Prosecutor: Former Democratic powerbroker sold influence

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Posted: Feb 26, 2015 3:05 PM
Prosecutor: Former Democratic powerbroker sold influence

NEWARK, N.J. (AP) — A former Democratic power broker sold his political influence in schemes including one that involved a multibillion-dollar megamall project that has languished for more than a decade at New Jersey's Meadowlands sports complex, a federal prosecutor told jurors Thursday at the start of Joseph Ferriero's racketeering trial.

Now known as American Dream Meadowlands, the sprawling project was known as Xanadu in the early 2000s when, the government contends, Ferriero used his position as head of the Bergen County Democratic Organization to squeeze nearly $2 million out of a Virginia-based developer in exchange for his political influence.

Ferriero is charged with racketeering, conspiracy, bribery, mail fraud and wire fraud. In opening statements Thursday morning, Assistant U.S. Attorney Barbara Llanes told jurors that Ferriero "abused his power and influence to line his own pockets."

The 57-year-old Bergen County native wasn't paid in his position with the BCDO but "made that position pay" by receiving kickbacks and bribes, Llanes said.

The case against Ferriero extends beyond Xanadu to include municipal contracts from which he is accused of receiving kickbacks. However, revelations about the mall project surfaced this month after the release of secret grand jury testimony from 2008 from James Dausch, a former executive of Mills Corp., the Virginia-based real estate company that won the original bid to build Xanadu.

It was Mills' desire to win the Xanadu bid competition that led it to Ferriero, who was more than willing to use his influence to garner political support for the company's bid, prosecutors say. That came with a price tag: $35,000 per month to Ferriero's consulting company, according to the indictment.

Llanes told jurors Thursday that Ferriero told Mills representatives that he would work to defeat their bid unless he was awarded the consulting contract. That amounted to extortion, she said, by creating a fear of economic harm.

Dausch told the grand jury in 2008 that "part of the reason that you wanted Joe Ferriero on your team and known to be on your team is that it was my understanding that people thought twice before crossing him."

Michael Baldassare, an attorney representing Ferriero, mocked Dausch's claim during his opening statement, derisively calling Dausch the "terrified executive of the $3.5 billion company" who feared Ferriero, an unpaid party official who couldn't cast an official vote on anything.

Ferriero was a minority owner in the consulting firm, Baldassare told jurors, and didn't have signatory authority. He added that the $35,000-per-month figure was the same amount that the two attorneys who formed the consulting company owed Hartz Mountain, an unsuccessful bidder on the Xanadu project, for a lease they were trying to break.

Ferriero will testify in his defense, Baldassare said.

Dausch also told grand jurors in 2008 that U.S. Sen. Robert Menendez, then a member of the House, made several calls to push the Army Corps of Engineers to grant Mills a permit for the Xanadu project. Soon after the permit was granted, he said, the Menendez camp asked for $50,000 for his 2006 Senate campaign. At least $20,000 was donated by Mills employees or their family members, according to federal election filings.

Menendez wasn't accused of or charged with any wrongdoing, and Dausch testified that Menendez did not make his efforts for Mills contingent on receiving the money later.

Tricia Enright, a spokeswoman for Menendez, said there was no quid pro quo arrangement involving Menendez's help for the company.

She said his efforts to push the project forward were "hardly a surprise for a man who has always worked to bring jobs to our state."

Developer Triple Five, whose properties include the Mall of America, took over the project about four years ago and plans to open American Dream by next year. It is considered the largest project of its kind in the country.