Port of No Reform by Steven Malanga, City Journal September 14, 2015
How a scandal-plagued agency survives
The nation was introduced in September 2013 to the Port Authority of New York and New Jersey via the Bridgegate scandal, in which officials of the bi-state agency conspired with staffers of Garden State governor Chris Christie to close down lanes of the George Washington Bridge as political retribution against a local mayor. The easy exploitation of the Port Authority by a few well-connected individuals was nothing new to residents of the metropolitan area. They’ve seen for years how the scandal-plagued agency serves the interests of its political masters, rather than residents of New York and New Jersey. Now, as lengthy investigations into the Port Authority proceed, we’re getting deeper glimpses into its dysfunction—and of the cost to the region.
Last week, United Airlines chairman Jeff Smisek and two other top executives at the carrier, which uses the Port Authority-managed Newark Airport as one of its main hubs, were forced to step down in the wake of an internal investigation sparked by subpoenas from U.S. Attorney Paul Fishman’s office. Though the airline won’t say what it found, the Recordreported back in February that Fishman had possibly uncovered a deal between Smisek and former Port Authority chairman David Samson in which United agreed to restart service between Newark and Columbia, South Carolina—where Samson has a vacation home—as part of lease negotiations between the airline and the agency. United was upset at the steep fees charged by the Port Authority at Newark—more than 50 percent higher than it pays at other major airports—and Smisek was trying to engineer a better deal through Samson.
If indeed there was such a quid pro quo—and Fishman’s office issued new subpoenas in the ongoing probe last month—it would represent business as usual at the Port Authority. When it’s not engaging in petty political games and insider deal-making, the agency can be relied upon to mismanage the major assets under its care. Given the task of rebuilding Ground Zero, for example, the Authority has spent $2 billion more than projected on the site’s new transportation hub alone, including some $650 million in administration costs (including construction management, inspection, and contract monitoring). Wild overspending at Ground Zero, helping to double the Port Authority’s debt over ten years, is one reason why, as Nicole Gelinas has described, the agency has jacked up rates at its money-making facilities—notably local bridges, tunnels, and airports—but slashed investments in needed capital projects it now can’t afford, like a new Manhattan bus terminal. Vice President Joe Biden may have labeled the Port Authority-run LaGuardia Airport something out of “a third world country,” [Biden should know about this as Obama's VP] but LaGuardia is practically an oasis compared with the bus terminal, which the agency can’t afford to rebuild any time soon, even though it is, as the Asbury Park Press wrote in April, a “money machine.” The Port Authority’s strongest suit is in fact squandering money. As a 2011 report by the New York State comptroller noted, the agency lacked oversight on dozens of expensive contracts it let out for rebuilding work, including an absence of documentation to support payments to architects, engineers, and others. ...
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