The Newark Watershed Conservation and Development Corporation once maintained Newark, New Jersey’s watershed. Supplying water to New Jersey’s biggest city is big task. The NWCDC is technically a not-for-profit private business but it operated as a quasi municipal corporation. Its revenues came from the city and the city’s mayor sat on its board of trustees.
Earlier this week, the former executive director of the company, Linda Watkins Brashear, pleaded guilty in federal court to single counts of honest services fraud and filing false tax returns. The story behind the charges is worth telling.
For 6 years, Watkins Brashear served as the executive director of the agency. During her tenure, however, she demanded kickbacks from employees and rewarded vendors who paid her cash for contracts. Making matters worse, she failed to report and pay taxes on her ill-gotten gains and apparently took $700,000 in severance pay even though she was accused of fraud.
How much cash are we talking about? The Justice Department says she got away with $990,000 in severance and checks made payable to herself. That sum doesn’t include kickbacks and “cash for contracts” payments.
It’s impossible to know exactly how much the agency’s vendors were rewarded for their “donations”, either. We know from court records, however, that:
- A printing contractor was awarded a contract after making a $70,000 donation
- A marketing vendor received a contract after paying $30,000
- A cleaning contractor paid $90,000
- An interior designer paid $40,000 in return for a contract
- An “internet research consultant” paid $177,000 and received a contract
- A Homeland Security contractor paid $118,000
- A media consultant paid $32,000
- A security consultant paid $84,000
- A roofing contractor paid $27,000.
We understand how a water company could need a roof but an interior designer? And why does a pumping station need a media consultant? And do we get any sense of security from a Homeland Security paying bribes or kickbacks?
Obviously, the vendors appear to be up to their eyeballs in the muck too. Rather than providing pure water it sounds like this cast of characters was more suited for work in a sewage treatment plant.
While serving the people of Newark, Watkins Brashear was running a criminal empire that extended to the agency’s contractors and employees. Not everyone was on the take, of course but many were. Corruption costs money and ultimately someone has to pay these bribes and contracts. In this case, it was the residents of the city.
The Justice Department claims that Watkins Brashear allowed her vendor pals to submit fraudulent invoices for work never performed. Sometimes the work was done but the bills inflated. And sometimes she asked her co-conspirators to create fake entities to better conceal their crimes.
The City of Newark had to take over the agency after the scheme collapsed. Shortly thereafter the NWCDC filed for bankruptcy protection. And there are lawsuits galore including one against U.S. Senator Cory Booker for his service on the board of trustees of the NWCDC while previously serving Newark’s mayor.
During its heyday, the NWCDC supplied water to over 500,000 people and managed a 35,000 acre watershed. While the city was laying off cops, Watkins Brashear and some of the agency’s contractors were living high off the public trough. An audit said taxpayers are out millions.
The state comptroller reported that while 160 Newark cops and hundreds of other city workers were waiting on unemployment lines, Watkins Brashear was treating her friends to a feast of filet mignon, lobster and cognac in Atlantic City. The agency paid for that soiree.
This story broke almost two years ago. It was big news in New Jersey (which is no stranger to political corruption). The headlines have faded and now months later, Linda Watkins Brashear pleaded guilty to some of her crimes. Judgment day won’t come until next spring when she is sentenced. She faces 25 years. A copy of her plea deal can be found here.
Not much has been said about the contractors and vendors, although some have been named in lawsuits. Public corruption is a group effort. Watkins Brashear may have made almost a million dollars from this shameful scam but she didn’t act alone.
This isn’t our normal whistleblower post. Brashear Watkins worked for the agency for 32 years, six years as its executive director. Somewhere, some agency or contractor employee could have stepped forward and blown the whistle.
New Jersey False Claims Act
New Jersey is one of the majority of states with a False Claims Act. Those laws allow a whistleblower to receive an award based on how much the state collects from wrongdoers. In most states, the laws require there to be a fraud involving a government program or funds. (NWCDC was a private corporation but it’s funds came from the City of Newark.)
The whistleblower must also have inside knowledge of the fraud.
Not every fraud can be prosecuted under a False Claims Act but many can and those laws generally have strong anti-retaliation provisions.
Are we upset that no one came forward for years and years? Of course. Unfortunately, most folks don’t about these laws, how they work or the anti-retaliation provisions available.
If you know of fraud involving government funds (including Medicare and Medicaid) call us. We can help you determine if you have a case and how to proceed. We never charge for our whistleblower services unless there is a recovery and all inquiries are protected by the attorney – client privilege.
Need more information? Visit our False Claims Act information page or contact the author of this post at or by telephone at (414) 704-6731 (direct).
MahanyLaw – America’s Whistleblower Lawyers