TRENTON — Gov. Chris Christie’s fight with the federal government over abandoning a train tunnel under the Hudson has already cost New Jerseyans more than $1 million in legal fees and interest, records show. For a month, Christie has been vowing to appeal a decision from the Obama administration ordering the state to repay $271 million for abruptly pulling...
Part of the canceled ARC Tunnel Project in North Bergen, shown in this file photo. The Obama Administration is demanding Gov. Christie pay $271 million for scrapping the project. TRENTON — Gov. Chris Christie’s fight with the federal government over abandoning a train tunnel under the Hudson has already cost New Jerseyans more than $1 million in legal fees and interest, records show.
For a month, Christie has been vowing to appeal a decision from the Obama administration ordering the state to repay $271 million for abruptly pulling out of what was the largest public works project in the country.
In the meantime, interest on New Jersey’s debt is adding up at the rate of $225,000 a month. In addition, bills from Patton Boggs, the Washington law firm hired by Christie in December to fight his battle, have averaged another $300,000 a month, invoices obtained by The Star-Ledger show.
The interest on the $271 million, which began accruing on April 29, could be frozen by a federal judge once an appeal is filed, but neither the governor nor Patton Boggs has said when the case will be brought to court.
A spokesman for the governor, Michael Drewniak, declined to comment, as did a Patton Boggs spokeswoman.
Some transportation experts say Christie is spending good money after bad. When the last brief is filed, they predict, New Jersey will have to surrender a large portion of the $271 million — if not all of it.
"Christie is not arguing about dollars and cents. He’s saying they don’t owe anything, and he’s on unsound ground," said Martin Robins, a transportation expert at Rutgers University who was closely involved in planning the tunnel. "I suggest we should be talking in terms of collaboration and reduction in the debt that he owes and that he caused by the stomping of this project."
Janine Bauer, a transportation lawyer who ran the Tri-State Transportation Campaign for 10 years, said she is "not really a fan of the position that the state of New Jersey has taken. Although, obviously, I’m conflicted about that since we’re all taxpayers and commuters."
The federal government has a stronger hand, Bauer said, but added that Patton Boggs has made some persuasive arguments. New Jersey had won $219 million in stimulus funds and transportation grants before it signed the contract with the federal government. That money was later included in the tunnel deal, she said, and Christie may have a shot at keeping it depending on how the initial grants were negotiated.
The Obama administration has dismissed that argument on the ground that Christie knew when he signed off on the agreement that all the money was meant for the tunnel.
"I don’t think it’s going to be all or nothing for either party," Bauer said. "The winner is the one who ends up with more money in the pocket."
State Sen. Joseph Pennacchio (R-Morris) said the state has reason to keep the federal funds: The money could later be folded into alternate tunnel projects, and the state, struggling financially, would suffer if it returned the money.
"Put yourself in the governor’s shoes," Pennacchio said. "I wouldn’t want to give the money back without a fight, and that’s exactly what he’s doing."
He said the matter would not enter into this year’s budget negotiations because it was likely to be "tied up in litigation for years."
Whatever the legal outcome, emotions over the decision to pull out of the project are still raw.
Transportation Secretary Ray LaHood was incensed by the governor’s decision to kill the deal after months of voicing support for the tunnel and snubbed him earlier this month when doling out $450 million for high-speed rail projects.
The state desperately needs money to repair the aging Portal Bridge over the Hackensack River, but LaHood put that option out of Christie’s reach when he allocated the funds for other Amtrak projects.
"We owe it to the American taxpayer to protect their investments and work with reliable state partners," LaHood told The Star-Ledger last week. "We need to know we are working with strong partners who will see big projects through."
LaHood, an Illinois Republican known for his diplomatic touch, contends Christie is misleading people when he says unexpected cost overruns led him to cancel the tunnel — a massive public works project 20 years in the making that would have doubled train capacity to Manhattan.
When Christie first announced his decision in October, LaHood offered different financing methods to salvage the project, including one in which private investors assumed responsibility for cost overruns. The governor flatly rejected that option — and continued to say New Jersey alone was on the hook for more than $2.5 billion in unforeseen costs.
"Only the governor felt that the entire burden would have fallen on the state of New Jersey," said David Widawsky, the Port Authority of New York and New Jersey’s point man for the tunnel project. "Over the course of the many years of construction ahead, these kinds of things could have been worked out."
The governor has redirected the $271 million and other funds meant for the tunnel to the state’s Transportation Trust Fund, a heavily underfinanced account that covers road maintenance.