New Jersey commission questions tax incentive awards for NFI

The program awarded tax incentives to companies that promised to build or rent new office space for jobs that would otherwise be eliminated or relocated out of the state.

But the audit, which came at the request of Governor Phil Murphy, said NFI and two other companies “committed to move to Camden more than a year before submitting their applications for tax incentives, in which they claimed they were considering relocating to Pennsylvania as a potential alternative.”

“This meant that their certifications in their applications that jobs were ‘at risk’ of leaving New Jersey were, at best, dubious,” the report said.

The report said the $245 million in total tax incentives awarded to the three companies would have been reduced by over $70 million based only on new jobs moving to Camden from outside New Jersey.

In its application for the incentives, NFI said it was not involved in any legal proceeding covering areas of wages or work hours. But the audit panel found that the EDA was aware of “at least three lawsuits related to NFI.”

In a follow-up to the original application, NFI disputed claims in the lawsuits. But the company settled with the parties anyway to avoid protracted legal battles.

While the EDA reviewed the settlement agreements before approving the application, the audit panel said no one at the agency was “concerned that at the crux of the matter, NFI’s application contained potential misrepresentations.”

The audit panel recommended that EDA strengthen the vetting and due diligence process for firms that apply for tax credits. Likewise it said New Jersey should try to “recapture” the tax awards.

NFI did not respond to a request for comment on the report.