Category: "Background"

Bright Lights, Big City

November 29th, 2015

[Editor's Note: At 6:57 p.m. on November 29, 2015, this story was edited for style, content and accuracy.]

Bright lights in public spaces do not always illuminate the darkness.

At home and abroad, whispered secrets can lead to dark deeds.

The truth will out, but only if government officials look for it.

According to a spokeswomen for the N.J. Treasury Department, which establishes the retention schedule for financial disclosures, municipalities have the responsibility of ensuring that local officials file the state-required form.

Not according to a spokesperson in the fastest-growing municipality in the state.

According to the Office of the Lakewood Township Clerk, the township is no longer responsible for the information provided on New Jersey financial disclosure forms under changes spearheaded by the administration of Gov. Chris Christie.

Since enacting those changes, no one at the local or state level is apparently reviewing state-required financial disclosures for accuracy or completeness, which the Christie Administration now requires local, county and state officials to file electronically, let alone sanctioning government officials that do not file them at all in a given year.

In a November 10 e-mail from the DCA communications manager, the state official responded to a reporter's request for response based on an unsuccessful search on the Local Finance Board Web site for the financial disclosure of a member of the Lakewood Industrial Commission (LIC).

The Local Finance Board, which is part of the state Department of Community Affairs (DCA), rules on ethics complaints.

The DCA spokeswoman attributed the reporter's unsuccessful search for the disclosure to an error by the official in filling out the form.

"Perhaps there is a typo or misspelling," the spokeswoman told the reporter.

Absent a complaint, no one is looking over government officials' shoulders to ensure they are not profiting from their office.

They are.

Last month, a reporter for NJ News & Views downloaded all 2014 and 2015 financial disclosures submitted electronically to the state by members of the Lakewood Township Committee and the Lakewood Industrial Commission (LIC), which sells and leases public land in the township's industrial parks.

Two LIC commissioners filed under an alias, not their legal first name. As a result, the state's search engine did not display those commissioners' disclosures using their full legal names.

The commissioners are Gregory Stafford-Smith, who filed his 2015 disclosure under the name Gregg Stafford-Smith, and Shlomo Katz, who filed his disclosure under the name Solomon Katz.

In 2013, Stafford-Smith was one of 21 residents that petitioned the Lakewood Township Committee, which appointed him to the LIC, to rezone their property for increased density, making it more attractive to developers.

In 2014, committeemen responded to the petition by adopting an ordinance to rezone the area.

According to 2015 land records posted on the Ocean County Clerk's Web site, Stafford-Smith and his wife, Karen, directly profited from the committee's action by selling their home at 1200 West Cross Street for a sum more than twice the amount of the property's assessed value.

The home, assessed for a net valuation of $392,200, was reportedly sold on July 1 to Mesivta Ohr Chaim Meir Inc. for $800,000.

Committeeman Marc (Meir) Lichtenstein reported on his 2014 financial disclosure that one of his sources of income was his wife Sara's employment with Catapult Learning, a district contractor.

In 2013, the Federal Bureau of Investigation began a probe of the Lakewood School District's business relationship with Catapult.

In Lichtenstein's 2015 disclosure, he reported Sara's continued employment with the district contractor under investigation by the FBI. However, he also reported her second employment position at 1101 14th Street - the couple's home address, which Lichtenstein did not fill out at the top of the disclosure form as required.

Elected officials of Lakewood must reside in Lakewood.

Lichtenstein did not identify the name of his wife's second employer as a source of income on his financial disclosure. Instead, he identified her second employer as "Hippa protected."

The Health Insurance Portability and Accountability Act of 1996 was enacted by the United States Congress and signed into law by President Bill Clinton the same year.

The Office for Civil Rights enforces the HIPAA Privacy Rule, which protects the privacy of individually identifiable health information.

HIPAA is not a shield to protect New Jersey elected officials from public disclosure of all sources of their income.

On August 23, 2013, Committeeman Raymond Coles and his wife, Janice, reportedly purchased 1293 Ventura Drive in Lakewood, located on the same street as his family home at 1311 Ventura Drive, from Atlantic City Partners LLC.

Atlantic City Partners LLC's reported address is 1985 Cedarbridge Avenue #1, the address of a building owned by David Lichtenstein of the Lightstone Group.

At the September 20, 2007 meeting of the Lakewood Township Committee, Committeeman Lichtenstein recused himself from a committee vote to table a proposed sale of public land to a company David Lichtenstein owned. A reporter asked Committeeman Lichtenstein after the meeting why he had recused himself. Lichtenstein confirmed that he still had a business relationship with David Lichtenstein, which NJ News & Views reported in a story posted August 31, 2007.

Committeeman Lichtenstein was again forced to recuse himself during a committee vote at the February 14, 2008 meeting. At that time, committeemen eligible to vote approved first reading of an ordinance to continue a 2003 tax abatement to the new owner of a property located in the Lakewood Industrial Park.

The new owner of the property was David Lichtenstein, who purchased it earlier that day.

Located at 1985 Cedarbridge Avenue, near the Lakewood border with Brick, a majority of the property would reportedly continue to be leased to its former owner, Dan Jesel of Jesel, Inc., but David Lichtenstein, Chief Executive Officer of the Lightstone Group, became the building's new landlord.

Coles formerly leased office space in a commercial building located on Swarthmore Avenue in the township's industrial park. According to documents posted on the county tax board Web site, Tek-Net is now being operated out of a residential home.

In 2013, the year Katz was required to report all sources of income on the 2014 financial disclosure he did not file with the state, Katz profited from a state program.

In a mortgage dated April 25, 2013, the New Jersey Economic Development Authority (EDA) pledged to secure Bais Yaakov's $1.6 million loan from TD Bank of Toms River.

The authority's Web site defines its mission in doing so.

"(The) EDA can provide low-interest financing to small businesses through direct loans; or partner with banks through loan participations and guarantees to reduce the lender's risk and increase the borrower's access to capital," the Web site stated.

Documents posted on the Ocean County Clerk's Web site report that since 2000, Katz has been an owner, as well as president of Bais Yaakov High School of Lakewood, a girls school located at 277 James Street, just across the street from the industrial park he oversees as a commissioner of the LIC.

As an LIC commissioner since 1999, he is not only a government overseer of tax dollars, the school he has owned almost as long also receives them - which is a conflict of interest.

In 2009 and 2010, the administration of N.J. Gov. Chris Christie took millions of dollars from Urban Enterprise Zone (UEZ) municipalities across the state, including Lakewood, and redistributed them as extraordinary aid to school districts statewide - including Lakewood, which in turn reinvested that money in services provided to the township's public and non-public schools - including Bais Yaakov High School.

Lakewood's industrial parks are located in the township's Urban Enterprise Zone.

At the November 9 meeting of the Lakewood Zoning Board of Adjustment, members approved the LIC member's application for a new source of funding for his school - residential development on the tax-exempt school's property.

Prior to the start of the meeting, zoning board member Obed Gonzalez discussed the application, which he later voted to approve, with a reporter for NJ News & Views.

Gonzalez indicated that he supported the Bais Yaakov development application. He said that many Catholic schools also developed their property for construction of residential housing in order to raise needed funding for the operation of the school.

According to the 2012 IRS tax return that Katz signed and filed for Bais Yaakov in July 2014, the non-profit business reported total revenue for the year of $1,898,579 and total expenses of $1,815,869.

Part VII of the return required the school to report total compensation paid in excess of $10,000 during the year to key officers and trustees of the tax-exempt organization. If no compensation was paid to those officers during the year, IRS Form 990 required Katz, who signed the return, to report an amount of $0 in the appropriate column for each trustee that did not take a salary.

Katz did not fill out the columns other than to report the number of hours he and his fellow trustees, Y. Kreiser and N. Herzka, worked per week for the school during the reported year.

Katz reported working an average of 10 hours per week as the school's president and trustee.

Katz reported that Herzka worked on average just half-an-hour per week as a school trustee.

Kreiser, who signed school loan documents posted on the Ocean County Clerk's Web site under the title of secretary, reportedly did not work at all to earn the undisclosed compensation that Katz paid him in the reported year as a trustee of the school.

In 2013, another LIC official also profited from his office.

From 2002-2008, Republican Sean T. Kean represented the 11th Legislative District in the state Assembly. From 2008-2012, he served his legislative district as its state senator.

Following legislative redistricting in 2011, Kean's hometown of Wall Township was placed in the 30th Legislative District.

State Senator Robert Singer represents the 30th Legislative District, which includes Lakewood Township.

Instead of facing off against Singer in the Republican Primary, Kean successfully ran for the 30th Legislative District Assembly seat.

One year after being sworn into office as the elected representative of Lakewood Township in the state Assembly, Lakewood committeemen voted to appoint Kean to the position of legal counsel for the LIC, replacing attorney Sean Giblin.

According to his 2014 and 2015 financial disclosures, Kean also serves as legal counsel to the Lakewood Development Corporation (LDC), which oversees the township's UEZ.

Kean is now in the conflicting position of being paid by both local government that establishes public policy, as well as legislative constituents that seek to challenge it.

In the 1980s, state legislators investigating the LIC sought to reform the way Lakewood officials conducted business.

Following a 1981 investigation of complaints filed against the LIC, the State Investigation Commission (SIC) reported its findings and recommendations to the governor and state legislators.

"The State Commission of Investigation (SCI) examined a number of citizen complaints alleging various irregularities in the operation of the Lakewood Industrial Commission," an unsigned letter reported. "The SCI undertook this inquiry not only to assess the validity of the allegations but also to determine whether the statute governing the creation and operation of municipal industrial commissions -- N.J.S.A.40:55B-1 et. seq. -- should be strengthened."

Investigators determined that based on their findings, legislators should amend state law.

"As stated in the report, the SCI's investigation revealed no evidence of criminal or corrupt activities by the Lakewood commission but did confirm "certain inappropriate actions or omissions in the conduct of the Commission." These are the basis for SCI proposals to revise N.J.S.A. 40:55B-1 et. seq. to require:

1.) That all municipal industrial commissions be structured and operate on a bipartisan basis.

2.) That all policy, financial and other decisions and transactions be a matter of public record open and available at all times within the business hours of a municipality.

3.) That all members and prospective members of industrial commissions make a public disclosure of all sources of personal income and all sources of real estate holdings."

The Lakewood Industrial Commission was established in 1960.

Following the 1982 release of the SIC report of its investigation into the LIC, state legislators amended state law governing industrial commissions.

Three decades later, township officials are still struggling to comply with those changes.

Five years ago, NJ News & Views noted the absence of any approved LIC meeting minutes posted on the township Web site the commission subsidizes.

"In 2009, the year the LDC hired contractor Ben Heinemann of BP Graphics as township Web master, he posted 10 months of industrial commission meeting minutes," this editor/reporter wrote in a 2010 post. "Heinemann has not posted any (2010) meeting minutes for the industrial commission, which... subsidizes his services."

During the commission's July 2010 meeting, which a reporter for NJ News & Views attended, commissioners discussed the development of a new logo for the township in place of the Victorian horse and buggy that currently represents Lakewood.

A reporter asked to see the proposed drawings being discussed by members.

In response, commission Chairman Robert Kirschner asked if members could go into executive session to continue their discussion.

Under the state Open Public Meetings Act, board members may not go into executive session to discuss contracted work, only contracts being negotiated.

No agendas were placed out for members of the public that attended the meeting since few ever do at the scheduled time of 12 noon.

The LIC now meets at the regularly scheduled meeting time of 11:30 a.m., when most citizens are at work.

One month earlier that year, a reporter for NJ News & Views contacted Yisroel (Steven) Reinman, Lakewood Executive Director of Economic Development.

The reporter asked Reinman, as LIC director, for all 2010 dates the industrial commission was scheduled to meet, but did not, and all 2010 industrial commission meetings attended by then-Mayor Steven Langert, committee liaison to the commission.

Reinman did not reply to the reporter's e-mail. Instead, his administrative assistant, Anita Doyle, e-mailed all 2010 industrial commission meeting minutes that had not been posted and all 2010 scheduled meeting dates.

Last month, the reporter e-mailed Doyle regarding comments NJ News & Views had received from readers seeking to inspect 2015 LIC meeting minutes and agendas they did not find on the township Web site the LIC subsidizes.

"If, by some chance, minutes weren’t posted because of an oversight, ANYONE can email me and I can email ANY approved minutes and can THANK them for their notation and reminder that I need to log in and post," Doyle responded. "There is a “contact” feature on the Lakewood Township website and believe me, questions posed to our department are responded to.  If one can get internet connection to read the Township website or read your product, they can contact our department. And they will get response."