3/31/2014 

Jim Cpolein 

Inside the Port Authority, the Corrupt Powerhouse Behind Christie's Bridgegate Scandal- The Daily Beast 

i;' POLITICS ENTERTAINMENT WORlD NEWS TECH • h~l"(l!~ «::D 

Inside the Port Authority, the Corrupt 

Powerhouse Behind Christie's 

Bridgegate Scandal 

Inside the Port Authority's dirty politics: the agency behind Bridgegate 

and Christie's demise has a reputation as a patronage clubhouse and an 

ATM machine for unaccountable spending. 

"I feel violated," Leon Keylin of Fort Lee, New Jersey told USA Today, 

describing his reaction to the dirty details behind the Bridgegate traffic jam that 

choked his town for four days last September. New Jersey Governor Chris 

Christie's office has taken most of the heat for screwing citizens by playing dirty 

politics, but there's another party responsible that has so far evaded most of 

the blame. The Port Authority of New York and Nev: Jersey, the government 

agency that directly caused the gridlock, is an enormously powerful bastion of 

patronage that violates all commuters every day of the year. 

It would be easy to discount the George Washington Bridge scandal as a case of 

a few bad apples abusing their power. But it's actually just one example of how 

an organization that was supposed to rise above politics became a tool 

for politicians to act out their worst impulses. The episode is an indictment of 

the very concept of the Port Authority-and the Progressive-Era ethos that 

good public policy is all about entrusting smart people to run things. 

A bi-state agency that controls a good share of the transportation 

infrastructure around New York City and 

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3/31/2014 Inside the Port Authority, the Corrupt Powerhouse Behind Christie's Bridg egate Scandal -The Daily Beast 

NYC- what's 

this weekend 

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What to do in New York for 

Free? Over 80 Free 

Things to do- more 

political retribution. 

North Jersey, the Port Authority 

squanders its wealth and mismanages its 

assets; it charges high tolls and puts off 

necessary maintenance work; and it's a 

cesspool of dirty politics. How ironic that 

an organization designed to be the 

antithesis of old school Tammany Hall 

machine politics, would be turned into a 

patronage mill forced to absorb dozens of 

New Jersey Gov. Chris Christie's cronies 

-''they came in like cockroaches," 

quipped one Port Authority stafferincluding a deputy executive director 

willing to create a phony traffic jam at the 

behest of a gubernatorial aide seeking 

Founded in 1921, the Port Authority was tasked with breaking through the 

logjams that made building big projects so difficult, and in its early years the 

agency was successful in this regard. Before the founding of the Port 

Authority, cities generally financed bridges, tunnels, and roads with bonds 

backed by tax revenues, which required direct approval from voters. This was 

a major obstacle to getting even the most worthwhile projects past the planning 

stages. The Port Authority, modeled after a similar organization in London, 

raised money by issuing bonds that would eventually be paid back through user 

fees lilce bridge tolls. That meant projects didn't require direct voter approval, 

and mayors and governors didn't have to account for infrastructure projects in 

their budgets. 

The agency was also designed with the idea that cities were hampered by too 

much democracy, as Jameson Doig details in his excellent history of the Port 

Authority, Empire on the Hudson. Julius Henry Cohen, the visionary behind 

the Port Authority's founding, wanted to create an organization 

shielded from "the hurry and strife of politics," to borrow Woodrow Wilson's 

phrase, run by wise technocrats empowered to carry out the best plans for 

society without politicians and party bosses getting in their way. The Port 

Authority was supposed to have all the efficiency of a private firm, but with the 

higher aim of furthering the public good. 

But the key to efficiency is competition, 

and commuters have few a1ternatives 

to the Port Authority's bridges and 

airports. So, like any monopolist, the 

agency ba11ooned into a bureaucratic 

monstrosity that spends mucl1 ofits 

wealth on itself. Today the 

organization's ranks are flooded with 

middle managers (PDF) paid handsome 

salaries based on the time they've 

served, not how well they do their jobs. 

The compensation package for 

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3/31/2014 Inside the Port Authority, the Corrupt Powerhouse Behind Christie's Bridg egate Scandal -The Daily Beast 

the average Port Authority employee 

exceeds $143,000, stemming in part 

from out-of-control overtime payments 

and rich perks. David Wildstein, 

Christie's high-school classmate who 

worked for the Port Authority and 

ordered the bridge closure on behalf of 

the governor's office, was making a 

base salary of $150,000 before he 

resigned in disgrace. 

Over the years, the Port Authority's 

portfolio grew into a hodgepodge of 

assets that no wise technocrat would 

ever recommend putting under the 

aegis of one agency, including airports, a 

bus terminal, seaports, bridges, tunnels, and the World Trade Center. This 

allows it to drain money from some holdings to float others. The Port 

Authority's bridges and tunnels generated excess cash flow of $453 million in 

2011, but a 2012 audit (PDF) found it was falling to carry out 

routine maintenance work. Its airports generated $892 million in excess cash in 

2011, and yet it can't afford to fund the major capital upgrades needed at La 

Guardia, Newark, and JFK airports. Instead, the money goes towards sopping 

up loses elsewhere in the organization, such as the agency's estimated $7-4 

billion tab for construction cost overruns at the World Trade Center. 

A n1ajor reason New York's three major airports provide such a 

lousy experience for travelers is that they're all operated by the Port 

Authority, so they don't have any reason to compete for customers. The agency 

imposes a rule that prevents most flights traveling more than 1,500 miles from 

departing out of LaGuardia-a form of turf protection for Newark and JFK. And 

what's the rush to replace outdated infrastructure? LaGuardia's new state-ofthe-art terminal isn't expected to be finished until2021. 

"The Port Authority has been a money tree, an ATM maehine ... a place [the 

governors of New York and New Jersey] can go to do projects that they can't 

get through their budgets," Stephen Berger, a former Port Authority executive 

director, said at a recent breakfast forum held by the Citizens Budget 

Commission. During Berger's tenure, New Jersey Governor Thomas Kean 

pushed the Port Authority to underwrite an office building in 

downtown Newark that had nothing to do with transportation. In 1992, 

Governor Mario Cuomo got the Port Authority to buy a portion of the Aqueduct 

Racetrack for $40 million to help plug a budget shortfall. 

Currently, 94% of New York State's outstanding debt was issued by a public 

authority, aceording to the State Con1ptroller's Office. 

So what should be done about the Port Authority? An obvious step would be to 

break the agency up so that money collected on the George Washington Bridge, 

for exmnple, would have to be spent on maintaining and hnproving the George 

Washington Bridge. Bob Poole, the director of transportation policy at the 

Reason Foundation and an expert in airport finance, suggests that New York 

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3/31/2014 Inside the Port Authority, the Corrupt Pot.Nerhouse Behind Christie's Bridgegate Scandal -The Daily Beast 

and New Jersey could turn to private operators to run the airports 

competitively-something Mayor Rudy Giuliani was pushing back in 1994-

though the Port Authority holds long-term leases on LaGuardia and JFK 

Airports that run through 2050. 

Poole also suggests a better model for funding new infrastructure called 

"project fmance," which taps future user fees to pay for new bridges and 

tunnels without involving an unaccountable pubic authority. Under this 

approach, popular in Europe, a city or state selects a private firm to borrow the 

necessary capital to build a project, tasks it with overseeing construction, and 

then allows it to collect tolls to pay off its debt and fund operations. This model 

has all of the benefits of the authority model with built-in incentives to keep 

costs in line and plundering politicians at bay. 

Unfortunately, the Fort Lee scandal won't be enough to force any meaningful 

reforms at the Port Authority, because the governors of New York and New 

Jersey, who jointly control the agency, have no interest in cutting off the supply 

of easy money or the flow of jobs for their friends. An agency designed to he 

insulated from obstructionist politics in order to better serve the public has 

become a private bank and enforcement arm for the powerful, increasingly 

corrupt, and cut off from the public interest. 

So the Port Authority will keep "violating" commuters and putting off the 

inevitable day of reckoning when Julius Henry Cohen's vision of an organization 

insulated from politics comes apart in even more spectacular fashion. 

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