This 2008 report warned against solar
The 2011 document used to sell the solar deal to the Sussex County Freeholders was called the Solar Proposal Evaluation Report. It was the work of a committee that was formed to sell the solar scheme -- the Sussex County Evaluation Team. Here are the members of the team:
- John Eskilson Sussex County Administrator
- Dennis McConnell, Sussex County Attorney
- Bernard Re, Sussex County Treasurer
- Steve Pearlman, a lawyer with Inglesino, Pearlman, Wyciskala & Taylor
- Deb Verderame, a lawyer with Inglesino, Pearlman, Wyciskala & Taylor
- Gerry Genna, Birdsall Services Group
- Tom Brys, Birdsall Services Group
- Douglas Bacher, NW Financial Group
- Heather Litzebauer, NW Financial Group
- Steven Gabel, Gabel Associates
- Richard Preiss, Gabel Associates
- Cadence Bowden, Gabel Associates
The evaluation team was put together by John Eskilson. At the time, the Birdsall Services Group was under scrutiny by state law enforcement authorities for circumventing pay-to-play laws in order to funnel a million dollars in campaign contributions to political players. But this is a minor detail compared with the BIG deal missed by Eskilson when he was assembling the committee that sold solar to the Freeholder Board.
By simply searching the Internet -- a simple GOOGLE search would have done it -- Eskilson would have known that Inglesino, Pearlman, Wyciskala & Taylor attorney Steve Pearlman was a central figure in the Encap scandal a decade earlier. Like the Sussex solar scandal, EnCap used government grant money to secure bond financing for private development. It too was built around an under-funded, inexperienced private corporation that quickly went bust. And, like solar, the lawyers, vendors, and consultants kept getting fat off the taxpayers throughout the process.
EnCap ended up costing taxpayers, several indictments were handed down, the lawyer who worked with Pearlman died before he could be brought to trial, and the founder of EnCap pleaded guilty in federal court.
The warning that the county professionals should have placed under the Sussex Freeholders' noses, and that the Freeholders should have heeded, was contained in a detailed 277-page report which was the culmination of an investigation conducted by the state Inspector General. It was published in February 2008 -- years before the Freeholders voted for solar in 2011.
The report can easily be found on the Internet, using a simple GOOGLE search:
The report discusses the mismanagement of the project by the private corporation, how assurances were given and government backing obtained, the creation of the "economic development authority" for the purposes of borrowing, problems with insufficient collateral, "material omission" by EnCap, corporate misfeasance, cost overruns, and requests for payment of ineligible expenses. It tracks many of the allegations raised in the case of MasTec v. SunLight that is at the heart of the Sussex solar debacle. MasTec, the contractor for the project, sued SunLight, the project's private corporation, after SunLight could no longer pay MasTec. Here are some of MasTec's allegations against SunLight:
- 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."
Why didn't county professionals alert the Freeholder Board to this report? Why wasn't it read? And if the county professionals did read it, why did they include a central figure from the EnCap scandal as a member of the Sussex County Evaluation Team -- the very committee that wrote the Solar Proposal Evaluation Report that assured Freeholders the solar project was a safe investment?
We urge you to read the report, as well as these related documents: