E-ZPass bidding 'debacle'

Published in the Asbury Park Press 6/30/04

The way in which the contract for New Jersey's E-ZPass system was designed and awarded by Whitman administration officials was the result of an "administrative and financial debacle of immense proportions," according to a blistering State Commission of Investigation report.

The report, released yesterday, contends some former senior state transportation officials manipulated the bidding process to favor one company and other officials ignored repeated warnings that the funding system they preferred would not work.

"Ultimately, this procurement was approached in such a way that the combined absence of oversight and transparency produced a contract award recommendation under circumstances that strongly suggest malfeasance," the report states.

The 18-month SCI study examined how MFS Network Technologies, a California company, was awarded the E-ZPass automated toll collection contract in 1998. The E-ZPass program was to have paid for itself through fines and leases, but ran up a deficit of more than $400 million by 2003.

The 149-page report alleges that state transportation officials rejected any attempts at financial oversight and conducted much of the discussions and negotiations for the contract out of public view.

Targeted for particular criticism in the SCI report are:

  • Former state Department of Transportation Commissioner Frank J. Wilson, who, the SCI said, was engaged in employment discussions with companies linked to the E-ZPass procurement process while the bids were being created and reviewed and who steered the process away from Lockheed-Martin and toward MFS.
  • David Mortimer, Wilson's chief of staff, who the SCI said refused to allow any consideration of financing plans other than one under which toll cheats and leasing excess fiber-optic network space would generate all needed revenue and who engineered a drawn-out grading process through which the eventual winning bidder was chosen.
  • California-based consultant Kingston Cole, who the SCI said had a "pre-existing professional relationship with Wilson" and was given no-bid state contracts by Wilson in New Jersey.
  • Berkeley Township attorney Edward Gross, who was then the acting executive director of the New Jersey Turnpike Authority and who, the SCI said, intimidated turnpike employees who appeared to get in the way of the project. The report said Gross also told the state Assembly Transportation Committee in 2002 that the Turnpike Authority's finance department had approved the numbers supporting the self-funding scheme, while the authority's chief financial officer told the commission that she had not.