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“Con the Waterfront”: Corruption even N.J. pols wouldn’t buy

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The auditor ran his private tax business from the office, where he downloaded porn. Commissioners gave their felon friends jobs. They also used a boat bought with Homeland Security funds for pleasure cruises and pretty much looked the other way while all kinds of corruption went on in their shop. It’s easy to imagine this in a longshoremen’s union of decades ago — only this was at the very agency established in the 1950s to root out “On the Waterfront”-type corruption in New Jersey and New York’s ports, investigators say.

And it involved some very prominent New Jersey figures, including Michael DeCotiis, then-Chief Counsel to Gov. Jim McGreevey; as well as Michael Madonna, of Bergen County, a former state police union president who once wielded tremendous power.

Maybe that’s why it took New York investigators to get to the bottom of the stink at the New York and New Jersey Waterfront Commission.

“This was a total agency breakdown,” New York Inspector General Joseph Fisch said in a 67-page report that details crime after greedy crime. “Instead of ridding the waterfront of corruption, this agency itself was corrupt.”

Port Elizabeth, NJ

During his seven years on the commission, Madonna was also president of the New Jersey State Policemen’s Benevolent Association, which included detectives from the Waterfront Commission.

So, basically: Madonna both managed AND represented the Commission’s detectives, “a conflict of interest that extended to three contracts negotiated between the local union chapter and the Commission,” the report reveals.

Madonna, who lives in Oakland and was once a borough detective, also got DeCotiis to give him a recommendation letter for a friend’s promotion that neglected to mention that DeCotiis was related to the candidate, the report says.

Congress established the bi-state Waterfront Commission in 1953 to “investigate, deter, combat, and remedy criminal activity and influence in the Port of New York and New Jersey and to ensure fair hiring and employment practices, so that the Port region can grow and prosper.”

The commission regulates and licenses stevedoring companies operating in the harbor and on the piers. Anyone who comes into any contact with waterborne freight must be registered with and licensed by the agency.

This has become particularly crucial in the wake of 9/11. Yet the seven-year period covered by the Inspector General’s probe came after the attacks.

Imagine someone failing the application for the agency’s police department and then recording the highest score ever on his third try. That’s nothing compared to what else the New York Inspector General found.

The raft of complaints had New York officials on the commissioners’ tails two years ago. Ironically, rumors ran rampant several times within the past decade of Waterfront Commission wrongdoing in New Jersey, but no one in charge here did anything about it.

In fact, this was the first time that anyone in either state had ever looked into those activities in the agency’s 53-year history. Without such oversight, the Attorney General’s report says, those in charge were free to do as they pleased.

Although they cooperated, the commissioners weren’t happy — and even objected to the review, the report says.

According to the report:

Companies operated in the harbor for at least 10 years, as even as much as 14, with what were supposed to be five-year licenses, and no one so much as conducted an audit to find out what the commission was owed.

The man charged with keeping those tabs, and enforcing the audit and licensing regulations, was then-Director of Audit and Control Frank Nastasi. However, Nastasi “devoted little effort in supervising his staff; instead, for portions of the workday, Nastasi conducted a private tax preparation business out of his Commission office and accessed pornography on his Commission computer.”

Meanwhile, former General Counsel Jon Deutsch helped out his pals “despite obvious conflicts of interest,” issuing a license to the son of a close family friend while disguising the recipient’s prior drug conviction.

“Madonna was aware of Deutsch’s misconduct but
refused to address it,” the report says.

Deutsch also led the questioning of the father of Al Cernadas, Jr., the First Assistant Prosecutor of Union County, who was a former co-worker and close friend, during a joint investigation with federal authorities.

The report says Deutsch also “inappropriately intervened in a police investigation for a friend of the Cernadas family, Jimmy Zamuz.

“When asked why he, rather than members of the Commission’s police division, obtained police records
from New Jersey, Deutsch testified:

“I was a prosecutor in Union County. I mean, New
Jersey’s a little different than New York. I mean, we know people.

“Who did I know? I knew a special assistant to the mayor of Newark. It happened in Newark, I believe.”

After awhile, you stop reading. It becomes like all the other corruption stories you’ve heard out of New Jersey.

If you do press on, you’ll find Deutsch at it again when he gave private information to Albert Cernadas, Jr. from an investigation of a fight Cernadas family members had in a bar. Deutsch also tried getting one of the combatants suspended, but he was far from through.

Directly from the report:

“In one particularly egregious instance, former General Counsel Jon Deutsch fashioned a scheme to allow Frank Cardaci, a convicted felon, to place his warehouse in
his wife’s name and continue to operate uninterrupted in direct violation of the Waterfront Commission Act.

“Deutsch accomplished this cover up with the knowledge of several former senior officials, including Director of Law Joy Kelly, Director of Licensing Peter Goldfinger, Assistant Director of Licensing Jeffrey Schoen and Director of Audit and Control Frank Nastasi.

“Cardaci, owner of ASA Apple, had been convicted
in federal court of participating in a scheme in which goods intended for international shipment were illegally sold domestically at lower prices.”

New York’s Inspector General “found that Cardaci’s wife was a mere figurehead, and that the involved officials were aware at the time that the arrangement was improper.”

Madonna, while commissioner, did much of the same. In fact, he boosted Deutsch’s promotion to general counsel by obtaining a stellar recommendation letter from DeCotiis.

“DeCotiis neglected to reveal that he and Deutsch had a familiar relationship,” the report says.

Madonna also tried to broker his power to get three unqualified candidates shields and guns with the commission’s Police Division.

One of them didn’t have a diploma. Another had a prior work history that included “lackluster performance, and angry outbursts including a threat of physical assault against a supervisor.”

The second didn’t make it through the academy after constantly falling asleep. But the first was hired — as was
a detective “who failed the required examination on the first two of three occasions” despite the fact that it was the exact same exam.

On his third shot, he “scored the highest score ever recorded by an applicant in the history of the Commission, a 97.8 percent, and boasted to other Commission staff that Madonna had provided him the answers.”

The story could best stop at the point in the report where the Inspector General notes that commission detectives often “were diverted from their law enforcement duties to guard parking spaces designated by the New York City Department of Transportation for Waterfront Commission vehicles for use by executive staff.

“The detectives would first report to the Brooklyn field office, retrieve a Waterfront Commission vehicle, and drive to Manhattan to guard the spots.

“The detectives were assigned to arrive at the spots at approximately 7:00 a.m. and to remain until all supervisors arrived, usually at 9:00 a.m. The detectives then returned to
the Brooklyn field office to resume their normal police-related duties.”

In response to the Inspector General’s report, “Madonna acknowledged that many problems existed in the agency, but refused to accept any responsibility,” it says. “Instead, Madonna placed the blame on Commission staff.”

Currently headquartered at 39 Broadway in Manhattan, the commission has field offices in Brooklyn, New York, and Port Newark, New Jersey. It also operates a “hiring hall” for dock workers in Edison.

The governors of New York and New Jersey each appoint a commissioner, with the advice and consent of the respective state senates.

The commission licenses 53 companies to operate on the waterfront, maintains a registry of 6,452 longshoremen and other waterfront employees, and has a staff of nearly 100.

Its nearly $11 million budget is funded primarily through an assessment on the salaries paid to employees on the piers. Stevedoring companies are assessed nearly 2 percent of company’s payroll devoted to waterfront work.

Madonna was New Jersey’s commissioner and Michael Axelrod was New York’s during the period covered by the probe. When Axelrod’s term expired, he was replaced in July 2008 by Ronald Goldstock.

New Jersey Gov. Jon Corzine told the commission last week he was firing Madonna. Deutsch was terminated last October, during the investigation, after a lengthy suspension.

Thomas De Maria was executive director before being replaced by Walter Arsenault last September, amid the probe.

Nastasi has since retired.

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