Port Authority of NY-NJ admits wrongdoing over roadway projects

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By Hilary Russ

<span class="articleLocation”>The Port Authority of New York and New Jersey
has agreed to pay $400,000 to settle allegations it failed to
inform investors of risks to roadway projects, becoming the
first municipal bond issuer to admit wrongdoing in an
enforcement action with U.S. securities regulators.

The Securities and Exchange Commission’s probe is part of a
sprawling web of investigations that began following the
so-called Bridgegate controversy, the politically motivated
closure of several lanes at the George Washington Bridge in
2013.

Reuters was first to report in April that the bi-state
agency, which underwent governance changes following intense
scrutiny in the fallout of the scandal, was in talks with the
SEC.

The agency operates airports, bridges and tunnels in the
region, which produces at least 10 percent of the nation’s
economic output, according to the U.S. Census Bureau.

According to the SEC, the authority held internal
discussions about whether certain projects, including New
Jersey’s Pulaski Skyway, were outside its mandate and might not
be legal.

Internal memos noted that there was “no clear path to
legislative authority” for such projects and identified “the
risk of a successful challenge by the bondholders” in connection
with the funding, the SEC said in a statement.

Even so, the Port Authority sold $2.3 billion of bonds
without disclosing the risks around its ability to fund the
projects.

The SEC’s investigation is ongoing, its statement said.

The probe includes an examination of the cancellation of the
Access to the Region’s Core project in 2010 by New Jersey
Governor Chris Christie because of concerns about cost overruns.
The project would have created a much needed new commuter rail
tunnel under the Hudson River.



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