Atlantic City takeover legal bills topped $4.8 million before Gov. Murphy pulled the plug

Ron Israel, an attorney with the law firm of Chiesa, Shahinian and Giantomasi, at a court hearing in which the state was seeking permission to cut Atlantic City fire fighters salaries 11.3 percent. Israel’s share of the $4.8 million in billings by the West Orange law firm running Atlantic City for the state topped $300,000.

ATLANTIC CITY — By the time former U.S. Sen. Jeffrey Chiesa’s role overseeing Atlantic City under a state takeover was terminated by the new governor, his North Jersey law firm had submitted more than $4.86 million in billing invoices to the state, according to records released Thursday by the New Jersey Department of Law.

Chiesa, a longtime ally of former Gov. Chris Christie, was named the “designee” in charge of the legislated state takeover of the financially troubled city, and he negotiated a contract that allowed his law firm to bill at rates ranging from his $400 an hour to $90 an hour for paralegals.

A spreadsheet summary released under an Open Public Records Request filed by the Inquirer and Daily News showed an additional 50 invoices filed since an earlier release Jan. 12. These invoices total $859,415.14, on top of previously released billings that totaled $4 million.

Gov. Murphy took office Jan. 16, a day many in Atlantic City anticipated would lead to a return to local control. Lt. Gov. Sheila Oliver, who now runs the state Department of Community Affairs (DCA), has indicated that she supports a return to local control. The announcement that ended Chiesa’s role still leaves the state with authority over Atlantic City’s operations, budget, payroll, and assets.

In an e-mailed comment, Oliver said the law firm’s cost “was of concern to us and was relevant in our decision to bring Atlantic City oversight responsibilities back into DCA.

“The fact is DCA historically has had the responsibility of overseeing financially distressed municipalities and has well-qualified professionals who can manage Atlantic City’s finances and supervise day-to-day decision-making,” she said. “Also, DCA is better equipped than an outside law firm to build and maintain relationships with community-based organizations and civic groups to address such issues as unemployment, underemployment, homelessness, housing foreclosure, and affordable housing, which are all challenges facing the city. ”

The state takeover remains in place, and the DCA will take over the oversight role. Tim Cunningham, the department’s director of Local Government Services, has already been performing many of the oversight functions as part of his state duties. The outside law firm, Chiesa Shahinian & Giantomasi, will continue to handle some litigation, according to the governor’s office. The law firm has been in court battling the city’s Firefighters Union and other challenges to the law that set up a Payment in Lieu of Taxes (PILOT) for casinos.

Murphy gave the ax  to Chiesa’s role on April 16. The new invoices, which predate that announcement,  mostly cover general legal services related to “the stabilization and recovery of Atlantic City.” The actual invoices, typically released with heavy redactions, were not made available with the spreadsheet because the invoices had not been officially approved, according to records custodian Octavia L. Frias.

John Varallo Jr., the president of Local 198 of the International Association of Firefighters, described the time since November 2016, when the state takeover took effect and Chiesa was appointed as designee, as “a bad dream.”

It’s unclear if the position of the state, which had sought drastic cuts to firefighter staffing levels, will change under the new governor.