Lawyers warned five years ago that New Jersey Gov. Chris Christie’s decision to take $1.8 billion from a bistate port agency to fix state roads might cause legal problems.
They turned out to be right.
That expenditure by the Port Authority of New York and New Jersey on the Pulaski Skyway is now being challenged by an airline, probed by the Federal Aviation Administration and investigated by both the Securities Exchange Commission and the Manhattan district attorney.
It has also become a key issue in a lawsuit filed by AAA, which will appear before a federal judge in New York on Thursday for arguments in a long-running legal dispute over toll hikes the authority began to impose in 2011 to pay for projects that included the Skyway, a bridge and a causeway link between Newark and Jersey City.
The case focuses on whether the Port Authority, the entity that controls the region’s airports, seaports and several key bridges and tunnels between New Jersey and New York, is allowed to raise tolls on motorists crossing the Hudson River to pay for a state highway project deeper into New Jersey.
The same issue was raised by United Airlines, which filed a complaint with the FAA in 2014 that it was being hit with millions of dollars in fees at the Port Authority-controlled Newark Liberty airport and that the money was then being improperly used to subsidize projects including the Skyway.
Port Authority lawyers all but predicted these types of problems when Christie’s appointees at the authority began pushing for it to get involved in rebuilding the Skyway during his first year in office, when New Jersey was facing an empty state transportation fund.
In an internal memo in 2011, Port Authority lawyer Carlene McIntyre wrote that the authority could legally spend money on the Skyway by declaring it to be an access road to the Lincoln Tunnel, an authority-owned tube several miles away.
An obscure part of the law authorizing the authority to build the Lincoln Tunnel had also given it the right to build access roads in New Jersey, but it hadn’t spelled out exactly which roadways “approach and feed” the tunnel — or, more importantly, how far away they could be.
“However,” McIntyre added, “it is important to note, that this statutory construction is not without doubt and may raise questions in the minds of some.”
In court papers, AAA lawyers complained that calling the Skyway an access road to the Lincoln Tunnel was a farce.
“The Pulaski Skyway and New Jersey roads, miles away from the Lincoln Tunnel, cannot be considered ‘approaches,’ unless the Port Authority considers any road that eventually leads to the Lincoln Tunnel … to be an ‘approach’ to the Lincoln Tunnel,” they wrote.
In recent years, the Manhattan district attorney’s office and the SEC have subpoenaed records from the authority pertaining to the Skyway project. They both declined to comment on their investigations.
Last summer, lawyers for AAA deposed former Port Authority chairman David Samson, a Christie appointee and confidant, whose once-cozy relationship with United Airlines is being investigated by federal prosecutors after it was revealed the airline operated a money-losing flight from Newark to South Carolina, near where Samson had a vacation home. A transcript of that deposition hasn’t been made public.
In court papers, the Port Authority has argued that while AAA might not agree with how it spends its money, that’s not enough to stop the toll hikes. Even without spending the diverted Pulaski money, the Port Authority would face financial problems requiring toll hikes, Port Authority lawyers wrote in court papers.