Law firm running Atlantic City for state has now billed $4 million

ATLANTIC CITY — The North Jersey law firm appointed by departing Gov. Christie to oversee a state takeover of Atlantic City has now billed more than $4 million for its services, according to invoices released by the state late Friday in response to an Open Public Records Request by the Inquirer and Daily News.

In November 2016, Christie designated  Jeffrey Chiesa, a former U.S. senator and a close ally, to run Atlantic City under a new state takeover law that gave the state powers over Atlantic City government, assets, payroll, and operations. Chiesa negotiated a contract that paid him $400 an hour and allowed partners, associates, and paralegals in his law firm, Chiesa Shahinian & Giantomasi, to bill at slightly lower rates.

In all, the West Orange-based law firm submitted invoices that now total more than $4 million, nearly a quarter of that spent in litigation battles with the city's firefighter and police unions and others. These latest invoices — billings approved since mid-September and released Friday — total about $908,000. The total from previously released invoices was $3.1 million.

The future role of the law firm in Atlantic City remains unclear.

Incoming Lt. Gov. Sheila Oliver, who takes office Tuesday and will oversee the Department of Community Affairs, has said she will take a hard look at the law firm's spending and activities in Atlantic City, as well as reviewing the state's role. Oliver and Gov.-elect Phil Murphy have both criticized the takeover, but it will remain in place in some form without a legislative repeal.

John Varallo Jr., president of Local 198 of the International Association of Fire Fighters, said Friday evening he hoped Murphy and Oliver would come in and "really sit down and analyze what's going on."

"Four million dollars is ridiculous for what's going on in this town," Varallo said. "The new governor has to come in and really examine what's going on here, because it can't continue."

In all its billings to date, the law firm billed about $118,000 for reviewing City Council agendas, more than $680,000 on its court fight against the firefighters, whose pay the state is seeking to cut an additional 11.3 percent. The state recently settled with the police union; the Chiesa law firm has billed about $210,000 related to the negotiations.

Ron Israel, the lead attorney battling in court for reduced salaries for the city's firefighters, has billed more than $300,000 at the $350-an-hour rate since November 2016.

Melissa Salimbene, another partner in the law firm who bills at $350 an hour, submitted invoices for more than $408,000. She worked on City Council issues, and various litigation and other activities.

Chiesa's billings total about $207,000.

John Lloyd, the attorney who negotiated a favorable settlement of a tax appeal with Borgata and other casinos, billed a total of $408,000 at a rate of $350 an hour.

It is those settlements that Christie has cited as negating any criticism of the cost of the Chiesa law firm, as they saved Atlantic City about $150 million. On Tuesday, in his final State of the State address, Christie said Chiesa has "produced phenomenal results" and credited him with turning around the fortunes of the near-broke resort where five casinos closed since 2014. Two casinos, Hard Rock and a new owner for the Revel, plan openings in 2018.

A spokesman for Christie did not respond to a request for comment Friday evening. Dan Bryan, a spokesman for Murphy, deferred any comment until after Tuesday's inauguration

As to whether the state takeover should continue under the new state administration, Christie said those who advocate "reversing course" are "just as wrong now as they were before."

"Atlantic City is ready for a revival. Let's not screw it up," Christie said.

City elected officials and other state officials have argued that the achievements under the takeover were all either already set in motion or things that could have been accomplished without the usurping of power and the millions sent to a politically connected out-of-town law firm with ties to the governor. Former Mayor Don Guardian has said the city was already prepared to hire Lloyd when the state took over.

"As I stated from the very beginning I didn't want the state of New Jersey here," said City Council President Marty Small Sr., who took many trips to Trenton fighting against the takeover. "I have to give credit — they have made some positive changes, particularly with the Borgata settlement, and some of the bonding issues.

"All is not lost," he said, "but this could have been done without the $4 million price tag."