Port Authority: The lavish, secretive workings of the PA $5B agency cuts deals far from the public eye

The lavish, secretive workings of the PA
$5B agency cuts deals far from the public eye

October 08, 2006 Star-Ledger
They have been known to spend a billion dollars in an afternoon, hire their own retired executives for six-figure consultant deals, hand out 22 percent pay hikes, lease land, fix bridges and pay for $300,000 parties.

All in secret

Operating in a governmental twilight zone, they work mostly behind closed doors, immune from state and federal open public meeting rules even though their decisions affect millions of people.

"They operate without transparency or accountability," said New York Assemblyman Richard Brodsky.

The mysterious people in question are the 12 commissioners of the Port Authority of New York and New Jersey, who meet 10 times a year to award consulting and construction contracts for public transportation projects.

Because of the authority's unusual status as a bistate agency, the commissioners decide how to spend most of their $5 billion annual operating budget in closed session. Open discussion seldom happens; they rarely give either the public or the media notice that a vote is going to be taken, and little inkling of the final outcome.

It's been that way since the authority was formed, 85 years ago in a special act of Congress.

Anthony Coscia, the Port Authority chairman, says the Port Authority conducts its business in the way it does mostly because it can. Nothing in its 1921 compact or current policies require extensive open sessions.

"The way the PA conducts its business is completely consistent with what it's legally entitled to do," said Coscia.

Now a move is afoot to make the Port Authority subject to the same sunshine laws and legislative oversight that apply to most other governmental bureaucracies. Assemblyman Brodsky is leading the push in New York for legislation that would create the change, and he plans to seek help from New Jersey legislators.

"There needs to be fundamental, structural reform," he says.

Brodsky wants Port Authority commissioners to tell the public exactly what is happening at their meetings and submit to independent budget oversight and review by an independent inspector general. Additionally, he wants more stringent rules over how authorities buy and dispose of property.

Coscia, now in his fourth year as PA chairman, says he has tried to convince the board that it needs to become more open to scrutiny and some advances have been made -- but change is coming slowly.

"If we want to be the agency that builds billion-dollar projects ... we have to have a level of public confidence in what we do," says Coscia, New Jersey's top board member. "I'm realistic about the fact that you are talking about getting a government agency to change the way that it's conducted its business over generations, over decades of time."

Charles Gargano, the agency's vice chairman and New York's top board member, did not respond to requests for comment.

Coscia also said he has sought a review by year's end of the agency's open-meetings policy, which has not been revised since 1992.

"That's a positive," said Anthony Coley, a spokesman for Gov. Jon Corzine.

Additionally, Coley praised Coscia for agreeing to comply with the governor's recent executive order demanding greater "transparency" from state authorities, even though the Port Authority does not have to do so.


Port Authority commissioners meet early in the morning over bagels, muffins, juice and coffee on the 15th floor at their Manhattan headquarters, with member dividing into groups for private morning sessions. Following a break for mini-deli sandwiches and sodas, they reassemble in the afternoon -- again behind closed doors.

Afterward, the members hold a brief public session.

They get an update on a pending project from a department head. They take just a single vote on a series of resolutions -- known as a "consent calendar." Approval is unanimous and debate is rare. It usually is all over within 15 minutes.

While details of items on the consent agenda are contained in a sheaf of papers handed out after the meeting ends, they don't include everything that has been acted upon in closed session.

Last December, the commissioners authorized $1.1 billion for a company to oversee the construction of Ground Zero's permanent PATH train station. Port Authority officials said they did not disclose the action because a contract had not yet been signed and they feared not getting the best price.

Two years ago, they awarded consulting contracts worth hundreds of thousands of dollars each to two former high-ranking Port Authority executives who already were drawing big pensions. In 2001, commissioners, who receive no pay themselves, gave top agency executives raises of up to 22 percent, failing to announce the increases at a public meeting the same day. In 1999, they spent $311,000 on two parties to celebrate a major airport anniversary, but did not disclose the costs.

Most other regional transportation agencies -- such as NJ Transit and New York's Metropolitan Transportation Authority -- follow the government accountability laws of their respective states.

Even two other nearby bistate agencies, the Delaware River and Bay Authority -- run by New Jersey and Delaware -- and the Delaware River Port Authority -- operated by New Jersey and Pennsylvania -- provide more public information during their monthly meetings than does the Port Authority.


The Port Authority of New York and New Jersey receives no tax dollars from either state. Its multibillion-dollar operations primarily are funded through airport leases, landing fees and bridge and tunnel tolls.

With a current $5 billion operating budget for 2006 and a capital plan that calls for spending $10 billion to $15 billion in capital projects over the next decade, the authority is one of the region's giant spenders. Its holdings and operations include the area's three major airports, the Hudson River bridge and tunnel crossings, Port Newark/Elizabeth, the former World Trade Center site and the PATH rail system.

"When you have a massive agency spending that much ... transparency really shouldn't be a voluntary matter," said Paul McMasters, a Washington-based ombudsman for the First Amendment Center.

"The bottom line is, if there's not an accountability mechanism, it's been shown public officials -- elected or appointed -- do what they want," said Geoffrey Segal, director of government reform at the California-based Reason Foundation. The Port Authority's dual-state status makes oversight particularly difficult, he said.

"Most authorities can fall into that vacuum," continued Segal. "There's no direct link between the citizen and the board members."

Coscia has acted to address some complaints.

For example, after two reporters objected in December 2003 to the lack of public notice before the board approved its $4.5 billion 2004 budget, Coscia decided to provide notice in the future and also to release agendas a day before meetings.

He has also changed a rule that required persons wishing to speak at meetings to submit a written request first, preferably a week or two in advance. Now, individuals may sign up the day of the meeting and speak for three minutes on a topic.

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