The Office of the Inspector General at the U.S. Department of Housing and Urban Development (HUD) has opened a federal investigation into whether New Jersey Gov. Chris Christie (R) improperly used Hurricane Sandy relief funds to produce commercials starring himself and his family ahead of his re-election campaign. Auditors will examine how the Christie administration used $25 million set aside for “a marketing campaign to promote the Jersey Shore and encourage tourism,” focusing on the bidding process awarding a $4.7 million contract to a politically connected firm that cast Christie and his family in the Sandy ads, while “a comparable firm proposed billing the state $2.5 million for similar work” but did not include Christie in the commercials.
The ads produced by the company, MWW, attracted significant criticism. The New Jersey Star Ledger accused Christie of siphoning off “money that was intended for victims of Sandy to promote himself in a series of TV ads,” and described the move as “offensive” and a “ new low.” Watch the ad here:
Here are 6 things you need to know about the investigation:
1. Congress raised alarms about the ads in August. In August, Rep. Frank Pallone (D-NJ) alerted the Inspector General for the U.S. Department of Housing and Urban Development that the Christie administration may have “irresponsibly misappropriated funding allocated by Congress from the Sandy aid package” and used funds set aside for promoting the state “for political purposes.” “[T]he contract was awarded to a firm that is charging over $2 million more than the next lowest bidder to develop the marketing plan,” Pallone wrote, noting that “the winning bid proposed including Governor Chris Christie in the advertisements, while the lower cost proposal that was not selected did not.” “It is inappropriate for taxpayer-funded dollars that are critical to our state’s recovery from this natural disaster to fund commercials that could potentially benefit a political campaign.”
2. Conservatives questioned Christie’s staring role. In November, Sen. Rand Paul (R-KY) said Christie’s appearance in the television ads gave the recovery effort a “black eye.” “People running for office put their mug all over these ads while they were in the middle of a political campaign,” Paul said during a committee hearing. “In New Jersey, $25 million was spent on ads that included somebody running for political office. You think there might be a conflict of interest there? That’s a real problem and that’s why when people who are trying to do good and trying to use taxpayers’ money wisely, they’re offended to see our money spent on political ads. That’s just offensive.”
3. Chair of bidding committee has close ties to Christie. A six-member bid evaluation committee of Christie administration officials selected the higher price despite issuing a report that said Sigma’s proposal also “addressed the tasks and deliverables specified in the RFQ (request for quotation) … (and) could effectively meet the requirements of this RFQ.” Michele Brown, a close Christie aid, led the bid evaluation. “Brown is a former federal prosecutor in New Jersey but resigned that post in 2009 amid controversy over a loan of $46,000 from Christie,” Asbury Park Press reports.
4. The winning firm donated thousands to Republicans. The East Rutherford, New Jersey based MWW Firm has donated heavily to Democrats, but “MWW employees donated $1,000 to Christie’s 2009 Republican gubernatorial primary campaign and $1,500 to his 2010 inaugural committee.” The MWW Group PAC “spent $95,250 in the 2012 federal election cycle, with 73 percent of the money going to Democrats, though the largest single expenditure, $5,000, went to the National Republican Congressional Committee.” The losing ad firm, Sigma, did not make any political contributions.
5. The winning firm originally sought more money. Contract documents reveal that “MWW’s team had sought $5.2 million in labor costs and markups, with company CEO Kempner requesting his own compensation to be set at $595 per hour. After negotiations with state officials, MWW reduced its price and removed Kempner from the compensation list.”
6. Christie says he selected firm for its “statewide connections.” The Christie administration insists that MWW was the best choice, claiming that it had “statewide connections that would allow it to mobilize quickly to perform the high-stakes work of boosting tourism in the first summer season since superstorm Sandy.” “The size and scope of the PR campaign that MWW undertook was far larger and more labor-intensive than any other bidder’s,” said Michael Drewniak, a Christie spokesperson.
Christie responds by attributing the ads to Obama: “The Stronger Than The Storm [ad] campaign was just one part of the first action plan approved by the Obama Administration and developed with the goal of effectively communicating that the Jersey Shore was open for business during the first summer after Sandy,” Christie spokesperson Colin Reed said in a statement. “We’re confident that any review will show that the ads were a key part in helping New Jersey get back on its feet after being struck by the worst storm in state history.” While the Obama administration approved a waiver to allow the state to spend $25 million on ads, it was not involved in the bidding process under federal review.