Several high-profile city cases came closer to a conclusion last week as the New Jersey attorney general’s office announced the indictment of the former head of the Hoboken Parking Utility, John Corea, and the city said they are close to the end of an administrative (non-criminal) hearing regarding a Hoboken police lieutenant.
Friday afternoon, state Attorney General Anne Milgram announced that Corea, the former director of the Hoboken Parking Utility, was indicted on charges that he conspired to allegedly split $600,000 with a Toms River contractor who collected coins from city parking meters.
“United Textile Fabricators is still an area of deep concern for the city.” – Steven Kleinman
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Hiring was troubling from beginning
Corea was hired for the position five years ago by former Mayor David Roberts, even though Corea had a questionable record. When Corea was a member of the New York Stock Exchange in the 1990s, he was found guilty of improper trading, and was censured and permanently barred from trading again on the New York Stock Exchange.
Critics of Roberts’ protested the hiring of Corea, a former City Council candidate who had supported one of Roberts’ candidates.
Additionally, at the time, the city had a hiring freeze on jobs that pay more than $25,000, so the Roberts administration hired him for $24,500 and then gave him raises later.
Corea was also hired in place of the Parking Authority’s longtime director, who was demoted. She eventually sued the city and won a $400,000 settlement.
Corea worked for the city until this past September, when he resigned after the new administration of Acting Mayor Dawn Zimmer reduced his salary and demoted him. He was earning $114,000 when he left.
No-bid contracts
The contractor with whom the city’s Parking Utility did business, Brian A. Petaccio, 49, of Toms River, is the owner and president of United Textile Fabricators LLC of Toms River. He pleaded guilty on Sept. 30 to an accusation charging him with allegedly stealing more than $1.1 million in coins from Hoboken’s parking meters, according to the state attorney general’s office.
Corea allegedly steered three separate no-bid contracts to United Textile Fabricators in November 2005 to collect and count the coins, according to the state.
So how did the missing money come to light? The first clue was when the city’s 2007 audit uncovered approximately $575,000 missing. Petaccio’s company returned the money, but – according to the state – he and a Hoboken official allegedly had split an additional $600,000 sum that was never reported to the city.
When Petaccio pleaded guilty in September, he apparently told the investigators that he had “conspired with an official of the City of Hoboken, whom he did not name in court but had previously identified to investigators.”
Investigators believe the man is Corea.
The release states, “The two men allegedly worked out a scheme in which Petaccio reported to Corea the amount of coins collected each day, and Corea would tell him how much to put aside as the ‘take’ to be split between them.”
Brian Petaccio had already been indicted on state Grand Jury racketeering charges on March 7, 1991, long before the city contracted with UTF in 2005.
The city’s outgoing attorney, Steve Kleinman, said last week that nowadays, the city has a much easier method of counting their coins than sending them to Toms River.
“They are counted on a daily basis at a bank across the street from City Hall,” he said.
Other cases
Now that newly hired Hoboken city attorney Michael Kates will be taking the reins from Kleinman, he will have to deal with several of the city’s high-profile legal concerns and suits like this one. Kleinman was asked to give an update last week on several other cases.
Nine city police officers were hit with administrative charges more than a year ago after a special investigation outlined mismanagement and misconduct surrounding the Hoboken SWAT team. Twenty months later, not one person has been found innocent or guilty.
In April 2008, a lawsuit and media attention brought about a city investigation into misconduct among some members of the Hoboken Police Department. Nine police officers were hit with administrative charges.
The city appointed special attorney David Corrigan to compile a report, which chronicled alleged mismanagement by former Police Chief Carmen LaBruno and former SWAT team commander Lt. Angelo Andriani.
The Hudson County Prosecutor’s Office also looked into the matter, but found no criminal charges.
LaBruno was allowed to retire with a six-figure payout and without being saddled with any charges.
Andriani and several other officers are still facing suspension or termination as a result of the administrative charges, but most of the officers continue to work. Andriani is on a paid suspension.
The scandal originally arose from two humanitarian trips the police took to bring supplies to a Louisiana town devastated by Hurricane Katrina. Along the way, some officers partied with girls at a Hooter’s restaurant and let the girls handle their guns. Embarrassing photos of the ribaldry hit the news media.
Later, five members of the SWAT team filed a discrimination suit against their commander, Lt. Andriani, alleging racist comments, intimidation, and harassment. That suit is not part of the city’s disciplinary hearings, although some of the same officers were involved in both situations. The legal proceedings for that lawsuit are just starting to get underway, according to a source.
The various troubling incidents among the department sparked a special investigation assigned to city labor attorney David Corrigan, and the administrative charges stem from his report.
A judge and prosecutor are being paid by the city to conduct the disciplinary hearings. The proceedings have been separated into two parts: Andriani’s and everyone else’s.
Kleinman said last week that Andriani’s disciplinary hearing “has been proceeding as quickly as possible” and is “near a final conclusion.” He said it may be completed around the first of the year.
Then the city can move on to the other eight officers’ disciplinary charges.
Andriani faces termination and is serving a paid suspension while his hearing continues. Kleinman would not comment on whether the city would try to litigate for that pay should Andriani be found guilty.
Andriani also reached his 25-year pension date while on leave for the hearing, which would guarantee him medical benefits for life. Kleinman said the state pension department will make their own determination on what Andriani is entitled to after the hearing concludes.
“Pension credits time based upon honorable service,” Kleinman said. “They have broad discretion.”
If found guilty of the charges, sources have said it is possible that Andriani will receive his pension based on his 23 years of service, rather than the final two years.
The $4.2 million blunder
Last year, amid a budget crisis, the city tried to save some money by offering a voluntary severance program, similar to an early retirement incentive plan. But the city never showed the plan to the state, relying on the fact that Newark had a similar plan approved by Trenton.
The program may end up costing the city more money than it saved, because the state asked the city to pay for pension costs that were not taken into consideration.
After enrolling employees and allowing some to retire, the city was forced to end the program in February 2009 and asked to pay the state pensions department $4.2 million.
The cost was attributable to the early retirements and the unexpected financial burdens they placed on the pension system.
The city told the state that they were willing to find a resolution to the matter, possibly to negotiate down the $4.2 million.
Since then, no communications have come from the state pension department. No one has asked for the money, Kleinman said.
But the cost isn’t the only lingering byproduct of the nixed plan.
Several of the employees who were promised a severance package may take the city to court since only some of the enrolled employees actually received the buyout, sources engaged in the matter claim.
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