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The FBI sting that snared Hudson County, N.J., Executive Robert Janiszewski is, as many such scandals are, a story of vendors, business people, lawyers, officeholders and insiders interacting at the confluence of government and politics, where billions of public dollars flow. It also appears to be without precedent in New Jersey. No one with the state and national clout of Janiszewski, who then went undercover for the government, has been wired to conduct such a sting in recent memory. Janiszewski, the onetime state assemblyman and Port Authority commissioner who headed President Clinton’s 1992 campaign in New Jersey, had his sports utility vehicle and his Jersey City condominium wired after signing a cooperation agreement with federal prosecutors, according to sources who asked not to be identified. Janiszewski, 56, resigned abruptly as county executive on Sept. 6 as word of the federal sting spread in Hudson. He also resigned as chairman of the county’s Democratic committee and as a member of the Democratic National Committee. He had vanished shortly after an Aug. 14 raid by FBI agents on the offices of Hoboken developer Joseph Barry and has not resurfaced since. The Star-Ledger reported after his resignation that tight security had been installed around his house in Tannersville, N.Y., in the Catskill Mountains before his resignation. Calls to a condominium he owns in Steamboat Springs, Colo., where some believe he had been holed up, went unanswered. His lawyer, Bruce Goldstein of Newark’s Saiber, Schlesinger, Satz & Goldstein, a former executive assistant with the U.S. Attorney’s Office in Newark, declines comment. So far, the political corruption probe, by the U.S. Attorney’s Office in Newark, also has led to subpoenas for records from the planning authority, formerly headed by Janiszewski, that controls federal transportation funds in northern New Jersey. Six sources familiar with the federal investigation say Janiszewski was ensnared by a county vendor, a psychiatrist whose company had been earning $1.65 million annually serving two jails and a psychiatric hospital. Three sources say the vendor, Oscar Sandoval of Union City, was videotaped paying off Janiszewski in a hotel room last November during the annual League of Municipalities convention in Atlantic City. Janiszewski, according to one source at the convention, left Atlantic City early and abruptly. When asked whether he set up Janiszewski, Sandoval says, “No comment,” but then adds, “I didn’t know about these rumors.” But on Sept. 27, Sandoval got the boot from Janiszewski loyalists, who control county government until the Democratic county committee meets this week in Jersey City, where they are expected to name Jersey City lawyer Bernard Hartnett Jr. as interim county executive. A resolution to renew Sandoval’s contracts was pulled from the freeholders’ Sept. 27 agenda when county administrator Abraham Antun, whom Janiszewski named to take over as acting county executive, asked the board to give the psychiatric business to a Utah firm. Sandoval was out after more than a decade with the county. When pressed by Freeholder William O’Dea as to why Sandoval’s firm, Hudson County Psychiatric Associates, was dumped after 11 years without any prior warning, Antun, according to the Sept. 28 edition of The Jersey Journal, said only, “I’m just disappointed with the way this vendor has done business with the county in the past.” For his part, Sandoval says he was dropped in retaliation for continuing to demand an investigation into a death at Meadowview Psychiatric Hospital in Secaucus, N.J., on July 4. Sandoval says the death was due to excessive force and incompetence by county employees. County administrator Antun did not return a call seeking comment. Some sources say they believe the covert operation ended prematurely because prosecutors had hoped Barry would agree to cooperate and continue the sting. Those sources say that when FBI agents armed with search warrants confronted Barry at his Hoboken office on Aug. 14, he, like Janiszewski, was offered an opportunity to cooperate. However, Barry declined and instead reached out for Joseph Hayden Jr. with Roseland, N.J.’s Walder, Hayden & Brogan. Hayden says his client has done nothing illegal. “I’m confident that at the end of the day there will be no showing of any criminal wrongdoing by Joe Barry.” FEDERAL GRANTS EXAMINED The FBI, say three sources, is examining the type of federal grants and loans that developers such as Barry seek — for instance, grants or loans for projects that benefit new residential and commercial projects. To that end, subpoenas for records have been served on the North Jersey Transportation Planning Authority, say two sources with knowledge of the authority’s workings. The NJTPA is a federally mandated regional planning agency that recommends which projects are to be funded by the U.S. Department of Transportation in 13 northern and central counties. Janiszewski chaired the authority until he resigned on Sept. 6, the same day he stepped down from his other posts. NJTPA grants are often for roads and infrastructure, but cover all forms of transportation, from rail lines to bike paths. The authority prioritizes the recommendations for the spending of about $2 billion annually in federal transportation dollars. Barry’s companies have been involved in building housing and in redevelopment for three decades, particularly in Hudson, where the Barry family have built thousands of housing units. The companies, known collectively as the Applied Companies, are building housing, retail, and commercial projects in Asbury Park, Long Branch and Morristown, N.J. But Barry is most active in northern Hudson County, especially in redeveloping the so-called Gold Coast along the waterfront. Barry, who built Port Liberte in Jersey City, where Janiszewski and his wife, Beth, lived before recently selling their condominium, has two major jobs in Hoboken. One is at the city’s south end, where he and another redeveloper have built a 526-unit luxury apartment complex on the waterfront. The other, not yet finished, is in the north end and is known as “The Shipyard.” It is a 1,160-unit rental and condominium project with 63,000 square feet of retail space, at the site of an old shipyard. Barry, a nonpracticing lawyer, is a political player, through his fund raising, contributions and political muscle. He had owned seven local newspapers until he sold the chain in 1999. Since 1998 he, relatives and his companies have contributed more than $152,000 to both parties, according to the state Election Law Enforcement Commission and the Federal Election Commission. The majority of the contributions went to Democrats. U.S. Rep. Robert Menendez, D-N.J., received $18,000 during that period, including $7,000 given in one day, this past March 27. On another recent day, June 29, a Barry company, New Liberty Two, gave $26,666 to the national Democratic Party. Two sources familiar with the NJTPA side of the probe say federal prosecutors are examining what are known as “ISTEA” grants, named for the Intermodal Surface Transportation Efficiency Act of 1991, which set up the funding mechanism and mandated the regional planning organizations. Congress appropriates the money, and, according to a spokesman for the NJTPA, members of Congress can designate some specific projects in the appropriations bills. One source also says the government is examining federal Section 108 loans from the U.S. Department of Housing and Urban Development. These are reduced-rate loans given to developers for economic development or redevelopment, housing as well as commercial building. According to Susan Mearns, director of Hudson’s Department of Community Development, Barry received a Section 108 loan for the retail side of The Shipyard, for about $6.7 million. However, she says the loan was granted about three years ago. Moreover, at least for Barry’s latest Hudson project, The Shipyard, no ISTEA grants have been awarded, according to officials from the NJTPA and the state Department of Transportation. PROBE STILL IN PROGRESS As for the current direction of the probe, one source with knowledge of the investigation says Janiszewski “has got a lot to say. He’s got a lot of names.” Sources say there appear to be many people speaking to Janiszewski on tape, with two sources saying they believe restaurant conversations were bugged. One of those taped, according to four sources, is Donald Scarinci, an influential lawyer whose firm, 25-lawyer Scarinci & Hollenbeck in Secaucus, has earned millions of dollars through the years in legal work on behalf of towns, counties and agencies in Hudson, Passaic, Bergen, Union and Camden counties. He is a key political operative and fund-raiser for Menendez. Those sources caution that it would be premature and unfair to draw conclusions about the nature of those conversations. The probe, they say, is still in an early stage in which prosecutors are sifting through a mound of data. Two other sources say Scarinci’s discussions with Janiszewski were dominated by politics. Whatever Janiszewski and Scarinci allegedly discussed in the taped meetings, the sources familiar with the probe emphasize that they have no knowledge of any wrongdoing by Scarinci, only that Janiszewski chose to tape him and got FBI approval to do so. For his part, Scarinci says that if he was taped, he is certain there are no problems with anything he said. “If Mr. Janiszewski was taping people, then he probably taped dozens of people in random conversations. In politics, I always assume that conversations get repeated, and I’m certainly not concerned about any conversations of mine being taped,” Scarinci says. Scarinci says that while he’s talked to Janiszewski since last November, he never discussed anything but politics with him. One source close to Scarinci says the two discussed Janiszewski’s efforts this past June to hang on to the county Democratic chairmanship. Scarinci’s friends also note that Janiszewski and Scarinci have been political opponents in recent years, with Scarinci’s firm losing lucrative legal work when Menendez’s political fortunes waned at the expense of Janiszewski’s power. In fact, two of his allies blame political and legal enemies for selectively disclosing Janiszewski’s taping of Scarinci. Political insiders say, however, that there was a rapprochement of sorts between Janiszewski and Scarinci, who has been able to hold on to two legal contracts with the county for labor work and for representation of the county community college. In addition, the clout of Menendez and Scarinci had been on the rise, propelled in large measure by the dethroning a year ago of Menendez rival Raul “Rudy” Garcia as mayor of Union City, Menendez’s stronghold. Last summer, Scarinci was instrumental in brokering the Essex-Hudson coalition of Democrats that succeeded in blocking U.S. Sen. Robert Torricelli’s mad dash to push Woodbridge Mayor Jim McGreevey out of the 2001 gubernatorial race. Torricelli’s attempted grab for the nomination without a primary fight ended when Menendez and Newark Mayor Sharpe James teamed up to put McGreevey over the top. For his efforts, Scarinci is expected by many to be rewarded if McGreevey wins, as attorney general, chief counsel, or even supreme court justice. Janiszewski, in turn, backed Torricelli and was weakened to the point that he had to fight to be re-elected county Democratic chairman. One Hudson insider involved in the deal to give Janiszewski another term says he now believes Janiszewski wanted the chairmanship to bolster his efforts to ensnare top Democrats in the FBI sting. Joseph Sherman, of counsel to Scarinci & Hollenbeck, is expected to be named Hudson County counsel this week, replacing Janiszewski’s county counsel, William Northgrave. Moreover, Menendez, who last month was named to head the Homeland Security Task Force created after the World Trade Center and Pentagon attacks, is expected to be named the Hudson Democratic chairman, replacing Janiszewski. That post will help Menendez should he decide to run for the Senate seat now held by Torricelli, though Menendez has said he does not intend to run.

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