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Pennacchio & Corrado Bill to Combat Conflicts of Interest State Investment Council


March 26, 2018

the staff of the Ridgewood blog

Bill Aims to Stop Corruption on NJ State Investment Council In Wake of Pension Scandals
Legislation sponsored by Senate Republicans Joe Pennacchio and Kristin Corrado to combat corruption on the State Investment Council, by forbidding members from voting on investments that present a financial or familial conflict of interest, has passed the New Jersey Senate.

Ridgewood NJ, Sens. Joe Pennacchio and Kristin Corrado’s bill would combat corruption on the State Investment Council, by forbidding members from voting on investments that present a financial or familial conflict of interest. The bill was introduced in response to scandals involving the council and the state pension system. (Pixabay)
“State Investment Council members should serve the people of New Jersey, not themselves,” Senator Pennacchio (R-26) said. “We cannot turn a blind eye to the despicable violations of public trust that have occurred in recent years. People who handle taxpayer dollars must be held accountable.”

The Senators’ bill, S-396, was introduced in light of reports that in 2008, the State Investment Council invested in Lehman Brothers right before the firm went bankrupt. The Lehman Brothers managers who sat on the council did not recuse themselves prior to voting to approve the investment in their firm. The misguided vote cost the pension system nearly $116 million.
Additionally, in 2014, concerns arose that Robert Grady, the former chairman of the council, had invested public money into a fund which his own private firm also invested in. Such potential conflicts of interest would not be tolerated under the Pennacchio/Corrado legislation.

The State Investment Council was created by the New Jersey Legislature in 1950 to develop policies governing the investment of funds by the Director of the Division of Investment.
S-396, would require members of the State Investment Council to recuse themselves from a vote if the matter before the council involves one of the following conflicts of interest:
The member or their spouse is or was employed by the entity in which the investment is being made.

The member or their spouse has a direct investment exceeding $5,000 in the entity in which the investment is being made.

Under S-396, a member who breaks this law would be removed from the council, and must be immediately reported to the Governor and the Legislature.
“Any member who casts a vote despite an obvious conflict of interest does not deserve to sit on the State Investment Council,” Senator Corrado (R-40) said. “The hardworking families we represent must be able to trust that the state is investing and spending these funds wisely. This legislation will ensure council members who use public money for personal or political gain are punished accordingly.”

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State Senator Corrado Accuses Acting Treasurer Muoio of Mishandling & Missing Money, During Her Time as Freeholder

elizabeth muoio treasurer

photo acting Treasurer Elizabeth Maher Muoio’

Independent Auditor Was Unable to Determine What Happened to $33 Million in State & Federal Grants, Said $475,000 in County Funds “Unlocated”

March 23, 2018

the staff of the Ridgewood blog

Ridgewood NJ,Senator Kristin M. Corrado (R-40) said a new document provided by the non-partisan Office of Legislative Services (OLS) raises questions about financial irregularities that occurred during Acting Treasurer Elizabeth Maher Muoio’s time in local government that will need to be answered at her confirmation hearing on Monday.

Sen. Kristin Corrado said that Acting Treasurer Muoio must answer questions at her confirmation hearing about missing and mishandled money during her time as a Mercer County Freeholder. (
“The Senate Judiciary Committee has a responsibility to carefully vet gubernatorial nominees to confirm that they’re qualified and fit for the office to which they’ve been appointed,” said Corrado, a member of the committee. “During our routine research into Acting Treasurer Muoio’s time as a Mercer County Freeholder, we were disturbed to learn that the county could not account for the receipt or appropriate use of $33 million of state and federal grants. Further, we were shocked to learn that hundreds of thousands of dollars went missing, which an independent auditor was unable to locate. Given Acting Treasurer Muoio’s indication to the Judiciary Committee that she worked ‘closely’ on budgets during her time in local office, we’d like to know if she can explain these financial discrepancies that occurred on her watch.”

The OLS memo includes a 2003 audit in which an independent auditor noted “an inability of management” at Mercer County at that time to reconcile accounts receivable, including nearly $22 million of grants authorized by the New Jersey Department of Transportation (NJDOT) and more than $11.4 million from the Federal Aviation Administration (FAA).

The auditor noted that it was “unable to confirm these accounts receivable” or the assignment of grants to “specific projects approved” by the FAA, or, apparently, the NJDOT.
Corrado said these financial irregularities were concerning since the county’s property taxes increased by 86 percent during Muoio’s time working on the Mercer County budget.

“I’m concerned that during Acting Treasurer Muoio’s time managing Mercer County’s money, tens of millions in grants couldn’t be accounted for, nearly half-a-million dollars went missing, and county property tax bills skyrocketed,” added Corrado. “We need to know if she assumes responsibility for these irregularities, or if she overstated her involvement in managing the county’s fiscal affairs. These are questions that Acting Treasurer Muoio must be prepared to answer.”

Given the massive budget and tax increase proposal recently unveiled by the Murphy Administration, Corrado said it’s important for the Acting Treasurer to explain how her prior experience has prepared her for the responsibility of managing tens of billions of dollars of New Jersey taxpayers’ money.

“We must presume that Acting Treasurer Muoio helped to craft the Governor’s budget proposal, which includes the most spending in New Jersey history and a $1.7 billion tax increase,” Corrado concluded. “New Jersey taxpayers need assurances that the fiscal mismanagement that occurred during her watch in Mercer County won’t be repeated at the New Jersey Treasury.”