Lisa Brennan (Main Justice) broke the news today that “people close to the matter” have said that the Securities and Exchange Commission has joined with the Manhattan District Attorney’s office “to investigate possible misuse of Port Authority of New York and New Jersey funds by Gov. Chris Christie and his allies.” She said that two SEC lawyers from the New York regional office of the Enforcement Division “are examining the manner by which the Christie administration apparently steamrolled the agency’s top in-house counsel into creating a legal justification in 2011 allowing the New Jersey governor to grab $1.8 billion of Port Authority tax-exempt bonds to fix the aging Pulaski Skyway bridge and other neglected state roadways.”
Brennan said that Christie was able to keep his campaign promise not to raise taxes by “re-routing the Port Authority funds to local New Jersey roadway repairs.” She added that this diversion of Port Authority funds made it possible for the governor of New Jersey “to avoid raising gasoline taxes to refill the depleted coffers of the state’s transportation trust fund.” She said that “the justification for the diversion may have constituted fraud. The SEC’s rule 10b-5, issued pursuant to the Securities Exchange Act, authorizes the agency to investigate fraud in the securities markets, including in the offering of tax-exempt bonds.”
Scott Raab, who is doing an ongoing series of stories about Christie and his political problems for Esquire’s Politics Blog, wrote that Christie’s political career “is forever down the crapper.” He said the SEC and Manhattan District Attorney are looking into “Christie Crew’s looting of Port Authority funds originally meant to help build a rail tunnel that would’ve been the nation’s largest infrastructure project — creating thousands of jobs in New Jersey, and easing the commute to and from New York City for hundreds of thousands of New Jerseyans.
Raab added that the governor “killed that tunnel project in order to use the money to fix decrepit, neglected New Jersey roads that the state itself is supposed to repair, with money from its Transportation Trust Fund, which was entirely depleted. Faced with the option of raising New Jersey’s gas tax — the second-lowest in the land — to pay for the road repairs, Christie preferred swiping the tunnel money from the Port Authority.”
Raab said that Christie got help in this matter from his “Port Authority business partner”—New York Governor Andrew Cuomo. He added that they two men were able “to pull off this heist without either state legislature making a peep. Maybe they didn’t know; maybe they didn’t want to know. Nobody said a word. Never even came up.”