DRPA postpones action on legal representation for subpoenaed officials

Posted: August 22, 2014

The Delaware River Port Authority postponed action Wednesday on a measure that would have allowed commissioners and staffers subpoenaed by a federal grand jury to choose their own lawyers.

Pennsylvania Lt. Gov. Jim Cawley, who chaired the meeting, did not explain to fellow commissioners why the item was withdrawn from the agenda.

It appeared, however, that the board would have lacked a quorum for a vote because the subpoenaed commissioners would have had to recuse themselves.

While the authority would pay for the legal representation, DRPA deputy chief executive Michael Conallen said it was unclear if those under subpoena must use only authority-approved law firms that have agreed to a ceiling on their fees.

And if they may select their own representation, he said, it was also unclear if the outside firms must abide by the fee threshold. "It's never been an issue before," Conallen said.

In April 2013, the U.S. Attorney's Office began investigating millions of dollars of politically connected "economic development" spending by the DRPA.

Board members who have been subpoenaed include Camden County Freeholder Jeffrey L. Nash, South Jersey labor leader Richard Sweeney, and Philadelphia lawyer William Sasso.

Commissioners also extended until the end of September the repayment due date on a $1 million loan the board had made about 14 years ago to the iconic Blue Horizon boxing venue in North Philadelphia for its refurbishment - one of its many economic development loans.

The original recipients defaulted on that loan as well as its tax obligations, and the Blue Horizon closed in 2010.

The DRPA has agreed to allow the current equitable owners of the site, Mosaic Development Partners and Oren Bros. Real Estate, to satisfy its loan obligation by repaying just the original principal, without interest or penalties.

The developers, who plan to build a hotel, jazz club, and restaurant on the site, say they expect to pay off the loan by the end of the month.

The board on Wednesday also awarded a contract for $17.9 million to IEW Construction Group of Trenton to resurface the Betsy Ross Bridge. No date was set for work to begin.

"That's DRPA money to help motorists," Pennsylvania Auditor General Eugene DePasquale said afterward. "That's what it should be doing."

DePasquale, a member of the DRPA board and a critic of its discontinued practice of making economic development loans, said that at his initiative the board is looking at returning to its general or capital fund money that was once appropriated for those loans but not spent. He said it appeared that about $2 million in such money has been identified.

In other business, the board authorized a contract with TransTech Management Inc. of Greensboro, N.C., to conduct the authority's biannual management audit.

Signing of the contracts must wait 10 days to allow the governors of New Jersey and Pennsylvania the option to veto the board's actions.


doreilly@phillynews.com

856-779-3841 doreillyinq

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