Serious Allegations of Wrongdoing

SunLight General stopped paying Power Partners MasTec, so MasTec sued SunLight.  What they alleged in federal court forms the basis of Freeholder Gail Phoebus' and Assemblyman Parker Space's a request to the Securities and Exchange Commission, U.S. Department of Justice, and the N.J. Office of the Attorney General to review the allegations set forth in MasTec v. SunLight.  The allegations are serious and deeply troubling:

- That the SunLight Entities "have drawn on the Public Bond Funds and diverted such funds for non-trust purposes in violation of the New Jersey Trust Fund Statute."

- That the SunLight Entities have admitted that "millions of dollars of Public Bond Funds" have been used to "make lease payments" and to "fund the SunLight Entities' required contributions under the Program Documents, and to pay the 'soft' costs (including attorneys' fees) of the Authorities and the SunLight Entities."

- That "the SunLight Entities owe Power Partners millions of dollars as a direct beneficiary under the New Jersey Trust Fund Statute and there are no longer sufficient funds in the Public Bond Funds to pay Power Partners and to complete the projects."

- That the SunLight Entities "participated in an additional scheme to draw down over $6.3 million in Public Bond Funds and misdirected more than $2.7 million of such funds for non-trust purposes."

- That SunLight General Capital and its subsidiaries were formed "with virtually no assets, such that they were undercapitalized at the time of formation."

- That those who controlled the SunLight Entities treated corporate assets as "their personal piggy banks, repeatedly transferring assets from one entity to the next for the purpose of ensuring that there would be insufficient assets in each entity to satisfy its obligations to Power Partners."

- That "the corporate form of the SunLight Entities was used to commit conversion, make fraudulent transfers, and other improper acts."

SunLight's attorney told the media that "context matters and it is important to recognize that MasTec's statements were made in the context of a commercial dispute".  In fact, this so-called "commercial dispute" is a lawsuit filed in United States District Court.  Do attorneys file baseless lies in federal court?  Maybe attorneys do, and maybe they also lie to freeholder boards.  That is why we need an investigation run by federal officers.  Lie to them and you go to jail.



Marie Bilik: Former Mayor, Lobbyist, Assembly candidate

After a career spent working for state and national advocacy groups, Marie Bilik of Green Township is running for Assembly in District 24.  She faces newcomer Nathan Orr of Branchville and Freeholder Gail Phoebus in the June 2nd Republican Primary.

According to newspaper reports, Ms. Bilik resides and works in Virginia and travels to New Jersey for the weekends.  She is registered to vote in New Jersey. 

Ms. Bilik served on the school board and on the township committee.  She was Mayor of Green Township until she resigned suddenly in 1993, citing "personal reasons".  She is a longtime employee of the New Jersey School Boards Association and served as that group's executive director before landing her current position with the National School Boards Association.  These groups lobby the state legislature and Congress, respectively.  They oppose school privatization as well as school vouchers.

In a recent interview with Star-Ledger affiliate, Ms. Bilik made it clear that she was not a political conservative, telling the reporter that she "will be emphasizing education issues in her campaign," and that she "supports the Common Core program" -- a controversial program opposed by most of the Republican presidential candidates for 2016.  Common Core has been criticized by both the right and the left for its perceived attempt to impose a "one-size-fits-all" federal curriculum and to limit local control over schools.  It is often opposed by conservative groups like the Heritage Foundation, while it is supported by liberal teachers' unions like the NEA.

Ms. Bilik also stressed that  she's "not looking to be known as the most conservative in the race," adding, "I want to be known as a reasonable individual, but someone who won't raise taxes."

The former mayor could be a strong candidate.  Her campaign team is being led by county lobbyist Wendy Molnar, whose clients include Concord Engineering.


Nathan Orr, Republican candidate for Assembly

Assemblywoman Alison Littell McHose's announcement last month that she was taking a job with Franklin Borough and not running for re-election, has created a three-way contest in the Republican primary for her seat.  This week we will look at each declared candidate in that primary.

We start with the youngest, least experienced, but freshest candidate in the race, Nathan C. Orr of Branchville.

This young, self-avowed conservative is an admirer of Senator Rand Paul.  He recently turned 23 and is a graduate of Centenary College in Warren County, where he majored in criminal justice.  He is currently working as an EMT and hopes to practice law.  He also volunteers with the Blue Ridge Rescue Squad.

Mr. Orr told that his campaign will focus on "wasteful spending" and that he would like to see the state's budget focus on core issues like infrastructure, education, and public safety. In his interview with, a website associated with the Star-Ledger newspaper, Mr. Orr told the reporter that he intends to "run as an independent if he loses the primary."  This isn't allowed under New Jersey law.  A candidate gets just one bite at the apple.

Mr. Orr's father served as a Branchville councilman.  Nathan Orr received a single write-in vote for Freeholder in November2012.

The form his campaign will take is anyone's guess at this point.  Last year Ron Bassani managed to collect enough signatures to get on the ballot in the Republican primary for Freeholder.  He raised very little money and did minimal campaigning.  Yet he was able to capture nearly 40 percent of the vote against incumbent Phil Crabb, despite Mr. Crabb running a campaign that included several paid direct mail pieces, paid radio advertising, and robo-calls. 

Freeholder Crabb's campaign had the support of the Sussex County GOP establishment and was managed by former Freeholder Rich Zeoli and county lobbyist Wendy Molner.  But even with all this money and support, Freeholder Crabb was only able to make it a 60-40 race.  So Mr. Orr has reason to be optimistic.



Outside Employment at the Legislature: Putting things in Perspective

The New Jersey Herald has been making an issue over Republican Assemblywoman Alison Littell McHose doing a full-time job for Franklin Township, while handling her responsibilities as an elected member of the Legislature.   In fact, the Legislature is a part-time job and most legislators hold some other form of full-time employment.

Recently, two of McHose's Democrat colleagues were hired.  Democrat Assemblyman John Burzichelli got a $100,000-a-year job at the Gloucester County Improvement Authority, while Democrat Assemblywoman Linda Stender picked up a $90,000-per-year position at the Union County Improvement Authority.  For Burzichelli, who also owns a full-time business, it's his third job.  And unlike Republican McHose, Democrats Burzichelli and Stender intend to keep both jobs.  Read the stories here for yourself:

One Democrat whose outside employment does interfere with his job as a legislator is Senate President Steve Sweeney.  For several years Sweeney, who controls every piece of legislation that comes to the Senate for a vote, has been paid by his union for lobbying activities.  Sweeney is paid about $200,000 a year by the union, in addition to his $65,000 salary as senator and senate president.

This came to light from an examination of mandatory filings his union has made with the United States Labor Department. The Department of Labor requires public disclosure by labor unions of how union dues are spent.  These disclosures list union employees, their salaries and allowances.  The disclosure also includes the allocation of time by union officers and employees estimating the amount of time spent on various activities such as organizing or administration.  One of the purposes of this disclosure is to show how much the union has spent on its core activities: collective bargaining, contract administration, and grievance adjustment.  Non-members working in a union environment are obligated to pay dues, but only to support these core activities.

According to disclosure filings by the International, Sweeney spends a considerable amount of his time as a union official on activities described as “Political Activities and Lobbying.” (LM-2, Schedule 12, Disbursements to Employees, Line I, Schedule 16).

As Senate President, Steve Sweeney is paid $49,000 per year, plus an “allowance equal to 1/3 his compensation” ($16,333) for a total of $65,333.

Steve Sweeney is also an official with the Iron Workers union.  As a general organizer paid through the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers Union, AFL-CIO, Sweeney received a base salary of $165,264 in 2012.  In addition to his base salary, Sweeney also received compensation in the form of allowances and disbursements for expenses. His total compensation through the International in 2012 was $206,092.

In addition, Sweeney received allowances of $21,351 as President of Iron Workers District Council of Philadelphia and Vicinity. In 2012, Sweeney's total compensation through the Iron Workers was $227,443.

New Jersey state law does not appear to allow legislators to simultaneously serve as lobbyists.

Questions concerning Senator Sweeney’s political activity and lobbying for the Iron Workers union become a more serious matter when the amount of time allocated to these activities is noted.  Calculating the value of that allocation as a portion of Sweeney’s compensation adds further emphasis. 

Sweeney spent 30% of his union effort in 2012 on political activity and lobbying.  In 2011 and 2010, the amount was 38%.  In 2009, the amount was 34%.  There is no indication of the actual amount of time Sweeney devoted to these activities, only the proportion of the whole.

Placing dollar amounts on Sweeney’s activity helps put matter into an easily understandable form.  In 2012, Sweeney’s gross pay was $165,264, and his total compensation was $227,442.  In simple terms, Sweeney was paid $49,579 of his gross, or $68.233 of his total compensation, to engage in political activity and lobbying for the union.  In 2011, Sweeney was paid $62,141 of his total compensation for political activity and lobbying.  In 2010, $58,377, and in 2009, $56,669.

For readers of the Herald, the question becomes why is this story not being placed in the context of what other legislators are doing? 




The Herald misses a big story

The Herald has been trying to write a conspiracy story about the 2015 elections for Assembly and Freeholder.  Last week they even reported that the new candidates  haven't filed campaign finance reports showing that they have any money. Why would they?  They have all just started their campaigns and the law doesn't require them to file a report with this information until 29 days before the primary election on June 2nd.

Yet the Herald dedicated a whole story to report, well, nothing.

Anyway, there is an important story with a local connection that you would have had to read about in the New York Times.  It involves the rich and powerful Mulvihill corporate family in Vernon.  We read about it two weeks ago and have been waiting ever since for someone at the Herald to pick it up.  Do they read the NY Times at the Herald? 

The story appeared on January 14th and it concerns a lawsuit filed that week in federal court by Anthony P. Miele III of Manhattan, whose deceased father left him stock worth $16,000. Mr. Miele contends he did not know for years about the stock, now worth $130 million, because his late father's business partners concealed its existence from him.   The Times writes:

At a meeting of Mr. Miele, Mr. Johnson, Mr. Mulvihill and Robert E. Brennan — a rising star at Mayflower who was later sentenced to nine years in prison for money laundering and bankruptcy fraud at First Jersey Securities — Mr. Miele agreed to lend Mr. Johnson $100,000. The money was to be used “to solidify the Winfield acquisition,” according to the complaint, which goes on to explain that although “no documentation of that loan appears to exist,” Mr. Johnson claimed it “was documented with a promissory note and listed on the public books and records of Franklin as part of its capital structure.”

Mr. Johnson also contends, according to the complaint, that 4,000 shares of Franklin stock were given to Mr. Miele as a bonus for providing the loan. According to the complaint, the stock certificate was issued to a trust that Mr. Miele established for his son, the plaintiff. A little more than a year later, Franklin’s records show that the 4,000 shares were voted at the annual shareholders’ meeting on March 21, 1974. Then on Nov. 8, 1974, while having dinner at Stash’s, Mr. Miele died “suddenly and unexpectedly,” apparently of a heart attack. Mr. Miele was 39; his son was 3.

According to the complaint, Mr. Miele’s son was never informed, until years later, of the existence of the trust with the 4,000 Franklin shares. At the time of Mr. Miele’s death, the shares were worth $4 each, for a total of $16,000.

The original 4,000 Franklin shares have turned into 2,531,250 shares, with a value of about $130 million, with an additional $20 million in uncashed dividends, according to the complaint. But through “a variety of acts including breaches of fiduciary duty, forgery, theft, diversion and a cover-up,” neither the shares nor the dividends have ever been delivered to Mr. Miele, it contends.

The complaint, drafted by Mr. Miele’s lawyers at Liddle & Robinson, contends that Richard Hanrahan, at the Bank of New York, offered to find Mr. Miele in the early 1990s, using the Social Security number it had on file, but Mr. Johnson and Franklin declined the offer. Instead, according to the complaint, when Mr. Johnson learned that New Jersey was about to take control of the trust because its owner appeared to have abandoned it, he asked Mr. Mulvihill to find Anthony Miele Jr. By then, Mr. Johnson, who was chairman of the National Association of Securities Dealers at the time, was most likely aware that Mr. Mulvihill had been convicted of numerous crimes, including forgery, and had been barred from the securities industry.

In any event, that is when Mr. Johnson says he learned of Anthony Miele Jr.’s death nearly 20 years earlier. Mr. Johnson then “delegated to Mulvihill” the responsibility of making sure the Franklin stock was delivered to his son, according to the complaint.

Mr. Mulvihill told Mr. Johnson “he would take care of it,” according to the complaint. At that point, Mr. Johnson recalled seeing that the stock had been transferred to a “street name” — meaning that a brokerage firm held the stock in its name — and the Bank of New York records show that the account address was changed to F.N. Wolf & Company, a successor company to Mayflower and First Jersey, run by a friend of both Mr. Mulvilhill and Mr. Brennan’s. F.N. Wolf ceased operating in December 1994 and filed for bankruptcy under regulatory scrutiny.

During the second half of 2012, before his death on Oct. 27, Mr. Mulvihill had a series of increasingly strange conversations with Mr. Miele about the Franklin stock, according to the complaint. On Aug. 21, Mr. Miele called Mr. Mulvihill on his cellphone, but Mr. Mulvihill told him he could not talk and that he was with Mr. Brennan. Three days later, Mr. Miele again called Mr. Mulvihill, who told him he was at the airport in Nantucket and couldn’t talk but was going to meet Mr. Johnson about the Franklin stock.

In mid-October, Mr. Mulvihill met with Mr. Miele and told him that because the mail related to Mr. Miele’s Franklin stock kept getting returned to Franklin — and Mr. Johnson had asked Mr. Mulvihill to take care of it — Mr. Mulvihill contacted John Steinbach, a business partner and the stepson of Abner Zwillman, known as the Al Capone of New Jersey. Mr. Mulvihill told Mr. Miele that Mr. Steinbach had “signed something” at Mr. Mulvihill’s request for Mr. Miele.

When Mr. Miele contacted Mr. Steinbach, according to the complaint, Mr. Steinbach admitted to “signing a document” in Mr. Miele’s name.

Mr. Mulvihill told Mr. Miele that if he “ever investigated this matter, Robert Brennan would hire a Russian hit man to kill [Miele III] and your family,” according the complaint. 

Ten days later, according to a Forbes story about the lawsuit, Mulvihill suffered a heart attack and died.

Now we should stress at this point that all this is what has been alleged in federal court.  The case hasn't gone to trial and the veracity of these allegations have not been tested in a courtroom.  To read the whole story in the New York Times, please go here:

You can also read the Forbes magazine story here:

The comments on both are worth reading.