214-unit Bayonne housing complex that had become a violation-ridden slum, and turned it into 147 bigger units suited for families. "Today you can walk into those apartments and they’re in as good condition as they were 20 years ago when they were rehabbed," he said. "Joe Barry is a good man who provided clean and decent housing that improved the quality of life of our residents."
Barry, a man of varied interests, serves on the board of the Actor’s Shakespeare Company in Hoboken and is the former owner of the Hudson Reporter newspaper chain. In 1983, he started the Hoboken Reporter newspaper out of a small office on First Street. The venture gradually grew into a chain of eight weekly papers. While rumors naturally persisted throughout Barry’s ownership that the newspaper was intended to promote Barry’s development interests, Barry often encouraged the reporters to write about the tough issues in town, and many articles and letters have appeared in the newspaper that have been counter to Barry’s development interests.
In 1999, when the development boom commanded all of his time, he sold his share in the chain to minority partners David Unger and Lucha Malato, who have been with the chain since the mid-1980s.
Some of Applied’s properties include:
- Thousands of low and moderate income units in Hoboken, North Bergen, and Bayonne
- The Shipyard Development Project, a $150 million development of 1,160 residences, retail shops, a ferry stop, and a marina on the Hudson River in Hoboken
- Port Liberté, a 1,650 unit waterfront condominium community facing the Statue of Liberty in Jersey City
- The Palisades, a 538-unit, 42-story luxury rental residence overlooking the George Washington Bridge in Fort Lee
- 333 River St. in Hoboken, 526 premium rental residences and retail shops on the Hudson River facing Manhattan, and
- Pier Village and Beach North, a mixed-use development of 750 rental residences, condominiums and townhomes in Long Branch.
No impact on future Applied projects
Christie said during his press conference that the U.S. Attorney has no plans at this time to stop or intervene in any of Applied’s projects that are under construction or are in the planning stages. One of those will be a 275-room, full-service luxury hotel on Hoboken’s south waterfront.
Foreshadowing the defense
Leaving the federal courtroom on Wednesday, Joseph Barry’s attorney, Joseph Hayden, gave insight into his client’s defense tactics.
Hayden said, "We intend to mount a significant legal attack on this unprecedented federal action in which a corrupt public official was permitted to stay in office for more than two years, when he should have been removed immediately, in order to further a federal fishing expedition."
Hayden added that Barry has hired retired Supreme Court Justice Gary Stein as special counsel on the issue.
The argument is that the federal government should have never allowed someone who was known to be corrupt to continue the day-to-day business of being the executive of Hudson County government.
In a press conference Wednesday, U.S. Attorney Christopher Christie responded directly to criticism of leaving Janiszewski in office for a period of time. First, he said that Janiszewski’s period of cooperation was only from mid-October 2000 to mid-August 2001, a nine-month period, not two years or more as Hayden claims.
Second, he said that the sheer numbers of indictments that have resulted from Janiszewski’s cooperation have shown the investigation to be worthwhile.
"I believe that the decision has proven itself fruitful," said Christie. He added that investigative techniques and using Janiszewski as they did were "perfectly appropriate" and "not a new or novel approach."
When asked if he was worried about a defense that takes on the system, Christie said that he is not concerned. "Bring it on," said Christie. "We are ready to meet it."
A second line of defense will likely be a vigorous attack on the credibility of Janiszewski, who has already pleaded guilty to accepting bribes. It is likely that both Barry and Byrne will paint Janiszewski as a liar who is trying to avoid jail time.
"The truth is," Hayden said, "Robert Janiszewski is a convicted extortionist who, according to court testimony, habitually violated that public trust for years."
A third possible defense is that the funding that Barry secured was monitored by a government level above the county level, which means that Janiszewski wouldn’t have jurisdiction to dole out the money.
"The public funding received for the Shipyard project was, in each and every case, approved and monitored by a government agency above the Hudson County level," said Hayden. "The merits of the project and the strength and quality of Applied’s work have never been questioned by state or federal officials."
He also added that Applied has invested over $46 million in its own funding, more than five times the amount of public funding that the projects in question have received. He noted that all of the state and federal money that has been received has gone to the project for which they were intended. Nowhere in the indictment, said Hayden, was there an implication that the funds were misappropriated or that Barry personally pocketed the funds. – Tom Jennemann
Description of the charges
The 16-count indictment against Joseph Barry and Paul Byrne charges them with five counts of mail and wire fraud, each carrying a maximum penalty of five years in prison and a $250,000 fine. They also have one count each of conspiracy to offer and give corrupt payments in connection with federally funded programs, carrying a maximum penalty of $250,000 and five years.
Additionally, Barry is charged with four counts of offering and giving bribes in specific amounts. Each count carries a maximum penalty of five years and a $250,000 fine.
Separate of Barry, Byrne is charged with three counts of attempted extortion under "color of right" for seeking payoffs on behalf of former County Executive Robert Janiszewski from county accountant Gerald Lisa in connection with the award of a renewable contract. This is unrelated to the Barry matter. Lisa has already pleaded guilty to paying bribes to an intermediary to Janiszewski for a county auditing contract. Each of those charges carries a maximum penalty of 20 years in prison and a $250,000 fine.
Byrne also faces three counts of tax evasion for allegedly failing to report or pay taxes on more than $900,000 in income, including the alleged bribe income. Each count carries a maximum penalty of five years and $250,000.
The indictment lists five projects in Hoboken for which Barry secured loan and grant money through allegedly corrupt payments:
- The Hoboken Shipyard project, a mixed-use retail and residential development bounded by 12th and 16th streets. According to the indictment, $6.69 million in federal loan guarantees were awarded to the Applied Companies by the U.S. Department of Housing and Urban Development (HUD) in July 1998 through an application submitted by the Hudson County’s Division of Housing and Development.
- A $1 million Economic Development Initiative grant was awarded by HUD to the Hudson County government, and then given the Applied.
- The Waterfront Walkway Project in Hoboken, an Applied Project, which involved the completion of a publicly accessible pedestrian walkway along the waterfront adjacent to the Shipyard. The federally funded Transportation Enhancement Program authorized approximately $1.036 million, of which the Applied Companies have received $968,897. It was applied for by the Hudson County Improvement Authority and Hudson Transportation Management Association.
- The 12th-14th Street extension projects, which involved construction of additional roadways to extend those streets to the Hudson River and the Shipyard Project. In 1995 and 1996, the Local Aid Division of the New Jersey Department of Transportation allocated approximately $1.064 million to the Hudson County Engineering Department for that project.
- The 15th Street extension to similarly extend that street to the Hudson River, the Waterfront Walkway and the Shipyard Project. Through NJDOT funding, the Applied Companies received $365,000 in 1999 from the Hudson County Engineering Department.