I-Team: NJ Writes Off Millions in Debt

New Jersey's Treasury Department has written off tens of millions of dollars in debts from companies and individuals that owe the state money, and is refusing to provide records of the disappearing debts to the public.

Seeking the names of companies whose debts have been forgiven, NBC 4 New York's I-Team filed a request with Treasurer Andrew Sidamon-Eristoff's office under the state's Open Public Records Act (OPRA) last fall. But after months of negotiation, Eristoff's office still has not provided the information.

"It is troubling to me that the treasurer's office is not giving the public this kind of information," said Senate Majority Leader Loretta Weinberg, D-District 37. “Whenever someone doesn't want to tell you something, there is always that antenna that they don't want to tell you, that there must be a reason."

Weinberg, who sits on the Legislature's budget committee, says it would be useful to know what companies are being forgiven of their debts. That money could be used to restore cuts to health and education, she said. 

Representatives for the treasury office initially told the I-Team that records of specific debt write-offs could not be provided because it could compromise the financial privacy of businesses and individuals who owe the state money.

"Without research and analysis, Treasury cannot ensure proper redaction of confidential personal financial information," the Treasury Department said in its official OPRA denial.

New Jersey's 2012 debt collection report indicates companies and individuals owe the state $524 million in cumulative outstanding debts and fines. Of that total, $401 million, or about 76 percent, consists of debts owed by prisoners in the corrections system, debts to the Parole Board, and debts owed by people who are unable to pay legal bills charged by public defenders. Those debts are notoriously hard to collect and clearly fit the criteria necessary for a debt to be written off.

But other debts are less clear.

The rest of the cumulative outstanding debt – about $123 million – consists of debts and fines owed to state departments including the Department of Environmental Protection, the Department of Banking and Insurance, the Lottery, and Division of Medicaid Assistance and Health Services.

Although Eristoff withheld information about specific companies and individuals that have had their debts erased, Eristoff’s office defended the general accounting practices employed by Treasury administrators.

According to a statement from Treasury Department spokesman Bill Quinn, decisions to write off debt are based on criteria that “embody common sense judgments that administrators can make based on facts particular to each case.

"The grounds for write-off include periods of inactivity during which there has been no contact with the debtor, the death of a debtor, a debt discharged in bankruptcy, or one owed by a company that is no longer in business or that has no assets or a debt that has been otherwise declared uncollectable by the Attorney General," said Quinn.

Because the Treasury is withholding the data sought in the I-Team’s OPRA request, it is unclear what percentage of the state’s outstanding debt is determined to be “uncollectable” and thus written off in any given year.

Still, the 2012 debt report does provide information about what percentage of debts are collected.

The I-Team found solid and hazardous waste disposal companies owe New Jersey $7.4 million in outstanding debt. That represents less than a 13 percent collection rate.

Financial entities regulated by the Department of Banking and Insurance owe the state more than $19 million in outstanding debt. That represents a collection rate of less than 11 percent.

In order to determine which firms and individuals have been forgiven of their debts – and how much -- the I-Team filed a civil suit against the NJ Treasury Department. The original OPRA request seeking the information was filed Oct. 1, 2012.

Finally, after four months and just before publication of this report, the Treasury Department provided the I-Team a fraction of the requested data. It included a list of $8.2 million in debts owed to the NJ Department of Environmental Protection and $378,229 owed to the NJ Department of Transportation, and while some business names and dollar amounts were included, large chunks of information was redacted.

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