Dougie In Doo Doo

Fascinating to watch the Repug "old boy" network functioning, isn't it?

Forrester contracts tied to entities that aided his candidacy

A Burlco agency for which he has done work and a man who brokered the contracts are linked to GOP powers.

By Tom Turcol

Inquirer Staff Writer

While running for governor, New Jersey Republican Douglas Forrester has received $3.4 million in business from a Burlington County agency tied to the GOP machine that helped make him the party's gubernatorial candidate.

Moreover, the government contracts awarded to Forrester's company were brokered through the son of a powerful South Jersey Republican, State Sen. William L. Gormley, who also played a key role in Forrester's nomination.

Forrester's company, BeneCard Services Inc., was chosen by the Burlington County Special Services School District to manage its prescription-benefits program in 2004 and again in 2005. Since 2003, Forrester has contributed nearly $60,000 to county Republican coffers.

The school district selected BeneCard even though other companies offered lower costs for each year, and it renewed the contract this summer despite a 37 percent price increase by BeneCard.

Forrester did not respond to a request for comment. A spokesman, Pete McDonough, said that cost was not the only consideration in insurance-related contracts.

Forrester has amassed most of his personal fortune through insurance-related contracts his two companies have with more than 100 municipalities, school systems and other public agencies in New Jersey.

Forrester estimates that his two companies have combined annual revenues of $200 million, and he has already spent more than $20 million of his own money on the campaign.

During the contest, Forrester has said that his companies' government contracts were not influenced by politics but based on price proposals that were lower than its competitors'.

But key political players and connections surround Forrester's lucrative arrangement in Burlington County, and rival health-benefits companies offered lower costs.

The Burlington school contracts were brokered by Sean Gormley, whose father, William Gormley of Atlantic County, is one of New Jersey's most influential Republicans. Sean Gormley receives a 5 percent commission from the transaction, according to district records.

The district's school board is controlled by the Burlington County GOP, whose longtime leader, Glenn Paulsen, is among the small group of Republican powers influential in choosing statewide candidates. That group includes Gormley.

Paulsen and Gormley played key roles in helping Forrester become the party's candidate for governor.

Gormley said he was unaware of his son's role in the Forrester contracts and that it did not affect his political decisions.

"It's my son's business, not mine," Gormley said. Paulsen was unavailable for comment.

A main theme of Forrester's campaign is what he says is opponent Jon S. Corzine's cozy relationship with the Democratic Party's leading regional bosses. But Forrester's business practices have shadowed his campaign, with Corzine accusing him of profiting from government contracts.

In addition, the state is investigating whether Forrester's contributions to his and other Republicans' campaigns violated a state law. The law bars such donations by majority owners of insurance companies and other state-regulated industries doing business in New Jersey.

In an interview in August, Forrester said that about 80 percent of his business is through contracts with the public sector to provide insurance or manage prescription plans for tens of thousands of public employees in the state. The contracts do not require competitive bidding, but the agencies often solicit competing proposals.

Forrester said there was nothing inappropriate in continuing to do business with taxpayer-funded clients while seeking the governorship. He said he would sever his ties with his companies if elected.

The Burlington County Special Services School District is part of a network of public agencies connected to the county Republican Party. Its members are appointed by the county freeholders, a main cog of the Burlington GOP apparatus.

Until he stepped down last year, Paulsen had been the chairman of the county GOP for 15 years. Despite relinquishing the title, Paulsen is still regarded as the dominant GOP figure in the county and a major player in state Republican politics.

According to county records, Forrester's company began negotiations for the school district's contract in April 2004 in a series of correspondence with Sean Gormley, the district's designated "health benefits broker." Gormley is president of Innovative Risk Solutions of Egg Harbor Township.

BeneCard was awarded a one-year contract on July 1, 2004. Its proposal came in at $57,237 more than one submitted by Oxford Health Plans Inc., county records show.

BeneCard's contract, again with Gormley acting as the broker, was renewed July 1 of this year. Three companies submitted lower-price proposals. Garden State Pharmaceutical, for one, came in at $74,397 less than BeneCard; Catalyst's proposal was $66,703 lower, according to those records.

In addition, BeneCard was chosen a second time despite proposing a 37 percent price increase, according to correspondence from a BeneCard director to Sean Gormley.

Sean Gormley did not respond to phone calls seeking comment.

McDonough, Forrester's spokesman, said that while other companies offered lower costs than BeneCard, they may not have offered equivalent services. "That's why these things are not bid," McDonough said. "Each vendor offers something slightly different."

Neither Sean Gormley nor officials at the Burlington County Special Services District would discuss terms of the contracts.

At the time the contracts were negotiated, Forrester was courting both Paulsen and William Gormley in his bid to become the Republican nominee for governor. They were among a small group of key GOP officials who could have blocked - or seriously undermined - Forrester's nomination in June.

Paulsen and Gormley were among those asked to join a movement in late 2004 and early 2005 to draft Republican U.S. Attorney Christopher Christie into the race. Christie's candidacy, GOP officials believe, would have seriously hurt Forrester's chances to win the primary.

Christie, who would have had to resign as U.S. attorney to become a candidate, chose not to run. Christie's allies said that decision was made, in part, because Paulsen, Gormley and one or two others declined to publicly commit to Christie.

Both the Atlantic and Burlington GOP supported Forrester against the six other candidates who entered the GOP primary.

Gormley said Friday he would have backed Christie if he had entered the race. He added, "I told people [in the draft effort] that if he announced I would publicly support him."

The script seems to be that Forrester is the deep-pockets businessman and Corzine is "the people's liberal, activist candidate." That's too simple to be true, I know, but our MSM cousins have never shied away from simplicity, have they?