11-13-2003 -- Malloy, Patrick G. -- Guilty Plea -- News Release

New Hanover Township Mayor Pleads Guilty to Obstructing Justice in School Board Bid-Rigging Probe

TRENTON - New Hanover Township Mayor Patrick G. Malloy pleaded guilty today to witness tampering in connection with a grand jury investigation of the township Board of Education's award of a federally funded contract to one of his relatives, U.S. Attorney Christopher J. Christie announced.

Malloy, 69, entered his plea before U.S. District Judge Garrette E. Brown, Jr., who scheduled sentencing for Feb. 16.

Malloy pleaded guilty to a one-count Information which charges that he instructed a witness - who was cooperating with the FBI and wearing a recording device - to lie to a grand jury investigating the award of the school board contract to Malloy's relative. The witness-tampering charge carries a maximum penalty of 10 years in federal prison and a $250,000 fine.

Malloy, the township's mayor since 1968, turned himself in with his attorney to Special Agents of the FBI on July 17, when he was charged in a criminal Complaint.

At his plea hearing, Malloy admitted that from 1982 to July 1999, James J. Nash, former Treasurer of School Funds for the New Hanover Township Board of Education (BOE) and former township administrator, steered more than 30 township contracts to vendors identified by Malloy with whom Malloy had a personal and/or financial relationship.

Nash, who is cooperating in the investigation, pleaded guilty on June 16 to his role in the bid-rigging case. (See news release at the Public Affairs Office website, www.njusao.org

Nash admitted at his plea hearing that he and a then-unnamed township official planned with others how to steer the contract for the replacement of a sidewalk in front of the New Hanover Township School to the mayor's relative.

According to admissions from Nash at his guilty plea - it was Malloy, Nash, a then-member of the BOE and a local contractor, among others, who met on April 15, 1999, and confirmed their prior agreement that the contract would go to Malloy's relative. Prior to that meeting, according to Nash, the BOE member obtained a written quote from the relative which priced the sidewalk job at $11,500. Nash and the BOE member subsequently told the FBI that it was confirmed at the April 15, 1999 meeting that they would obtain two fabricated written quotes for higher prices in the names of local vendors, and that those would be submitted to the New Hanover BOE, along with the quote from Malloy's relative.

It was anticipated that the New Hanover BOE would believe that all three quotes were bona fide and award the sidewalk job to the Malloy relative, who would have the lowest price, according to Malloy.

Nash admitted that he directed another New Hanover municipal employee to fabricate a quote in the name of a real local vendor. That vendor subsequently informed the FBI that he neither prepared the quote for the sidewalk job or had knowledge of the job.

Later that day, at the April 15 evening meeting of the BOE , the school awarded a contract in the amount of $11,500 to Malloy's relative, rejecting the fabricated quotes in the amounts of $11,950 and $12,200. The job was completed three months later, and Malloy's relative was paid the $11,500 by the BOE.

Nash admitted that the relative was paid with funds that the BOE received from Impact Aid, a federal grant program designed to reimburse local school districts for the impact that federal land acquisitions had on the municipal tax base, and consequently, their respective school budgets. The BOE qualified for Impact Aid because the United States owned the land occupied by the Fort Dix military base in New Hanover Township.

Malloy admitted that on June 15, 2002, he met with Nash and the township employee who had fabricated a vendor's quote. At the meeting in township offices, according to Malloy, the employee told Nash and Malloy that the employee had been granted immunity and subpoenaed to testify before a federal grand jury regarding the sidewalk contract.

Furthermore, Malloy admitted that during the conversation he instructed the employee to withhold information and make certain misrepresentations to the grand jury. Malloy also admitted that a portion of the conversation focused on what the employee should say if the government knew the employee had fabricated the vendor's quote. Malloy admitted he told the employee to tell the grand jury that the vendor had told him to "type it up." He also admitted to suggesting that the employee falsely state that the vendor's son directed him to type up the quote. Malloy admitted to specifically telling the employee - "I'd bring the kid (meaning the vendor's son) in on it."

Nash pleaded guilty to a one-count Information charging him with misapplying federal money received by the New Hanover Board of Education. Judge Brown scheduled Nash's sentencing for Dec. 11. Nash faces a maximum penalty of 10 years in federal prison and a $250,000 fine.

Christie credited Special Agents of the FBI's Trenton Resident Agency, under the direction of Louie F. Allen, Special Agent in Charge in Newark, for its investigation. The Government is represented by Assistant U.S. Attorney Treby Williams, of the U.S. Attorney's Criminal Division in Trenton.

Defense Attorney: George Robert Wells, Esq. Princeton