Legal Lode: Jersey Boys

Mercer County is the setting for a new take on public-private partnerships.

Prologue: Now and then, I come across a court case that unfolds with plot twists and rakish characters worthy of an HBO mini-series. Alas, to tell the story right can take more space than this column provides. That's why I'm asking loyal readers to bear with me. I begin by introducing you to Harry G. Parkin, lawyer, former prosecutor for Mercer County, N.J., and, from 1995 to 2003, chief of staff to the Mercer County Executive. Next month, I'll give you the rest of the tale.

Among his other roles, Harry Parkin served as the county executive's liaison to the Mercer County Improvement Authority (MCIA), an independent agency that manages development projects and oversees solid waste and recycling programs.

Unhappy with how Waste Management (WM) was handling curbside recycling pickup in the county, MCIA put the multi-million dollar contract up for bid. When WM turned out to be the only bidder, Parkin contacted MCIA's executive director, James R. Lambert Sr., to let him know that a big contributor to the Republican Party, Alex J. Abdalla, was interested in the work. MCIA then re-bid the contract, and this time got proposals from WM and from Abdalla's company, Central Jersey Waste & Recycling (CJW&R). Despite its shaky financial condition, Abdalla's firm ended up with the contract.

Six months later, Lambert resigned from MCIA and was named president of CJW&R. Seeking to address the company's financial woes, Abdalla and Lambert asked Parkin to invest in CJW&R. Parkin was eager to partner with the other men, but only if each of them owned an equal share of the company and, given his position with the county, if his stake could be hidden. Trying to mask his CJW&R interest, Parkin drew up two documents: a stock-option agreement with Lambert buying a two-thirds stake in the company from Abdalla; and a secret agreement between Lambert and Parkin assuring Parkin his one-third share. But, this approach got sidetracked. Instead, the parties tried a more convoluted arrangement.

To buoy CJW&R, Parkin agreed to loan $150,000 to the company at 15 percent interest, hiding the actual deal by making a sham loan on the same terms to PMT Contracting Co., which was owned by Abdalla's nephew. PMT transferred the money to CJW&R, which then made payments on the loan to Parkin. Predictably, Parkin did not reveal the source of his interest income on state ethics disclosure forms.

While the three men continued to seek ways to arrange a one-third interest for each of them, Abdalla went shopping for additional funds. He wound up taking a $250,000 loan from Frank Fiumefreddo and his son in exchange for an option for a 51 percent ownership stake and the right to manage CJW&R.

However, no sooner did the Fiumefreddos take over management than Abdalla became unhappy with the new setup. Meantime, Parkin got nervous about his interest payments, worrying that the Fiumefreddos would simply ignore the loan arrangement.

As Parkin figured it, the best solution was for Lambert, Abdalla and himself to buy the Fiumefreddos' interest in the company. But, Abdalla lacked the cash he would need.

When a building demolition contract in Trenton came up for bid, Parkin wanted to steer the work to CJW&R. He pressured Steven Dixon, the new MCIA executive director, to award the contract to Abdalla's company. After two rounds of bidding, a Dixon aide recommended that the contract go to the company that had bid lowest both times.

Paying no mind, Dixon re-bid the contract twice more, and each time CJW&R did not have the low bid. Exasperated, he offered CJW&R — and only CJW&R — a chance to submit a final bid. Abdalla submitted an undated, amended bid to Dixon, and CJW&R ended up with a $33,000 contract for the demolition work.

Progress, but not enough to suit Parkin. The Fiumefreddos had to be squeezed, and he knew just how to do it.

Continue reading Mercer County, N.J., official Harry Parkin's story with July 2009's "Parkin's Lot".

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Barry Shanoff is a Rockville, Md., attorney and general counsel of the Solid Waste Association of North America.

The legal editor welcomes comments from readers. Contact Barry Shanoff via e-mail: [email protected].