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Hoboken officials have asked the Hudson County Prosecutor’s Office and the U.S. Attorney’s Office to review $1.3 million in suspected overpayments to three sets of lawyers who provided counsel to the city. The lawyers — Murray, Murray & Corrigan of Little Silver; Carbone & Faasse of Ridgewood; and Cliffside Park solo practitioner Arthur Balsamo — were retained by the city council under Mayor Anthony Russo, who served from 1994 to 2001. The main question for the city, according to Corporation Counsel Joseph Sherman, is, “Was there an intent to defraud?” Beyond that, Sherman said last week he was not sure the city had legal grounds to recover excess payments. “We may not necessarily have a strong case here.” Sherman expects his review to be over in a couple of weeks. The investigation is notable because late last year Russo was indicted for allegedly taking a $1,500 bribe from an attorney who received a contract to advise the Hoboken school board. Balsamo and the Murray firm deny that they over-billed the city for their services, and note that it is not uncommon for elected officials to dispute the legal bills of their predecessors. The Carbone firm did not return a call by press time. Regardless of whether charges are brought, or whether Hoboken can sue for its money back, the episode provides another glimpse into the cozy world of pay to play — the unofficial system by which lawyers make hefty donations to election campaigns and receive heftier business contracts from election winners. Take, for instance, the Murray firm’s Robert E. Murray. In April 2000, the firm donated $2,000 to Russo’s election campaign. The donation was not unusual. Murray was a prodigious giver to politicians: his family and law firm gave more than $112,600 to Democrats and Republicans across the state in the past two decades, according to the Election Law Enforcement Commission. The Murray firm has been retained by a number of municipalities and school boards as general counsel or for labor matters. Jersey City, Atlantic City, Camden, Paterson, Asbury Park, Palisades Park, West New York, Clifton, Harrison, North Bergen and Long Branch have been among the firm’s clients. But it was Hoboken where Murray was most successful. In the late 1990s, under Russo, he simultaneously held the posts of city general counsel, city labor counsel, counsel to the parking authority and labor counsel to the school board. Curiously, the $2,000 gift to Russo came four months after Murray received a $325,000 contract to act as Hoboken’s general counsel, and an $85,000 contract to act as labor counsel. Then, in June 2000 — only two months after the $2,000 donation — Murray went back to the city and obtained two more contracts, doubling the value of the business originally awarded to him only halfway through the yearlong timeframe of the first contract. Despite that 100 percent pay rise after only six months, Murray eventually billed the city for $864,168 — or, put another way, $64,168 more than his contracts called for, Hoboken officials believe. The author and executor of the council resolutions approving these payments was Murray himself — as general counsel, Hoboken officials confirmed last week. Murray’s role as a legal adviser to Russo and the school board during the period in which Russo is accused of taking bribes in exchange for contracts is murky. The FBI and the U.S. Attorney’s Office have been investigating the Russo administration for years, holding grand jury hearings at the end of last year. Three sources familiar with the case told the Law Journal in October that the attorney who paid the $1,500 bribe for an assignment with the school board was Leo Vartan, the former mayor of Kearny, who was paid $16,500 to advise Hoboken on how to secure $2 million in state aid when it appeared that the city might be disqualified from receiving the money. DEFENDERS SAY FEES JUSTIFIED The as-yet unanswered question is whether Murray is a whistleblower guiding federal authorities through Hoboken’s bribery maze; a witness who’s been given immunity in return for cooperation; a target of the federal probe; or merely a na�f who found himself in the wrong place at the wrong time. The U.S. Attorney’s Office did not return two calls seeking comment. Russo’s lawyer, solo practitioner Dennis McAlevy in Union City, defended Murray: “I know Bob Murray and I have the greatest respect for him. Murray hasn’t been named anywhere in anything. I’ve never heard anybody suggest that Bob Murray was anything except a competent lawyer who served everybody well.” Murray’s lawyer, John McDonald of McDonald & Rogers in Somerville, defends his client. “He’s been practicing for 35 years with an unblemished record. Clients and lawyers dispute bills all the time — it’s not an uncommon occurrence,” he says. “I believe that all of the Murray law firm’s bills will withstand scrutiny and we will cooperate with any authorities that want to discuss the bills.” McDonald is right — municipalities frequently challenge their own lawyers’ bills, especially when a new administration comes in and gets the opportunity to go through their defeated opponents’ legal dirty laundry. Indeed, this is not the first time Murray has been accused of over-billing a municipal client. Something similar happened in 1996 in Clifton, when Murray was retained by the city council to investigate a complaint of sexual harassment against the mayor. He was authorized to spend $5,000 but ultimately presented the city with a bill for $18,000. Councilwoman Gloria Kolodziej protested the bill at the time. “Five thousand dollars is what basically every councilperson and the mayor is permitted. I remember how adamant the council was — you’re limited to $5,000. If you want more, you have to come back to the council and ask for more,” she says. Murray walked away with just the $5,000, and wrote off the rest. “He was under the mistaken belief that the $5,000 was an authorized amount and that they would approve more if necessary,” McDonald says. “There was no challenge to the competency of his work. The city of Clifton got the benefit of $13,000 of legal work they didn’t have to pay for.” Nor is it the first time Murray has found himself accused of self-dealing in Hoboken. In 2001, during the waning days of the Russo administration, 45 city workers received a total of $355,228 in “longevity” payments, according to the Feb. 9, 2001, edition of the Jersey Journal. Murray was asked to look into whether the money had been paid in error, but was forced by the city council to recuse himself when it emerged that he and Russo had been among the recipients of the bonus checks. Hudson County Superior Court Assignment Judge Arthur D’Italia ordered the money returned to the city’s coffers, the Jersey Journal reported. More recently, in May 2002, the Murray firm’s name surfaced in an exhibit to a complaint filed by the Election Law Enforcement Commission against three candidates for the Asbury Park school board ( New Jersey ELEC v. Brutus, C-1304 06 04 B2000). The candidates were accused of accepting donations to their 2000 campaigns and then not recording them properly with the election commission. One of the checks — for $2,000 — was from Murray, Murray & Corrigan. Neither the firm nor Murray was accused of any wrongdoing. OTHER PLAYERS WHO PAID An examination of Russo’s election finance forms shows that Murray was not the only one of the three lawyers currently under review to whom Russo showed largesse. Over the years, John Carbone donated $12,000 in cash and “in kind” contributions to Russo’s campaigns. Russo showed his gratitude to Carbone before the election result came in: Russo’s campaign paid Carbone another $15,000 for “professional services” in 2001, a few months before the election Russo lost. In terms of the city, Carbone is accused of having the same deal as Murray — obtaining a lucrative initial contract and then doubling its value by obtaining a second, similar one six months later. In December 1999, Carbone received a $110,000 deal to become Southern Waterfront Development counsel, Hoboken officials say. The next June he received another one for $100,000. Carbone was actually paid $395,463 at the end of the day, officials say: almost twice his authorized amount. The accusations against the third lawyer, Balsamo, are more modest. Balsamo was retained as Alcoholic Beverage Control prosecutor, and billed $18,250 without a contract. Balsamo gave $2,500 to Russo’s election coffers. Last week, Balsamo was eager to dispel suspicions. The city council did indeed resolve to retain Balsamo in 2000, according to a copy of the resolution provided by Balsamo. “I didn’t bill anything, strictly my contract amount is what I received,” he says. Unfortunately, a council resolution on its own is not a business contract — and neither Hoboken nor Balsamo could provide copies of his contract last week. Balsamo believes the Russo administration merely fouled up the paperwork. “I don’t have a copy of the contract. I have a copy of the letter sending it to me for signature, but I sent it back. I’ve got contracts for every year up to December 2000, but I don’t have a contract for that last year,” he says. Hoboken business administrator Robert Drasheff — one of the officials leading the billing review — was somewhat sympathetic last week. “I don’t think Mr. Balsamo acted in a malicious way. I think the administration was just very sloppy. He should’ve been more careful,” he says. “A resolution is not a contract, and any attorney should know that.” Adding to the complication is the fact that Drasheff, a Russo holdover staffer, received several checks from Russo’s campaign reimbursing him for minor election expenses. Despite the drama, there are already doubts as to whether anything concrete will emerge. Hudson County Prosecutor Edward DeFazio said last week he had referred the matter to the U.S. Attorney’s Office, “which has a pending case involving what may — or may not — be touching on what was forwarded to us by Joe Sherman,” DeFazio says. If no federal crime has been committed, DeFazio will then examine the papers to see whether there has been a violation of state law. “At first blush it looks like there was billings over and above the authorized contract, but that in and of itself surely doesn’t make it a crime even if it happened. You’d need criminal intent,” he adds. Sherman also downplayed his actions last week. “My preliminary research with respect to recovery of funds is not promising,” he says.

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