11 officials nabbed in FBI bribery sting
Published in the Asbury Park Press 02/23/05
By KATHY MATHESON
STAFF WRITER
(STAFF PHOTOS: TANYA BREEN, BOB BIELK)
A handcuffed Keyport Mayor John J. Merla (left photo) frowns in
response to a reporter's question after his arrest. Right: West Long
Branch Mayor Paul Zambrano is taken out of the FBI office.
Related Media
• Thomas Broderick
• Paul Coughlin
• John J. Hamilton Jr.
• Richard Iadanza and Joseph McCurnin
• John J. Merla and Robert L. Hyer
• Raymond O'Grady
• Patsy Townsend
• Criminal Complaints (in .PDF format) for:
Paul Zambrano & Joseph DeLisa
- advertisements -
The FBI on Tuesday unveiled an undercover bribery sting in Monmouth
County, rousting three mayors and eight other public officials from
their homes in early-morning raids, clapping handcuffs on them and
charging 10 of them with extortion.
The 10 accepted at least $45,000 plus a free driveway paving job worth
$5,000 in exchange for promises of government contracts, authorities
said. The 11th was charged with money laundering for a profit of "more
than $10,000."
The criminal complaints filed by the FBI read like scenes out of the
TV show "The Sopranos," in which envelopes of money change hands at
local eateries and conversations contain code words and occasional
profanity. One of the defendants even has a nickname — "Joey Buses."
What the public officials — representing six towns and county
government — didn't know is that the FBI was recording them on audio
and videotapes.
At the center of the sting — an extension of "Operation Bid Rig," the
FBI's probe into public corruption in the area — was an unnamed
cooperating witness who represented himself to officials as someone
involved in a Florida-based construction business as well as loan
sharking. He was occasionally accompanied by two "employees," who were
really undercover law enforcement agents.
U.S. Attorney Christopher J. Christie called the investigation the tip
of the iceberg and vowed more names would be added to the list of
defendants.
"Just when you think that you've seen it all in New Jersey, we peel back
another layer of the onion and see something uglier," Christie said at
a news conference. "There is an epidemic in New Jersey of public
corruption. . . . People (are) selling their offices for envelopes of
cash."
The bribery investigation was spearheaded by Edward J. Kahrer,
supervising special agent of the FBI's area office in Tinton Falls,
and three other special agents: William Waldie, Thomas Jobes and
Donald Russ.
"This case boils down to greed, ego and arrogance," said Joseph Billy
Jr., special agent-in-charge of the FBI's New Jersey operations.
Billy then quoted Kahrer in describing the impact of the sting: "The
corruption in Monmouth County has been like an infection untreated,
which has spread to threaten the health of the entire county. Today,
we have applied the tough medicine. But only constant attention and a
change in the environment will determine if the infection is eradicated."
The defendants are:
John J. Merla, 43, Keyport mayor.
Robert L. Hyer, 63, confidential aide to County Clerk M. Claire French
and a former Keyport borough councilman.
Paul Zambrano, 48, West Long Branch mayor.
Joseph DeLisa, 48, a West Long Branch borough councilman.
Paul Coughlin, 41, Hazlet mayor.
Raymond J. O'Grady, 55, a Middletown township committeeman and head of
the county's central motor pool.
Thomas Broderick, 55, assistant supervisor at the county Division of
Highways, a former Marlboro township councilman and former county
undersheriff.
Patsy Townsend, 57, deputy county fire marshal and code enforcement
and emergency management official in Neptune.
Richard J. Iadanza, 49, Neptune deputy mayor and police commissioner,
and director of the county Division of Highways.
Joseph McCurnin, no age available, operations manager for the county
Division of Transportation.
John J. Hamilton Jr., an Asbury Park city councilman.
All were charged with extortion except for Broderick, who was charged
with "laundering" tens of thousands of dollars from the unnamed
contractor's "loan-shark business." Each faces up to 20 years in
prison and a $250,000 fine.
The accused made their initial appearances Tuesday afternoon in U.S.
District Court in Newark before Magistrate Judge Ronald J. Hedges. All
were released on personal recognizance with the stipulation that they
cannot leave Monmouth County, except for work or case-related travel.
The defendants also had to surrender their passports and firearms.
Several of the men had private attorneys, but some were represented by
the federal Public Defender's Office. Except for Hamilton, who asked
about the penalties for the crime he was accused of, the rest waived
the reading of the charges.
"It's not fair," Hamilton said as he left the courthouse, adding that
he believed he was set up.
Most of the attorneys declined to comment.
Eugene M. Lavergne, an Asbury Park lawyer representing Zambrano, said
he had not reviewed the case or spoken to his client at length. "He
said to me he just wants to go home," Lavergne said.
Hazlet attorney Michael J. Pappa, representing Coughlin and Merla,
said his clients plan to plead not guilty.
Broderick, when asked by a reporter if he took a paper bag full of
cash as alleged in the complaint, replied: "No, absolutely not. Who do
you think I am?"
A cooperating witness
The central figure in the investigation is a contractor identified in
the complaints only as "CW," an abbreviation for "cooperating
witness." Authorities described him as being known to numerous
officials in Monmouth County.
The FBI complaints allege that:
John J. Merla took $9,000 in cash on Sept. 11, 2003, from the
contractor at a borough restaurant. The mayor wanted money to cover
costs of a political fund-raising picnic in exchange for government
work. Between December 2003 and February 2004, the contractor was
awarded jobs for bulkhead removal and tree chipping. Merla accepted
$2,500 more from the contractor for steering the bulkhead work, as
well as cash payments in connection with other projects.
Keyport Borough Administrator David Palmara confirmed that the
bulkhead job, which he said was worth about $30,000, was given to
Steffer Demolition of Ocean Township.
In the same complaint, Robert L. Hyer was described by Merla as "our
point guy" on projects steered to the contractor. For his role, Hyer
allegedly took a $5,000 payment on June 18, 2003, outside a Neptune
restaurant, as well as numerous smaller payments. Hyer was recorded in
one conversation with the contractor saying: "We'll do whatever you
want. . . . I know the game."
Paul Zambrano accepted $5,000 in cash from the contractor on Sept. 30,
2003, at a Tinton Falls restaurant — $3,500 for Zambrano and $1,500
for Joseph DeLisa ($500 of DeLisa's payment was for the purchase of
tickets to a DeLisa fund-raiser). In return, the contractor was
promised municipal projects, including possible demolition work on the
old West Long Branch borough hall. That contract has not yet been awarded.
On Oct. 16, 2003, the FBI says, Zambrano accepted $2,000 in cash from
the cooperating witness at a Tinton Falls restaurant. On Nov. 18,
2003, at the state League of Municipalities conference in Atlantic
City, DeLisa allegedly accepted an envelope with $1,500 in cash while
Zambrano accepted $1,500 for himself and $1,000 for an unidentified
official for help obtaining contracts in another Monmouth County town.
Zambrano allegedly accepted two more payments: one for $4,000 on Jan.
29, 2004, and one for $1,500 at the league conference on Nov. 17,
2004, from an agent posing as an employee of the contractor.
Thomas Broderick accepted more than $10,000 for laundering large sums
of cash from the contractor's purported loan-sharking operation.
Broderick became involved through an unnamed Keyport councilman who
already had engaged in similar transactions with the contractor. In
one transaction, Broderick accepted $50,000 in cash in a paper bag in
a Tinton Falls restaurant on May 4, 2004. In return, Broderick wrote a
check to the contractor for $45,000 and kept the difference in cash,
which he later referred to using the code word "munchkins."
"I wish I would have known you sooner," Broderick is quoted as having
told the contractor.
Patsy Townsend accepted $1,000 in cash from an "employee" of the
contractor in exchange for steering future fire-related work
(demolitions and such). The cash was exchanged during a party attended
by several county officials and sponsored by the contractor at the
League of Municipalities convention in Atlantic City in November 2004.
Two county officials who had taken bribes from the contractor —
including one that night — introduced Townsend to the contractor.
Richard J. Iadanza accepted $1,500 on June 25, 2004, for future work
to be steered to the contractor and as a reward for warning the
contractor to steer clear of a county official who might be
cooperating with law enforcement. He took another $1,500 on Nov. 17,
2004, in exchange for future government work for the contractor.
Iadanza was repeatedly captured in recordings discussing other
payments, including his belief that his vote in favor of someone in
line for a $45,000-a-year municipal position entitled him to a $10,000
to $12,000 cash payment.
The same complaint alleges that Joseph "Joey Buses" McCurnin accepted
$1,000 for warning the contractor away from a public official who
might be cooperating with authorities.
Raymond O'Grady is accused of accepting $6,000 from undercover agents
who he believed were employees of the contractor — one payment for
$1,000 on Oct. 21, 2004, and one for $5,000 last Thursday — in return
for future work. The meeting was set up by an unnamed county official
who was not cooperating with authorities and who told the agents that
O'Grady was politically well-connected and about to become mayor of
Middletown. During the meeting with the undercover agents, O'Grady
bragged he could "could smell a cop a mile away."
"Mr. O'Grady should have his olfactory senses tested immediately,"
Christie said during the news conference.
John J. Hamilton Jr. had the contractor install a paved driveway
valued at about $5,000 or $6,000 for free at his home in August 2001
in exchange for the promise of municipal contracts. Hamilton
subsequently asked the contractor for a $1,000 receipt in the event
that he had to explain the driveway. FBI agents approached Hamilton in
November 2002, at which time he falsely told the agents that he had
received a discount because the contractor was doing other work in the
area at the same time.
Paul Coughlin took $3,000 in an envelope on May 19, 2004, from the
contractor in exchange for future municipal work, including the
demolition of Hazlet's town hall. That work was performed Sept. 4,
2004, by Lertch Wrecking of Wall and Freehold.
Assistant U.S. Attorney Mark McCarren said Keyport was the only
municipality where the contractor actually received work because of
the bribes.
"Our targets were far better on taking the money than they were on
awarding the promised work," McCarren said.
Pay-to-play "alive and well"
The investigation stemmed from an earlier probe into corruption in
Asbury Park that led to the convictions of former Mayor Kenneth E.
"Butch" Saunders Jr. and his adviser, Rayfield James; former City
Councilman James Condos; former housing authority Executive Director
Kenneth Nixon; and former City Manager and former Ocean Township Mayor
Terrance D. Weldon.
And it comes at a time when public officials are under greater
scrutiny. The Legislature is scheduled to convene a special session
Monday to try to pass tougher ethics laws and a ban on pay-to-play,
the practice of rewarding campaign contributors with government contracts.
"This news today shows that pay-to-play is alive and well in counties
and municipalities," Assemblyman Steve Corodemus, R-Monmouth, said
Tuesday. "It is now time to act for a comprehensive pay-to-play reform."
Seventy-six public officials in the state — including those arrested
Tuesday — have been charged with, been convicted of, or pleaded guilty
to corruption charges in the past 37 months, according to Christie.
The officials come from all corners of the state and include Democrats
and Republicans, proving that corruption is "an epidemic," he said.
Monmouth County Freeholder Thomas J. Powers said he doesn't believe
corruption is widespread in the county — particularly in county
government — even though six of the 11 officials arrested in Tuesday's
sting are county employees. But he noted none of the alleged offenses
dealt with county contracts.
"Since I've been on the Board of Freeholders, I've never had any
suspicions that anyone on the board had any dirty dealings," Powers
said, adding, "If so, I would have walked" away a long time ago.
But Christie noted one conversation cited in the complaints in which
an unnamed county official said, "Nobody watches, nobody hears, nobody
sees."
"I am here to tell them that somebody watches, somebody hears,
somebody sees and, most importantly, somebody acts," Christie said.
"You would think that they'd get the idea by now."
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