Gov. Phil Murphy's campaign paid $2 million to a consulting company led by one of his top aides who at the time was tied to a campaign finance scandal under police investigation in Bermuda known as Jetgate.
WATCH: Murphy holds news conference, Oct. 15, 2018
The scandal rocked the British territory and led to resignations and an investigation — probes separate from the police inquiry — into a secret bank account set up by Derrick Green, a longtime political operative in New Jersey and Maryland. The account received $350,000 from wealthy American business men, but no one has determined exactly where the money went after Green and an associate withdrew nearly all of it.
His firm, Green Consultants, was hired by the Murphy campaign to help get out the vote, the same kind of work it did in Bermuda. The $2 million Green Consultants received was one of the largest expenses made by the Murphy campaign during the primary and general elections, according to Election Law Enforcement Commission records.
Green Consultants also employed Marcellus Jackson, the former Passaic councilman whose public corruption conviction a decade ago forced him to resign from the administration.
Green now earns $140,000 as a “govt rep 1” in the Secretary of State’s office — $1,000 less than Secretary of State Tahesha Way, according to payroll records.
Two Secretary of State employees reached by NorthJersey.com and the USA TODAY NETWORK New Jersey last week said they did not know who Green is and deferred comment to the governor's office.
Green does not have a phone number listed in the state’s directory. And a former Secretary of State official told the Network he never saw Green at the agency’s State Street office but has seen him around downtown Trenton.
Governors in the past have hired aides to work for them specifically only to have them listed on the payroll for other government departments. A person with knowledge of the hiring said Green is charged with "elevating the voices and participation of urban and faith based communities in the administration" and "he has done that."
That person also noted that Murphy won 94 percent of the African-American vote last year, and credited Green's outreach to that community.
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"Derrick was charged with that in the campaign to a lot of success," said the source, who was not authorized to speak publicly about the campaign.
Murphy’s hiring practices have come under intense scrutiny since Jackson resigned in September and another aide, Al Alvarez, abruptly quit ahead of reports about a sexual misconduct allegation during the campaign. And the pressure on Murphy to answer for his hiring threatens to overshadow a trade mission this week to Germany and Israel.
During a Monday news conference in Newark, Murphy declined to comment on whether he was aware of Green's involvement in Jetgate, but said he expects to "get right to that." At that news conference, Murphy announced an independent investigation into the Alvarez hiring.
"It's important that we figure how this particular hire happened but also whether the procedures and vetting and hiring processes were generally," Murphy said.
Green is not accused of criminal wrongdoing, but his own history in politics is blemished by controversy. And there are many unanswered questions about his activities in Bermuda, mostly centered on the money funneled in from American donors and on his outreach activities, similar to the work he was hired to do for Murphy.
Alvarez was also hired to lead outreach in minority communities, and he and Green were among the first brought to the campaign by Murphy as he was fighting Senate President Stephen Sweeney, Jersey City Mayor Steven Fulop and other Democrats to secure party support for the gubernatorial nomination.
Hiring campaign aides is common in new administrations, but Murphy’s willingness to put early supporters with checkered histories on the public payroll has brought unwanted attention to the new administration.
Beachhead in Bermuda
Green had partnered with New Jersey lobbyist Gerry Gibbs of Capital Impact Group several years ago to work on the campaign of the Bermuda Democratic Alliance, which was mounting an effort to defeat the ruling Progressive Labor Party. Gibbs described it in an interview as “some very preliminary work” such as polling and messaging for the alliance, which later changed its name to the One Bermuda Alliance.
“It was Derrick’s relationships that got us to the table,” Gibbs said.
But they “amicably” ended the partnership before the scandal broke.
In the fall of 2012, before the election, Green introduced One Bermuda Alliance leader Craig Cannonier to Nathan Landow, a Maryland developer and longtime Democratic donor who was interested in building casinos on the territory. Green also had a “commercial relationship” with Landow at the time that he hadn’t disclosed, according to an investigation by the alliance’s former chairman, Thad Hollis.
Green and a business associate, Steven DeCosta, had also set up a bank account under the name Bermuda Political Action Club that they didn’t disclose to alliance leadership, according to the investigation. That account received $350,000 — in seven installments of $50,000 — from Landow and a group of seven business men, according to the investigation. But Hollis and alliance leaders didn’t find out about the account until more than a year later.
“It is still not clear as to why a separate account had to be established that the party was unaware of and why these funds could not be transferred to the OBA’s operating accounts,” Hollis wrote.
The One Bermuda Alliance won the election and Cannonier took over as premier, the leader of the territory’s government.
In 2013, Cannonier and other alliance leaders flew on Landow’s private jet to Washington to meet with Landow, according to the investigation.
Landow did not respond to a voicemail seeking comment, but in a 2014 interview with the Royal Gazette newspaper in Bermuda, he said he and the other business men “were solicited by Derrick Green and we made a contribution based on the visit Mr. Cannonier paid us in Washington” in 2012.
The money was to be used for get-out-the-vote efforts, Landow said. Green and DeCosta signed for withdrawals from the account “in large denominations,” Hollis said, but he could not “determine the final destination of said withdrawals” that amounted to $348,000.
Landow did not develop any casinos in Bermuda.
“It is of concern that Mr. Derrick Green did not make known to the Party Executive that he had the relationship with Mr. Landow and Bermuda, LLC. While that may or may not have had an impact upon his role as the political consultant to the OBA, it is of utmost concern that if Mr. Landow was exploring development opportunities in Bermuda and Mr. Green had a commercial relationship with him, was there any conflict of interest between the OBA, the government and Mr. Green?” Hollis said in his report.
“At the very least, without full disclosure, it gives the party’s opponents the opportunity to claim that party political ties were being leveraged for personal benefit. If Mr. Green had made a full disclosure to the party, actions would have been taken to mitigate and the party would not be in the situation where I felt it necessary to conduct an investigation.”
The scandal prompted Cannonier and two cabinet members to resign in 2014. Cannonier said in his resignation speech that “nothing illegal was done, but I accept there was a failure over time to be completely transparent.”
Hollis also resigned from the alliance after issuing his report. He said in an email that “I haven’t seen or spoke with Derrick in years” and “there’s nothing I can add or say” beyond his report.
Money questions
Green told the news outlet Bernews in 2014 that “because of US tax law and rules governing campaign contributions, the account to receive the funds had to be a PAC account.” He also disputed some of Hollis’ findings and said he was never interviewed for the investigation.
Green told the outlet that “the vast majority of the funds” went to DeCosta’s consulting firm, not Green Consultants.
“It is my hope that the money spent was used to pay for campaign activity and these workers,” Green said.
The Bermuda Police Service is still investigating Jetgate, but said in a statement that it “is not investigating Mr. Green at this time.”
Green Consultants had to forfeit its Maryland LLC license in 2015 for not filing its annual report for the prior year, according to the state’s tax department. Green formed it under the same name in 2017 with a Newark address and it is in good standing in New Jersey, but Green still listed the business in campaign finance records as having an address in Silver Spring, Maryland, where he has a home.
State law does not require campaign consultants to disclose employees or the work they do, so it isn’t clear how many people worked for Green Consultants during the campaign. It’s typical for consulting groups to pay workers for canvassing and other get-out-the-vote efforts.
Jackson worked for Green Consultants between 2016 and 2018, according to his resume obtained by the Network. He listed his title as a “faith-based coordinator” who facilitated meetings, secured venues for campaign events and supervised canvassers and phone bank workers.
Jackson resigned after media reports and an investigation by the Attorney General found his hiring was against the law. Days later, Alvarez resigned without explanation, but it happened on the same day the Wall Street Journal asked him for comment about a sexual assault allegation against him.
Green and Alvarez were among Murphy’s first hires, and both had been charged during the campaign with leading outreach efforts in minority communities.
The resignations of Alvarez and Jackson have led Republicans to call for legislative hearings into Murphy’s "dangerous" hiring practices. One Republican, Assemblywoman Holly Schepisi, said the Green hiring raises additional questions and that his work for the Murphy campaign should be investigated.
“There’s a pattern of a very small group of people who all worked together on his campaign who have all been rewarded with government jobs, and at least with respect to Jackson and Green, a simple Google search and doing your due diligence on an employee would have raised some real concern that needed to, at a minimum, be properly vetted,” Schepisi said.
“We’re not talking about juvenile indiscretions. We’re not talking about things that occurred 20 years in the past. We’re talking about active public corruption, fraud type of concerns directly related to public trust. And to see a pattern among such a small group coming forth, it’s really disturbing,” she said.
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