NEWARK, N.J. (AP) - This week's federal trial of a former Democratic powerbroker is expected to shed light on the maneuvering behind a multibillion-dollar megamall project that has languished for more than a decade at New Jersey's Meadowlands sports complex.
NEWARK, N.J. (AP) — This week's federal trial of a former Democratic powerbroker is expected to shed light on the maneuvering behind a multibillion-dollar megamall project that has languished for more than a decade at New Jersey's Meadowlands sports complex.
Now known as American Dream Meadowlands, the sprawling project was known as Xanadu in the early 2000s when, federal prosecutors contend, Joseph Ferriero used his position as head of the Bergen County Democratic Organization to squeeze nearly $2 million out of a Virginia-based developer in exchange for his political influence.
Ferriero is charged with racketeering, conspiracy, bribery, mail fraud and wire fraud. Opening statements in U.S. District Court are expected to begin Thursday.
In court filings, Ferriero's attorney, Michael Baldassare, has argued that Ferriero made his living as an attorney, consultant and businessman and "exercised his prerogative to engage in political speech" by holding the unpaid, volunteer position with the Bergen County Democratic Organization. The indictment "never alleges that any of the activities were connected to the affairs of the BCDO," Baldassare wrote.
The case against Ferriero extends beyond Xanadu to include municipal contracts from which he is accused of receiving kickbacks. However, revelations about the mall project surfaced this month after the release of secret grand jury testimony from 2008 from James Dausch, a former executive of Mills Corp., the Virginia-based real estate company that won the original bid to build Xanadu.
Among other revelations in Dausch's testimony was that Mills initially sought to get the Xanadu contract without going through a bidding process by "swapping" it with a nearby site that the company had already acquired an interest in. Dausch said then-Gov. James McGreevey told him he could "do it legally, but politically I can't do it."
"Any businessperson who tells you he likes competition is lying," Dausch told the grand jury. "A competition is fine for other people but not for you."
It was Mills' desire to vanquish the competition that led it to Ferriero, who was more than willing to use his influence to garner political support for the company's bid, prosecutors say. That came with a price tag: $35,000 per month to a consulting company formed by Ferriero, according to the indictment.
Prosecutors say Ferriero and others told Mills' representatives that another company seeking to get the contract would use a "scorched earth" strategy that would be successful unless Ferriero was hired, creating what the government alleges was a "wrongful fear of economic harm."
Dausch told the grand jury that "part of the reason that you wanted Joe Ferriero on your team and known to be on your team is that it was my understanding that people thought twice before crossing him."
Dausch also told grand jurors in 2008 that U.S. Sen. Robert Menendez, then a member of the House, made several calls to push the Army Corps of Engineers to grant Mills a permit for the Xanadu project. Soon after, he said, the Menendez camp asked for $50,000 for his 2006 Senate campaign. At least $20,000 was donated by Mills employees or their family members, according to federal election filings.
Menendez wasn't accused of or charged with any wrongdoing, and Dausch testified that Menendez did not make his efforts for Mills contingent on receiving the money later.
Tricia Enright, a spokeswoman for Menendez, said there was no quid pro quo arrangement involving Menendez's help for the company.
She said his efforts to push the project forward were "hardly a surprise for a man who has always worked to bring jobs to our state."
Developer Triple Five, whose properties include the Mall of America, took over the project about four years ago and plans to open American Dream by next year. It is considered the largest project of its kind in the country.