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Governor James McGreevey
Hudson County Politics
Hudson County Facts

For Release:
Immediate
October 10, 2001

Schundler Camp to DiFrancesco: Fire Corwick
Schundler manager calls Corwick letter a “partisan whack job,” calls on Acting Governor to fire McGreevey ally for abuse of office, conflict of interests, and gross incompetence

(WEST ORANGE, OCTOBER 10) - Schundler for Governor campaign manager Bill Pascoe, responding to a trumped up letter to new Jersey City Mayor Glenn Cunningham from the nine-day-old Director of the Division of Local Government Services, one Marvin Corwick, today issued the following statement:

“Acting Governor DiFrancesco should immediately fire Marvin Corwick.

“Mr. Corwick -- who happens to be a well-known political ally of Jim McGreevey, Ray Lesniak, and John Lynch, and is a Democrat operative with a long history of writing bogus ‘reports’ to justify whatever his Democrat Party bosses want, who was appointed to his position on October 1 of this year -- spent his first week on the job with one mission in mind: trashing Bret Schundler’s successes in Jersey City. “He should be fired for three reasons: first, because he abused the power of a government office for political purposes; second, because, as the former Budget Administrator of the township of Woodbridge and as a close ally of Jim McGreevey, he had a clear conflict of interest; and third, because he’s grossly incompetent -- he can’t even get his numbers right, mislabeling a ‘debt’ as a ‘deficit.’

“Yesterday’s letter from Mr. Corwick to Glenn Cunningham is the most egregious example of a partisan whack job masquerading as an official government document that I’ve ever seen -- and I’ve seen a lot of them. But the flaws in his letter and the attached so-called ‘report’ he issued are so riddled with inaccuracies that it shows them to be what they really are: not independent, non-partisan budgetary analyses, but campaign propaganda masquerading as official literature.

“For the record: Marvin Corwick is a well-paid political ally of Jim McGreevey, Ray Lesniak, and John Lynch. In one of his first acts as the newly-elected Mayor of Woodbridge, Jim McGreevey hired Mr. Corwick to ‘analyze’ Woodbridge finances. Corwick reported that Woodbridge faced a $24 million ‘deficit’ left by McGreevey’s predecessor, Joe DeMarino - a charge hotly disputed at the time, and for which there was no evidence other than Corwick’s ‘reports.’ McGreevey used the Corwick ‘reports’ as the justification to increase Woodbridge’s debt by 50 percent, borrowing $34 million to cover operating expenses. The taxpayers of Woodbridge are still paying off those bonds.

“From Woodbridge, Marvin Corwick traveled to -- interestingly -- Jersey City. Mr. Corwick is the same ‘budget analyst’ who was hired by Bret Schundler’s immediate predecessor to ‘analyze’ Jersey City’s finances prior to Bret’s inauguration as the first Republican Mayor of Jersey City in 75 years. That ‘analysis’ urged the incoming Mayor to lay off 10 percent of the city’s work force and raise taxes by $30 million. Bret rejected it out of hand and instead found innovative ways to keep taxes down even as he put the city’s finances back on a stable footing. Because Bret rejected Mr. Corwick’s recommendations, Jersey City taxes today are lower than they were ten years ago, and Jersey City is now the state’s job-growth engine.

“Mr. Corwick then moved on to places like Rahway and Hamilton, where newly-elected Democrat mayors needed justification for tax and debt increases. In both places, he followed his well-established pattern: write a ‘report’ trashing the predecessor’s financial management and make the case for massive tax and debt increases.

“Now, then. Let’s look at the numbers cited by Mr. Corwick in his bogus report about the state of Jersey City’s finances.

“First of all, let’s be clear. THERE IS NO DEFICIT IN JERSEY CITY. As we have said before, according to Jersey City’s Annual Financial Statements for FY 2001, the City ended its year with a surplus of $19,392,493 -- and $12,641,673 in CASH in its bank accounts.

“That’s right - -Jersey City had over a $19 million surplus, and over $12 million in the bank on June 30th. This is a reported fact. (Please see Sheet 21 of the FY’2001 Annual Financial Statement.) It should also be noted that the document which includes these surplus numbers was prepared and filed by the Cunningham administration, not by the Schundler administration.

“Then why is there a so-called $54 million ‘cash deficit’ in Jersey City? Well, as anyone who has taken a high school accounting class knows, the ‘cash deficit’ referred to in today’s newspaper stories refers to the city’s liabilities, but doesn’t count the assets the city has on file to cover those liabilities.

“For example, by far the largest portion of the city’s so-called ‘cash deficit’ is $36.3 million in outstanding tax appeal refunding notes. These notes are not a current year cash liability, they are multi-year debts - pure and simple - that are being paid off over time.

“Why was this debt issued? Well, in the wake of a botched real estate revaluation in the late 1980s by Democratic Mayor Anthony Cucci and then Council-President Glenn Cunningham, Jersey City lost over $1.2 billion in property tax ratables. These successful tax appeals not only forced the city to lower property assessments, but it also required the city to pay tax judgments to property owners -- with interest.

“Rather than try to pay millions in judgments in one year, the City obtained the permission of both the State Department of Community Affairs and the State Local Finance Board (which oversees the issuance of debt by cities) to finance the cost of these appeals with short-term notes that would be paid off over ten years.

“The City began this practice, with State DCA approval, in 1990 -- almost three years prior to Mayor Schundler’s tenure. These notes have principle and interest payment schedules that the city has met on-time every year for the past eleven years.

“Classifying this outstanding debt as part of a budget deficit is like adding the outstanding mortgage debt on the family house to the household checking account, and then arguing your account is overdrawn. That’s simply ridiculous.

“As for the remaining assets on Jersey City’s ledger, it is important to point out that a majority of these assets are actually payments owed to it by other government agencies.

“For example, on June 30, the State of New Jersey still owed Jersey City $5.3 million for overdue state aid and another $746,000 in property tax reimbursements. (These IOUs are noticeably absent from Mr. Corwick’s letter to Mayor Cunningham.) The Jersey City School District, which is controlled by the State, also owed the City over $4 million for their purchase of city-owned property and another $1.5 million for police services the City provides to the school system. Therefore, over $12 million worth of receivables owed to Jersey City are monies owed it by the State of New Jersey itself.

“We believe the State of New Jersey is good for the money it owes Jersey City, even though they pay their bills slower than we would like. We would hope that the Department of Community Affairs shares our assessment of the State’s ability to pay Jersey City those funds rightfully owed to the City. We also believe that every other receivable recorded on Jersey City’s ledger is collectable.

“Finally, the so-called ‘report’ cited by Mr. Corwick was never a ‘report’ at all -- according to a senior State government official, the three-page document appended to Mr. Corwick’s letter to Glenn Cunningham is nothing more than two-year-old internal working documents never approved for release by the Department of Community Affairs.

“The fact is, Marvin Corwick never should have been hired in the first place. Mr. Corwick’s letter to Glenn Cunningham is nothing more than a put-up job, a partisan whack. It’s flat-out WRONG for government officials - who are paid by the taxpayers of New Jersey -- to use their official offices for partisan political purposes. In order to maintain New Jerseyans’ faith in the integrity of their State government, Governor DiFrancesco should fire Marvin Corwick immediately.”


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