Gov. Phil Murphy's chief executive at the Schools Development Authority hired more than three dozen friends and relatives to the agency that oversees billions of dollars in projects, according to an investigation commissioned by the administration.

Twenty-seven of those people were among 30 fired from the SDA Tuesday, when the Murphy administration announced the findings of two outside legal reviews and an audit committee that reviewed personnel and hiring practices at the embattled agency.

“SDA Board Chair Rob Nixon and Interim SDA CEO Manny Da Silva have my full and unwavering support to make any management decisions they deem necessary based on the findings of these reports,” Murphy said in a written statement.

“The SDA is undergoing changes to more efficiently meet its current needs,” said Da Silva, the SDA’s interim chief executive officer. “The changes support the declining number of educational facilities remaining in our current portfolio.”

The report said the SDA’s payroll increased by more than $2 million during Lizette Delgado-Polanco’s eight months as CEO. It found that while pay increases may have been appropriate, “there was not a documented justification for the substantial increase in the employee count” and a lack of discussion with senior staff before making the hires.

“Ultimately, the promotions, promotional increases, merit-based increases, equity increases and the new hires increased by the salary budget by over two million dollars. This is not an insignificant amount of money for organization that was running out of money, had been very budget conscious and whose renewed focus became reauthorization,” the report said.

State Sen. Kristin Corrado, R-Passaic, co-vice chairwoman of the New Jersey Legislative Select Oversight Committee that investigated SDA hiring practices in connection with former chief of staff Al Alvarez, called the findings unfortunate.

"Our worst suspicions have come true," Corrado said. "It's clear that under the Murphy administration and under Lizette Delgado-Polanco, there were a number of improper hirings and improper firings as well."

"Unfortunately, it's not a surprise, and it's government at its worst," she said. "I do think the one thing that should come from this report is that those individuals that were improperly fired deserve and should have the opportunity to be reconsidered for their jobs. A lot of those people were not career politicians."

The report depicts a string of new hires with connections to Delgado-Polanco and deputy chief of staff Patricia Arcila Cabrera, a close friend since they met in 2008 as employees at the Service Employees International Union.

It indicates that three were members of Delgado-Polanco’s family; 12 were friends or family of friends; eight were acquaintances through the SEIU; three were from the Murphy campaign and one from the Governor’s Office; two were people she knew or relatives of people she knew working in Gov. Jim McGreevey’s administration; and two were people she knew through other avenues in politics.

“During the time period which the complaints cover, Ms. Delgado-Polanco was the highest-ranking employee and the person who was in charge and made most, but not all, of the decisions which ultimately led to the complaints which we investigated.  For that reason, she must shoulder a majority of the blame for what ultimately occurred,” the report said.

“However, this does not mean that all other employees were without fault.  It was also clear that a number of employees who were employed at the SDA did not act immediately to embrace the new regime or the new employees who were hired,” it said. “Understandably, there were multiple reasons that went into this and each person may have had a reason to act in the manner that he or she did, however, this contributed greatly to the atmosphere which many of the employees complained about.”

A complaint was received by the Governor’s Office from an anonymous SDA employee about hiring practices at the agency under then-chief executive office Lizette Delgago-Polanco, who resigned in April.

The matter was referred to the Attorney General’s Office, which hired outside counsel to investigate: Domenick Carmagnola and his Morristown firm, Carmagnola & Ritardi. The office interviewed 47 witnesses over four months and reviewed thousands of pages of SDA documents.

The report found that many of the long-time SDA employees fired in September 2018 were identified not by Delgado-Polanco but by then-Human Resources director Maribell Osnayo-Lytle, who compiled a “Dead Wood List” of employees with either performance or disciplinary issues. Executives at the agency were then able to get some of the employees removed from the termination list.

The report said most of the people then hired under Delgado-Polanco didn’t actually replace the 19 fired employees. Six of the 15 positions of employees terminated on Sept. 20, for example, were eliminated in a reorganization, and three remain vacant.

But the report did find that Delgado-Polanco reorganized the agency without board approval; hired people without following normal procedures, many of them friends and relatives of her or another top executive with whom she is close friends; gave better titles and higher salaries to some of the connected new hires; and created positions tailored to the people she wanted to hire.

Witnesses said that in the past, normal hiring procedures were skipping for one or two high-level and confidential positions during a transition, such as for chief of staff. This time, it was skipped for dozens, under two different human resources directors.

The report said most of the new hires were generally qualified for their positions, but not all. In most cases job descriptions were modified or employees transferred to make up for that, but one resigned.

A second outside review, conducted by DeCotiis, FitzPatrick, Cole & Giblin, found no evidence of tampering with personnel files, as had been alleged by some SDA employees. It did find that rules for maintaining and handling such files weren’t clear and that best practices aren’t followed.


New Jersey: Decoded cuts through the cruft and gets to what matters in New Jersey news and politics. Follow on Facebook and Twitter.


Michael Symons is State House bureau chief for New Jersey 101.5 and the editor of New Jersey: Decoded. Follow @NJDecoded on Twitter and Facebook. Contact him at michael.symons@townsquaremedia.com

Sign up for the NJ1015.com Newsletter

Get the best of NJ1015.com delivered to your inbox every day.