POLITICS & GOVERNMENT

Sweeney reacts to alleged EDA grant fraud

BY Brenda Flanagan, Senior Correspondent |

New Jersey Senate President Steve Sweeney says the state should make companies pay refunds plus penalties if they cheat on their tax incentive applications. His comments followed a day of bombshell testimony before a special task force where a whistleblower said her former employer — Jackson Hewitt — lied on an application to get a $2.7 million tax incentive from the state Economic Development Authority.

RELATED: Whistleblower testifies company lied to EDA in order to get tax breaks

Sweeney spoke with Correspondent Brenda Flanagan Friday.

Sweeney: Listen, if anyone’s cheated the state of New Jersey, the comptroller had a list of businesses and he just rolled out this one person who was a whistleblower from Jackson Hewitt. We should know all of them. We should know them all, and we should get the facts on every one of them. If it’s oversight and the oversight wasn’t tight enough, then we should review it. But we need to do an inventive program like every other state has. We just have to decide what it’s going to be. I spoke to the governor’s chief of staff, hopefully the Assembly, the Senate and the administration will sit down and start looking at the framework of a tax incentive program and we don’t wait until the middle of June, that we start now. So that was a good thing, that we’re actually sitting and talking now. But anyone that cheats the state of New Jersey should be held accountable.

Flanagan: Should the state aggressively go after these people and claw back?

Sweeney: Absolutely, 1,000%. If we give you something based on a number, that we were committed to, and you don’t provide that? We absolutely deserve to get our money back plus penalty.

Flanagan: What kind of penalty?

Sweeney: We’d have to talk to the administration about it, but there should be some interest associated with it. If I gave you $2 million, $2.5 million and you didn’t provide the benefit that you promised me. Just giving me back the money? They had my money for how many years? They should have to pay interest, establish whatever the interest rate is, and reimburse.

Jackson Hewitt said in a statement, “Jackson Hewitt values its relationship with the state of New Jersey and intends to cooperate with the Task Force, as we would with any government inquiry. Jackson Hewitt believes it provided an accurate and comprehensive application to the EDA and is in compliance with all applicable provisions of the Grow NJ and Economic Redevelopment and Growth programs.”

The EDA, which a state comptroller audit found lacked sufficient data to even verify how many New Jersey jobs its grants had retained or created, also released a statement: “We take the allegations raised today seriously and we will work with the Task Force to address these matters swiftly. If a company did commit fraud and willfully provided inaccurate information to receive an approval, the EDA is committed to pursuing all legal options, and referring potential criminal action to the Office of the Attorney General.”

The task force, meanwhile, has offered companies which received EDA grants the opportunity to voluntarily come forward with details — and the documents to back them up — in order to re-certify their eligibility and compliance. It will hold subsequent hearings on the matter.

The two remaining tax incentive programs expire in June and Gov. Phil Murphy has proposed replacing them with programs that are smaller in scope and targeted at smaller businesses, designed to spark innovation and capped. Sweeney said lawmakers are discussing new program frameworks with the governor’s office.