For months, Kim Guadagno has fought the leadership of the agency that disburses millions in grants
Lt. Gov. Kim Guadagno attends a meeting of the New Jersey State Council on the Arts in Trenton in this 2010 file photo.TRENTON — The testimony was dramatic. The lieutenant governor suggested that all is not well at the New Jersey State Council on the Arts, the body responsible for the nurturing of the state’s artistic enterprises. The same body that is considered part of her department.
Appearing before an Assembly Budget Committee, Lt. Gov. Kim Guadagno told lawmakers that the council improperly awarded three contracts for public art projects, including several involving the state’s 9/11 Memorial at Liberty State Park in Jersey City.
The contracts "exceeded $300,000 and were awarded to a sole contractor," Guadagno said. They "were not publicly bid, nor were state procurement practices followed."
Guadagno blamed the council’s staff for the mistake and expressed frustration that her office, the Department of State, had "no oversight authority" over the arts council or its activities.
But a Star-Ledger review of the contracts and other Department of State documents — including the arts council’s own internal report — shows that the contracts were actually greenlighted by the State Department itself.
The review shows Guadagno’s chief financial officer, Eric Anderson, signed the payment vouchers for the deals, appearing to contradict the lieutenant governor’s claim that her office has no authority over council actions.
Anderson did not return calls for comment.
The arts council documents show that the contracts were complex management agreements for three public art commissions and that most of the funds were targeted to artists and fabricators. The "sole contractor" mentioned by Guadagno could only earn about $12,000, according to the terms of the agreements.
Guadagno, who also serves as secretary of state, New Jersey’s top cultural official, said she would not discuss the newspaper’s findings, according to her spokesman, who added that the lieutenant governor would have no further comment until a final audit report is released. That report is expected this summer.
A spokesman for Gov. Chris Christie said the governor’s office would have no comment.
For months, the arts council and Guadagno have been battling over the leadership of the state agency that supports the nonprofit arts industry and last year distributed $16 million in competitive grants. Last July, Guadagno asked the council to dismiss executive director Steve Runk after questions were raised about its members’ compliance with the state ethics code. The council refused. She repeated that request to lawmakers at the budget hearing. Runk submitted his letter of resignation on April 4.
ROUTINE PROCEDURES
The arts council’s internal review of the contract issue found that Runk and his staff "acted appropriately" and were actually guided by Guadagno’s own staff in the Division of Administration at every turn. In its five-page report, the arts council describes the division as the gatekeeper for its financial dealings.
"The council cannot establish a state purchase order or issue payments directly — only the Department of State’s Division of Administration has this authority," according to the council’s review.
The council determined that any irregularities should have been spotted, and rectified, by that division.
"In our investigation, we found no wrongdoing on the part of our executive director or staff in the handling or processing of these contracts," vice chairwoman Judith Leone said.
A week before Guadagno’s April 12 appearance before the Assembly Budget Committee, arts council chairwoman Sharon Burton Turner said she requested a meeting with the lieutenant governor to share the council’s findings, but she was rebuffed.
"I was told she would be unavailable to meet with me until some time in May," Turner wrote in an e-mail last week.
David Miller, who served as executive director of the arts council for six years prior to Runk’s tenure, described the procurement process as complex and said the council could not complete these actions without the assistance of the Division of Administration.
"You can’t know everything and the rules change from time to time," Miller said, noting the division would regularly ask for additional information from his agency. "We routinely relied on the chief financial officer and his crew to respond to anything we sent through and to verify that we followed all correct procedures."
MONEY MATTERS
The contracts in question were awarded to Co-Works, a nonprofit arts firm in Hamilton, in 2006, 2009 and 2010 to administer four public art projects totaling $312,875. For its management of the projects, Co-Works was eligible to receive a maximum of $12,128 in fees.
The commissions include photo documentation by Ricardo Barros and the design, printing and framing of 25 black-and-white prints of the construction of the 9/11 Memorial and a historical time line, a component of the memorial created by the New York State Museum. Katherine Hackl of Lambertville made a tile installation and Helene Massey-Hemmans of Orange created two bronze portraits with text plaques. Both are featured at the Ann Klein Forensic Center in Trenton. Another project for the War Memorial in Trenton was funded, but the artists and designs had not been selected.
Although Guadagno asked legislators to help her gain control over the arts council’s actions, the internal memo from Anderson shows fiscal controls of the agency already in place.
On Feb. 1, Anderson wrote to all division heads, including Runk, to remind people about the procedure for purchasing requests made to the Treasury Department. The memo states that all requests must be submitted to his office "for review and processing."
The document outlines the requirements for orders costing from $1,000 to $17,500 and notes orders of $17,500 to $36,000 require sealed bids and "will be handled by the Division of Administration." Orders of more than $36,000 require a meeting with the division.
"Submissions that do not meet these requirements will be returned to the originating division for correction," Anderson wrote.
The arts council pointed to the memo as evidence that the responsibility for the "irregular" contracts rested with the Division of Administration and not its staff.
Assemblyman Gordon Johnson (D-Bergen), a member of the budget committee, said that he was troubled by the contradictions in Guadagno’s testimony but that he would give her "the benefit of the doubt."
"Maybe she didn’t know that there was an employee who has fiscal oversight," Johnson said. "I have a few more questions about this."