Paterson mayor accused of graft
Feds charge Barnes took bribes for help in obtaining city contracts

January 25, 2002  STAR-LEDGER

Federal authorities accused Paterson Mayor Martin G. Barnes yesterday of accepting a nonstop stream of free trips, home improvements and luxury items from contractors in return for his help in winning city improvement projects worth millions of dollars.

A grand jury indictment alleges that Barnes sold his office almost from the day five years ago that he became the mayor of New Jersey's third-largest city.

It says Barnes extorted $5,000 from a contractor, illegally skimmed from his campaign funds, filed false tax returns and sometimes charged the city for travel expenses that were already secretly paid by contractors.

It also said Barnes required some businesses to arrange "female companionship" on trips or pay for his wife or girlfriends to accompany him on others. In one case, investigators said, Barnes arranged for a company to receive a monthly consulting fee from the city in return for the firm adding one of his girlfriends to its payroll.

"The conduct here is the most reprehensible type of public conduct that you can find anywhere in this country," U.S. Attorney Christopher J. Christie, who took office last week, said of the 49-page indictment. "It is personal gratification and financial gratification at the expense of the public, using your public office to do that. And it's disgraceful."

The indictment was long expected by Barnes, a 53-year-old Republican fixture in Paterson politics who recently launched his bid for a second full term. Last year, he publicly dared investigators to charge him, and he emerged from his office yesterday afternoon almost as defiant.

"We have not done anything wrong and we know we have done nothing wrong," the mayor told reporters, with aides at his side. "I'm glad this is over. Now I can get my reputation back. We're going to stand up and fight for our rights."

Barnes has agreed to surrender to the FBI in West Paterson and is scheduled to be arraigned Monday in Newark on charges including mail and wire fraud, witness tampering, extortion and lying to investigators.

Prosecutors said they probably won't object to bail but will ask a judge to revoke Barnes' passport.

The mayor's attorney, Jack Arseneault, said Barnes will plead not guilty and "adamantly" assert his innocence. "There will be a trial in this case," Arseneault said.

Prosecutors declined to discuss the penalties, but the extortion charge alone carries a maximum 20- year prison term and a possible $250,000 fine. The 40-count indictment comes amid a municipal corruption investigation that has been percolating for more than two years and could snare more officials throughout the state. Specifically, federal agents have been looking into dealings between officials in Paterson, Essex County, Camden and Elizabeth and United Gunite, an Irvington-based concrete firm that builds sewers and bridges.

A former Gunite vice president, Gerald David Free, admitted last February that he paid elected officials in Paterson and elsewhere for contracts. Two others - Gunite President W. Steven Carroll and Paterson City Engineer Nicholas Giella - also pleaded guilty to bribery and corruption charges.

Paterson officials say United Gunite has been the only bidder for sewer work in Paterson for more than a decade, and earned $16 million in contracts since 1994.

Long before his plea, Free had been cooperating with federal investigators. He spent months secretly recording conversations with officials and Arseneault acknowledged that Free taped conversations with Barnes. But he described Free as "an admitted con man" who would say anything to win a lighter sentence.

Assistant U.S. Attorney Perry Carbone, the lead prosecutor in the case, said the evidence will show that Barnes' crimes were not limited to a single company and that the payoff was millions of dollars in work on city projects.

Investigators declined to identify the companies, but the indictment refers to one contractor that "provided gunite and concrete projects" and lavished Barnes with designer suits, dinners, travel and entertainment between February 1997 and 2000. That company allegedly paid for a new swimming pool and waterfall at the mayor's house, and foot the bill for 14 trips - details that mirror the gifts Free said he doled out.

The indictment says a second contractor allegedly funded a $3,500 excavation and paving job at Barnes' home and a third, described as a building renovator, allegedly paid the mayor $5,000 to be considered for work in the city.

Investigators also said an unnamed attorney gave Barnes and a girlfriend a free trip to Washington, D.C., in return for business - a junket that prosecutors say became a standard price of admission for businesses hoping to get Paterson contracts.

According to the indictment, Barnes took his wife on contractor-paid trips to the Kentucky Derby, an Aruba casino and a $400-a night English castle. He took a girlfriend to an all expenses-paid Grand Rapids, Mich., business meeting with a Paterson businessman, then canceled the meetings and stayed three more days. Later, he allegedly billed the city for more than $1,000 in expenses related to the trip, even though contractors had paid his tab.

When Barnes traveled solo to Rio De Janeiro, Brazil, in January 1998, a contractor paid for four female companions and the mayor's $1,041 room service bill, according to the indictment. About 10 days later, Barnes signed an agreement that gave the company an emergency sewer repair contract in Paterson.

Later, the indictment says, Barnes allegedly coached an unnamed executive from the company on how to mislead federal agents who were scrutinizing their dealings. He didn't realize their conversation was being recorded.

Councilman Thomas Rooney, the mayor's fiercest critic on the council, said Barnes should resign, or abandon his re-election bid.

"This is bad publicity for Paterson and the state of New Jersey," Rooney said. "We're trying to hard to attract businesses. Why would an executive decide to come to the city now?"

Bob Grant, the mayor's spokesman, said Barnes doesn't plan to resign and that the charges won't impact city operations. "It's going to be business as usual," he said.

Grant also charged that the indictment could be politically and racially motivated. "This appears to have serious racial overtones," he said. "If you look at the track record of indictments and trials, African-Americans lead the way."

Barnes, elected to the city council in 1974, became Paterson's first black mayor in 1997, when he was appointed to fill the seat vacated by U.S. Rep. William Pascrell Jr. Barnes easily won election the next year.

Christie, the new U.S. attorney, called Grant's comments "the height of irresponsibility." He said they were an attempt to deflect attention from the charges against Barnes, and he recited the names of nearly a half-dozen Passaic County officials, all white, who have been convicted of corruption charges in recent years.

"The indictment had nothing to do with race. The indictment has to do with the conduct with a public official that was reprehensible, illegal and violated the public trust," Christie said. "We will not be distracted by those type of charges."

Special Agent Kevin Donovan, who heads the FBI in New Jersey, called such cases an "erosion of trust" and proof that public graft is more than a victimless crime.

"We pay a corruption tax as a result of activities outlined like those today," Donovan said.