Christie Knew Financial Risk of Hudson Tunnel: Feds

NJ Transit just hired $485-per-hour firm to fight bill

Gov. Chris Christie knew New Jersey would have to repay the $271 million in federal funds spent on a canceled tunnel to link the state with New York, federal officials said, while Christie charged that the Obama administration has cherry-picked his state to pay back the money because he is Republican.

To speed up the Hudson River Tunnel project, Christie successfully urged federal officials in April to use a type of funding agreement that federal law requires to be repaid if the state backed out.

According to the Early System Work Agreement, "If an applicant does not carry out the project for reasons within the control of the applicant, the applicant shall repay all government payments made under the work agreement plus reasonable interest and penalty charges the Secretary establishes in the agreement.

Christie canceled the project Oct. 27, citing potential cost overruns that he said could add $2 billion to $5 billion or more to the price.

"Gov. Christie's decision to renege on that contract and abandon the project is what now requires us to insist on the return of federal funds expended under the ESWA," FTA Administrator Peter Rogoff said in a statement to The Record of Woodland Park.

Last week, Christie approved the hiring of a high-powered Washington, D.C., law firm to wage the battle on the tunnel tab, which is due for repayment by Dec. 24. Christie claims New Jersey is being targeted for political reasons and that the federal government has been inconsistent in trying to recoup money when a project falls through.

"We don't think we have to pay any of that money back because, in fact, the Obama administration and previous administrations have selectively enforced when they asked for the money back," Christie said Wednesday at a town hall meeting in Livingston.

"And I'm not going to allow them to say, 'Hey, New Jersey has a Republican governor, so we'll get the money back from them, so states where we have Democratic governors, we don't ask for the money back."

When Christie announced that he was fighting the bill, he cited a transit project in Rochester, N.Y., that was halted, saying the FTA did not demand repayment of tens of millions of dollars spent.

However, the Rochester project used a different funding agreement than the one New Jersey.

Federal Transportation Department documents show New Jersey Transit sought a new Early System Work Agreement in January to speed up the project.

Christie reaffirmed New Jersey's commitment to the project in an April 8 letter to U.S. Transportation Secretary Ray LaHood. The governor called the tunnel "critical for the transit riders of New Jersey and the region."

Only five transit projects have been awarded Early System Work Agreements in the past 30 years, including the tunnel project, and only New Jersey has canceled its project.

The administration contends the work already completed has ongoing value for future transportation projects in the region.

"Clearly, there are other issues, in addition to ones we've identified, which we believe work in our favor," Christie spokesman Michael Drewniak said Friday.

"We are relying on the expertise of our outside counsel to address the interests of New Jersey with the federal government," Drewniak said. "We've also received support of our position from numerous members of New Jersey's congressional delegation."

Copyright AP - Associated Press
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