DRPA audits flag favoritism, funding

Eastbound rush hour on the Walt Whitman Bridge. The DRPA says the bridge needs a $139 million improvement project.
Eastbound rush hour on the Walt Whitman Bridge. The DRPA says the bridge needs a $139 million improvement project. (ELIZABETH ROBERTSON / Staff Photographer)
Posted: June 21, 2013

Selective pay raises for some Delaware River Port Authority workers, improper use of outside law firms, misuse of economic-development funds, and overcharges for employee health insurance are among issues raised by internal audits, DRPA Chairman David Simon said Wednesday.

Although the audits have not been made public, Simon took the unusual step of describing some of their findings at a DRPA board meeting Wednesday. That immediately drew fire from the chief executive and the vice chairman of the agency, who said the reports were not completed and should not be publicly discussed until staff responses were prepared.

Simon said the conclusions of inspector general Thomas Raftery were "disturbing" and "cannot be ignored." He said the audits would be released after they are reviewed by the board's audit committee, chaired by Pennsylvania Auditor General Eugene DePasquale. DePasquale's chief counsel, Kathryn Boockvar, who represents him at DRPA board meetings, said "all of the affected people will get an opportunity to comment" before the audits are made public.

Simon's revelations surprised his fellow board members from both Pennsylvania and New Jersey, and several reportedly expressed their dismay in a closed-door executive session after the public meeting.

"I'm stunned to hear about reports that haven't been shared with the board," said board member William Sasso, a Philadelphia lawyer and confidant of Gov. Corbett, during the public session.

Board Vice Chairman Jeffrey Nash, a Camden County freeholder and leader of the New Jersey delegation, asked "the public to hold judgment on these issues" because the reports are incomplete and "everyone involved needs to be talked to."

Simon said that "in the interest of transparency, I feel it important, with the inspector general's agreement, to provide information on some key reports which will be issued publicly later this year."

He said one audit dealt with salary decisions since 2007 and concluded that Chief Executive John Matheussen "has taken personnel action, including authorizing staff raises, that violate the terms of the employment agreement of the CEO."

That audit also concluded that a lack of a defined compensation policy "has resulted in the appearance of favoritism in personnel actions," Simon said.

Simon said that because of that, he will not approve any new high-level hires, promotions, or salary increases until the issues are addressed.

Matheussen objected that he and top staff had not yet had a chance to respond to the audit and the public was only hearing part of the story.

A second audit reported that newly hired insurance companies last year "were instructed to use specific law firms, some of which were not on the list of qualified law firms" maintained by the DRPA. The law firms were directed to settle claims without the knowledge of the board or the agency's general counsel, Simon said.

That audit also concluded the DRPA overcharges employees for their contributions for health-insurance benefits, Simon said.

A third audit looked at the use of economic-development funds, which were widely used for non-transportation projects such as museums, sports stadiums, and concert halls. The audit found most of the grants "did not include justification documents" for board approval and were approved without due diligence by staff, Simon said.

A fourth audit "discovered significant internal control problems, which resulted in overpayments in excess of $100,000" on a contract for "transit ambassadors" at PATCO commuter rail stations, Simon said.

Raftery, a former FBI agent who was hired in January 2012 as the DRPA's first inspector general, has been a lightning rod for controversy since his arrival. He chafed at the slow pace of reforms and clashed with Matheussen. New Jersey board members boycotted a meeting in August to object, they said, to a proposed raise for Raftery to $165,000 from his current $130,000.

The raise proposal was withdrawn, but the dispute caused a two-month delay in replacing Corbett as chairman of the DRPA board. Simon, appointed by Corbett, took the post last October.

Contact Paul Nussbaum at 215-854-4587 or pnussbaum@phillynews.com

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