The City Council rejected a $742,000 contract for a firm that gave to a Hudson County political action committee (PAC) which spent large sums of money to get mayor Andre Sayegh elected nearly four years ago.
Hoboken-based NW Financial Group was in line to receive the $742,050 contract to provide “technical assistance to the city with sub-recipient management, compliance. and reporting for programs and services funded through coronavirus state and local fiscal recovery funds,” according to city records.
The Sayegh administration wanted to hire the firm to handle compliance and reporting for the $64 million it has received through the American Rescue Act.
Some council members wondered why the municipal government couldn’t handle the paperwork.
“This is an incredible infusion of money. While some people might have experience with federal funds, there is not the bandwidth in house to do this level of compliance,” said business administrator Kathleen Long.
Long said NW Financial Group worked with Passaic County to assist them with reporting and compliance for Cares Act funds.
Council members voted 6-2 to reject the contract. They criticized the mayor for trying to award a contract to a firm that helped him win the mayor’s office.
Dennis J. Enright, a founding member of NW Financial, gave $1,000 to Progressive Values Committee, a Hudson County Political Action Committee (PAC), in April 2018. He also gave $2,000 to assemblyman Benjie Wimberly’s campaign on Oct. 4, 2018. More recently, he gave $2,400 to assemblywoman Shavonda Sumter’s campaign in 2019.
The PAC spent $138,000 to help Sayegh get elected mayor in 2018.
“This mayor dedicated four years, or three years and a half, to pay back favors. And I’m not here for that,” said councilman Luis Velez.
Velez also pointed out the body of the resolution mentions NW Financial Group, but not Millennium Strategies. Millennium Strategies is mentioned in the certification of funds, a page attached to the back of the resolution.
Millennium Strategies is owned by Ed Farmer, a longtime ally of the mayor’s.
“That’s the most clear example of corruption 101. I don’t care how you are going to put it,” said councilman Alex Mendez.
Mendez also wondered if the firm gave money to Sayegh’s One Paterson organization.
“Who knows how many companies that are doing business with the city at this moment that are donating money to One Paterson,” alleged Mendez.
Sayegh has refused to disclose the names of people donating to One Paterson, a 501(c)(4) nonprofit organization. 501(c)(4) organizations are called “dark money” groups because the law allows them to avoid disclosing donors.
Mendez suggested it’s an example of pay-to-play. Under the city’s pay-to-play law, a professional services firm is barred from making reportable political contributions to municipal candidates and political action committees backing them within a 12-month period. In this case, Enright made the contribution more than three years ago, allowing his firm to receive the contract without running afoul of the pay-to-play ordinance.
Law director Aymen Aboushi said there’s no pay-to-play violation here. He said the firm submitted a proposal through an open request for proposal (RFP) process.
“Do you see an ethical dilemma here, corporation counsel?” asked councilman Shahin Khalique.
“No, I do not,” said Aboushi.
“My gut is telling me something is off,” said councilwoman Lilisa Mimms.
Councilman Michael Jackson suggested going out again to seek proposals. Just two firms submitted proposals for the contract. The second firm wanted $1.7 million.
Council members Jackson, Khalique, Mendez, Velez, Mimms, and Maritza Davila voted against awarding the contract. Abdelaziz and Ruby Cotton voted in favor.
“The requirements are strenuous. Soon as the wrong piece of paperwork come down, they want the money back,” said Cotton.
Abdelaziz pointed out the city has given back millions of dollars to the federal government over the years.
“I always hear about how the administration mismanages the day-to-day operations. I hear from my council colleagues, this administration mismanages this and that,” said Abdelaziz. He said the consulting firm is being hired as a “safeguard that’s supposed to help the administration not to mismanage any funds.”