This 2008 report warned against solar

The 2011 document used to sell the solar deal to the Sussex County Freeholders was called the Solar Proposal Evaluation Report. It was the work of a committee that was formed to sell the solar scheme -- the Sussex County Evaluation Team.  Here are the members of the team:

- John Eskilson Sussex County Administrator

- Dennis McConnell, Sussex County Attorney

- Bernard Re, Sussex County Treasurer

- Steve Pearlman, a lawyer with Inglesino, Pearlman, Wyciskala & Taylor

- Deb Verderame, a lawyer with Inglesino, Pearlman, Wyciskala & Taylor

- Gerry Genna, Birdsall Services Group

- Tom Brys, Birdsall Services Group

- Douglas Bacher, NW Financial Group

- Heather Litzebauer, NW Financial Group

- Steven Gabel, Gabel Associates

- Richard Preiss, Gabel Associates

- Cadence Bowden, Gabel Associates

The evaluation team was put together by John Eskilson.  At the time, the Birdsall Services Group was under scrutiny by state law enforcement authorities for circumventing pay-to-play laws in order to funnel a million dollars in campaign contributions to political players.  But this is a minor detail compared with the BIG deal missed by Eskilson when he was assembling the committee that sold solar to the Freeholder Board.

By simply searching the Internet -- a simple GOOGLE search would have done it -- Eskilson would have known that Inglesino, Pearlman, Wyciskala & Taylor attorney Steve Pearlman was a central figure in the Encap scandal a decade earlier.  Like the Sussex solar scandal, EnCap used government grant money to secure bond financing for private development.  It too was built around an under-funded, inexperienced private corporation that quickly went bust.  And, like solar, the lawyers, vendors, and consultants kept getting fat off the taxpayers throughout the process.

EnCap ended up costing taxpayers, several indictments were handed down, the lawyer who worked with Pearlman died before he could be brought to trial, and the founder of EnCap pleaded guilty in federal court.

The warning that the county professionals should have placed under the Sussex Freeholders' noses, and  that the Freeholders should have heeded, was contained in a detailed 277-page report which was the culmination of an investigation conducted by the state Inspector General.  It was published in February 2008 -- years before the Freeholders voted for solar in 2011.

The report can easily be found on the Internet, using a simple GOOGLE search:

http://nj.gov/comptroller/news/oig/pdf/Meadowlands%20Remediation%20and%20Redevelopment%20Project.pdf

The report discusses the mismanagement of the project by the private corporation, how assurances were given and government backing obtained, the creation of the "economic development authority" for the purposes of borrowing, problems with insufficient collateral, "material omission" by EnCap, corporate misfeasance, cost overruns, and requests for payment of ineligible expenses.  It tracks many of the allegations raised in the case of  MasTec v. SunLight that is at the heart of the Sussex solar debacle.  MasTec, the contractor for the project, sued SunLight, the project's private corporation, after SunLight could no longer pay MasTec.  Here are some of MasTec's allegations against SunLight:

- That the SunLight Entities "have drawn on the Public Bond Funds and diverted such funds for non-trust purposes in violation of the New Jersey Trust Fund Statute."

- That the SunLight Entities have admitted that "millions of dollars of Public Bond Funds" have been used to "make lease payments" and to "fund the SunLight Entities' required contributions under the Program Documents, and to pay the 'soft' costs (including attorneys' fees) of the Authorities and the SunLight Entities."

- That "the SunLight Entities owe Power Partners millions of dollars as a direct beneficiary under the New Jersey Trust Fund Statute and there are no longer sufficient funds in the Public Bond Funds to pay Power Partners and to complete the projects."

- That the SunLight Entities "participated in an additional scheme to draw down over $6.3 million in Public Bond Funds and misdirected more than $2.7 million of such funds for non-trust purposes."

- That SunLight General Capital and its subsidiaries were formed "with virtually no assets, such that they were undercapitalized at the time of formation."

- That those who controlled the SunLight Entities treated corporate assets as "their personal piggy banks, repeatedly transferring assets from one entity to the next for the purpose of ensuring that there would be insufficient assets in each entity to satisfy its obligations to Power Partners."

- That "the corporate form of the SunLight Entities was used to commit conversion, make fraudulent transfers, and other improper acts."

Why didn't  county professionals alert the Freeholder Board to this report?  Why wasn't it read?  And if the county professionals did read it, why did they include a central figure from the EnCap scandal as a member of the Sussex County Evaluation Team -- the very committee that wrote the Solar Proposal Evaluation Report that assured Freeholders the solar project was a safe investment?

We urge you to read the report, as well as these related documents:

http://nj.gov/comptroller/news/oig/pdf/Report%20on%20Meadowlands.pdf

http://nj.gov/comptroller/news/oig/pdf/OIG_2008_Annual_Report.pdf

Solar scam's Birdsall pleads GUILTY

The 2011 document used to sell the solar deal to the Sussex County Freeholders was called the Solar Proposal Evaluation Report. It was the work of a committee that was formed to sell the solar scheme -- the Sussex County Evaluation Team.  Here are the members of the team:

- John Eskilson Sussex County Administrator

- Dennis McConnell, Sussex County Attorney

- Bernard Re, Sussex County Treasurer

- Steve Pearlman, a lawyer with Inglesino, Pearlman, Wyciskala & Taylor

- Deb Verderame, a lawyer with Inglesino, Pearlman, Wyciskala & Taylor

- Gerry Genna, Birdsall Services Group

- Tom Brys, Birdsall Services Group

- Douglas Bacher, NW Financial Group

- Heather Litzebauer, NW Financial Group

- Steven Gabel, Gabel Associates

- Richard Preiss, Gabel Associates

- Cadence Bowden, Gabel Associates

The evaluation team was put together by John Eskilson.  Two Birdsall cronies were on the team.  Eskilson later got rewarded with a position as a trustee with the Sussex County Community College.  The Freeholders who voted for that were Phil Crabb, Richard Vohden, and Dennis Mudrick.

Yesterday, Birdsall's CEO pleaded guilty to criminal political corruption.  We'll let Star-Ledger reporter S. P. Sullivan take it from here:

Birdsall CEO pleads guilty in huge N.J. pay-to-play scheme

The former CEO of what was one of the state's most politically connected engineering firms is facing four years in state prison after admitting to his role in a $1 million scheme to circumvent New Jersey's pay-to-play laws.

Howard Birdsall, 72, pleaded guilty Thursday to corporate misconduct in Superior Court in Ocean County, according to the state Attorney General's Office.

Birdsall, of Brielle, was the top corporate officer and largest shareholder of Birdsall Services Group, the now-defunct Monmouth County firm that folded after investigators found executives and employees were reimbursed by the company for campaign donations to politicians. 

Under a plea deal, Howard Birdsall faces the prison time and will pay $49,808 — the total amount of political donations he personally made in the scheme. Acting Attorney General John Hoffman said in a statement Thursday that Birdsall's plea "should serve as a warning to any corporate officials who would engage in this type of criminal scheme."

Birdsall's attorney, John P. McDonald, declined to comment.

Birdsall exec pleads guilty in pay-to-play scheme

In 2013, the company pleaded guilty to first-degree money laundering and second-degree making false representations for government contracts, crimes for which it paid a $1 million fine. It was later sold to a California firm that pledged not to make political contributions in New Jersey.

Company records obtained by The Star-Ledger that year showed that hundreds of politicians, from mayors and freeholders to major state power brokers, received money from the firm. Those donations came in the form of personal checks from shareholders and firm employees, who were reimbursed through bonus payments and other means, authorities said. 

Three other former Birdsall employees — chief administrative officer Scott MacFadden, of Brick, marketing director Philip Angarone, of Hamilton, and Eileen Kufahl, of Bradley Beach, previously pleaded guilty to participating in the scheme and are awaiting sentencing, authorities said.

A former executive vice president at the firm, Thomas Rospos, of Belmar, is scheduled to go on trial on Feb. 22.

An epidemic of single-bidder contracts

As prosecutors get down to unraveling the complex web of relationships behind the "solar gold rush" that resulted in some politically-connected firms getting a lot of money while taxpayers in counties like Sussex were left holding the bag, they will no doubt focus on who knew whom way back in 2005 when these political alliances were forming.  The social circles these people travelled in -- gatherings in upscale Manhattan and the political cocktail circuit of some of the more expensive communities in Morris and Somerset Counties.  And let's not forget the hot tub parties hosted at a multi-million dollar shore house.  All gathering grounds for the chic and well-connected to play, exchange information, and make deals.

The result of all this was a notable absence of competition to facilitate the "solar gold rush" in New Jersey.  While some states saw scores of engineering and other vendors line up for a taste of taxpayer dollars, too often New Jersey saw a single bidder looking for a too narrowly-written contract.  This trend was getting noticed even before Sussex County decided to try its hand at going solar.

Consultants get a cut from North Jersey solar energy projects

JULY 24, 2011    LAST UPDATED: MONDAY, JULY 25, 2011, 6:37 PM

BY JOEL SCHECTMAN

STAFF WRITER | 

THE RECORD

Two politically connected firms at the front of the solar energy development gold rush are teaming with North Jersey improvement authorities to sell projects to local governments and school districts.

In the latest push, the firms, together with the Passaic County Improvement Authority, are pitching a no-money-down solar-paneling solution to the county’s municipalities and districts to help reduce electricity costs. It’s asking them to sign on to a 15-year pact in which a developer would install the panels and then charge the government entities rates lower than those currently paid.

Bergen County is using a different approach — private financing and smaller scale.

So far, Passaic County’s efforts have met with mixed results after numerous presentations. For instance, Clifton has signaled interest, and both the borough of Ringwood and the Lakeland school district signed on to the plan this month, but North Haledon’s Borough Council recently heard the pitch and took a pass, expressing concern about unknowns of the cost structure.

"The advantage of the program is having an outside agency look at the proposals and make sure there are real cost savings," said Clifton Mayor James Anzaldi.

But the project would include layers of professional fees from the collaborative efforts of the legal firm of Decotiis, Fitzpatrick and Cole LLP based in Teaneck and New York, and the engineering firm Birdsall Services Group of Sea Girt. The two firms have already spearheaded the same solar development model in Morris, Union and Somerset counties and are now helping evangelize the plan throughout Passaic County.

Decotiis is responsible for the legal side of the project, writing the contracts with the developers and drafting the wording of resolutions to bind local governments to agreements. Birdsall Services Group is responsible for the engineering side — helping governments select sites for the construction and vetting developers to build the panels once bids are sought.

 Former Decotiis partner Steven Pearlman, called the "godfather" of the plan by one county administrator, created the concept when he was general counsel for Morris County in 2008. The $21.6 million project is estimated to save the county $3.8 million over the 15-year life of the project. The plan became known as the "Morris Plan," and Pearlman pitched it to the Somerset County freeholders in 2009, signing the county onto the plan in 2010. Over the next year Union County brought the same team in to develop the plan for its towns.

Somerset County Improvement Authority project manager Yvonne Childress said that although the county went through a competitive selection process before signing on with the firms, the three companies selected were the only ones to apply: Birdsall; the Decotiis firm; and Inglesino, Pearlman, Wyciskala & Taylor LLC — a firm Pearlman helped found after leaving Decotiis.

Pearlman’s new law firm handled the bonding for the project, obtaining credit through the county. Birdsall, Decotiis and Pearlman did not respond to requests for comment.

"We have learned that more law firms are starting to model this program, so going forward, there may be more players in this game," Childress said in an email.

Both firms have contributed generously to election campaigns statewide, and have received impressive contracts from state and local governments.

Birdsall has contributed at least $669,910 to state and local elections since the solar push began in 2008 through 2010, the last date for which complete contributions are tallied. During that same period, the company received $70 million on all its state public-works contracts. The improvement authorities have not yet provided The Record with contract amounts for the solar projects.

Decotiis employees gave at least $200,000 to state and local campaigns, according to state election records. The firm received $45.7 million in New Jersey contracts in the same three years, according to public records.

In Passaic County, the group of consultants, along with the PCIA, has pitched the proposal to towns that include Hawthorne, Woodland Park and West Milford.

Nicole Fox, PCIA executive director, said she would not be available for comment by deadline.

In the solar-paneling project, the construction costs would all be paid by the developer, using cheaper credit from bonds written through the county. The builder would make back his money by charging the governments involved for the electricity produced and used by those governments. The firms pitching the deal are offering significant savings to government over the life of the program — Clifton, for example, would save as much as $85,000. Bonding through the county could, presumably, offer a lower rate than private financing and help the developer to pass on the savings to taxpayers.

In Passaic County, the developer, which hasn’t yet been selected, will have to charge governments enough to recoup construction costs and make a profit over a 15-year contract, and it also will have to add in the fees for Birdsall and Decotiis, according to the PCIA.

John Bonanni, commissioner of the Morris County Improvement Authority, the first to use the plan, noted those add-ons as significant.

"But someone has got to pay them," he said. "[The fee] gets baked into the cake."

Passaic County’s local governments and school districts have until the beginning of August to sign on — the PCIA will request proposals from developers by the end of that month, Fox said. Construction would start in fall and last one year.

Bergen County’s solar projects are of a smaller scale and without financing through public bonds. Instead a private solar financing company, Sunlight General Capital, is putting up the money and charging for the electricity. Bergen has built panels on the  Prosecutor’s Office in Paramus and the parking garage of the County Administrative in Hackensack.