Profiles in Corruption

by Peter Schweizer

  Drawing on his network of supporters around the country, Booker raised huge sums of money for the race. By Election Day, of the more than $3 million in total he had raised for the campaign, only $47,550 of it actually came from Newark.21 There were more problems than just where the money came from. After the race, Booker’s campaign was charged with more than 1,500 election-law violations. It received the largest campaign fund-raising fine in New Jersey political history to that point. Sharpe James held the record previously.22

  Booker had impressive credentials—and Mayor James quickly used his pedigree against him. “You have to learn to be black,” he lectured Booker, “and we don’t have time to teach you.”23 There were also savage and slanderous personal attacks. According to Booker’s people, James smeared his opponent as a “faggot white boy.”24 James appeared impervious to any sense of shame. During the campaign, the mayor was forced to admit that he had visited a strip club that the police alleged was a brothel where underage prostitutes were working. The mayor responded that he had been at the club only in his “official capacity” to make sure that the club would be shut down. It did not help Booker’s cause that his own campaign chief of staff, Jermaine James, was also at the club when the police arrived, waiting in a line to get in.25

  However crude and offensive Sharpe James’s attacks against Booker might have been, they proved effective: Booker lost the election by about 3,500 votes. Booker, however, got the last laugh. James was indicted on thirty-three counts of fraud. His crimes included charging Newark city credit cards with $58,000 worth of personal expenses. Convicted and sent to jail, James added his name to a long parade of corrupt Newark mayors. Every other mayor in Newark over the past forty-five years had been indicted.26

  Booker and his allies turned the 2002 election defeat into another national media opportunity. Defeat at the ballot box did not dent national enthusiasm for Booker. Indeed, he found his celebrity status only rising. Part of it was the result of an extraordinary documentary film called Street Fight, which covered the 2002 race. A gritty, street-level look at urban politics, Street Fight positioned Booker as the the Reformer fighting the Establishment. Many in Hollywood championed it as a sort of organic citizen film. It was even nominated for an Academy Award. But the film was less grassroots than it might appear. In fact, Marshall Curry, one of Booker’s closest friends, produced the film. Curry’s family owned the investment firm Eagle Capital Management, and the family was among the most generous of his campaign donors.27

  The Curry connection would prove to be an interesting one. Booker was a champion of charter schools, which he viewed as the best option for improving the performance of failing public schools. Booker pushed aggressively for charter schools, not only in Newark, but also on the national stage. For Curry and Eagle Capital, charters schools were a commercial opportunity, suggesting their support for Booker was in part a calculated investment. Ravenel Boykin Curry IV of Eagle Capital Management told the New York Times that charter schools are “exactly the kind of investment people in our industry spend our days trying to stumble on, with incredible cash flow, even if in this case we don’t ourselves get any of it.”28

  Still, there were ways to profit. Like Frank Biden, they discovered there were a variety of means to take an educational reform and profit from it. Hedge funds like Eagle enjoyed a lucrative tax credit called the New Markets Tax Credit (NMTC), which Bill Clinton established in 2000. The tax credit allowed hedge funds to take a 39 percent tax credit on money they contribute to charter schools and to collect interest on those payments. According to Investopedia, “A hedge fund could double its money in seven years” with the NMTC. Not bad for what some would consider an altruistic investment.29

  In the wake of the 2002 defeat, Booker joined the local law firm Rabinowitz, Trenk, Lubetkin, et al. (hereafter Trenk). The firm, later renamed Booker, Rabinowitz, Trenk, et al., specialized in government contracts and services, thriving on its ties to local politicians. What Booker did at Trenk is unclear. An examination of legal records suggests that Booker had a light footprint at the law firm. He appears to have spent much of his time giving speeches around the country and continuing to build his political machine. As part of that effort, he also set up a nonprofit organization called Newark Now, which shared an address with the law firm.30 Newark Now stacked its board and staff with Booker’s political aides and the family members of local machine politicians. He chose Modia “Mo” Butler, a close political aide, to run the organization. Butler would be a fixture at Booker’s side going forward. Mo’s ex-wife, Nicole, was later on the payroll of another Booker nonprofit, Newark Charter School Fund.31 Once Cory was elected mayor, Newark Now would become an important conduit for money from city contractors and others wanting favors from the mayor’s office. Leverage requires a pathway for payment.

  With his partnership at Trenk and his new nonprofit, Booker began almost immediately campaigning for the 2006 election. This time Booker would leave no room for error; he was raising an astounding $6 million and solidifying his relationship with the “Big Steve” Adubato political machine. His opponent this time was a long-in-the-tooth politician named Ronald Rice Sr. He raised a small fraction of Booker’s war chest—variably reported at $150,000 and $250,000—a pittance either way. Predictably, Booker won the 2006 mayoral race going away, capturing 72 percent of the vote. His major support came out of the North and East Wards of the city, which were controlled by his political ally Adubato’s bloc of voters.32

  Booker’s victory meant he was now running the state’s largest urban government, dubbed by some at one time as “the Worst American City.”33 Newark, rife with crime, poverty, decay, unemployment, and corruption, felt like it had never quite recovered from the violent 1967 riots.34

  On election night, Booker shone as the Reformer declaring that things were about to change. “This is the beginning of a new chapter in the life of our city.”35

  But his tenure involved more continuity than change, especially as it concerned corruption and cronyism. Indeed, it appeared to many that a new machine was replacing the old—both corrupt, but the upgrade was finely tuned and running at peak efficiency.

  Booker’s years in the mayor’s office were controversial, a mix of policy successes and failures. He tightened the city’s belt, cutting the workforce by 25 percent. He also doubled the amount of affordable housing in the city. Yet even admirers admitted serious flaws. “The Newark police,” wrote one journalist, “on Booker’s watch, accumulated a horrifying record on race and brutality that prompted federal intervention in 2016.”36

  As mayor, Booker continued the pattern of absences from Newark that had marred his time as councilman. In one year, he was gone almost three months total, giving speeches and appearing on national television. During his eight-year tenure, he gave nearly 100 speeches around the country, for which he was paid. In all, he collected over $1.3 million, donating a significant but unknown percentage to charity, keeping the rest for himself. Like Bernie Sanders, Booker discovered that speaking fees would be a very helpful way to collect outside income while in political office. In addition to the podium, he was also a regular fixture on national television, hanging out with Oprah and Ellen DeGeneres, as well as on Meet the Press.37 Indeed, Booker seemed to spend an extraordinary amount of time doing national publicity instead of governing Newark. Even his former campaign manager, Carl Sharif, admitted, “He can’t sit still for a day without having a press conference or giving a speech.”38 But while his record on policy was mixed, the corruption and cronyism in Newark city politics would prove to be downright alarming. The mayor of Newark had substantial powers, especially when it came to lucrative contracts and making decisions involving real estate development. Booker masterfully managed this intersection of money and power, passing out favors while collecting checks for his political machine and friends.

  When Booker took his seat at the mayor’s office on 920 Broad Street in Newark, he quickly went about building up his political base a
nd leveraging his newfound powers. Despite his platform as a reformer, he ran the city much as any city political boss would. As one reporter put it, “The legacy of political corruption Booker inherited in Newark is the stuff of gangster movies and mob lore.”39 Booker added a more sophisticated political gloss, but, according to many, the extortive system remained.

  Booker was quick to reward friends and donors with Newark taxpayer money. In his first few months in office, Booker gave his campaign manager’s son a sole-source contract to update a website for the city. However, the son’s company was new and had no background doing such work. The contract was sizable—more than $2 million—and after two years the project was still incomplete, so the city had to hire another firm to clean up the work.40

  Booker also hired friends to join him in the mayor’s office amid complaints of cronyism. Alarm bells went off in some Newark circles almost immediately when Booker appointed a campaign aide named Pablo Fonseca as his first chief of staff. Before joining forces with Booker, Fonseca had been an “operative” for notoriously corrupt and future convict Sharpe James. Indeed, even after James went to prison, Fonseca remained “close” to him. With Booker traveling in and out of town, Fonseca “wielded an inordinate amount of power in the administration,” says Professor Andra Gillespie in her study of Booker as mayor of Newark. “To many current and former city hall insiders . . . Fonseca was the real mayor during the first half of Booker’s first term.”41

  In addition to his chief of staff, Booker signed on Oscar James Sr. as another advisor who had been close to former mayor Sharpe James, but was no relation. Oscar James Jr. was a city councilman. Oscar James Sr. would later plead guilty to tax evasion charges over failing to pay taxes while he was advising Booker.42

  Booker quit the law firm where he had been working, but they continued to pay him throughout his tenure. He had been at Trenk just four years, much of the time out of Newark, overseeing his nonprofit, and giving speeches. In short, he had a scant presence at the firm, but Trenk paid him nearly $700,000 over the next five years in what they claimed was a payout for his share of the law firm.43

  The trouble is that while his old law firm was paying Booker, Booker’s office was steering contracts back to the firm.

  Trenk received more than $2 million in work from city departments, including Newark’s Housing Authority, a public wastewater treatment agency, and the Newark Watershed Conservation and Development Corporation (NWCDC). As one New Jersey Democrat put it, “That’s almost like Sharpe James–type shit.”44 The local newspaper, the Star-Ledger, also made comparisons to the previous administration, warning about Booker’s boss-like tactics: “We hope Booker is not starting to look like James, The Sequel.”45

  For the money to flow for the benefit of friends and supporters, Booker relied on his political aide Mo Butler, who had been running his nonprofit Newark Now. After Booker became mayor, he appointed Butler as chairman of the Newark Housing Authority, a perch that would have allowed him to steer contracts to Booker’s friends and donors.46

  Butler also served on the board of the Brick City Development Corporation, a city-owned corporation Booker established when he became mayor. Brick City had the authority to help with development plans and provide taxpayer-financed loans. Auditors later discovered that 40 percent of the loans issued had not been repaid.47 Further consolidating his power, Butler became Booker’s chief of staff in 2008.48

  Lucrative city contracts were doled out to political donors as well. Law firms, who had been among his largest financial supporters, won big with new contracts when Booker became mayor. Eight law firms were slated to receive more than $2.4 million in legal contract increases—six of those had contributed to his campaign. Booker pushed for and got $1.3 million in legal contracts for allied law firms known to be “Booker boosters.”49

  Beyond contracts, Booker was willing to do other favors for big donors. In principle, Booker was opposed to the city using eminent domain to force landowners to sell their properties for big developers and their new construction projects. However, when one condo developer who had donated $53,000 to allied campaigns wanted it invoked, Booker conveniently made an exception, offering no rationale. Perhaps none was needed.50

  Booker had campaigned as a reformer in 2006. Among his promises were bold commitments to eliminate the several “deputy mayor” positions that had become magnets for cronyism at City Hall. He also pledged to halt donations from city contractors to political campaigns, to limit campaign contributions by city employees, and to install an anticorruption official in the mayor’s office.51 Booker would honor only some of these promises. Even when he did fulfill them, circumventions were available—often to his benefit. For example, while he did ban campaign contributions from city contractors, those same contractors could and did donate to the nonprofits he controlled. While the law caps campaign contributions, there was no cap on the amount they could give to his nonprofits.

  According to Professor Curvin, Newark Now “apparently became the place for donations by contractors who sought business from the city.” The Star-Ledger discovered that they populated Newark Now donor events. At one golfing event, for example, nine contractors gave $19,500 to Booker’s charity. Over the next twelve months, the companies received $21.5 million in city contracts.52

  Booker might have promised that he was going to eliminate the positions of deputy mayor, but he appointed Margarita Muñiz, the wife of an allied councilman, as one of his deputy mayors. He picked David Giordano as Newark’s fire director, even though he had no senior management experience. Giordano, a longtime Booker supporter, had served as the head of the firefighters’ union.53 In the early months of his mayoral administration, many of his appointees negotiated six-figure salaries with Booker, which sometimes exceeded the amount allowed by law. Booker issued executive orders increasing their salaries retroactively.54

  Another deputy mayor appointee was Ronald Salahuddin, who had been active in local politics. Booker tapped him to be in charge of public safety. Unfortunately, within a month of his appointment, Salahuddin was already steering contracts in exchange for bribes.55 Within four years, Salahuddin was indicted on federal charges involving bribery and extortion. U.S. Attorney Paul Fishman laid out how Salahuddin had shaken down business owners for money, not just for himself, but also donations for Booker’s nonprofit Newark Now.56

  Local businessman Nicholas Mazzocchi owned a demolition firm and had been implicated in a case of bribing city officials in exchange for contracts.57 He agreed to wear a wire for federal officials to avoid going to jail on bribery and tax evasion charges. He met with Salahuddin, who offered to steer city demolition contracts to his companies in exchange for contributions. Mazzocchi made clear that he thought the deputy mayor was “shaking him down” at the behest of Booker. A thirty-five-page federal indictment mentioned a Newark official seven times, which was later confirmed to be Booker chief of staff Pablo Fonseca.58 Salahuddin explained how he would pressure the right city bureaucrats to funnel contracts to Mazzocchi’s firm. (Neither Booker nor Fonseca was charged in the case.) Federal officials accused Salahuddin of steering demolition contracts to a local businessman named Sonnie Cooper, who donated $6,300 to Booker’s campaign. They also charged him with steering business to Mazzocchi and Joseph Paralavecchio, who was an East Ward political boss.59

  Booker declared his innocence saying that Salahuddin was a good friend and advisor, but that he did not know anything about the arrangements.60 Salahuddin was found guilty of conspiring to commit extortion and went to jail.61 He would not be the only one.

  As mayor, Booker pushed for strengthening the Newark Watershed Conservation and Development Corporation, a city-owned entity that managed Newark’s water resources and sewers. Booker appointed Linda Watkins-Brashear, a donor and close ally, to the post in 2007. Spending at the city-owned corporation exploded, especially funds paid to outside consultants. In 2005, the corporation spent $6.7 million; five years later, it was $10 million. Some of
those funds were going to consultants tied to Booker, including $812,000 sent to his old law firm, Trenk, which was of course still paying him. There were also consulting fees going to a board member’s father. But the money flowed both ways: of the thirty-six contracts that were awarded by the Watershed, sixteen of those vendors gave to a political action committee aligned with Booker called Empower Newark.62

  At the same time, Watkins-Brashear used the entity’s considerable financial resources to dole out contracts to her friends and ex-husband. Cory Booker’s old law partner, Elnardo Webster, was also put under contract to act as the corporation’s lawyer. His firm received more than $200,000 as a result. Elnardo had also been Booker’s campaign treasurer.63

  A state audit by the comptroller would later reveal that there were widespread financial problems, including “siphoning millions of public dollars and making illegal payments and sweetheart deals.” Watkins-Brashear “was using the Watershed like her own personal bank account” and confessed to using taxpayer money to fund her gambling addiction. Mayor Cory Booker was an ex officio board member of the Watershed, but he did not attend a single board meeting. Soon the Watershed was under investigation by both the U.S. attorney and the FBI. Watkins-Brashear would later plead guilty to a kickback and corruption scheme.64

  A state audit found problems not just at the Watershed, but also throughout the Booker administration. Indeed, auditors found that, like the Sharpe James administration, there was “a long list of problems and violations of regulations and city ordinances, many indicating that there is little or no competent supervision in many areas of the city.”65