Seven of the nine members of Jersey City’s council also have paid jobs with the county.
This, said Mayor Glenn Cunningham, might cause a conflict of interest, especially in matters in which the city and the county are wrangling over money.
The ongoing battle between Cunningham and the majority of the City Council underwent a new twist when Cunningham filed a lawsuit last week attacking the fact that Councilman William Gaughan has his paid council position and also is the chief of staff to the county executive (who is a political foe of Cunningham).
The suit claims that there is an inherent conflict of interest because Gaughan has influence over the jobs of the other council members who also happen to work for the county. If they vote for Cunningham’s proposals, the theory goes, Gaughan could retaliate by changing their county jobs.
Besides the fact that seven members of Jersey City’s nine-member City Council also work for the county, an eighth has a daughter-in-law who has a county job, the suit says.
Gaughan is on his third term in the Jersey City council. He has been chief of staff to County Executive Tom DeGise since November of 2002. DeGise’s administration and Cunningham’s have been at odds for two years.
“There are often competing interests between various municipal and county departments or commissions,” says the suit, filed in state Superior Court. “By way of example, there are often clashes between county and municipal departments involving public improvements, parks and recreation, and roads and maintenance.”
William Ayala, Cunningham’s chief of staff, said last week, “It isn’t allowed by law to be an appointed official in the county while holding an elected office.”
Mayor Cunningham also has a second political job, but it is as state senator, to which he was recently elected.
Anatomy of a conflict
According to a statement of facts attached to the lawsuit, there does not have to be an actual example of incompatibility for a conflict of interest to exist.
“If the duties of the two offices are such that when placed in on person they might disserve the public interests,” says the legal argument, “or if the respective offices might or will conflict even on rare occasions, it is sufficient to declare them legally incompatible.”
The lawsuit accused Gaughan of putting Hudson County needs ahead of Jersey City’s. The suit claims to have a videotape of Gaughan stating that he wears two hats and he was concerned that the county would end up with zero money if a new law was not enacted giving 5 percent of a tax abatement service charge to the county.
“In this one instance alone,” says the suit, “he was expressing concern over ‘the county ending up with zero.’ The clash and conflict is clear. While ‘the county ending up with zero’ may have been the defendant’s concern on that day, he, arguably, should have been concerned with the city having not to pay the county that $400,000 and otherwise retaining such funds for city purposes.”
But Jim Kennelly, spokesperson for the county executive’s office, said Friday that Gaughan’s priorities do not conflict.
“We believe that the lawsuit is baseless, because there is no conflict of interest between the work Gaughan has done from 10 years looking out for the people of Jersey City as a councilman, and the work he does at the county office,” Kennelly said.
Debt restructuring
The suit notes that as chief of staff, Gaughan has the power to make employment decisions for the county, and it claims that this has already impacted decisions, specifically referring the restructuring of the city’s massive bond debt.
Recently, Cunningham supported a proposed restructuring of the city’s debt that would allow the city to pay off less of its debt this year – thus avoiding a tax hike or layoffs – and pay much more of it later on. The council rejected it, saying they didn’t want to have to pay extra later on.
This could be bad for Cunningham politically if he has to raise taxes or lay workers off to cut the budget.
“The people of Jersey City cannot have faith that the members of the council are voting for the interest of the people of Jersey City, or just trying to protect their high-paying county jobs,” Ayala said last week.
The suit notes that the council voted 7-0 for the bond refinancing ordinance introduced in September. Gaughan was not present from the initial reading, and neither was Councilman Mariano Vega. In December, the ordinance had its second reading and was defeated 3-6, with council members Gaughan, Brennan, Donnelly, Maldonado, Vega, and Smith voting negative. Each of the council members voting no has ties to county employment.
But council members Viola Richardson and Jerremiah Healy also hold positions with the county, yet voted for the bond restructuring ordinance and weren’t mentioned in the suit.
“You don’t need them all,” said Stan Eason, spokesperson for Mayor Cunningham, explaining why only some of the county employees may have felt pressure to vote against the restructuring. “You just need a majority. Why go for overkill?”
The suit notes that Mariano Vega is the director of Hudson County Public Resources Department, Junior Maldonado has a job at the Hudson County Improvement Authority, Peter Brennan has a job in the Hudson County Maintenance Department, Mary Donnelly’s daughter-in law works for Hudson County, and Council President Harvey Smith was just recommended to a job as Hudson County undersheriff.
But according to Kennelly, the council has generally been cooperative with Cunningham, passing 98 percent of his proposals.
“There is no evidence that Gaughan has used any influence on anyone,” Kennelly said. “We haven’t so much as laid a glove on anyone aligned with Cunningham. This is not an obstructionist council.”
Cunningham’s office also sent out a letter with the city’s tax bills hammering home the fact that the council rejected his debt restructuring plan. The letter repeatedly states that Cunningham presented the plan hoping to keep property taxes stable this year. Cunningham implied that his opponents are hoping to force a tax increase during an election year. Council members opposing the debt restructuring say that Cunningham is mortgaging the future so he does not have to raise taxes during an election year.
Every council member was phoned for this article, but none of them returned the call by press time except for councilman Jerremiah Healy. He had not returned a followup call by press time.