The Port Authority on Tuesday agreed to a pay a $400,000 penalty to settle a federal probe of the controversial $1.8 billion it spent to repair New Jersey’s Pulaski Skyway and other state roads.
The state was running low on funds in 2010 to repair its crumbling infrastructure when Gov. Chris Christie pressed the agency to funnel money for repairing its tunnel entrances and approaches to state projects like the 3 ¹/₂-mile Pulaski Skyway, which was featured in the opening montage of “The Sopranos.”
PA lawyers knew using agency funds for such state projects was improper, memos that surfaced years later revealed — but after pressure from Christie the money was nonetheless diverted.
The Securities and Exchange Commission found that the PA failed to disclose to purchasers of its bonds that there was a huge risk in spending the money, a violation of securities regulations.
In settling the probe, the PA admitted it failed to disclose the risk in spending its money on state roads.
“The Port Authority represented to investors that it was authorized to issue bonds while not disclosing significant known risks that its actions were not legally permitted,” Andrew Calamari, the SEC’s New York regional office director, said in a statement. “Municipal bond issuers must ensure that their disclosures are complete and accurate so that investors can make fully informed decisions about whether to invest.”
The PA is the first municipal bond issuer to admit wrongdoing under a settlement with the SEC.
The 84-year-old Pulaski Skyway connects Newark to Jersey City and is a well-known piece of the North Jersey skyline. It is miles from the entrance of the PA’s Holland Tunnel.
PA lawyers knew the Authority was on thin ice when it was asked by the governor’s office to spend the money on state roads.
“There is no clear path to legislative authority to undertake such projects,” one memo from a PA lawyer said, according to the settlement.
Manhattan DA Cyrus Vance Jr’s office is also probing the matter, according to reports. A message left with Vance’s office wasn’t immediately returned.